Tuesday, September 19, 2023
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Britain considers lifting fracking ban amid soaring gas prices

A moratorium on fracking for shale gas has been in effect in the U.K. since 2019, with the final wells set to be plugged imminently. But the British government is split over a last-minute revival of the unpopular industry.

LONDON (CN) — The United Kingdom government is in discussions this week over an unlikely last-minute revival of the country’s troubled shale gas industry.

Two shale gas wells at the center of the U.K.’s exploratory efforts in the northern English county of Lancashire were due to be plugged this week, signaling a symbolic end to British efforts to emulate the U.S. boon in fracking for shale gas. However, in light of rising gas prices and Russian sanctions amid the Ukraine war, the government is said to be considering halting the plugging process – a matter that had been thought to be resolved.

Cuadrilla – the firm previously given licenses for onshore hydraulic fracturing in England – has urged the government to save the industry. In a statement this week, CEO Francis Egan highlighted said time is running out for any intervention, with an approaching deadline imposed by the regulator by which the wells at the Preston New Road site must be filled with concrete.

We have a rig contracted, waiting to travel to our site in Lancashire, costing dearly for every day it waits idle,” Egan said. “I urgently request the Business Department and the [Oil and Gas Authority] to formally withdraw its instruction to plug the wells. They should also put sensible protections in place to ensure that companies like Cuadrilla and others aren’t forced to suffer the risk and financial uncertainty of operating in a position where a government can keep changing its mind.”

"If we are serious about energy security, as a very basic first step we must not concrete-up these wells,” he added.

In the wake of the war in the Ukraine, the U.K. has signaled its intention to rapidly scale down oil and gas imports from Russia. Britain is considerably less reliant on Russian gas than most of Europe, but also has a high proportion of gas in its energy mix and so is particularly affected by wholesale gas prices. Last week, Prime Minister Boris Johnson compared Russian President Vladimir Putin to a drug dealer and accused him of blackmailing Europe by “feeding an addiction in Western countries to his hydrocarbons.”

In light of a burgeoning price crisis which has seen energy bills for average British households more than double, the government has launched a wide-ranging energy security review. But a proposal to revive fracking is likely to provoke considerable controversy in a country where the industry is decidedly unpopular.

A moratorium on onshore fracking has been in force since 2019, following a 2.9 magnitude earthquake at the Preston New Road site. It was the third and largest earthquake registered at the site. The indefinite suspension of activity came after the regulator said it was impossible to predict the size of tremors that could be caused by the drilling.

At the time, the government was criticized by opposition parties for failing to ban the practice outright and accused of electioneering, with the announcement being made 10 days before the U.K.’s general election. A previous moratorium had been placed on another site in Lancashire in 2011, after an earthquake led to property damage.

Other sites in the U.K. were abandoned after widespread public opposition made drilling operations unfeasible. In Balcombe, a village in West Sussex, Cuadrilla ceased exploratory work following consultation with the police due to a high volume of threats.

The Preston New Road site in particular became a focal point of public protest for almost a decade, with the local community and environmental campaigners regularly blockading access roads. The protests led to a policing operation that cost upwards of 13 million pounds ($17.2 million) and placed considerable strain on the Lancashire Constabulary’s resources.

The campaign to revive the industry is being a led by a group of rank-and-file Conservative members of parliament, or MPs, who have also questioned the government’s attempts to reduce carbon emissions to net zero by 2050.

“We are seeing the effects of high gas demand and limited supply in the international markets, pushing wholesale energy prices to historic highs. We hardly need to point out the risks of relying on other countries for our energy needs, especially those hostile to us," they wrote in a letter. “There seems little sense, on any environmental assessment, in importing gas and thereby reducing energy security, increasing risks of price volatility, adversely affecting our balance of payments and exporting jobs.”

They added, “It is no accident that American consumers pay a mere tenth of what we do for gas.”

The letter appears to have opened up divisions in the government. It was reported earlier in the month that Johnson does not think it makes sense to plug the wells in the context of the energy supply squeeze. Jacob Rees Mogg, an ally of the prime minister, registered his support for the industry. Downplaying the impact of earthquakes, Mogg said: "It does worry me that people hear about something on the Richter scale and they immediately think it's the San Francisco earthquake.”

However, the Business Secretary Kwasi Kwarteng, who is responsible for energy policy, has expressed skepticism towards the idea that domestic shale gas production would reduce prices for British consumers. In a tweet last month, Kwarteng wrote: “The wholesale price of gas has quadrupled in UK and Europe. Additional UK production won’t materially affect the wholesale market price. This includes fracking – UK producers won’t sell shale gas to UK consumers below the market price. They’re not charities.”

On Wednesday, Michael Gove, an influential government minister, publicly revealed that he was also unconvinced by the case for fracking. Speaking at an environmental function, he said, “The only way you can wean yourself off the addiction [to fossil fuels] is to diversify the sources of energy we have.”

Alongside the debate over the economic and environmental viability of fracking, there are political considerations for the U.K. government. Almost all of the constituencies where shale gas reserves are present are represented by Conservative MPs. The Conservative Party’s parliamentary majority is particularly reliant on narrowly won seats in northern England, where fracking is coincidentally most viable. Indeed, some campaigners claim that it was the opposition of local candidates to fracking that helped the party to win crucial marginal seats in the North. Reviving the industry therefore carries considerable electoral risk.

As such, it is the strength of local opinion that may once again prove fatal for the nascent industry, even if the government gives the go-ahead. Drilling has been firmly opposed in every location where it has been proposed. Unlike in the U.S., the U.K. does not have the geographic space to drill far away from population centers, while more complicated geological formations make earthquakes and water contamination more likely than they are across the pond.

Speaking to the Guardian, Tina Rothery, a veteran of the anti-fracking movement, argued that the intensity of protests would be even greater this time round. “We will give the fracking industry no peace. We don’t even need to gear back up. We’ve got boots by the door, we’re ready,” Rothery said.

“We’ve done it before, we’ll do it again,” she added.

Categories / Energy, Environment, Government, International

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