Gas prices could fall by a quarter and help bring down household energy bills if Britain exploits its shale gas reserves, a report commissioned by Ed Davey, the Energy Secretary, suggests.
Green for go: Britain has the engineering, health, safety and environmental expertise to develop shale resources safely
The study by Navigant Consulting backs up David Cameron’s claim that shale gas drilling could help cut the cost of living for families struggling with average bills of more than £1,300 per year.
However, it contrasts with the claims of Ed Davey, the Energy Secretary, that shale gas is “unlikely” to bring down household bills. He has said higher gas prices are probable regardless of the discovery of Britain’s shale reserves and used this argument to justify spending billions on wind farms and nuclear power stations.
This week, Mr Davey criticised NPower, an gas and electricity company, for saying that green energy would be a major factor behind rising bills, criticising their “weird” assumption that gas prices would fall.
However, the new study published today by his own department found gas prices may actually drop by 12 per cent by 2020 even if Britain does not pursue its shale resources.
In Navigant’s “base case” of “limited” shale exploration in Britain and Europe, Navigant said it expects the gas price to fall because of lower oil prices and America producing larger amounts of unconventional gas for export. The price would still be lower than it is today in 2030.