The U.K. Should Keep Its Fracking Ban for Good

(Bloomberg Opinion) -- The U.K. government's temporary fracking moratorium should turn into a permanent ban. Allowing shale gas extraction makes sense only when a country is still phasing out coal, and then only under certain conditions. But the U.K. is almost finished with coal, and fracking can only postpone its transition to clean energy.

The Conservative government has banned the drilling of new wells that use hydraulic fracturing — a technology that involves pumping liquids, chemicals and sand into bedrock formations to crack them and free up natural gas or oil. This follows a report commissioned by the U.K. Oil and Gas Authority that has linked earth tremors to fracking activity by Cuadrilla Resources Ltd., one of the companies developing shale gas in Britain. The risk of earthquakes arises when fracking is used close to geological faults, and these are hard to detect beforehand with current technology.

The U.K. government's move is a pre-election turnabout: The Conservatives have always backed fracking, but it is unpopular with locals pretty much everywhere it's used, including in the U.S., the technology's greatest proponent and beneficiary. In the U.K., 40% of the population — the highest share since 2013 — say they're opposed to fracking, while just 12% support it. But public attitudes shouldn't be the only reason to impose a fracking ban.

As she announced the drilling moratorium, Energy Secretary Andrea Leadsom spoke of “the huge potential of  U.K. shale gas to provide a bridge to a zero carbon future.” But, almost regardless of all the earthquake- and water-supply-related concerns, that potential is highly questionable.

When it comes to carbon emissions, natural gas is certainly preferable to coal. But the U.K. has almost eliminated coal-fired power plants. Last month, Electricite de France announced that it had shut down its Cottam coal plant, which had provided power to 3 million homes. Most of the few remaining coal-burners are scheduled to close. According to the U.K. Office of Gas and Electricity Markets, coal's share in the country's electricity-generation mix reached just 0.5% in the second quarter of 2019.

The case made for shale in the U.K. and elsewhere has less to do with moving to clean energy than with importing less natural gas. As conventional gas production on the U.K. continental shelf has declined, imports have been increasing.

The idea is that by developing its own shale gas, the U.K. could increase its energy security and drive down energy prices. But thanks to the shale boom in the U.S. and the recent growth in global liquefied-natural-gas exports, it's unlikely the U.K. will ever experience a gas shortage — and today's prices are the lowest in almost a decade.

Besides, a growing export dependence isn't necessarily bad. Germany, which banned commercial natural gas fracking in 2017, believes in the concept of natural gas as a bridge to a cleaner energy future and intends to displace coal with gas, not just wind and solar. But it would rather increase imports (thus the country's staunch support for Nord Stream 2, a Russian natural gas pipeline project fiercely opposed by the U.S. and a number of eastern European countries) than face fracking-related protests. 

In the immediate future, shale can boost employment — but if a country is serious about its climate goals, it's a bad idea to let an entire new industry develop and then have to shut it down and incur the costs of compensating its employees for the loss of jobs. This process is already costing billions in the German coal industry. Imports, meanwhile, can be phased out at little political cost. 

In a recent paper, Katheline Schubert and Fanny Henriet of the Paris School of Economics showed that, in most cases, allowing shale-gas production will slow a country's switch to clean, renewable energy. Shale gas is cheap, and once it displaces coal it'll be hard to phase it out. 

In U.S. power generation, increased consumption of natural gas since 2009 is almost equal to the decrease in use of coal. A ban on fracking, supported in the U.S., for example, by Democratic presidential candidate Elizabeth Warren, would require that the country quickly develop a renewables industry to cover that deficit — a costly project to say the least. The Netherlands appears to have embarked on a similar crusade, though. There, a moratorium on fracking runs until 2020 but is highly likely to be extended, despite a still-significant share of coal in the generation mix; the Dutch government plans to drive down the share of gas in the mix from 55% last year to 30% by 2030, and extracting more gas wouldn't serve that purpose.

But the U.K. doesn't even have to make that difficult choice; it already has a cleaner energy mix than the U.S., Germany or the Netherlands. When France banned fracking in 2011, it didn't just give in to voters' fears of tremors and water contamination. It defended its power generation mix, which currently consists of 66% nuclear, 27% renewables and just 5% gas.

The U.K. should ban fracking permanently — and not just because of the tremors. In that sense, the Liberal Democrats and Labour, who support a full ban, are on firmer ground before the December parliamentary election than the Conservatives.

To contact the editor responsible for this story: Mary Duenwald at mduenwald@bloomberg.net

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Leonid Bershidsky is Bloomberg Opinion's Europe columnist. He was the founding editor of the Russian business daily Vedomosti and founded the opinion website Slon.ru.

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