OECD head warns against creating shale gas ‘dependency’

Shale gas exploration risks diverting countries from the path to zero emissions, the head of an influential global think-tank has warned.

Angel Gurría, secretary general of the OECD, cautioned against investing too much in dedicated infrastructure for new fossil fuel resources and creating “a new and permanent dependency”.

Speaking at the launch of a report on the “ambitious policies needed” to eliminate net carbon dioxide emissions by the second half of this century, Gurría asked: “How do you ensure that gas is a transitional step?”

The report’s foreword called on governments to “take a hard look at policy measures that subsidise or encourage the exploration, production and consumption of fossil fuels”. Policies that conflict with a cost-effective carbon price “must be eliminated”, it said.

Ministers in the UK have committed to offer tax breaks for shale gas production, which they say could help to keep down energy bills.

At the launch in London, Gurría said carbon capture and storage (CCS) “will have to play a vital role” in the zero carbon transition. “However, we should not over-estimate its potential in the coming decades nor rely on it as the ‘get out of jail free’ card.”

The International Energy Agency estimates that even if all CCS projects in planning were to go ahead, they would capture less than 1 per cent of global power sector emissions in 2012.

“Without CCS, continued reliance on coal-fired power is a road to disaster,” Gurría went on. Every government should consider restricting finance to new coal power projects at home or abroad, he said, following the example of the World Bank, the US Export-Import Bank, the European Bank for Reconstruction and Development and the European Investment Bank.

Gurría acknowledged the cost of phasing out fossil fuels “can appear daunting”, but said: “If we are equally realistic about the costs climate change could impose, we should see transformative zero-emission technologies as opportunities.”