All fracked up

Sooner or later if the government’s plan comes off there will be a shale gas fracking site near you. Or you will have a friend or family member who lives near one.

That’s because around 3,000 wells could be drilled at more than 1,000 sites across the country in order to deliver up to a fifth of the country’s annual gas demand to an increasingly power hungry society - welcome to Fracking GB plc!

Today the government began a new round of licensing for onshore oil and gas, which opens up around half of the UK to potential fracking, including national parks in ‘exceptional circumstances’.

The licences are the first step towards exploration but firms will also have to obtain planning consent, permits from the Environment Agency and a sign-off from the Health and Safety Executive.

Fracking involves blasting water, chemicals and sand at high pressure into shale rock formations deep under ground to release the gas held inside.

In announcing the so-called 14th onshore licensing round, Business and Energy Minister Matthew Hancock said: "Unlocking shale gas in Britain has the potential to provide us with greater energy security, jobs and growth.

"We must act carefully, minimising risks, to explore how much of our large resource can be recovered to give the UK a new home-grown source of energy."

Today’s Guardian newspaper reports the government has committed nearly £2.5m of public money to an office to encourage fracking - before a single home has been powered by shale gas.

David Cameron has said the UK is going "all out for shale", with his government offering tax breaks to fracking companies and promising local authorities they will be able to keep 100% of the business rates from fracking operations, rather than 50% as before.

Previously unreleased figures show that the Office of Unconventional Gas and Oil (Ougo) - set up in March 2013 to encourage the development of shale gas and oil and coal bed methane - has already spent £568,000 and has been awarded a budget of £1.8m for this financial year.

There are already people living near fracking sites in the north of the country whose homes have been blighted - making insurance difficult and expensive, and significantly reducing property values.

"In pushing forward with their fracking fantasy, Cameron and co are riding roughshod over the climate science," said Natalie Bennett, leader of the Green Party.

"The science overwhelmingly indicates that 80% of known fossil fuel reserves need to be left underground if we are serious about meeting internationally agreed climate commitments."

She said fracking would add to the huge financial risk of the carbon bubble and called for the use of renewable and conservation technologies to build a sustainable energy policy.

"We need a government that doesn’t want to sacrifice our homes and communities for the profits of oil and gas firms while ignoring the pressing reality of climate change," she added.

The renewable wind power industry has had to deal with a broad range of challenges, particularly visual impact, and so far this doesn’t seem to be on the shale gas radar.

But type ‘shale gas rig’ into an internet search engine and select 'images' to see a taster of what might actually be in store for any community where drilling might take place.

We're likely to see the industrialisation of tracts of the British countryside, gas flaring in the home counties and a steady stream of trucks carrying contaminated water down rural lanes.

Production rates for the UK are expected to be lower than in the US because of lower pressure in UK basins, while costs might be higher because of demanding local environmental standards and the proximity of populated areas.

Analysis by Carbon Tracker estimates that if we are to contain greenhouse gas emissions at a level that preserves a reasonable chance of remaining below the 2C of global average temperature increase (considered a critical danger threshold), then four-fifths of known fossil fuel reserves need to remain locked in the ground.

The official Committee on Climate Change has warned that in the context of the UK’s legally binding climate-change targets, a new ‘dash for gas’ should be Plan Z, not Plan A.

All this makes for a risky backdrop to shale gas development in this country, which the Government seems determined to ignore in its public pronouncements and new round of licensing.

The industry will require major investment to get going and investors will need to be patient in getting a return, as going through the planning process and exploratory drilling will take years of expensive development before commercially useful quantities of gas are produced.

And no one really knows how much of gas can be got out, or how much that will cost both financially and to the environment at large.

Add to that the expectation that it will not in reality reduce energy prices, then the case for shale gas looks a lot more risky than proponents and the Government is suggesting.

The shale gas narrative and tax breaks presented by George Osborne a year ago are also, in part, based on the fear of being 'left behind'.

