Would more UK gas actually bring down prices?

Image source, Getty Images

The government has confirmed that it is ending the ban on the practice of frack in the UK.

Liz Truss said in her first speech as prime minister that they would get spades in the ground to make sure people don't face high energy bills.

She wants to increase domestic energy production by using more oil and gas from the North Sea.

"We need more secure and cheaper supplies of gas, which is why we are going to issue more licences and why we are looking at shale gas," said the new business and energy secretary.

More than 100 new licences for oil and gas exploration are expected from the government, according to him.

People's energy bills will not be reduced in the short term because of these measures.

In a letter to the prime minister, the Climate Change Committee and the National Infrastructure Commission warned that increased domestic production of fossil fuels could improve energy security. Our gas reserves are not large enough to have a meaningful impact on the prices faced by UK consumers.

Labour leader Sir Keir Starmer referred to Greg Hands in February of this year, when he was energy minister.

It was a myth that if the UK produced more North Sea gas, prices would go down.

Image source, HM Government

In February, Kwarteng said that additional North Sea production wouldn't have a noticeable effect on the wholesale price.

The international market where UK energy companies buy gas is set by global supply and demand.

Unless the government agrees a price with the companies that extract it, the amount of extra that could be taken from the North Sea is not likely to be enough.

New long-term energy contracts with domestic and international gas suppliers will create a risk of being tied into prices that are above market levels in the future according to the government.

There are questions about how long it would take for gas to come on line.

It would be two to four years before you could produce enough gas to make a difference to UK output if you start drilling tomorrow.

Most of the oil and gas under the North Sea is in deep water, which means it takes even longer to bring it online.

Image source, PA Media

It's not easy to find a quick answer to high energy bills.

10 years ago, research concluded that fracturing wasn't viable in Europe.

It's a huge problem in Europe that you don't know if you have a worthwhile resource until you dig a few wells.

Europe is more crowded and more expensive than the US because of that.

"US infrastructure for export is relatively limited, so they can only export a small portion of what they're producing," said Kathryn Porter, an energy consultant at Watt- Logic.

That makes it harder for US companies to sell gas in other countries.

"Maximizing the UK's domestic energy supply is vital if we are going to overcome the ongoing energy crisis and reduce the risk of it recurring in the future" said the boss of Cuadrilla.

The new wind energy could be online quicker than gas. Once planning permission has been granted, a small wind farm can be built in two months.

It could take two years for a big farm to get the infrastructure it needs. The planning permission process can take a long time.

The Chancellor has just announced that the planning process for the installation of turbines will be made simpler.

Better energy advice for consumers is one of the policies recommended by the NIC.

The solution is to allow households to have long-term contracts with renewable electricity generators, according to some analysts.