Companies should be allowed to get on with fracking to asses the UK's shale gas reserves, according to MPs

Fracking companies must be able to 'get on and drill'

Fracking may not be the "silver bullet" to solve Britain's energy problems but companies must be able to "get on and drill", according to MPs.

The Energy and Climate Change Committee said it was "too soon to call" what impact shale gas, which is extracted through a process known as fracking, could have in the UK and although extraction has led to big energy cost reductions in the United States a similar "revolution" in the UK is not certain.

They warned the Government not to base future energy policy on future shale gas production, but also criticised the government for unnecessarily delaying development of shale gas saying it should now encourage companies to come up with more accurate estimates of recoverable reserves.

Energy committee chairman Tim Yeo said: "It is still too soon to call whether shale gas will provide the silver bullet needed to solve our energy problems. Although the US shale gas has seen a dramatic fall in domestic gas prices, a similar 'revolution' here is not certain.

"If substantial shale resources do turn out to be recoverable in the UK, and community concerns can be addressed, then it could limit future energy price rises, reduce our reliance on imported gas and generate considerable tax revenues.

"The Government has dithered on this issue and should now encourage companies to get on and drill, to establish whether significant recoverable resources exist.

"Ministers should be careful, though, not to base energy policy on an assumption that gas prices will fall in future as a result of shale gas production. Rising global demand for gas, particularly from Asia, could limit any potential price reductions."

Shale gas is exploited through drilling into rock and fracturing it with high pressure liquid to extract the gas, a process known as hydraulic fracturing or fracking, but the Government temporarily banned the process in the summer of 2011 after several earth tremors were measured in an area near a shale gas exploration site in Blackpool, northwest England.

Opponents are concerned about the possibility of earthquakes and water pollution caused by fracking, but the Government lifted the ban in December 2012 on the condition of tighter monitoring rules after several expert reports advised a policy in favour of fracking.

But in their Impact of Shale Gas on Energy Markets released today the MPs said the Government was too cautious in its approach to fracking, with the report stating, "we do not believe that it was necessary to take so long to establish the safety of fracking."

The committee concluded that it is "impossible" to come up with reliable estimates of shale gas in the UK without practical production experience so companies that meet the required standards should be encouraged to carry out exploratory work, although public concern must be taken into account.

Energy Minister Michael Fallon said: "This report is helpful analysis, it underlines what we know; that UK shale has potential to play a role in our energy security and to create valuable jobs.

“But the scale of future production and the impact it will have on prices is not yet clear. We have already set up the new Office of Unconventional Gas and Oil to promote the safe, responsible and environmentally sound recovery of the UK's reserves."

The report also notes that importing shale gas from the US is unlikely to reduce British bills because the shipping costs are too high, and that while shale oil is likely to be present in the UK, it remains uncertain whether it is economically worthwhile to explore.

Ken Cronin, chief executive of industry body the UK Onshore Operators Group, told BBC Radio 4's Today programme: "We welcome the report and the central message that we need to be allowed to get on with the drilling. We need to get drilling to get practical experience and to understand the geology and the flow rates we have in the UK.

"What we now need to do as an industry is work out what is technically and economically recoverable, but we believe there is a significant amount of gas in the UK.

"I think the seismic issues are now well understood. Various independent reports came out saying the seismic issues were insignificant compared to background. We've put in place monitoring systems across the industry to ensure that we understand the situation a lot more, and we have also published our best practice guidelines in February which will manage environmental risk effectively.

"The important thing here is not just about prices, but it's about energy security. Our import dependence on gas is going to rise significantly over the next few years. It makes economic sense for us to produce our own gas and pay tax for it to the Exchequer rather than paying somebody else to produce the gas for us.

"Shale gas is pretty much across the UK in various different locations. There is the North West, the East Midlands, down in the southern area. For example, this morning IGas Energy will be announcing that they will be drilling in the Bowland Shale in the North West."

But environmental campaigners say all the report really confirms is that little is known about the UK’s shale gas reserves.

"Fracking remains a fantasy and a dangerous distraction from renewables, which continue to fall in cost. The Government needs to start backing energy winners, instead of gambling with consumers' pockets and the climate," says Greenpeace climate campaigner Leila Deen.

"This report confirms that what we know about UK shale gas is that we don't know much. The only thing most experts agree on is that it won't reduce bills.

Friends of the Earth energy campaigner Tony Bosworth said: "This report does little to back the case for a UK shale gas revolution. MPs say clearly that shale gas production may threaten our climate targets, may not stop the price of gas from soaring further and we can't rely on it to improve energy security.

"Fracking is dirty, unnecessary and a threat to our climate and environment - it's little wonder so many communities are in opposition. Instead of gambling with shale gas we should be building an affordable power system based on our abundant clean energy from the wind, waves and sun."

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