At the time Osborne said that a technological revolution based on government "getting out of the way of progress" is what we need. He couldn't be more wrong.

Where the country is being left behind, however, is in the development of new environmental technologies, including renewables and carbon capture. If we are to keep up in these areas, perhaps with some gas in the mix, it requires clear policy and leadership.

You can get away with small government on some issues - but not when it comes to energy. The UK needs a clear framework and strategy that sets out how we will secure our energy needs while meeting environmental goals. Right now we don't have that.

The current UK government - initially hailed by Cameron as ‘the greenest ever’ - is a liturgy of broken promises and short-term opportunism.

When it comes to energy policy and our long-term future it seems that little George has no idea. And neither has little Britain.

See also - Cameron talks up fracking and Fracking hell! from 2013.
The Lighthouse Keeper is written by Clive Simpson - for more information, commission enquiries or to re-publish any of his articles click here for contact information.

Back to the blues

There is sometimes a fine line when it comes to discerning the difference between the colours of green and blue - as British Prime Minister David Cameron has been finding out.

His bold claim on coming to power to be leading the "greenest government ever" seems to be turning into something of a wistful ruse at best.

The summer’s unresolved fracas over fracking for shale gas didn’t really help matters but the latest salver came from a more unlikely source - a Conservative party donor.

Alexander Temarko, a significant British energy investor, claims investors in renewable technologies are being scared off by "seriously mis-leading" messages from the Government.

The Russian businessman, who has made donations in excess of £50,000 to the Conservative party, believes the Government is now paying little more than "lip service" to renewable energy.

Temarko says that failing to provide the clear targets investors need before committing to long term green electricity generation projects is squandering the opportunity to create thousands of jobs and generate billions of pounds in revenues.

The charge is levelled equally at the Prime Minister, his Chancellor of the Exchequer, George Osborne, and, to a lesser extent, at Ed Davey, the Energy and Climate Change Secretary.

In fairness, Davey campaigned to include a requirement in the Energy Bill - currently progressing through Parliament - that would have required the UK's electricity supply to become almost entirely ‘green' by 2030.

But Osborne replaced the target with less onerous wording that grants the Government the power from 2016 to require Britain's electricity supply to become almost entirely green only at some point in the future and should it choose to do so.

All this comes at a time when the country’s profit-hungry big six energy companies are about to announce another inflation-busting price hike to gas and electricity prices.

An exception to the rule is Ecotricity which announced mid-September that it was ending its ‘Big Six price match’ under which the small energy provider had matched each Big Six standard tariff in their home regions.

This delivered green energy for the price of brown and meant that, for most people in Britain, it costs no more to be with Ecotricity.

The company’s new pricing promise is that it will charge less than each of the Big Six standard tariffs - delivering green energy for less than the price of brown.

In the meantime, the Prime Minister and his Government’s ‘green' credentials have shifted chamaeleon-like back through the political colour spectrum to the traditional Conservative party blue.

And Temarko is right in one sense - the lack of a sound, long term energy policy is doing no one in the UK any favours.

This piece was originally scheduled for publication on 21 September 2013 but the Lighthouse Keeper was unable to access his blog due to Chinese internet restrictions whilst on assignment in Beijing and so it has been published retrospectively. The title is inspired by the album of the same name from the late Gary Moore (1952 – 2011), a musician from Belfast, Northern Ireland, best recognised as a blues rock guitarist and singer. In a career dating back to the 1960s, Moore played with artists including Phil Lynott and Brian Downey and was a member of the Irish rock band Thin Lizzy.

RSPB's fracking objection

The media hiatus in the fracking for shale gas frenzy - which graced the front pages for several weeks during the summer - has left room for some more reasoned debate and comment.

The RSPB, for instance, has waded into the issue by lodging objections to proposals to drill for shale gas and oil in Lancashire and West Sussex, citing that regulations are inadequate to ensure water, landscapes and wildlife are protected.

