Fracking will not reduce UK gas prices

The Guardian reminds us:

In August, Cameron said: "If we don't back this technology, we will miss a massive opportunity to help families with their bills … fracking has real potential to drive energy bills down." In July, Osborne said: "This a real chance to get cheaper energy for Britain … a major new energy source that can reduce energy bills."

But they were wrong, as the article shows by quoting the former BP chairman Lord Browne:

"We are part of a well-connected European gas market and, unless it is a gigantic amount of gas, it is not going to have material impact on price."

Chris Huhne made the same point at greater length in another Guardian article a couple of month ago:

If we had US gas prices, consumers would save hundreds of pounds a year. Gas enthusiasts say this is due to the US fracking revolution driving down prices. George Osborne thinks if we turn Cheshire and Sussex into wildcatting Texas, our prices will fall. He has even given fracking a tax break. 

But there would be no such effect. We have pipelines to mainland Europe. More gas from the North Sea did not much cut British prices. The US gas price is so low because it is hard to ship. It has to be liquefied, put in special ships, and then regasified when it arrives. The fracking revolution in the US has happened more quickly than the ability to turn import terminals into export terminals. 

The key to lower British energy bills is not our own production, but more US export terminals.

None of this tells us whether or not fracking should go ahead in Britain, but it does show that the arguments of some of its warmest supporters are misconceived.