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Talking ‘Fracking’: A Consultation on Unconventional Oil and Gas - Analysis of Responses


11. Benefits of an unconventional oil and gas industry (Q8)

11.1 This chapter discusses respondents' overall views relating to the benefits of an unconventional oil and gas industry in Scotland. Question 8 invited comments as follows:

Question 8: Overall, and in the light of the available evidence, what do you think would be the main benefits, if any, of an unconventional oil and gas industry in Scotland?

11.2 Altogether, 3,670 respondents addressed this question. This comprised 122 organisations, 14 discussion groups, 2,588 individuals and 946 standard campaign respondents.

Overview of responses to Question 8

The predominant view among respondents was that there is no benefit or no NET benefit to the people of Scotland of developing an unconventional oil and gas industry. The only beneficiaries would be the small number of companies, shareholders and employees who would profit financially from such a development. Respondents thought that while there may be some limited benefits from developing the industry – particularly in terms of employment and jobs – these benefits would be small and short-term, and would not in any way outweigh the environmental and social damage that would result (in the longer term) from the development of such an industry; in other words respondents believed that 'the benefits do not outweigh the risks'.

The alternative view was that there were benefits to the development of an unconventional oil and gas industry in Scotland. The benefits identified most often related to the economy and more specifically to increased employment with consequential benefits in terms of wealth, prosperity and investment. Other benefits – identified less often – related to energy security and the diversification of energy sources, community benefits due to increased investment, and environmental benefits.

11.3 Among the respondents who commented at Question 8, the main benefits of an unconventional oil and gas industry were discussed in terms of: the economic benefits; energy mix and energy security benefits; environmental benefits; and community benefits. Each of these topics is considered below. Occasionally respondents also identified other benefits or raised related issues, and these are discussed at the end of this chapter.

11.4 The following should be noted about the analysis presented in this chapter:

  • Many of the respondents commenting at Question 8 simply said there would be 'no benefits whatsoever', 'zero benefits', 'absolutely none', 'no overall benefits', 'there will be no benefits only drawbacks', that 'I can see no benefits', or that 'I don't believe there are any benefits' from the development of an unconventional oil and gas industry. In addition, respondents said an unconventional oil and gas industry was not necessary or needed. These respondents did not elaborate their views any further in response to this question and so their perspectives are not otherwise reflected in the main analysis in this chapter.
  • The views offered in response to this question often recapped the points that respondents had made earlier in their submissions; these views have been set out in detail in the earlier chapters of this report (Chapters 4 to 10) and are not repeated at length here.

Economic benefits

11.5 The main benefits of unconventional oil and gas were seen to be related to the economy, to wealth creation and, more specifically, to increased employment and more jobs within the manufacturing sector. However, the predominant view, expressed by those who were opposed to developing an industry in Scotland, was that these benefits were 'small', 'limited', 'negligible', or 'short-term', and would only be experienced by a small number of companies, shareholders and employees. Respondents offering such views thought that (i) there would be 'no meaningful benefits' to the wider population or to 'ordinary people' or communities, (ii) the economic benefits claimed by the industry were highly speculative and had been exaggerated and (iii) any economic benefits did not outweigh the risks – especially the environmental risks – of developing the industry.

11.6 Respondents who held these views highlighted that:

  • The impact on the wider economy (including on GDP, tax receipts etc.) would be small and short-term; they thought the economic case for developing the industry was weak.
  • The main economic benefits would be restricted to companies in the oil and gas sector and their shareholders; respondents viewed these beneficiaries in a negative light, describing their 'profit motive' or 'wealth extraction' as something which should not be encouraged or supported.
  • The number of jobs that would be created would be small. Many of the jobs would be short term, and would go to 'outside contractors'; moreover many of the jobs that would be created would be 'low quality' or 'low skill' jobs and they would be restricted to (a few) local areas.
  • There could be 'economic disbenefits' which also needed to be considered, including (negative) impacts on house prices and damage to roads.
  • The same amount of money invested in almost any other industry would create a greater 'return on investment' in terms of the number of jobs supported. In particular, it would be preferable to invest in renewable technologies. Linked to this was a view that investing in unconventional oil and gas would act as a disincentive to investment in other (energy) industries.

11.7 By contrast, the alternative view which was put forward by those supportive of unconventional oil and gas was that there would be significant economic benefit (described by some as 'an unmissable opportunity') of developing an industry in Scotland. These respondents highlighted that:

  • The growth in the Scottish economy, and the related wealth creation and increased employment, would allow a wide range of social, environmental, and community benefits to be pursued. These included: funding for research and development of renewable technologies; the reduction of fuel poverty; investing in methods for reducing energy demand; the potential to build expertise in a sector where Scotland could have an international and leadership role including the provision of services beyond Scotland; and the opportunity for Scotland to continue to build its tradition for engineering excellence.
  • There would be many jobs created both directly (within the industry itself) and indirectly (through supply chains). Jobs in the unconventional oil and gas sector could help to manage the decline of employment / assist with redeployment in the conventional (offshore) oil and gas industry; many of the jobs created would be high quality, highly skilled jobs and the current capability within the conventional sector can be 'ported' into the unconventional sector. It was argued that if the investment was not made in Scotland, the jobs will 'go elsewhere' within the UK and Scotland would lose out.
  • The petrochemical and related industries would benefit economically from the cost advantages of having a domestic supply of gas, and there was specific mention of securing jobs at Grangemouth. Furthermore, any surplus oil and gas can be exported or sold. The energy source is close to existing markets and the transportation infrastructure is in place; this will enable the industry to work more efficiently, to the benefit of the whole Scottish economy.
  • Jobs will be created in deprived areas where they are much needed, and young people in particular will benefit from this development.