These are the first formal objections to fracking from the RSPB. The drilling proposal at Singleton, Lancashire, is less than a mile from an internationally important area for pink-footed geese and whooper swans.

The society is also protesting against drilling at Balcombe, West Sussex - the focus of large summer protests - on the grounds that no environmental impact assessment has been carried out.

In both written objections the charity also says that increasing oil and gas use will reduce the UK's chances of meeting climate change targets.

Harry Huyton, head of climate and energy policy at the RSPB, said: "Balcombe hit the headlines as the battleground in the debate over fracking. The public there are rightly concerned about the impact this will have on their countryside.

"We have looked closely at the rules in place to police drilling for shale gas, and they are simply not robust enough to ensure that our water, our landscapes and our wildlife are safe."

Huyton also said that Cuadrilla's proposed operations in Lancashire could damage populations of geese and swans. "This area is protected by European law because it is so valuable for wildlife and the company has done nothing to investigate what damage their activities could do to it," he claimed.

The RSPB says that Government figures show the potential for 5,000 sites and a total of up to 100,000 wells in the north of England.

"The idea that these will have a benign impact on the countryside is very difficult to believe," said Huyton.

"This is all in too much of a hurry – the regulations simply aren't in place," he added. "If Cuadrilla did their assessments and found there wasn't a serious concern, we'd accept that. But no assessments have been done."

The group's other main objection is that a push for shale gas will divert funds and attention from the UK's previously stated goal of having an electricity system almost completely powered by ‘clean' energy by 2030.

This piece was originally scheduled for publication on 20 September 2013 but the Lighthouse Keeper was unable to access his blog due to Chinese internet restrictions whilst on assignment in Beijing and so has been published retrospectively

Cameron talks up fracking

This week the Prime Minister David Cameron suggested in a national newspaper article that local communities will become richer and we will all see reduced energy bills if the UK embraces a shale gas revolution.

There was no discussion of other issues (such as reducing our dependence on energy) and only a cursory dismissal of some of the very real concerns that fracking for shale gas might cause – irreparable damage to our countryside, pollution in the ground and atmosphere, and severe water shortages.

But different stories are beginning to emerge from the lands of eastern Europe and even America (more of which later) where the mining of shale gas has been seriously on the agenda for a while longer.

Take Poland for instance. The Prague Post – the Czech Republic’s English-language newspaper - reported back in June that the Polish government had announced plans to improve regulation and postpone tax collection on shale gas production in the hopes of encouraging investors to continue their explorations for the fuel.

A somewhat strange move if things were going so well – but then something had to be done following the unexpected withdrawal of three North American companies from explorations in the country.

Doubts over the estimated scale of Poland's shale gas reserves began surfacing more than a year ago after ExxonMobil announced plans to cease exploration in the country, citing disappointing test drilling results.

The withdrawal last month of two more multi-nationals - Talisman Energy of Canada and US oil giant Marathon - has now cast more uncertainty over the commercial viability of shale gas in Poland.

Marathon stated this summer that it had decided to end its Polish operations after ‘unsuccessful attempts to find commercial levels of hydrocarbons’.

Talisman, meanwhile, announced the sale of its Polish operations to the Irish-based San Leon Energy group, which is presumably going to tackle things in a different way - or perhaps with the ‘luck of the Irish’ where the talisman failed.

Exploration company executives had complained that complicated environmental regulations in Poland, along with a lack of legislation on shale gas, has also caused difficulties. Some foreign firms also found the legal framework for shale gas investment in the country to be less straightforward than expected.

Shale gas mania was triggered in Poland when a report by the United States Energy Information Agency estimated the country to have untapped reserves of some 5.3 trillion cubic meters - enough to meet domestic demand for 300 years.

