Member Article

Government urged to unlock UK shale gas jobs

Lack of development in UK shale gas industries could be masking tens of thousands of jobs according to a report from the Institute of Directors (IoD).

The study, which looks at the lessons of previous energy schemes, has suggested development of shale gas could also reduce imports, generate significant tax revenue and offer support to British manufacturers.

‘Getting shale gas working’, the report launched in Lancashire on Wednesday, also investigates the impact shale gas production at scale could have on the economy, and outlines measures that could be made by industry and the Government to overcome current barriers.

A long list of benefits to the economy, the environment and the amount of land needed to produce energy from shale gas were laid out in the IoD’s report.

Investment of £3.7bn a year could sustain 74,000 jobs, according to the study, which is above previous estimates that gave a lower figure for the number of jobs created.

The industry could not only create jobs for geologists and drilling specialists, but construction workers, truck drivers, cement manufacturers, water treatment specialists and people in local retail and service industries.

Corin Taylor, senior economic adviser at the IoD and author of the report, said: “Shale gas could be a new North Sea for Britain, creating tens of thousands of jobs, supporting our manufacturers and reducing gas imports.

“Further exploration will be needed to assess the size of technically and commercially recoverable resources.

“At the same time, partnerships need to be established between industry, government and communities to ensure that development of this vital national resource benefits local people.”

Employment opportunities could be created in areas across the UK where it is needed most, according to the report, including the North West where the proportion of working-age people receiving at least one out-of-work benefit has averaged at 15% over the last 10 years.

This figure compares to just 9% in the South East.

Similarly, IoD said chemical industries and manufacturing will receive a jobs boost, as shale gas jobs could support these positions and help Britain to produce more goods.

Production of shale gas could also generate considerable tax revenue with rates of up to 62%, which could help offset predicted tax gaps of 1.25% GDP from lower Fuel Duty and North Sea receipts.

Furthermore, IoD said the environmental benefits of shale gas development would bring in lower emissions that imported gas, while UK production’s impact on the chemicals and goods industries could also lower emissions as IoD said UK industry is very energy efficient.

Land usage would also be small, as just 2 hectares of land would be needed to potentially house 40 horizontal wells, that could supply 747,000 homes with gas at its peak capacity.

By this token, a third of Britain’s gas needs could be catered for by just 100 km of land.

IoD recommended the Government to work with industry to collaborate and allow production to go ahead.

Dan Byles MP, chair of the All Party Parliamentary Group for Unconventional Oil and Gas, said: “Shale gas is about more than simply gas. It is about wider British industry, providing secure energy and raw materials for manufacturers.

“The North Sea is rightly regarded as a model for effective offshore oil and gas regulation. If we get this right, in future I believe the world could look to the UK as the gold standard for a well regulated and safe shale gas industry that benefits local communities and the nation.”

Dan Leis, chief executive of Future Energy Strategies, energy policy adviser to the IoD, and author of Chapter 2 of the report, added: “Within living memory, Aberdeen became the energy capital of Europe and the second richest part of the UK.

“With excellent infrastructure, a long history of innovation and key strengths in advanced engineering and manufacturing, Lancashire is well placed to take advantage of the benefits that shale gas could bring.”

This was posted in Bdaily's Members' News section by Miranda Dobson .