'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

  • Maritime Engineering Opportunities

    Defence Equipment & Support (DE&S)
    • Bristol
    • £30,424 - £35,285

    You will be working alongside a team of people who are immensely proud of what they do in providing the best possible service to our Armed Forces

    • Recruiter: Defence Equipment & Support (DE&S)

    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

  • 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

  • Structural Designer

    BAE Systems
    • England, Barrow-In-Furness, Cumbria
    • Negotiable

    Structural Designer BAE Systems is looking to recruit multiple Structural Designers to join our Maritime Submarines unit to be based in our site in Barrow-in-Furness, as the Trident Replacement Programme progresses towards the start of the build stage in

    • Recruiter: BAE Systems

    Apply for this job

  • Mechanical Design Engineer

    BAE Systems
    • England, Hampshire, Portsmouth
    • Negotiable

    Mechanical Design Engineer Would you like to work in an interesting and challenging role with the chance to gain exposure to a number of maritime projects? We currently have a vacancy for a Mechanical Design Engineer at our site in Portsmouth. As a Design

    • Recruiter: BAE Systems

    Apply for this job

  • Operations Manager

    BAE Systems
    • England, Barrow-In-Furness, Cumbria
    • Negotiable

    Operations Manager We currently have an opportunity for an Operations Manager to join our Maritime - Submarines business area at our Barrow-In-Furness site. As the Operations Manager you will work within a Construction or Manufacturing Facility and be res

    • Recruiter: BAE Systems

    Apply for this job

  • Principal Chemist

    BAE Systems
    • Barrow-In-Furness, Cumbria, England
    • Negotiable

    Principal Chemist Would you like to play a key role in the safety and assurance of submarines for the Royal Navy? We currently have a vacancy for a Principal Chemist at our site in Barrow-in-Furness. As a Principal Chemist, you will be carrying out a rang

    • Recruiter: BAE Systems

    Apply for this job

  • Software Engineer

    BAE Systems
    • England, Hampshire, Portsmouth
    • Competitive package

    As a Software Engineer, you will be investigating how technology and data can be used to optimise the services we provide to our clients, including the Royal Navy, and will include unique pieces of equipment at the forefront of innovation.

    • Recruiter: BAE Systems

    Apply for this job

  • Principal Control Systems Engineer

    BAE Systems
    • England, Cumbria, Barrow-In-Furness
    • Competitive package

    As a Principal Engineer you will be responsible for the design and integration of control systems at a safety integrity level (SIL) 3. This will include requirements management, system design, and integration into the wider platform.

    • Recruiter: BAE Systems

    Apply for this job

  • Ship Refit Operations Manager

    BAE Systems
    • Jubail, Saudi Arabia
    • Negotiable

    Ship Refit Operations Manager Would you like to work with some of the largest defence projects in the world, with the chance to deploy on a contract basis to Jubail, Saudi Arabia with increased allowances? An exciting opportunity has arisen to join BAE Sy

    • Recruiter: BAE Systems

    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