Released today, the report argues that although shale gas in the US had caused gas prices to plummet to the lowest in the world, the UK faced a different scenario.

Committee chairman Tim Yeo said: “It is still too soon to call whether shale gas will provide the silver bullet needed to solve our energy problems. Although US shale gas has seen a dramatic fall in domestic gas prices, a similar ‘revolution’ here is not certain.”

Ministers argued that despite this uncertainty, shale gas had the potential of enhancing the UK’s energy security and boosting tax revenues. They urged the Government to act but claimed thet crucial to a successful shale market, would be the development of Carbon Capture and Storage (CCS) technology alsongside it.

Yeo said: “The Government has dithered on this issue and should now encourage companies to get on and drill, to establish whether significant recoverable resources exist.

“Developing technology to capture and store carbon dioxide will be absolutely essential if we want to continue burning significant quantities of gas and other fossil fuels beyond the 2020s. The current slow pace of CCS development is incredibly frustrating. We intend to keep a close eye on DECC’s progress in this area,” he added. 

In addition, MPs on the committee argued that a substantially developed shale industry in the UK could hinder it meeting its climate change targets. 

The US has a number of favourable conditions for the extraction of shale gas, such as its low population density, federal subsidies, and a sympathetic regulatory regime.

However, the report says that the UK does not have comparable conditions and that the extent of recoverable shale in this country is unknown.

The report also acknowledged that a successful shale gas industry had to win over a sceptical public, a role taken on by DECC’s newly-formed Office of Unconventional Gas and Oil.

However, MPs claimed the Government would need to ensure that the new public body demonstrated it had no conflicts of interest as it seeks to simultaneously promote and regulate the industry.

Environmental campaigners, staunchly against a shale revolution in the UK, have used the report to back up their position.

Friends of the Earth Energy campaigner Tony Bosworth said: “This report does little to back the case for a UK shale gas revolution.

“MPs say clearly that shale gas production may threaten our climate targets, may not stop the price of gas from soaring further and we can’t rely on it to improve energy security.”

Conor McGlone

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