Lord Stern, author of the hugely influential Stern review on the
financial implications of climate change, has dismissed David Cameron’s
claims that a fracking boom in the UK can bring down the price of gas in
the UK as “baseless”.
In an interview with The Independent, the respected economist said he was puzzled by the prime minister’s claim this month that “fracking has real potential to drive energy bills down… gas and electric bills can go down when our home-grown energy supply goes up”.
“I do think it’s a bit odd to say you know that it will bring the price of gas down. That doesn’t look like sound economics to me. It’s baseless economics,” said Lord Stern, chair of the Grantham Research Institute on Climate Change at the London School of Economics.
Gas is a commodity that can be traded on the international market, meaning that it will be sold to the highest bidder, whether inside or outside the UK. As a result, any shale gas boom in the UK would be unlikely to have an impact on the world price, Lord Stern said.
Lord Stern also criticised the Government for encouraging a rush into fracking without a thorough analysis of all its potential ramifications.
He says a proper investigation is needed into the environmental threats surrounding hydraulic fracturing, or fracking, a process which releases oil and gas from shale by blasting a mixture of sand, water and chemicals into the rock. It has been linked to a series of environmental problems such as earthquakes and water pollution.
“There are major questions around fracking and those questions ought to be explored. We’ve not had a proper discussion on these serious issues,” said Lord Stern.
He is particularly concerned about whether some areas of the UK have enough water for such a water-intensive process, whether the country has enough space for such a space-consuming industry and whether fracking could pollute the water supply.