‘Substantial’ economic impact of shale gas in the UK, say Lords

House of Lords

Exploration and appraisal are urgently needed to establish the economic potential of the UK’s shale gas and oil resource. Shale gas is not the answer to all the energy policy challenges facing the UK.

However, the House of Lords’ latest report states that substantial economic benefits would flow from successful development.

It would reduce imports and help maintain security of supply. This would be especially valuable given the continuing fall in output from the North Sea and Europe’s reliance on Russia, its biggest gas supplier, highlighted by the crisis in Ukraine.

Development of shale gas and oil in the UK would also generate direct employment  and would be a significant benefit to the balance of payments and the Exchequer.

UK produced shale gas is also likely to be cheaper than imported gas from the Middle East or elsewhere which carries the extra costs of transport and processing.

If the UK does not develop its shale resources in a timely fashion, it runs a serious risk of losing the energy intensive and petrochemical industries which depend on competitively-priced energy and raw materials and which employ around 250,000 people.

The question is whether the UK is to be a producer or simply an importer. 


Public concerns in the UK

Public concern about possible environmental and health risks – most of it unfounded – together with regulatory uncertainty, have so far delayed the exploration and appraisal needed to assess the UK’s economically recoverable onshore shale gas reserves.

Development of shale gas in the UK cannot go ahead without public acceptance. Public concerns must be taken seriously and every possible effort made to reduce or eliminate risk and provide reassurance. We consider that the risks to human health and the environment are low if shale development is properly regulated, with the improvements we recommend.

We welcome the community benefit schemes announced by the industry which, if well-targeted, could play a role in winning public acceptance. We also recommend that the industry improves its presentation and communication skills and puts across more convincingly the economic and employment gains shale development can bring.



There is no reason why effective regulation should not be transparent and speedy as well as rigorous. Delay is not only costly and wasteful, it can also drive investors elsewhere.

Pixie Energy

Pixie logo Pixie Energy is an incubator and a facilitator of strategic research and project work, focusing on energy regulation, policy and markets at the local and national level. Find out more about Pixie Energy here.

Local Energy Matters: Scotland

Local Energy Matters: Scotland is a free-to-download brochure with a focus on energy tariffs in the two Scottish electricity distribution regions, as well news on local energy and low-carbon schemes.

Previous editions can be download here.

Scottish energy market overview

You can read an overview of the Scottish energy market here.

Scottish Government energy feed