By Raúl Ilargi Meijer, editor-in-chief of The Automatic Earth, Cross posted from Automatic Earth
It’s a state of mind, a way of thinking and a belief system bordering on outright religion all in one. If it would be recognized as a religion, it would be the world’s biggest. Its followers and proponents hold that growth is a necessary element of survival, that technology is capable of solving all problems (especially those caused by mankind), and that the earth, nature, the living environment, is there for mankind to be exploited at will to achieve that growth. What puts it so close to being a religion is that it doesn’t like to question it own assumptions, let alone have them questioned by others, and anyone who does so anyway is ostracized.
One group of people that fits the description to a tee is the current British government. It would be hard to find anyone in the world outside of corporations involved who promote genetically modified food as fervently as Downing Street 10 and its crew. Likewise, there probably is no government that’s as convinced of the blessings of the shale and fracking industry as Prime Minister David Cameron and his lieutenants. Until recently, the Polish government might have given them a run for their money, but in Poland the entire industry essentially died in just the past few months.
Just last week, I wrote an article named Shale Is A Pipedream Sold To Greater Fools, a title which of course kind of gives away my position on the shale issue. Still, if you read it you can see that position isn’t primarily based on environmental issues; I simply looked at the numbers and started questioning the assumptions. Comments to the article said things like: “… the US has seen a huge rise in production of both oil and gas..!, but that wasn’t not my point: what I’m questioning is what’s extrapolated from today’s data, for tomorrow.
People assume all too easily that what is produced today will be also be produced well into the future, maybe because of how conventional oil and gas typically play out, but the 40% depletion rates for the average well at the Bakken play today, put together with the undoubtedly worsening future rates, for ever more, and inevitably ever more marginal, wells, don’t paint a rosy picture. It may all look fine today, but looking at the numbers I don’t see how it can still look good even a few years from now.
On to Britain. A few months ago, the Telegraph reported:
Chancellor George Osborne has pledged to make Britain’s tax regime the “most generous for shale in the world” as the Treasury pressed ahead with promised tax breaks for fracking firms. “I want Britain to be a leader of the shale gas revolution – because it has the potential to create thousands of jobs and keep energy bills low for millions of people,” Mr Osborne said.
A new tax allowance will see a certain portion of income from each shale gas “pad” — or production site – receive an effective tax rate of 30%, rather than 62%. The tax break is similar to those on offer to oil and gas explorers in technically-challenging and less economic fields in the North Sea, where they have been credited with revitalising interest. [..]
That made the cabinet’s position plenty clear, but apparently protest groups like Frack Off! have been so successful in drawing attention to their take on matters that today PM Cameron himself got involved, with a letter to the people, also published in the Telegraph. Let’s take a look at it. But first, here’s the parts of Britain the government considers fit for drilling:
And here’s Cameron this morning:
Fracking has become a national debate in Britain – and it’s one that I’m determined to win. If we don’t back this technology, we will miss a massive opportunity to help families with their bills and make our country more competitive. Without it, we could lose ground in the tough global race.
As with any advance in technology, fracking – drilling for so-called “unconventional” gas – has rightly drawn scrutiny. But a lot of myths have also sprung up. So today I want to set out why I support it – and deal with the worst of the myths at the same time.
Always nice to see that someone on one side of a debate says something like “a lot of myths have sprung up,” without feeling the need to specify which side of the debate these myths have come from. Me? I’m the Prime Minister, I don’t spread myths!!
First, fracking has real potential to drive energy bills down. Labour’s mismanagement of the economy means that many people are struggling with the cost of living today. Where we can act to relieve the pressure, we must.
Also great. It’s almost as if the other side’s failures in the past (Cameron’s been in power for over 3 years) make fracking today inevitable. Like the myths, classic political spin 101. (Don’t get me wrong, I have no more sympathy for Tony Blair or Gordon Brown then for Cameron, they’re all the same to me).
It’s simple – gas and electric bills can go down when our home-grown energy supply goes up. We’re not turning our back on low carbon energy, but these sources aren’t enough. We need a mix. Latest estimates suggest that there’s about 1,300 trillion cubic feet of shale gas lying underneath Britain at the moment – and that study only covers 11 counties. To put that in context, even if we extract just a tenth of that figure, that is still the equivalent of 51 years’ gas supply.
Now, now, now, the spin is starting to spin out of control here (and we’re only in the 3rd paragraph). Initial estimates for Poland, which came from the US Energy Information Administration (EIA), had to be slashed by over 90% within 2 years. So, “to put that in context”, the UK can count on less than 1% of the initial estimates.
This reservoir of untapped energy will help people across the country who work hard and want to get on: not just families but businesses, too, who are really struggling with the high costs of energy. Just look at the United States: they’ve got more than 10,000 fracking wells opening up each year and their gas prices are three-and-a-half times lower than here. Even if we only see a fraction of the impact shale gas has had in America, we can expect to see lower energy prices in this country.
Secondly, fracking will create jobs in Britain. In fact, one recent study predicted that 74,000 posts could be supported by a thriving shale-gas industry in this country. It’s not just those involved in the drilling. Just as with North Sea oil and gas, there would be a whole supply chain of new businesses, more investment and fresh expertise.
74,000 jobs. That’s the best Cameron’s spin doctor could do. What’s Britain’s working population? 40 million? Hmm.
