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Power Station by Martin Kelly
Power Station by Martin Kelly

Unprofitable fracking just became the only means of keeping Britain’s lights on

Britain just lost three quarters of its natural gas storage capacity, leaving it dependent upon gas imports from as far afield as Qatar and Russia.  Centrica, the owner of the Rough storage site in the North Sea off the coast of Yorkshire has applied for permission to close the facility due to ongoing safety concerns that cannot be rectified.

The Rough facility had the capacity to store the equivalent of 10 percent of Britain’s peak winter gas use – enough to provide a buffer against shortages and price volatility.  With North Sea production down more than 60 percent on its 1999 highs, the closure of the facility leaves Britain’s energy policy in tatters.  As Iain Withers in the Telegraph notes:

“The news will add to concerns about Britain’s energy security, as North Sea gas reserves fall and archaic nuclear and coal power plants are closed down.”

According to Ken Cronin, chief executive of UK Onshore Oil and Gas, the closure of the storage facility strengthens the case for fracking:

“The solution for the UK in the medium term cannot be to transport gas across oceans and continents.”

We might, however, wish to consider a somewhat different possibility – that at some time between now and the mid-2020s, Britain will be out of power (something that a hard Brexit can only add to).   After all, nobody is stopping oil and gas companies from fracking.  Local authorities are increasingly inclined to grant planning permission, and there is no reason to believe that the police and private security firms will be any kinder to anti-fracking protestors than they have been to various protest groups in the past.

This raises the one question that the fracking industry and pro-fracking politicians always shy away from – what exactly is stopping you?  The answer, of course, is the one that we have raised time and again; one that has even been alluded to by fracking bosses themselves… nobody has figured out a way of extracting European shale gas at a profit.  Even in the USA, where the fracking industry enjoys huge geological, geographical, technical and political advantages, fracking companies are only able to break even so long as nobody expects them to pay back all of the funds they borrowed back in the days when oil was over $100 per barrel.

Unfortunately for you and I, there is no Plan B.  The government chose to cut investment in wind, solar and tidal energy generation even as it cut coal and nuclear.  The few nuclear projects that they have approved are in dire financial straits as the companies that are supposed to deliver them teeter on the edge of bankruptcy.  In this sense, fracked shale gas probably is our last best hope… but it is far more likely that five years from now we will all be shivering in the dark.

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