Four senior energy ecoomists have issued a stark warning to policy makers on the UK’s shale gas – ‘don’t expect there to be any!’

In an article published by Warwick Business School, ‘Conditions for environmentally sound UK shale gas development‘, they advise policy makers:

“Given the current incomplete state of knowledge about shale gas and its potential role in a low-carbon transition, we suggest that policy makers should take as their basis for energy policy that there will be no shale gas produced domestically and plan their gas security strategy accordingly.”

The authors, Professor Paul Ekins and Dr Christophe McGlade of UCL, Professor Michael Bradshaw, of Warwick Business School and Professor Jim Watson of UKERC, point to the current incomplete state of knowledge about shale and its potential role in low-carbon transition.

Ten serious hurdles for frackers to overcome

And while the UK may be able to develop some of its potential shale gas resources within the context of a global effort to keep average global warming within 2C, they set out ten caveats that they consider “fundamental to ensuring that any potential shale gas development in the UK is compatible with its required greenhouse gas emission reductions and environmental protection more broadly.”

1. There must be viable resources. “As recognised by the British Geological Survey in the report on the Bowland shale, at present there are no UK shale gas reserves, and next-to-no information or data on volumes that could be considered to be recoverable resources. Whether any will be resources that are recoverable in an economically viable way is unknown, despite frequent claims to the contrary, and this is self-evidently necessary for there to be any development of UK shale gas.”

2. No stalling on the path to low carbon power. “In the UK a danger of promoting the increased use of gas for electricity generation is that there may be a stalling in the necessary shift towards lower-carbon sources of electricity … Indeed, it could be argued that the UK government is planning for this … such a development would be tantamount to an abandonment of the UK’s contribution to limiting global warming to 2C.”

3. Need for carbon capture and storage. “Carbon capture and storage (CCS) is key to the development of new gas resources, shale or otherwise … If CCS does not become available commercially soon, it is unlikely that there will be much scope within available carbon budgets for significant UK and European gas consumption beyond 2050. This calls into question the wisdom of developing a whole new UK shale gas industry for such a limited period of operation.”

4. The main effort lies elsewhere. “Gas can only be a short-term complement to the much larger increase in true low-carbon energy sources that must also occur to substitute for coal, and ultimately for gas too, in order for the low-carbon transition actually to be achieved.”

5. Time is against shale gas. “The bridge formed by natural gas to a low-carbon energy system, and by extension the timeframe for the development of shale gas to help reduce GHG emissions, is strictly time-limited.”

6. It must be accompanied by major emissions reductions. “The development of some shale gas resources is only helpful if there is real global commitment to CO2 emissions reduction. In the absence of such an agreement additional natural gas is not helpful for reducing emissions. The IEA modelled a ‘Golden Age of Gas’ scenario, based upon the widespread availability and development of new gas sources (including shale gas). This resulted in 3.5C of global warming … Under such circumstances the development of shale gas could not in any way be viewed as a positive emissions reduction mechanism.”

7. It’s a zero sum game – so more unburnable carbon. “Policy makers and advocates for UK shale gas development will need to recognise that, if new resources are to be developed in the UK, then fewer fossil fuel reserves need to be developed as a result elsewhere. All countries and regions already hold significant levels of ‘unburnable’ reserves, which will be increased by new UK production, if commitments to limit global warming are to be met.”

8. Gas leaks could wipe out all the ‘benefits’. “The level of fugitive emissions that occurs during production needs to be determined and managed. The literature on this issue is not yet at a mature enough stage to have any confidence on what a reasonable range for fugitive emissions might be. If they are non-negligible the usefulness of shale gas as a lower-carbon bridge fuel diminishes rapidly.”

9. Shale development is no free for all. “Development of shale gas cannot occur in an unrestricted manner … 80% of potential European unconventional gas resources should still be classified as unburnable under a cost-optimal 2C scenario.”

10. Wider environmental impacts must be contained. “Local environmental impacts, including those from waste disposal, toxicity, noise and water pollution, groundwater contamination, induced seismicity, water use in water-deficient areas, and flaring, are appropriately regulated, controlled or avoided. Convincing the public that these risks can be minimised and managed is essential to gaining a ‘social licence to operate’, which the shale gas industry does not yet have in a UK context.”

The authors conclude: “While we are not against shale gas exploration in principle, we believe that it is incumbent upon the shale gas industry and its supporters, and the Government, to demonstrate that the above conditions are met, as most if not all of them are not at present.