Thirdly, fracking will bring money to local neighbourhoods. Companies have agreed to pay £100,000 to every community situated near an exploratory well where they’re looking to see if shale gas exists. If gas is then extracted, 1% of the revenue – perhaps as much as £10 million – will go straight back to residents who live nearby. This is money that could be used for a variety of purposes – from reductions in council-tax bills to investment in neighbourhood schools. It’s important that local people share in the wealth generated by fracking.
This must be my favorite line. You get to keep an entire 1% of what they take away from under your feet. No further comment, your honor.
The benefits are clear. But it’s also crucial to put to bed the myths. It has been suggested in recent weeks that we want fracking to be confined to certain parts of Britain. This is wrong. I want all parts of our nation to share in the benefits: north or south, Conservative or Labour. We are all in this together.
If neighbourhoods can see the benefits – and are reassured about its effects on the environment – then I don’t see why fracking shouldn’t receive real public support. Local people will not be cut out and ignored. We are issuing very firm guidance: firms looking to frack should make people aware of their plans well before they apply for a permit. Dialogue is important and if residents express specific concerns, then companies should take them on board. From my experience as a local MP, people tend not to oppose developments for the sake of it. But what they do object to is the idea that their neighbourhood should change without any say. We want people to get behind fracking, and a transparent planning process is an important ingredient.
Equally, we must make the case that fracking is safe. International evidence shows there is no reason why the process should cause contamination of water supplies or other environmental damage, if properly regulated. And the regulatory system in this country is one of the most stringent in the world. If any shale gas well were to pose a risk of pollution, then we have all the powers we need to close it down.
In fact, international evidence shows a whole of doubt when it comes to the safety of fracking. First off, oil and gas companies can inject any quantity of any chemical they see fit into fracking wells, and not even a judge can force them to reveal what they are. Proprietary. Business secrets. Second, there are far too many stories about water contamination to just be brushed off the table. That’s just irresponsible behavior, and certainly not fit for a government.
Third, there are also many reports of earthquakes, in which nobody has conclusively ruled out the effects of fracking and drilling. It may be hard to prove 100%, but that doesn’t mean there’s no danger. And with a government so obviously so eager to start fracking away, people may be forgiven for asking a question or two about its attention to safety standards.
It’s not as if Cameron calls for an open discussion, he makes very clear that he wants to start fracking, and he either thinks the discussion’s already happened or none is needed. All that stands in his way is what he labels a bundle of myths spread by a bunch of pesky protesters who want that open discussion with him. Unfortunately for him, it’s quite simply not true that “International evidence shows there is no reason why the process should cause contamination of water supplies or other environmental damage”. The evidence doesn’t conclusively show any such thing. There are serious doubts, and they should call for hesitancy, not hurry.
When all is said and done, though, one myth still remains – that fracking damages our countryside. I just don’t agree with this. Our countryside is one of the most precious things we have in Britain and I am proud to represent a rural constituency. I would never sanction something that might ruin our landscapes and scenery. Shale gas pads are relatively small – about the size of a cricket pitch. But more than that, similar types of drilling have been taking place for decades in this country without any real protest. The South Downs National Park remains one of the most beautiful parts of Britain, yet it has been home to conventional oil and gas drilling since the Eighties. The huge benefits of shale gas outweigh any very minor change to the landscape.
I like this one. See, Cameron claims no damage will be done to the British countryside, but really, he himself mentioned above that the US has “more than 10,000 fracking wells opening up each year“. Which could effectively dot the lovely English landscape with 10,000 times this each year:
So my message to the country is clear – we cannot afford to miss out on fracking. For centuries, Britain has led the way in technological endeavour: an industrial revolution ahead of its time, many of the most vital scientific discoveries known to mankind, and a spirit of enterprise and innovation that has served us well down the decades. Fracking is part of this tradition, so let’s seize it.
Now, Cameron is right to be worried about Britain’s energy future. With the North Sea fields largely gone and little else on the horizon, the country finds itself at the very end of a very long pipeline coming from Russia. Norway may help a little, but still.
That, however, doesn’t mean a hasty plunge into an adventure that has very uncertain future outcomes, both in energy production and in environmental effects, is recommendable. One would hope the historical lessons of using, first, too much wood and, second, too much coal, would at least have lingered in the public mind to some degree.
If the assumptions I draw from the data are anywhere near the truth, fracking will not be much help for Britain. While the environmental costs can be biblical. It would be at best a huge gamble, and is gambling really the best option? Here’s another look at the average Bakken well:
There’s zero reason to assume Britsh wells will do any better than that. So it will be drilling more and more wells, faster and faster, until more drilling is no longer economically viable. At that point, anyone want to take a stab at what will happen to energy prices?
King Arthur’s descendants have some hard choices to make when it comes to their economy, their society and their country as a whole, and it’s not as if they’re the only ones. Plunging economic prospects and energy supplies will not be easy to deal with. But letting people like David Cameron and the techno-happy religion he represents take the upper hand will only make it worse.
Why not wait a few more years, see what happens to the fracking industry in Bakken, in North Dakota? Demand more reports on the risks of water contamination and earthquakes, tell the industry there’s no way they can inject massive amounts of chemicals into British soil not even a government’s allowed to know. What if what happened to shale in Poland happens in Britain too, and the whole industry crumbles?
Then again, looking at the succession of Thatcher through John Major, Tony Blair, Gordon Brown to David Cameron, it seems safe to say that Britain has a political crisis at least as damaging to its future as its upcoming energy crisis.
The ice age is coming, the sun’s zooming in
Meltdown expected, the wheat is growing thin
Engines stop running, but I have no fear
‘Cause London is drowning, and I live by the river
The Clash, London Calling