The publication of the Intergovernmental Panel on Climate Change (IPCC) Working Group 3 5th Assessment Report has been accompanied by some headlines suggesting that the report endorses shale gas. We take a look at what the report actually says, and what that means for the role of shale gas in the UK.
The IPCC’s report sets out the huge expansion of low-carbon technology deployment required to avoid dangerous climate change. Alongside these, and playing a diminishing role over time, it sets out the role for unabated fossil fuels:
- Meeting long‐term goals will most significantly reduce coal use, followed by unconventional oil and gas use, with conventional oil and gas affected the least. Over time, there is limited scope for use of fossil fuels with conventional technologies, particularly in power generation.
- Using natural gas (including shale gas produced with low-emissions practices) in a modern gas-fired plant would reduce emissions per kWh by half when shifting from the current world‐average coal‐fired power plant, evaluated using 100‐year global warming potentials.
- Unconventional gas could therefore lower emissions for the transitional period where gas competes with coal, if gas losses and additional energy requirements for the fracturing process can be kept relatively small.
- However, there is a gap in our knowledge concerning fugitive methane emissions (i.e. methane escaping during shale gas production) and also adverse environmental side effects associated with the increasing exploitation of unconventional fossil fuels.
These messages from the IPCC are consistent with the Committee’s stated position on the role of shale gas in a decarbonising UK energy system:
- The UK will continue to use natural gas for heating in buildings and energy-intensive industry for some time, and the UK is now net importer of gas. Well-regulated domestically produced shale gas could have lower lifecycle emissions than the liquefied natural gas that currently comprises a significant chunk of our gas imports, and would improve the UK’s energy sovereignty.
- But we wouldn’t expect the volumes of shale gas produced in the UK or elsewhere in Europe to have a large impact on natural gas prices, given that we’re part of a highly interconnected gas network spanning almost the whole of Europe. This has two implications for the role of gas in the UK power sector:
- There is already sufficient gas-fired capacity to switch from coal to gas generation in the UK power system. However, at the moment the economics are unfavourable, due to low prices of carbon and coal – stronger carbon prices or lower gas prices could drive more switching.
- Given the small impact on prices and the strategic importance of power sector decarbonisation, investing in a low-carbon portfolio represents a ‘low-regrets’ strategy in the power sector. Any UK shale gas production can instead be used to reduce our dependence on gas imports to heat our homes and to realise any potential economic benefits to the UK.
We will continue to monitor the latest evidence on fugitive methane emissions and wider environmental impacts of shale gas production and reflect this in our advice.