Britain's gas field discovery should force fracking back on the agenda

Yahoo

15-02-2025

It will supply the UK with cheap gas for a decade. And it will create tens of thousands of jobs and billions in extra tax revenues, saving the Chancellor from imposing extra taxes on an already battered economy. In some alternative universe, the UK is this week celebrating the news of the huge new natural gas deposits discovered in the Gainsborough Field.
Unfortunately, however, not in this one. It involves fracking, and the British political class sadly still considers that outside of acceptable discussion – even as it becomes painfully obvious that it is the one 'growth lever' that would actually work.
We already knew that the UK, like much of Germany and France, was sitting on plenty of shale oil and gas. Even so, the news of the huge new Gainsborough Field has made clear the size of the opportunity. Egdon Resources, the company behind the discovery, is expected to reveal the full extent of its findings later in the month. But as this newspaper reported, the field could hold as much as 480bn cubic metres of recoverable gas, enough by itself to power the UK for seven years.
According to a study by Deloitte, that would add £112bn to GDP, generate £27bn in extra tax revenue – more than the entire 'black hole' discovered by Rachel Reeves – and create tens of thousands of decent jobs in Lincolnshire, hardly the most prosperous part of the country. By replacing dirtier fuels it would even reduce overall carbon emissions while we take a few more years to gradually transition to climate friendly wind, solar and nuclear power.
It is not the only field of course. The UK already had plenty of proven reserves of shale oil and gas, especially in the huge Bowland basin in the North East of England, estimated to hold up to 400bn cubic metres, alongside smaller reserves in Kent and Sussex. But the Gainsborough Field adds hugely to the UK's known reserves of shale gas.
The trouble is, we are going to leave it all in the ground. Why? Because exploiting all that energy would involve fracking and to the Westminster policy class that remains a taboo subject. Ed Miliband's spokesman on Friday reiterated a pledge to 'ban fracking for good'.
And yet the refusal to even consider whether the technology works or not is becoming more and more bizarre with every year that passes. It is not as if this is an industry that is completely new and unproven. Over the last decade it has been booming in the United States and Canada. In the US, gas production rose by 186pc from 2014 to 2024, while oil production rose by 14pc over the same period, with most of the increase accounted for by improvements in fracking techniques.
In Canada, production has been hitting record highs in key provinces such as Alberta and British Columbia. China has been ramping up its shale gas production, with an 11pc increase in output last year. Most of the fields are in the Sichuan region and new fields are being developed in countries such as Argentina and elsewhere.
Meanwhile, huge new companies have emerged out of the industry. In the last two years, the shale producer Marathon was acquired by ConocoPhillips for $22bn (£17.5bn), while ExxonMobil paid $60bn for Pioneer, another leading player in the American fracking industry. Huge amounts of wealth have been created and, in the process, the United States has become self-sufficient in energy for the first time in a generation as its production levels have hit an all time high.
Indeed, most of the increased prosperity of the US compared to Europe over the last decade can be explained, not by its tech industry, but by rising energy production. Perhaps surprisingly, the key politicians driving the shale boom in North America were Barack Obama, Joe Biden and Justin Trudeau, all of whom have impeccably liberal credentials.
Donald Trump may have adopted 'drill, baby, drill' as one of his slogans, but he has been a marginal player so far. And fracking has of course proven itself completely safe. If Alberta and Texas have been engulfed by earthquakes, they have done a remarkably good job of keeping it out of the media. You might imagine we would have seen the pictures of collapsing buildings by now. Instead, there is no sign of them.
It is increasingly surreal. For a comparison, imagine it was 1930 and we were still refusing to allow cars on our roads because we thought they were unsafe. Or if it was 1970, and we wouldn't allow people to own televisions because we were worried they would cause house fires. This is a technology that has been around for 15 years now, has proved itself completely safe, as well as hugely lucrative, and yet we completely refuse to even contemplate using it.
It is not as if we can afford the luxury of turning down investment, or new industries. Ms Reeves, the Chancellor, is desperately searching around for 'growth levers' she can pull as she struggles to keep the economy afloat and pay for public services. But we all know that an extra runway at Heathrow, while a perfectly good idea in itself, won't make much difference to anything, and anyway will take 20 years to build even if it survives legal challenges. The Oxford-Cambridge arc is not going to be completed any time soon.
With this latest huge find, the UK needs to look again at fracking. It would create tens of thousands of well paid jobs. It would improve the balance of payments by reducing our dependence on imported energy. It would rake in tens of billions in extra revenue for the Treasury, allowing public spending to be increased, or (preferably) taxes to be reduced. It is the one growth lever that will really work – all we need is a political leader with the courage to actually pull it.
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