Polish leaders – quick to jump on the fast moving shale gas gravy train (and which government wouldn’t?) soon made shale gas exploration a priority, voicing ambitions that the country could surpass its own domestic requirements and even become a gas exporter.

The country's policy-makers had high hopes that shale gas would provide Poland with a boost to its slowing economy and help reduce its high unemployment rate of around 14 percent.

The strategy was also touted as an energy diversification tool that would lower dependence on Russia's Gazprom, which currently supplies around two-thirds of Poland's gas at some of the highest prices in Europe.

While the initial excitement and unrealistic optimism over a possible shale gas bonanza is fading, some companies remain hopeful. Lower shale gas projections arrived at by the government more recently might still be enough to meet Polish domestic demand for some 70 years and Chevron continues its explorations in Poland, currently drilling a fourth well with two more planned later this year.

The government is now working on a raft of new regulations that it hopes will prevent further departures of these firms, whose expertise and prior experience in North America is thought to be vital.

New regulations will also give North American companies the same rights as EU companies in in the belief their expertise will allow Poland to replicate the recent US ‘energy revolution’ brought about by (racking (hydraulic fracturing ).

The word ‘desperation’ comes to mind and some experts believe that attracting US companies may not be the answer because their techniques may not be as transferrable as they hoped.

So far, Poland has granted more than 111 permits to at least 30 investors, many of them from the United States and Canada, to explore what its government has touted as Europe's richest shale gas deposits.

Thirty-nine wells were planned for 2013, but according to Environment Ministry data only two had been drilled by May this year. Some 300 wells are thought to be needed to determine whether Poland could realistically be self-sufficient.

Back in the UK, in a week when the big six energy companies touted likely increases in the price of energy for the autumn, David Cameron chimed in with a lightweight piece suggesting the UK public should accept fracking and claiming the controversial method of extracting gas will attract ‘real public support’ once the benefits are explained.

Writing in the Daily Telegraph, the Prime Minister said the process would not damage the countryside and would cause only ‘very minor change to the landscape’.

His whimsical PR pros, penned in a let’s ‘dispel the myths’ style, added no depth to the case for fracking and only served to highlight once again the UK government’s inexcusable lack of a long term energy policy and failure to manage properly some of the big issues that really matter.

In demanding that shale gas drilling take place across the country, Cameron is playing a high-stakes political game based more on wishful thinking rather than hard economic analysis.




The Lighthouse Keeper is written by Clive Simpson - for more information, commission enquiries or to re-publish any of his articles click here for contact information

Fracking hell!

So far the market town of Spalding in South Lincolnshire seems to have escaped the rush for shale gas. But the town already has one gas fired power station dominating the flat Fenland landscape, with another one to be built alongside it on the way. And if our local MPs have anything to do with it fracking for shale gas won't be far behind...

For some UK Government ministers and MPs - including Spalding's John Hayes (South Holland and The Deepings) and Peterborough’s Stewart Jackson - the enthusiasm for mining shale gas is in part fuelled by a passionate hatred of wind power based largely on the latter’s aesthetic impact on local landscapes.

Blinkered by what they see as a golden economic opportunity, it is perhaps not surprising that such MPs, along with the coalition Government in general, assume the extraction of shale gas offers a palatable and commercially attractive energy source.

Fracking - short for hydraulic fracturing - involves drilling deep underground and releasing a high-pressure mix of water, sand and hundreds of chemicals to crack rocks and release gas stored inside.

Preparing the groundwork for last week’s Government tax-break announcement for fracking prospectors, Jackson used his weekly column in the Peterborough Telegraph (5 July) to promote the shale gas case.

He wrote: "Shale gas exploration gives us another once in a lifetime opportunity with clean, cheap, plentiful and safe shale gas - rather than the lights on the blink and half a million glass panels around Newborough [near Peterborough] and windfarms to boot!

"Government has wised up to the economically damaging Liberal Democrat-inspired green policies costing the UK tens of billions of pounds," he declared.

