Friday, 5 December 2014

Why green jobs are better than fracking jobs

My main objection to developing shale gas in the UK is that it will contribute to climate change - we need to use less gas and oil, not more. However there is at least one other good reason why green jobs are better than fracking jobs for the UK - they last.

Yesterday I went to a workshop by Julian Huppert (our Cambridge MP) on how to keep climate change and related issues high up on the government agenda. One point he made was that some people (including some MPs) are more motivated by everyday issues than climate change. So it helps when green policies also have non-green benefits. One of the benefits of green policies often cited is green jobs. But are green jobs better than other sorts of jobs? For example are renewable energy jobs, or energy efficiency jobs better than fracking jobs?

I have touched on this topic before (see 'Renewable energy or Fracking'). Both industries provide jobs (and good jobs too, paying reasonable salaries and generating taxes - the sort the chancellor likes). The number of jobs produced is comparable in both cases (per MWh of energy generated) [1]. Both industries make use of local resources and generate energy which does not have to be imported - thus improving our balance of payments. As of 2013 the UK was £72 billion in the red [2]. See also What can fracking do to our trade deficit?. Energy from fracking contributes to climate change whereas renewable energy does not - but that only appeals to greenies. What else is there?

The trouble with fracking is that once you have extracted the gas and oil from underground, it is gone - whereas the wind keeps blowing and the sun keeps shining. When your wind turbine is old and creaky, you can fix it up and generate more electricity. Whereas when your gas well production drops to a trickle there isn't any more. That's it. And it may only take a few years for this to happen - experience in many parts of the US is that production drops off dramatically within just a year or two and most wells last no more than 8 years [2]. In Texas, 90% of wells did not recover their costs within 7 years [3]. It is very hard to predict in advance how much a well will produce though developers naturally tend to be optimistic.

Back in March, the government released a heavily redacted version of a report 'Shale Gas: Rural Economy Impacts' [4]. One of the bits of this that did get past the censor was a chart showing potential job creation from developing the Bowland Shale in Lancashire. The chart (below) shows over 5000 jobs created at its peak - but only for about 4 years. Nine years after the start of development there are just a few hundred maintenance jobs and then, when the wells are dried up to the point when they are uneconomic - well maybe there will be some monitoring to make sure there is no leakage over time.
Jobs created from developing shale gas in the Bowland Shale [4] FTE means Full Time Equivalent job.
From the point of view of government revenue, jobs are good because they generate taxes. Company profits also generate taxes, unless they are shifted offshore by complicated company structures. Shareholders also pay taxes - if they are in the UK. This means the UK economy is guaranteed to benefit during the initial phase when there are lots of jobs - but not necessarily afterwards. Jobs matter.

Fracking jobs aren't sustainable because fracking isn't sustainable. Fracking uses up resources that will never be replenished, after just a few years. Fracking jobs run out with the oil and gas. However renewable energy jobs can keep going because renewable energy keeps going.

[1] Low carbon jobs: the evidence for net job creation from policy support for energy efficiency and renewable energy (UKERC) 2014
[2] Does the UK have a £70 bn deficit problem? (Telegraph) Nov 2014
[2] Fracking and the Shale Gas revolution (GlobalResearch) 2013
[3] Deepening Doubts About Fracked Shale Gas Wells' Long Term Prospects (Huffington Post) 2012
[4] Shale Gas: Rural Economy Impacts (Redacted, Rural Community Policy Unit) March 2014

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