Briefing Note: UK shale gas production as part of the Climate Change Committee's (CCC) net zero scenario

23 June 2021

In winter 2020, the CCC released the long-awaited 6th Carbon Budget analysis. This detailed analysis included five pathways through which the UK could achieve its goal of net zero emissions by 2050: headwinds, balanced, widespread innovation, widespread engagement and tailwinds. Within the fuel supply section, the 6th Carbon Budget assessment stated that the 'Decarbonisation of emissions from increased onshore petroleum production, such as shale gas, is considered in our Widespread Innovation Scenario', however the dataset used to inform the CCC scenarios was not made available until recently .

The dataset shows that in the widespread innovation scenario, 328 billion cubic metres (bcm) of UK shale gas production is included within the modelling. For context, the widespread innovation scenario assumes that the shortfall between UK natural gas demand and UK supply from the North Sea is around 760 billion cubic metres, meaning the development of UK shale gas reduces UK imports by 50% cumulatively by 2050. Doing so offers economic benefits such as job creation and reductions in the UK's balance of payment deficit. The development of 328bcm of shale gas in the UK could prevent around £84 billion being sent overseas to meet the UK's net zero energy requirements. Domestic shale production offers environmental benefits too, including a lower carbon footprint supply of natural gas for UK consumers, be it to feed natural gas boilers and power stations today, or methane reformers over the coming decades. To give an example of the emissions saving from UK shale gas production, if this 328bcm was to be supplied to the UK via LNG instead of UK shale gas, the UK would add an extra 158 million tonnes CO2e to the UK's fuel supply footprint by 2050.

UKOOG is of the opinion that if shale gas is compatible with one scenario, it is compatible with them all because every 6th Carbon Budget scenario has a shortfall between UK natural gas supply and demand (ranging between 691bcm and 1,183bcm).

Based on UKOOG's central forecasts for typical well recovery (EUR), 328bcm equates to 210 10-well pads across the UK by 2050 (2,100 wells total), with a total well pad land use of approximately 420 hectares, or 0.0017% of the total UK land mass. For context, an onshore wind farm would require a land area 750 times the size (315,000 hectares) to produce an equivalent amount of energy.

Recently the Energy Minister, Anne-Marie Trevelyan, was asked a question on oil and gas supply and commented that 'any reduction in the UK's own production would simply result in the UK importing more oil and gas from other countries.' UKOOG agree and in that context it is worthy of note that the CCC's fuel supply emissions forecasts do not include those from imported sources, despite their higher carbon intensity. The Minister also said that 'the UK Continental Shelf is a mature oil and gas basin that is declining. We expect this rate of decline to be broadly in line with our domestic demand, and even with continued licensing for oil and gas in the UK, we expect the UK to remain a net importer of both oil and gas.' While this statement is subject to interpretation, the CCC data shows that the rate of decline is broadly parallel to domestic demand meaning that, as the minister identifies, in the absence of increases in oil and gas production, the UK will remain a significant net importer of oil and gas.

Widespread innovation is required in all industries to meet the challenges of net zero, however the non-uniform regulatory environment for UK shale gas in the context of extractive industries nationally and internationally has unjustly slowed the development of one of the greatest industrial opportunities the UK has had for decades. In order to encourage continued investment in the onshore oil and gas sector, the Department for Business, Energy and Industrial Strategy should now take steps to work closely with the onshore industry and the regulator to resolve in a timely manner the questions that led to the effective moratorium on high volume hydraulic fracturing in England and realise the potential emissions savings and economic opportunities outlined in this briefing.

The failure to develop UK onshore oil and gas resources will simply result in the UK importing greatly increased volumes of oil and gas from more carbon intensive suppliers, effectively offshoring the UK's economic opportunity and environmental responsibility. No increases or continuation of UK oil and gas production will see the balance of payments deficit widen, job losses in the UK and an increase in the UK's carbon footprint.

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Sources:

• https://www.theccc.org.uk/publication/deep-decarbonisation-pathways-for-uk-industry-element-energy/ (2021-2050 BCM values - Sheet Baseline Projection Data – Rows 664.)
• https://www.ukoog.org.uk/images/ukoog/pdfs/Developing_Shale_Gas_and_Maintaining_the_Beauty_of_the_British_Countryside.pdf
• https://questions-statements.parliament.uk/written-questions/detail/2021-05-24/6251/