Fossil Fuel Firms Use 'Biased' Study in Massive Lobbying Push
Industry urging governments and business to reject renewables in
favour of 'green' shale gas
The Guardian (UK)
20 April 2011
by Fiona Harvey
Senior executives in the fossil fuel industry have launched an all-out
assault on renewable energy, lobbying governments and business groups
to reject wind and solar power in favour of gas, in a move that could
choke the fledgling green energy industry.
Multinational companies including Shell, GDF Suez and Statoil are
promoting gas as an alternative "green" fuel. These companies are among
dozens around the world investing in new technologies to exploit shale
gas, a controversial form of the fuel that has rejuvenated the gas
industry because it is plentiful in supply and newly accessible due to
technical advances in gas extraction known as "fracking".
The expansion of shale gas holds out the promise of a glut in gas that
is driving down prices and creating a bonanza for the fossil fuel
industry. Burning gas in power stations releases about half the carbon
emissions of coal, allowing gas companies to claim it is a "green"
source of fuel.
Central to the lobbying effort is a report claiming that the EU could
meet its 2050 carbon targets €900bn more cheaply by using gas than by
investing in renewables. But the Guardian has established that the
analysis is based on a previous report that came to the opposite
conclusion – that renewables should play a much larger role. The report
being pushed by the fossil fuel industry has been disowned by its
original authors who referred to it as "biased" in favour of gas.
For the last two months, company lobbyists have been besieging
government officials in Europe, the US and elsewhere to push the
report. Their efforts are being boosted through alliances with
energy-intensive industries, which are joining in the pressure on
government in the hope of securing cheap energy.
As the problems with the Fukushima plant in Japan have cast a pall over
nuclear power, gas companies sense the chance to brand themselves as
the main "green" source of energy. James Smith, outgoing UK chairman of
Royal Dutch Shell, one of the leaders in the lobbying effort, said
switching to gas would offer the world "a breathing space" in the
battle against climate change.
This view was challenged by Prof David Mackay, chief scientific adviser
to the UK's Department of Energy and Climate Change. He told the
Guardian: "You can't reach the [climate] targets like this - there is
no way that switching to gas would solve the problem. I don't think
it's really credible that gas is the only future."
The lobbying effort by fossil fuel companies has been intense. At a
high level meeting on Wednesday, the president of the European
parliament hosted a lunch for the gas industry with VIP guests
including the EU's energy chief, Günther Oettinger.
It is the latest in a long round of meetings in recent months between
gas lobbyists and senior officials in Brussels, including other EU
commissioners and prominent MEPs, as part of the industry's charm
offensive. Oettinger alone has held at least two other major meetings
with gas representatives this year.
At most of these meetings, and at many other formal and informal
meetings to discuss EU energy and climate change, officials have been
presented with a report commissioned by the European Gas Advocacy Forum
(EGAF), an industry lobbying group, based in part on an analysis by
consultancy firm McKinsey and called Making the Green Journey Work.
This report appears to show the EU could meet its 2050 climate targets
€900bn more cheaply using gas than by investing in renewables. A copy
of the report has also been presented to the office of José
Manuel Barroso, the EU president, who has taken a close interest in EU
gas supply with visits to the Ukraine, Turkmenistan and Azerbaijan this
year.
Apart from coming to different conclusions about renewable energy, the
report also relies on questionable assumptions about the future price
of technology to capture and store carbon.
The team at the European Climate Foundation that produced the original
report described the EGAF version as "biased to one preferential
outcome in support of gas advocacy". They warn that adopting its
conclusions would reduce energy security and expose the European
economy to the volatile gas price.
A spokesperson for McKinsey said: "It is our long-standing policy not
to discuss our clients or the work we do for them."
David Rimmer, Shell's general managed for global gas said, "Shell sees
renewables as a major part of the future energy mix but this analysis
has shown that increased reliance on gas in the near term saves money
and jobs, delivers on climate targets and allows new technologies to be
improved before large scale deployment."
Further doubt has been thrown on the industry's claims by a newly
released academic study from Cornell University which found that
generating electricity from shale gas – because of the difficulty in
extracting it from rocks – produces at least as much carbon dioxide as
coal-fired power, and perhaps more.
Jenny Banks, climate and energy policy officer at WWF-UK, called on the
British government to halt shale gas exploration. "It would be
ridiculous to encourage shale gas when in reality its greenhouse gas
footprint could be as bad as or worse than coal. We need to reject this
source of gas, and have a clear plan to move away from our dependency
on fossil fuels and harness the full potential of renewable
technologies."
Some in the gas industry are careful to argue that its fuel is
complementary to renewables, as it can be relatively easily turned on
and off to provide flexible back-up power when the wind is not blowing.
This argument is accepted by Oettinger, who insists that both gas and
renewable energy will be needed for flexible low-carbon power
generation, and some other senior figures. Nobuo Tanaka, the executive
director of the International Energy Agency, said: "Gas is potentially
a game changer. But it is complementary to renewables, as it can be
turned on and off quickly. It could be baseload power and we could turn
off coal."
But renewable energy generators are wary, as they fear that
cash-strapped governments will ease off on subsidies for clean power,
in favour of licensing gas-fired power stations.
A new gas-fired power station would be expected to have a useful life
of about 25 to 40 years. So although switching from coal to gas would
help countries meet their short term emissions targets, in the longer
term they would be left with fleets of redundant, high-emitting fossil
fuel power stations – unless they were fitted with expensive technology
to capture and store the carbon dioxide underground. However, this
technology is still unproven and it is likely to be decades before it
can be widely used. The economics of the technology are highly
uncertain, and renewable companies argue that the assumptions used by
EGAF to show that the fossil fuel is cheaper than renewables do not
stand up to scrutiny.
Shale gas is controversial because it requires large amounts of water
to release it from rocks, and the use of potentially dangerous
chemicals that could leach into the water supply. Numerous cases in the
US, which has led the way in releasing gas from shale rocks using
fracking technology, have shown evidence of contamination and dangerous
leaks of methane.
Prof Robert Howarth, lead author of the Cornell study, said: "My strong
belief is that shale gas has been promoted far beyond the objective
evidence of what it can and cannot do. It is time to step back, and
objectively analyse whether this is a reasonable energy technology for
our future. It is also time to analyse how environmental issues
associated with the technology might be reduced, and at what cost."