Andrew Rawnsley is the Chief Political Correspondent of the Observer, so what he says today about fracking will be read by many people who know little or nothing  about it. They won't be educated by this and I'll only refute the main premise here:

Frack-heads talk feverishly about the reservoirs of shale gas being the equivalent of Britain's share of the original North Sea oil reserves. If that were to prove true, this would indeed provide a rich source of energy for Britain and a big boost to tax revenues for the Treasury. Some Tories even believe that shale gas could do for David Cameron what the black stuff did for Margaret Thatcher. The shale deposits under Lancashire alone, so they claim, could power the country for more than half a century. When they get really carried away, they reimagine Blackpool as the "Dallas of the North" with kiss-me-quick hats swapped for stetsons. Climate-change deniers are prominent among the frack-heads. Yet it also seems to offer something to greens because shale gas emits half as much carbon dioxide as coal.

Well, it is only human to dream and the temptation to fantasise about miraculous treasures is all the greater if you are a politician looking for relief from many more bleak years of austerity. The trouble with their dream is that it is very risky for Britain.

A very good introduction to shale gas comes from Asahi Shimbun, Japan's second largest newspaper, in a series that covers the US, Europe, China and Japan in well balanced detail that we can only dream about from the UK press. Given that the UK insists that gas prices will inevitably rise from Japanese demand, this provides a good reality check. Who are you going to trust? Those who say UK energy prices will inevitably rise based on Japan LNG  demand, or the Japanese themselves.

The usage of renewable energies also needs to increase, yet renewables will not be able to meet Japan’s huge energy demand any time soon. As a result, the country will remain heavily dependent on gas for the foreseeable future.

This makes the shale gas boom especially good news for Japan.

Another way of looking at it is that if the shale gas boom is good for Japan, it is catastrophic for the constantly rising gas price scenario spun by DECC, Centrica, CBI, the BBC and even the FT. Yet here we have a newspaper with a circulation (7 million) that the UK press could only dream about, especially since the Shimbun is a serious quality newspaper. The other contrast is how the Japanese government, especially post Fukushima when it has to promote national recovery on one hand and finds itself the majority shareholder in companies like Tokyo Electric Power on the other, is happy to talk up the national interest instead of being a disinterested observer as in Europe.

A key rationale for the UK government energy strategy is gas prices will be expensive.This from the BBC's Roger Harrabin:

Prices won't be certain either. There's a popular notion that gas will be a cheap source of power. The truth is, it's impossible to predict whether volatile gas prices in the 2020s will be cheap or expensive.

Nevertheless we can see from mulitple other sources that the UK government is making a dangerous bet that they will increase. A root cause is the outdated notion that a shale boom will have no discernible impact outside North America due to a combination of apart from bad geology, environmental opposition in "crowded" Europe and the fundamental continuation of the oil gas link which will lead to increasing gas prices. On oil, one has to consider surging US oil production is going to have a moderating effect on oil prices.Oil is far more likely to fall than rise for structural reasons as not only US, but also Chinese, Australian, Canadian, Argentinian and Russian shale oil hits markets as Iraqi oil production also surges post 2015. We're not running out of either gas or oil anytime soon. But to go back to the link, two recent stories show that the oil/gas link is simply falling to pieces. First from Europe, where until now, Statoil has provided a lot of oil linked gas to Europe based on long term contracts, but new contracts are linked to spot markets:

The gas is priced at competitive terms related to German and NW European hubs. The gas will be delivered through existing pipeline infrastructure from the Norwegian Continental Shelf, with the bulk of the deliveries going to Germany

In the you can't judge a book by its cover category I must recommend the Natural Gas Daily published by Interfax Energy. Very complete and seemingly unbiased news about LNG and shale but from the surprising source of Radio Moscow way back. If you have the money, buy it.

Now let's recall how informed Ed Davey, the Secretary of State for Energy and the director of the CBI are. According to them, Asian demand is going to push up prices for Europe. But what if we had this story from Japan, via Interfax:

Japan is committed to challenging the long-held view that Asian buyers are willing to pay high, oil-indexed prices for LNG to safeguard security of supply, analysts have told Interfax. This shift has ominous implications for the future of Australia’s increasingly expensive LNG sector and could jeopardise future expansions.

The concern follows comments made last month by Japanese Trade Minister Yukio Edano that Japan is experiencing an “outflow of national wealth” as a result of the high-priced, oil-indexed LNG import contracts on which the country has become increasingly reliant for power generation since 2011.

Speaking at the LNG producer Consumer Conference in Tokyo on 19 September, Edano called on countries to “brainstorm new measures as an alternative to the crude oil- linked pricing system”. The comments were supported by the world’s second-largest LNG importer, South Korea.

“LNG imports have grown rapidly since the nuclear crisis, shooting up from 70 million tons [mt] in 2010 to an expected 90 mt in 2012. For Japan, how to procure cheap LNG is a significant challenge to address both for the public and private sectors,” Edano told delegates.

The “paradigm shift” caused by shale gas makes oil-linked indexing “less reasonable”, he added. If new suppliers from North America, Russia and Africa enter Asian markets in a few years, “it will no longer be reasonable”, Edano said, noting that Japan will shortly begin studying the creation of an LNG futures market.