Energy mix and energy security benefits

11.8 Respondents held a range of views on the benefits of developing an unconventional oil and gas industry for Scotland's 'energy mix' and 'energy security'. Among those who raised this point, there was a general view that access to an additional source of energy for both domestic and industrial purposes was 'a good thing' and that reducing dependence on imported gas and being more 'self-sufficient' in relation to Scotland's energy requirements (and thereby improving energy security) was desirable.

11.9 However, respondents differed in their assessment of the scale of these benefits and of the extent to which these benefits outweighed the risks. Those opposed to establishing an unconventional oil and gas industry emphasised that:

  • Any benefits to energy security would depend on whether the industry is economically viable and whether it was developed responsibly and safely. These respondents did not believe it was viable, or that it could be developed safely.
  • The additional supply would be small and temporary, and too late to be considered as a 'transition fuel', according to the calculations provided in the consultation paper; there would be no (positive) impact on energy prices.
  • It would be better to leave these resources in the ground 'for now', until there was a better understanding of the risks involved in their extraction.
  • Although this is an additional source, and diversity of supply is important, this is a 'cheap and dirty fuel' and not one which can be viewed positively when weighed against the risks.

11.10 By contrast, respondents who were supportive of unconventional oil and gas highlighted that:

  • It is important to make use of currently untapped resources (of oil and gas) which will continue to be relied on as an energy source for decades to come while cleaner technologies are developed and while the capacity of (current) renewable technologies are increased. This additional source would allow the 'transition period' to decarbonisation to be stretched and would offer a longer term sustainable source of hydrocarbons.
  • The less exposure there is to foreign imports and the associated potential supply-side shocks, uncertainties and variable costs the better. In particular, increasing price stability (and mitigating the price risk) was seen to be vital. Furthermore, it was suggested that it would be possible by this means to displace imported liquefied natural gas by 2030.
  • The additional supply from unconventional oil and gas will enable generating capacity associated with high greenhouse gas emissions to be decommissioned.

Community benefits

11.11 Respondents who were opposed to unconventional oil and gas did not refer to any community benefits which would arise as a consequence of the development of an industry. However, those in favour of developing an industry suggested that there was a range of community benefits which would flow from the decision to proceed.

11.12 Those who were supportive of unconventional oil and gas argued that community benefits would follow as a consequence of the economic benefits. In particular, these respondents thought that communities, particularly those in locations which might struggle to attract investment, would benefit from increased employment opportunities, and from the investment which would be channelled through community benefit schemes. It was suggested that community infrastructure would be improved and upgraded (e.g. public transport, sports facilities, pedestrian routes etc.), and that the health and wellbeing of communities would benefit from this additional investment. Finally, there was the potential for land to be improved post-decommissioning, which would benefit communities.

Environmental benefits

11.13 In most cases, respondents did not think there were any environmental benefits of developing an unconventional oil and gas industry; indeed they often highlighted in their responses the view that the unconventional oil and gas industry should be banned completely because of the associated risks and potential damage to the environment. By contrast, those who were in favour of establishing an industry in Scotland thought that there would be a decrease in greenhouse gas emissions (and therefore a positive impact on climate change) as unconventional oil and gas was substituted for fuels with a higher 'lifecycle emissions' profile both within the UK and elsewhere, and the number of 'gas miles' travelled was reduced.[22]

11.14 Occasionally, respondents on both sides of the argument about unconventional oil and gas suggested that one environmental benefit of developing an industry would be to reduce the numbers of windfarms and offshore oilrigs around Scotland; these were described as visually unattractive and undesirable.

Other benefits

11.15 There was a range of other benefits suggested by those who favoured the development of an unconventional oil and gas industry. These included:

  • Gas-powered electricity production is very responsive to demand, and is the first to increase when there is additional load in the system.
  • For landowners, there is the potential for land to be leased, which could contribute positively to enhanced business resilience (through diversification).
  • There is an opportunity to improve the regulatory framework and the associated public engagement procedures and to bring safety standards under domestic control.

Other relevant considerations

11.16 A number of other issues were raised by respondents including that:

  • Considering the unconventional oil and gas sector in isolation from the rest of the 'energy system' was inappropriate. A more relevant question to ask – although much harder to answer – was 'What is the best way to provide a decent standard of living while minimising environmental impacts?'
  • It was not clear to some respondents whether investment in the unconventional oil and gas industry would help or hinder investment in renewable technologies. (Note however, that respondents who commented at Question 4 – about the role of unconventional oil and gas in Scotland's energy mix – believed that it would hinder investment. See paragraph 7.8.)
  • Scotland needed to demonstrate that it was 'open for business' and the development of an unconventional oil and gas industry would signal this.
  • Development of the industry should not go ahead unless and until any benefits are fully under the control of the Scottish Government.
  • There was not sufficient information available to judge what the main benefits of developing the industry would be.