Fracking plans ‘more to do with ideology than true economics’

Plans to lift the moratorium on UK shale gas production have “more to do with ideology than true economics”, a former big six energy chief has told Utility Week.

Paul Massara was speaking following the government’s long-awaited announcement on plans to help consumers with the soaring cost of energy this winter.

The announcement, which included the decision to cap bills at £2,500 for average households over the next two years, included plans to lift the temporary ban on fracking “where there is local support” which the government says “could get gas flowing in as soon as six months”.

But the former Npower boss retorted: “The idea of increasing fracking and getting more gas and oil from the North Sea, most commentators would say that’s going to make zero difference in a world market price of gas and oil, that it’s going to be absolutely marginal and it’s more to do with ideology than true economics. And so therefore, I don’t think that’s the right move.”

He further pointed to clear divisions on the issue within the Conservative Party, with cabinet members sharing alternative view points on the issue of further gas extraction.

He continued: “Kwasi Kwarteng is well known for saying that fracking and taking extra gas and oil is going to make no difference to the world price of oil. And yet you’ve got the new secretary of state, Rees-Mogg, who is going to be saying actually take every drop that you can squeeze out the North Sea.

“So it’s clearly a conflict there. And the reality is that the fracking issues have failed due to local issues and therefore she’s (Liz Truss) being sensitive about them.”

Massara said the reality is that the UK operates in a global market and that excess gas produced will be shipped out through interconnectors, or the country will import less through LNG.

“In terms of impacting price, it’s really not going to make much difference and I don’t buy the security of supply issue anyway because we’re not talking about not getting hold of gas at this stage, we’re talking about the price of it,” he added.

Meanwhile concerns have been raised by several industry experts about the lack of plans for improving the energy efficiency of homes, with charity National Energy Action saying such plans were “notably absent” from the prime minister’s statement.

Massara agreed and said he believed one of the reasons for this is that energy efficiency is “not as attractive” as the idea of announcing projects “where a ribbon can be cut”.

He added: “The second is that we’ve had a number of failed starts quite frankly. Whether it’s the Green Deal or the Green Homes Grant, those have not been successful and therefore the government hasn’t got a go to solution for that. So even if they said, ‘yes, we want to put more money into it’, they’re struggling to find the necessary route to do it.”

The frictions inherent in balancing net zero, security of supply and affordability are at the core of the agenda for the Utility Week Forum, on 8-9 November in London. Find out more here.