Boom in renewables weakens fracking's case in UK, says Tory MP
The case for fracking in Britain has weakened because of government action to extract more oil and gas from the North Sea and meteoric growth in renewable power, according to a Conservative MP tasked with developing the party’s energy policy.
James Heappey said the new rules on tax relief for offshore oil and gas fields announced in last week’s budget could change the energy landscape.
“I suppose there’s a question mark over whether we’ve managed to unlock that [offshore], is an onshore industry as important as it was a couple of years ago,” said Heappery, who was recently appointed chair of an internal policy committee on energy.
There are believed to be 20bn barrels of oil left in the North Sea oilfields.
Asked whether the absence of shale gas in the budget and government’s recent flagship climate plan showed the Conservatives were going lukewarm on fracking, the MP for Wells said: “I can’t speak for the party. I’ve been encouraged by it fading away … I don’t know whether by accident or design.”
His comments came as the government prepared to issue its final consent for hydraulic fracturing at Kirby Misperton in North Yorkshire. If the green light is given in December, as expected, the fracking project will be the first in Britain for six year. It follows years of delays because bans and planning battles.
In an interview with the Guardian, Heappey said the rationale for
exploiting shale gas had been undercut by the growth in wind and solar power, and by new technologies that can reduce big energy users’ demand at peak times.
“If we can fill the gap in revenues through the North Sea, and renewables and clean tech are developing so quickly that gas as a bridge fuel [to renewables] is less important, you just start to wonder what the need is [for shale],” he said.
Fracking was a priority for George Osborne and David Cameron while in office, with the then prime minister saying his government was “going out all for shale” and the then chancellor asking cabinet ministers to fast-track development.
The election manifesto of Theresa May promised to “develop the shale industry in Britain”, but her government has been quiet in recent months, despite it finally being on the verge of an exploration phase.
However, industry figures said they had been given no indication the government was cooling in its support for shale.
A spokeswoman at the Department for Business, Energy and Industrial Strategy said: “The UK government is committed to ensuring we have secure energy supplies that are reliable, affordable and clean.
“As part of this, shale gas has the potential to be a home-grown energy source which can lead to jobs and economic growth, contribute to our security of supply, and help us achieve our climate change objectives.”
Heappey said another announcement in the budget, of no new subsidies for low-carbon power until 2025, was not as bad news as it may appear for the renewables sector.
He argued that wind and solar were on the cusp of being viable in Britain without subsidies. “I just think we’ve reached that point,” he said, though he acknowledged “there will be people in industry who say we’re close but not quite there”.
The Treasury defended the decision to stop new green energy subsidies on the grounds that energy billpayers would be paying £8.6bn a year for the power stations by 2025.
Heappey said the strategy was the right one. “Government should seek to get itself out of the place it has ended up in. The UK energy market hasn’t benefited from government stuck in the middle of it, saying how much it’s willing to pay for technology.”