“Only then should shale gas production be permitted to proceed in the event that it is proved to be economically viable, in the knowledge that it is consistent with a decarbonised UK energy system and environmental protection more generally.”

The paper: ‘Conditions for environmentally-sound UK shale gas development‘ is by Dr Christophe McGlade and Professor Paul Ekins, UCL Institute for Sustainable Resources and UCL Energy Institute, University College London; Professor Michael Bradshaw, Warwick Business School, University of Warwick; and Professor Jim Watson, UK Energy Research Centre.

Historians will regard the failure of governments to treat environmental objectives on a par with economic and social aims as an absurdity.

Even the most cursory understanding of the forces that govern our world tells us that everything we buy, sell and manufacture, from the simplest of foodstuffs to the most complex technologies that drive the digital revolution, has its foundation in natural products and processes.

It is self-evident that if we exploit these to destruction, increasing competition for diminishing resources will lead to economic crisis and political chaos. Put simply, we are living beyond the environmental limits of our one planet, and this is putting our wellbeing at risk.

So why do we base many of our political decisions, and the structure of the organisations that generate and implement these policies, on the outdated assumption that the world’s natural resources, and their capacity to provide for us, are infinite?

No government that displayed an equally cavalier attitude to, say, the management of tax revenues or defence hardware would be long in office. The environment is a mainstream issue, and it is time to re-shape our institutions to reflect this reality.

How government works – the worm’s eye view

I’ve witnessed Whitehall’s weaknesses from the inside. As a special adviser to DECC ministers, I saw how the government machine fails to ensure that every department consistently pursues environmental aims, even when that department’s activities are crucial to their realisation.

In the current set-up, at least eight departments have critical roles to play – alongside the lead departments of DECC and Defra, the Treasury, Business, Transport, Communities and Local Government, Foreign Office and International Development are all important.

I spent an inordinate amount of time arguing with special advisers in some of these other departments trying to persuade them to support our views over, for example, the Green Investment Bank or the UK’s carbon targets.

Generally I failed – which may just have proved I was a rubbish adviser! – and although in the end we did sometimes manage to achieve our objectives, it came down to bargaining between cabinet ministers.

One of the striking things about my experience was how infrequently party political considerations came into my arguments. Defra generally supported us (even though at the time there were no Liberal Democrat ministers there), while other departments, particularly the Treasury and sometimes BIS, were much more sceptical. And I would guess that the departments lined up in exactly the same way under the previous Labour government.

Part of the problem is a lack of political will. Our last four Prime Ministers – Major, Blair, Brown and Cameron – have all occasionally displayed an interest in environmental issues, but never consistently, and none have given it a high priority. And the country has yet to experience a green-minded Chancellor.

But even when the political will is there – and the cross-party consensus behind the Climate Change Act and the need for further action to build on it offers some hope here – the machinery of government is simply not fit to support new and environmentally sustainable ways of delivering policy.

The three stumbling blocks

There are three problems. Firstly, policy is often dealt with issue-by-issue with little strategic overview, or no over-arching objectives to guide decisions. This makes it very hard to reconcile competing policy objectives, for example around housing development versus protection of green spaces. Even where decisions do try to balance these competing objectives, it is often the environment that loses out.

Second, there is a failure to understand the importance of our natural environment to our economic and social wellbeing. Environmental protections such as the more efficient use of water or sensible management of marine stocks are seen as a cost and a burden, a brake on prosperity, rather than the bedrock of a successful economy.

The goods and services our seas, forests and clean air provide are not properly considered in policy appraisal processes and are all too often treated as a free resource.

Third, political short-termism does not provide for the longer-term response which environmental challenges require. All too often short-term pressures trump longer-term sustainability.

As a result of all this, the government departments that take the lead on environmental issues – primarily DECC and Defra – are small and of low political status compared to, for example, the Treasury, BIS or Transport. Although they do sometimes win arguments, it’s always an uphill struggle.

A green box for the ‘natural resource budget’?

Working with WWF-UK, I’ve proposed a set of comprehensive reforms, set out in the report ‘Greening the Machinery of Government: Mainstreaming Environmental Objectives‘, that would equip Whitehall to meet these challenges.

Long term thinking requires a clear 25 year-plan for the environment. The Committee on Climate Change, and the five-yearly carbon budgets it sets, help to impose a long-term framework on government decision-making.

