Importing Liquefied Natural Gas cost us at least £2 billion in 2016 - a figure predicted to rise sharply without fracking
We estimate that it cost the UK £2 billion last year importing Liquefied Natural Gas (LNG) from the Middle East, most of which came from Qatar. Substituting these expensive imports with UK shale gas could:
- help cut household energy bills for millions
- pay for over 18,000 senior nurses
This figure includes the costs of transporting LNG to the UK by ship, the wholesale price of the gas itself and the Treasury revenue that we miss out on because these imports are not taxed in the way that domestically produced gas is.
According to our earlier analysis, shipping LNG to the UK would have cost in the region of £189 million in 2016. Using the ICE Futures wholesale gas price of 31.74p per Therm, it's lowest level in 2016 (and making no allowance for the fact that prices steadily rose thereafter) buying all that gas would have cost at least £1.32 billion. At a marginal tax rate of 40%, it means the UK would have missed out on tax receipts of at least £529 million.
Money off for homeowners
Producing gas closer to the point of use instead of shipping LNG halfway around the world would have saved a minimum of £189 million last year in our analysis. So, even if the underlying cost of gas doesn't move, around 17 million UK households stand to benefit from a reduction in retail gas prices as a result of lower transport costs.
More cash for the NHS
Replacing all that LNG with a new UK source of gas would mean that we'd capture those lost tax revenues of at least £529 million a year. According to Prospects, the experts in graduate careers, a fully qualified senior nurse at Band 5 on the NHS payscale could be expected to earn £28,746 a year - meaning that additional tax take from domestically produced shale gas could fund over 18,000 new or existing nurses.
Without fracking for UK shale gas, and instead importing LNG from places like Qatar, it's clear that as gas sails in, money sails out. That can't be right, and is just one reason why we should all be backing fracking.