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The Impact of Shale Gas on the Environment and the Renewable Energy Industry

Dr. Steven Fawkes CEng, FEI

7th November 2012

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THE GLOBAL energy context

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20%

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It is not all about CO2

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Premature deaths a year from air pollution:

2 million globalWorld Health Organisation

700,000 ChinaWorld Bank

300,000 EUEuropean Commission

50,000 UKHouse of Commons Environmental Audit Committee

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1.3 billion

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Could shale gas help the uk achieve its carbon targets?

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the uk targets

80% reduction in carbon emissions by 2050 set in law June 2011

Period Reduction cf. 1990

Mt CO2

2008-12 23% 3,018

2013-17 29% 2,782

2018-22 35% 2,544

2018-27 50% 1,954

Current debate over 2030 carbon intensity target for generation

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Impact on uk carbon targets - 1

Tyndall Centre

“even if there were to be a rapid transition from coal to shale gas electricity, this could still not be reconciled with the UK’s 2°C commitments under either the international Copenhagen Accord or its own national Low Carbon Transition Plan.”

“there is a paucity of information on which to base an analysis of how shale gas could impact GHG emissions and what environmental and health impacts its extraction may have.”

“whilst the UK may be able to reduce its national emissions through indigenous shale gas consumption, this risks triggering a net increase in global emissions.”

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Impact on uk carbon targets - 2

Poyry

“You can develop shale and you can still achieve your carbon targets. The one caveat to that is that if the government chose to change its renewables support mechanisms that would mean the targets are not achievable.”

Higher cut of emissions in 2020s as shale gas substitutes for more coal in power generation.

Higher production of shale gas leads to lower imports of LNG (higher emissions).

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Climate change committee

“Extensive use of unabated gas-fired capacity (i.e. without carbon capture and storage technology (CCS)) in 2030 and beyond would be incompatible with meeting legislated carbon budgets.”

Climate Change Committee to Ed Davey

13 September 2012

NB This is a position on the “dash for gas” and not a comment on the source of the gas

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More research needed?

Tyndall Centre

“even if there were to be a rapid transition from coal to shale gas electricity, this could still not be reconciled with the UK’s 2°C commitments under either the international Copenhagen Accord or its own national Low Carbon Transition Plan.”

“there is a paucity of information on which to base an analysis of how shale gas could impact GHG emissions and what environmental and health impacts its extraction may have.”

“whilst the UK may be able to reduce its national emissions through indigenous shale gas consumption, this risks triggering a net increase in global emissions.”

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Three driving factors

The effect depends on 3 factors:

- What shale gas substitutes for:

- Gas for coal is net positive

- Gas for imported gas is roughly neutral

- Any price effect on overall demand and efficiency legislation:

- Low price, unconstrained demand

- Effect of energy efficiency legislation and programmes

- Renewables legislation and cost curves:

- Removal of subsidies

- Can renewables reach cost competiveness?

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Will the availability of shale gas destroy the market for renewables?

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Poyry scenarios

BOOM

- Unconventional gas price falls below North Sea production costs c.2020

BALANCED

- GB annual average cost of gas moves from cost level of Middle East LNG to oil indexed oil prices by c.2030

RESTRAINED

- Cost of unconventional gas is very high

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EFFECT ON RENEWABLES INDUSTRY

Scenario Gas price

Policy response Effect on renewables

Boom Down Relax on renewables & efficiency Strongly negative

Keep up pressure on renewables & efficiency

Moderate

Balanced Up Relax Negative to neutral

Keep up pressure Positive

Restrained Up Relax Neutral

Keep up pressure Strongly positive

Wild card will be cost curves of renewable technologies

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Gas and renewables

Integrated Renewables Combined Cycle (IRCC)

07 June 2011

MetCap Energy Selects GE’s New FlexEfficiency Technology for World’s First Integrated Renewables Combined Cycle Power Plant (in Turkey)

GE FlexEfficiency 50

510MW high efficency CCGT

22MW wind

50MW solar thermal

69% efficiency at site conditions

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Positively managing the environmental impact of shale gas

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Environmental concerns

- Water- Ground water contamination

- Surface water contamination

- Water demand – pressure on water resources

- Air- Fugitive methane release

- Radon gas release

- Other- Seismic

- Noise

- Road congestion

- Site restoration

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The need for transparency

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Mindset and two stages

Mindset has to be to positively manage

Stage 1:

Manage with integrity and transparency

Apply the highest standards of quality, H&S and environmental management

Failure to do so will relegate the industry to the level of bankers

Stage 2:

Research and development on lower impact technologies

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TWO Approaches to regulation

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CARBON TARGETS

i.e. will carbon targets survive anyway?

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contact

Steven FawkesEnergypro Limited+44 77 0223 1995

stevenfawkes@aol.com

www.outsource-energy.co.uk