Now we need to mirror that structure for natural capital – natural resources, air, water, countryside – with the existing temporary Natural Capital Committee transformed into a permanent statutory body setting natural resource budgets for governments to follow.

The UK’s National Security Strategy should be rewritten to include risks to society and the economy from environmental factors, and these should be discussed regularly by the National Security Council, which is chaired by the Prime Minister.

All public bodies should be required to report on the extent to which the risks identified by the analysis pose a threat to their ability to fulfil their responsibilities, and to produce a resilience plan to deal with the likely threats.

This would drive the development of policies that deliver better stewardship of natural capital, and inevitably accelerate efforts to combat climate change.

The current weakness of the environmental voice in government needs to be rectified. Environmentalists have long viewed the Treasury as a barrier to progress. I therefore propose the appointment of a Cabinet-level Chief Secretary for Sustainability located within that very department.

They would play a central role in driving the culture change required throughout government, ensuring that the economy is sustainable, resource-efficient and low-carbon, delivering the greatest overall welfare benefit for society. The new minister would present an annual report to Parliament on the state of the UK environment, and the government’s proposed response.

A new Office of Environmental Responsibility

While the UK is still a global leader on climate change, we are in danger of falling behind. And there is room for much more re-engagement on wider environmental issues, including the protection of the world’s oceans and forests – resources upon which we depend in the UK.

So the Foreign Office should appoint an International Environment Minister, who alongside tackling our international carbon footprint could join up international finance and environment policy.

Procedures need to be introduced to require all government departments (and other public bodies) to consider environmental costs and benefits when taking decisions and spending money. This includes reforming the systems for monitoring and challenging departments’ business plans, systems for impact and regulatory assessment and investment appraisal, Treasury modelling tools and the system of regulatory appraisal.

Most importantly, a new Office of Environmental Responsibility should be created to advise government and hold all its departments to account against its environmental objectives. Sitting at arm’s length from government, it would report to the Treasury.

The Chancellor rightly received plaudits for creating an Office for Budget Responsibility, but living within our means demands prudent management of our natural, as well as financial, resources.

There are recent precedents upon which these proposals could build. This month, the Well-being of Future Generations Bill passed by the Welsh Assembly committed the public sector to sustainable development goals, set down in statute.

This will ensure that Wales lives within environmental limits, tackles climate change, maintains functioning ecosystems and uses resources responsibly and sustainably. This is world-leading legislation.

And this week, the House of Lords EU Committee set out admirable proposals that would see better long-term management of the North Sea’s resources to ensure a viable future for those who depend on them, integrating the environment and economics in a mirror of the Dutch North Sea 2050 Agenda.

These reforms to the machinery of government would cost little up-front, could be delivered within the existing Whitehall headcount and would potentially save billions as the UK helped avert the unimaginable consequences of unchecked environmental degradation and climate change.

They would ensure Whitehall meets its own targets on biodiversity, emissions and sustainable procurement. They would put the UK back where it belongs – at the forefront of international efforts to tackle the most pressing issues of our age.

The report: ‘Greening the Machinery of Government‘ is written by Duncan Brack and published by WWF UK.

Duncan Brack is an independent environmental policy analyst, an associate fellow of Chatham House and an associate of Forest Trends. From 2010 to 2012 he was special adviser at the UK Department of Energy and Climate Change. Before that he worked for Chatham House, and from 1998 to 2003 was head of its Sustainable Development Programme.

MPs in the House of Commons Business, Innovation and Skills (BIS) Committee have demanded that “a right to regulate” be enshrined in the controversial Transatlantic Trade and Investment Partnership (TTIP) between the European Union and the United States.

There are growing fears – highlighted in today’s Ecologist with reference to Canada’s salutary experience – that TTIP’s fiercely investor-state dispute settlement (ISDS) mechanism would allow foreign companies and private investors to sue governments for enacting ‘business unfriendly’ legislation.

Where countries legislate for environmental protection, labour standards or the state’s right to run public services – like the National Health Service – ISDS could allow corporations to sue governments for the loss of future profits in secret tribunals.

As the report highlights, ISDS could also allow “the possibility of US oil companies challenging environmental regulations on fracking.” Other examples include challenging regulations on chemicals in food and cosmetics as well as EU restrictions on genetically modified organisms.

The Committee therefore demands that “a statement ensuring the right to regulate by Sovereign Nations takes precedence over an investor’s right to invest is placed at the heart of the Government’s response on ISDS provisions”, also insisting on “the exclusion of any clauses which would require the State to pay in all outcomes.”