Would more UK gas actually bring down prices?

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Would more UK gas actually bring down prices?

  • News by AUN News correspondent
  • AUN News – ISSN: 2949-8090

Summary: It would take two to four years before you could produce enough gas to make a difference to UK output. On-shore wind energy could also be available more quickly than offshore wind. According to the European Wind Energy Association, a small wind farm can be constructed in as little as two months.

The contentious practice of fracking will no longer be prohibited in the UK. The government anticipates issuing “more than 100 additional licences” for North Sea oil and gas exploration. However, our offshore or shale gas reserves are too tiny to significantly impact UK consumers’ prices. High energy costs cannot be solved easily or quickly by lifting the fracking moratorium. The land is more expensive and scarcer in Europe than in the US, where fracking has allowed for significant gas extraction.

The contentious practice of fracking will no longer be prohibited in the UK. The government anticipates issuing “more than 100 additional licences” for North Sea oil and gas exploration. However, our offshore or shale gas reserves are too tiny to significantly impact UK consumers’ prices. High energy costs cannot be solved easily or quickly by lifting the fracking moratorium. The land is more expensive and scarcer in Europe than in the US, where fracking has allowed for significant gas extraction.

The contentious practice of fracking will no longer be prohibited in the UK. The government anticipates issuing “more than 100 additional licences” for North Sea oil and gas exploration. However, our offshore or shale gas reserves are too tiny to significantly impact UK consumers’ prices. High energy costs cannot be solved easily or quickly by lifting the fracking moratorium. The land is more expensive and scarcer in Europe than in the US, where fracking has allowed for significant gas extraction.

The contentious practice of fracking, which involves drilling and injecting liquids under high pressure to extract shale gas, will no longer be prohibited in the UK, the government has announced.

Liz Truss declared in her first speech as prime minister, “We will put spades in the ground to ensure people are not faced with prohibitive energy prices.”

She has promised to use more fracking and North Sea oil and gas to boost domestic energy output.

Additionally, on September 22, the newly appointed Business and Energy Secretary, Jacob Rees-Mogg, stated to MPs: “We also need more secure and affordable supplies of gas, which is why we are going to issue additional licences and why we are looking into shale gas.”

He stated that the government anticipates issuing “more than 100 additional licences” for North Sea oil and gas exploration.

Why is fracking contentious, and what does it entail?
The UK government announces the lifting of the fracking prohibition.

However, there has been caution that these steps won’t immediately lower people’s energy costs.

The presidents of the National Infrastructure Commission and the Climate Change Committee advised the prime minister in a letter that increasing domestic production of fossil fuels “may improve energy security.” However, our offshore or shale gas reserves are too tiny to significantly impact UK consumers’ prices.

Also mentioned in Parliament by Labour leader Sir Keir Starmer were some “myth-busting” tweets sent by Greg Hands in February while he was the energy minister.

According to the tweet, it is a misconception that increasing North Sea gas extraction will result in lower prices since “UK production isn’t significant enough to affect the worldwide price of gas materially.”

In February, “Additional North Sea production won’t appreciably affect the wholesale price (definitely not anytime soon”),” tweeted Kwasi Kwarteng, who is now chancellor, in February.

Fundamentally, UK energy providers purchase gas on the international market, including gas from the North Sea, where prices are determined by global supply and demand.

Suppose the government does not agree on a price with the businesses that extract it. In that case, it is unlikely that the additional energy that could be taken from the North Sea or through fracking will be sufficient to reduce costs considerably.

The government has stated that it will consider new long-term energy contracts with domestic and foreign gas suppliers, despite the risk of getting locked into future costs higher than market rates.

Another issue is how long it would take for any additional gas to become accessible.

According to Prof. Jonathan Stern of the Oxford Institute for Energy Studies, “the main issue is that it would take two to four years before you could produce enough gas to make a difference to UK output, even if you started drilling tomorrow, had success the next day, and everything else went according to plan.”

What caused gas prices to spike so dramatically?
Seven strategies to reduce excessive energy prices

Government estimates indicate that there is still a sizable amount of oil and gas under the North Sea, but according to Prof. Stern, the majority of that is now in deep water, far from the shore, making the process of bringing it online considerably more time-consuming.

Fracking

High energy costs cannot be solved easily or quickly by lifting the fracking moratorium.

According to Prof. Stern, studies conducted ten years ago found that fracking wasn’t feasible in Europe and that finding hasn’t changed.

It’s a significant European issue that you can’t tell if you have a valuable resource until you’ve dug 50 to 100 wells.

That’s because land is more expensive and scarcer in Europe than in the US, where fracking has allowed for significant gas extraction and lowered domestic energy costs.

According to Kathryn Porter, an energy consultant with Watt-Logic, “the US export infrastructure is rather restricted, so they can only export a small fraction of what they’re producing.”

As a result, US corporations find it more challenging to sell their gas abroad, maintaining significantly lower domestic prices.

The head of the fracking company Cuadrilla, however, praised the decision to lift the ban, saying: “This is an entirely sensible decision and acknowledges that maximising the UK’s domestic energy supply is vital if we are to get through the current energy crisis and lower the likelihood that it will happen again in the future.”

What if the UK could reduce costs?

Onshore wind energy could become available more quickly than gas. Once planning clearance has been granted, a small wind farm can be constructed in as little as two months, according to the European Wind Energy Association.

However, it might take more than a year to build new roads for a larger farm. And obtaining a planning permit can take two to three years.

During the leadership race, Liz Truss stated that she preferred offshore wind to onshore wind. However, Chancellor Kwasi Kwarteng recently declared that the planning procedure for installing turbines would be simplified.

The CCC and NIC suggested several policies, including improved consumer energy education and increased building energy efficiency.

Some commentators have proposed that the solution allows people to enter into long-term contracts with renewable electricity providers, thus separating electricity prices from gas prices.

Analysis by: Advocacy Unified Network

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