Hayes, a former energy minister, has clearly stated his opposition to development of many forms of renewable energy and has lent his support to numerous anti-windfarm campaigns across his South Holland constituency, often on the grounds that they would ‘spoil’ the local view and amenity.

The wind power industry has had to deal with a broad range of challenges, particularly visual impact. So far this doesn’t seem to be on the shale gas radar.

But type ‘shale gas rig’ into an internet search engine and select ‘images' to see a taster of what might actually be in store for any rural community where drilling might take place.

We're likely to see the industrialisation of tracts of the British countryside, gas flaring in the home counties and a steady stream of trucks carrying contaminated water down rural lanes.
 

 
Another problem with fracking for gas is that the drilling process releases a host of undesirable by-products into the atmosphere, including large quantities of methane.

Strategic opposition to the development of shale gas in the UK rests on the fact that such large-scale exploitation is not compatible with meeting our targets to reduce greenhouse gas emissions.

Analysis by Carbon Tracker estimates that if we are to contain greenhouse gas emissions at a level that preserves a reasonable chance of remaining below the 2C of global average temperature increase (considered a critical danger threshold), then four-fifths of known fossil fuel reserves need to remain locked in the ground.

The official Committee on Climate Change has warned that in the context of the UK’s legally binding climate-change targets, a new ‘dash for gas’ should be Plan Z, not Plan A.

All this makes for a risky backdrop to shale gas development in this country, which the Government seems determined to ignore in its public pronouncements.

The industry will require major investment to get going and investors will need to be patient in getting a return, as going through the planning process and exploratory drilling will take years of expensive development before commercially useful quantities of gas are produced.

And no one really knows how much of gas can be got out, or how much that will cost both financially and to the environment at large.

Production rates for the UK are expected to be lower than in the US because of lower pressure in UK basins, while costs might be higher because of demanding local environmental standards and the proximity of populated areas.

Add to that the expectation that it will not in reality reduce energy prices, then the case for shale gas looks a lot more risky than proponents and our Government suggest.

But where there are potentially large amounts of money to be made there are also vested interests at stake.

So far the Prime Minister David Cameron has managed to dodge the claim that he bowed to pressure from lobbyists such as the Tory election strategist Lynton Crosby over the Government decision to give tax breaks for fracking.

Last week The Independent newspaper detailed the work that Mr Crosby's lobbying firm, Crosby Textor, does on behalf of companies promoting the controversial method of extracting shale gas.

The shale gas narrative and tax break presented by George Osborne last week is also, in part, based on the fear of being ‘left behind'.

Osborne’s Environment Minister colleague Owen Paterson (who dismayed climate scientists by expressing doubts as to the human impact on the climate system) used the same phrase in his promotion of GM crops.

Both Osborne and Paterson say that a technological revolution based on government getting out of the way of progress is what we need. They couldn't be more wrong.

Where we are being left behind is in the development of new environmental technologies, including renewables and carbon capture. If we are to keep up in these areas, perhaps with some gas in the mix, it requires clear policy.

You can get away with small government on some issues, but not on energy. The UK needs a clear framework and strategy that sets out how we will secure our energy needs while meeting environmental goals. Right now we don't have that.

The dash for shale - with all its inherent risks and uncertainties - ignores the massive growth potential of the renewable sector and the vital long-term goal of reducing carbon emissions.

Look at Germany, for instance. Some 26 per cent of its energy now comes from renewable sources. And its renewables industry is growing because it gets tax breaks. Germany's economy is larger, more successful and infinitely more resilient than the UK's. So who is right?

The current UK Government - initially hailed by Cameron as ‘the greenest ever’ - is a liturgy of broken promises and short-term opportunism. When it comes to energy policy and the long-term future of our country it seems that little George has no idea. And neither has little Britain.


The Lighthouse Keeper is written by Clive Simpson - for more information, commission enquiries or to re-publish any of his articles click here for contact information