In recent months, there has been ample attention paid to the energy boom that’s happening in the United States, and much speculation about what it might mean both for that country and for the global energy economy—but according to David Mowat, there may be a looming energy boom in the United Kingdom, as well. David Mowat is hardly alone in thinking so: In fact, a recent article from The National highlights, in some detail, the potential energy resources that the UK could soon tap into. Mowat has issued a new statement to the press, opining on the article and on what it says about the future of British energy policy.
According to the article in The National, “Britain could be on the cusp of a new boom along the lines of the North Sea oil bonanza of the past few decades.” The problem, the article continues, is that fears over the extraction of shale gas threaten its development. As the article puts it, many residents of the UK are “reluctant to take the plunge” into shale gas excavation.
The potential of the nation’s shale gas reserves is tough to deny. As recently as last month, the Institute of Directors (IoD) released a report noting that the UK’s shale gas reserves could unlock the potential of “a new North Sea” energy boom. The effects? Potentially, tens of thousands of new jobs created in the exploration and recovery of this unconventional fuel source.
Those who are knowledgeable about Britain’s shale formations say that the nation currently faces three long-term energy problems. The first of these is the problem of energy security; the second, the problem of energy taxes; and the third, the problem of joblessness. Shale gas could potentially help resolve all three of these problems.
David Mowat is nothing if not positive about the possibilities afforded by Britain’s own, native energy resources. In his new statement to the press, the MP says, “ There are many millions of cubic feet of gas under Warrington and Cheshire. These reserves need to be evaluated and exploited as quickly as possible which will reduce energy bills and reduce carbon emissions.”
Meanwhile, the IoD notes that a new shale gas industry “could create 74,000 jobs and provide, ultimately, a third of the UK’s energy needs, drastically reducing the country’s growing dependency on gas imports.”
More precisely—and more importantly—the shale gas exploitation could create jobs in areas of Britain that direly need them, especially in the northeastern part of the country. Here, unemployment is as high as 15 percent, compared with just 9 percent in the southeast. Not only that, but shale gas exploitation could also generate sizable tax revenues, as was certainly the case with North Sea oil and gas.
As The National makes clear, these issues are very much on the radar of officials in London, though the future of the UK’s shale policy remains very much an open-ended question. One respected energy expert, Peter Atherton, is quoted in the article as saying that “moving from a largely fossil-fuel-based power system to one dominated by renewables and nuclear in just a decade and a half, whilst keeping the lights on and consumer bills affordable, may simply be impossible.”
Specific concerns that Atherton voices are the concerns that investors may simply not wish to fund any British shale program, or worse, that the government would have no choice but to re-nationalize companies in the energy sector.
It is in this political climate that the IoD report has been released, noting that British shale production could peak at 1,121 billion cubic feet per year. “With UK gas demand predicted to remain more or less flat for the next two decades – it was 3,055bn cu ft in 2011 – shale could potentially meet about one-third of annual demand,” The National states. More specifically, shale could help reduce Britain’s import dependency from 76 to 37 percent by the year 2030.
Additionally, the article notes, shale gas could lead to significant tax revenues, making up for the declines in North Sea production.
The article goes on to opine that the UK ultimately wishes to follow the example set by the US. In America, shale gas discoveries have led to gas prices falling by 75 percent—about a third of what gas costs in Europe—and it has also created tens of thousands of jobs in the span of just six years or so. The shale gas surge has also been credited with kick-starting the American economy; some analysts say that the US could be energy independent by 2030.
“Experts believe Britain may well have comparable shale resources to the United States,” contends The National. Also noted in the article is the fact that David Cameron recently described the UK as envious of the US’ energy reserves.
There are naysayers who contend that the UK is simply a very different place than the US, noting that America has much better gas infrastructure already in place to keep up with the demands of shale. According to Mowat, however, it is nevertheless prudent and necessary for the UK to avail itself of its rich natural resources and energy supplies.
A long-time business leader and civil servant, David Mowat currently serves in Parliament, representing the Warrington area.
With ample experience as both a chartered accountant and a technology consultant, David Mowat is passionate about business ownership, energy efficiency, and strong financial stewardship—all three of which have marked his celebrated tenure as a public servant and political leader. In May of 2010, Mowat was elected as MP from Warrington South, and in his time in Parliament he has passionately argued for a reform to the unfair Barnett formula, which takes money from the English regions and sends it to Scotland instead. He has also been at the forefront of the campaign for High Speed Rail. In addition, he is known for his local job fairs, his attentiveness to unemployment, and his zeal for prudent energy policies.