'Fracking' for shale oil could drive down global price

14 February 2013
By Edward Gent
Mobile version
Share |
Shale oil could drive down prices of the commodity through the controversial

Shale oil could drive down prices of the commodity through the controversial "fracking" process

Global oil prices could be driven down by using the controversial technique of “fracking” to tap shale oil reserves, a report suggested today.

Shale oil, thought to be widely distributed around the world, can be exploited in the same way as shale gas through hydraulic fracturing, which uses high-pressure liquid to split rock and extract the fossil fuels. Consultancy firm PwC says it has the potential to reach up to 12 per cent of total oil production.

The extra supply could reduce prices by 25 to 40 per cent in 2035 compared to what they would otherwise be. The report also suggests reduction in global oil prices could boost output in many countries, including in the UK, where GDP would be 2 to 3.3 per cent higher in 2035 as a result of the lower prices.

John Hawksworth, chief economist at PwC and the report's co-author, said: "Lower global oil prices due to increased shale oil supply could have a major impact on the future evolution of the world economy by allowing more output to be produced at the same cost.

"These effects could build up gradually as shale oil production rolls out across the world to produce an estimated rise in global GDP of around 2.3 to 3.7 per cent in 2035.

"This would be roughly equivalent to adding an economy the size of the UK to total global GDP in that year."

But environmental campaigners warned the impact of failing to tackle climate change and move away from fossil fuels to low-carbon energy would hit the economy, with the costs of rising temperatures outweighing any benefits of shale oil.

The arrival of shale gas exploration in the UK has prompted dismay among campaigners who fear operations could pollute water supplies, cause tremors and lead to damaging development of drilling well sites in the countryside.

Dr Doug Parr of Greenpeace said: "Digging up and burning new reserves of fossil fuels can only exacerbate the huge negative impact on the global economy of climate change.

"As Lord Stern, a former World Bank chief economist calculated, the economic impact of global warming could be similar to that of a world war.

"Any short-term price gains for consumers will ultimately be dwarfed by the impact of rising temperatures on every aspect of economic life. We have to leave fossil fuels in the ground and instead invest in the clean alternatives."

And Friends of the Earth's senior energy campaigner Tony Bosworth said: "Fracking, whether for oil or gas, is a technology which brings huge risks for our environment and health; a gamble we simply don't need to take.

"If we're to avoid the looming spectre of catastrophic climate change we must urgently switch from fossil fuels to a power system based on slashing waste and getting clean British energy from the wind, waves and sun."

Latest Issue

E&T cover image 1606

"Where would Frankenstein and his creative mind fit into today's workplace? Should we fear technological developments or embrace them?"

E&T jobs

  • Graduate Electrical Engineers

    AECOM
    • United Kingdom and Ireland
    • Competitive

    Due to the diverse nature of our business there are many different teams each with very different responsibilities.

    • Recruiter: AECOM

    Apply for this job

  • Network Innovation Engineer / Analyst - UK Power Sector

    Premium job

    Nortech Management Ltd
    • Birmingham, West Midlands or Pershore (Worcestershire)
    • £30,000 - £35,000 (depending on experience) + benefits

    Network Innovation Engineer / Analyst to join a team of talented technology enthusiasts who design and support the low carbon networks of the future.

    • Recruiter: Nortech Management Ltd

    Apply for this job

  • Electrical Engineer with Strong telecoms background

    Premium job

    Sure South Atlantic Ltd
    • Falkland Islands

    Sure South Atlantic Ltd currently has a unique engineering opportunity in their Falkland Islands office. Surrounded by the Atlantic Ocean, teeming ...

    • Recruiter: Sure South Atlantic Ltd

    Apply for this job

  • Cyber, Communication, Information and Data Scientist roles

    Premium job

    Dstl
    • Porton Down, Salisbury
    • Competitive salaries

    Information is everything. Use it to serve your country and help keep us safe.

    • Recruiter: Dstl

    Apply for this job

  • Production Engineer

    Premium job

    Compact Engineering
    • Thirsk / Leeds / Banbury / Colchester / Cambridge
    • Salary will be competitive and commensurate with experience, knowledge, aptitude and capability

    A Production Engineer with some knowledge and understanding of radiant energy transfer.

    • Recruiter: Compact Engineering

    Apply for this job

  • Electronics Engineer

    Premium job

    Nikon Metrology Europe
    • Tring, Hertfordshire

    Nikon Metrology is looking for an Electronics Engineer to join our Electronics Team based in Tring (UK).

    • Recruiter: Nikon Metrology Europe

    Apply for this job

  • Engineering Manager

    BAE Systems
    • Hampshire, England, Portsmouth
    • Competitive package

    Would you like to play a vital role in managing and implementing the correct governance in order to enable BAE Systems to provide assurance and integrity of supply chain data? We currently have a vacancy for an Engineering Manager - Product Integrity

    • Recruiter: BAE Systems

    Apply for this job

  • Engineering Project Manager - Electrical & Automation

    Nestle
    • York, North Yorkshire
    • c£45,000 + Car Allowance + Bonus + Excellent Benefits

    Nestlé Product Technology Centre in York currently has an excellent opportunity for an Engineering Project Manager

    • Recruiter: Nestle

    Apply for this job

  • Consultant Engineer - Test

    BAE Systems
    • Farnborough, Hampshire, England
    • Negotiable

    Consultant Engineer - Test Would you like to be a lead within an exciting team working on one of the UK's largest defence projects? We currently have a vacancy for a Consultant Engineer - Test at our site in Ash Vale. As a Consultant Engineer - Test, you

    • Recruiter: BAE Systems

    Apply for this job

  • ELECTRICAL PROJECT ENGINEER

    SSE
    • Reading, Berkshire
    • SALARY: £37,588 TO £55,669 + CAR (SSE8/9), DEPENDING ON SKILLS AND EXPERIENCE

    SSE are looking to recruit an Electrical Project Engineer into office in Reading

    • Recruiter: SSE

    Apply for this job

More jobs ▶

Subscribe

Choose the way you would like to access the latest news and developments in your field.

Subscribe to E&T