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UK fracking ban lifted amid energy price crisis

The British government has reversed its ban on fracking as concerns over soaring energy bills deepen, but serious questions over the industry’s viability remain unanswered.

LONDON (CN) — New British Prime Minister Liz Truss has announced that her government will lift a ban on hydraulic fracturing for shale gas, as part of the United Kingdom's emergency response to an energy price crisis.

The technique known as fracking was banned in the U.K. in 2019 due to doubts surrounding its environmental and economic viability, as well as in response to long-running public opposition. However the new prime minister, who was appointed on Tuesday, had signaled her intention to explore all new avenues of energy generation, as Britain tries to stabilize its economy amid rampant inflation primarily driven by rising gas prices.

Announcing the move in the House of Commons on Thursday, Truss said, “We will end the moratorium on extracting our huge reserves of shale, which could get gas flowing in as soon as six months, where there is local support.”

“As a result of steps on shale and nuclear and the acceleration of renewables, I am today setting a new ambition for our country," she added. “Far from being dependent on the global energy market and the actions of malign actors, we will make sure the U.K. is a net energy exporter by 2040.”

Members of the British shale gas industry made clear their delight upon hearing the decision.

"Today's announcement sets the foundation for us to move towards gas self-sufficiency, and not be reliant on the whims of dictators, or the vagaries of international supply lines and prices," said Francis Egan, chief executive of extraction firm Cuadrilla, in a statement.

He added, "Without the strong measures set out today, the U.K. was set to import over two-thirds of its gas by the end of the decade, exposing the British public and businesses to further risk of supply shortage and price hikes down the line."

The government imposed a moratorium on fracking in November 2019, in response to a series of earthquakes over previous months associated with the drilling. A review by regulators was prompted by a 2.9-magnitude quake at one drilling site, which led to widespread property damage in the English seaside town of Blackpool. At the time, the U.K.’s Oil and Gas Authority concluded it was not possible to predict the size or timing of earthquakes that could be caused by the extraction of shale gas.

The earthquakes followed years of local opposition and civil groups campaigning against the practice. Almost a decade of sustained direct action saw local activists and environmental protesters regularly blocking access roads to drilling sites and locking or gluing themselves to critical machinery. The extent of the policing operation required to maintain drilling frequently became so expensive for local authorities that some police forces eventually advised extractors to conclude their operations.

The economic rationale for shale gas extraction in the U.K. has also been questioned. While the industry has been an economic success story in the U.S., geological formations make British shale gas much harder to extract, and it is also unclear whether the country has anywhere near the quantity of reverses required to have any noticeable effect on energy prices.

The final shale gas wells had been due to be sealed earlier this year, bringing the U.K.’s fraught relationship with fracking to a conclusive end. However, the sealing of wells was suspended by the government at the last minute, following the Russian invasion of Ukraine.

Under previous Prime Minster Boris Johnson, the decision on whether to lift the ban was left largely unanswered, due to divisions in government over the move. But Truss was clear throughout the Conservative Party leadership campaign that she would seek to do so.

The decision to resume shale gas exploration puts the government's new Chancellor Kwasi Kwarteng in an awkward position, due to his previous public opposition to lifting the fracking ban.

In February of this year, Kwarteng, who was then business secretary with responsibility for energy policy, stated that those who called for the return of fracking “misunderstand the situation.”

“The U.K. has no gas supply issues,” Kwarteng tweeted at the time. “The situation we are facing is a price issue, not a security of supply issue. Put simply: we have lots of gas from highly diverse and secure sources, but it is very expensive.”

He said the wholesale price of gas quadrupled in the U.K. and Europe, and fracking wouldn't materially affect the wholesale market price.

“Remember: renewables are cheaper than gas. U.K. renewable capacity is up 500% since 2010, but way more to do,” he said.

He later added the even if the ban were lifted “it would take up to a decade to extract sufficient volumes, and come at a high price to communities and our precious countryside.”

Kwarteng now finds himself the second most senior member of a government that is directly contradicting his previous position. The reversal of his stance was not lost on opposition politicians during parliamentary discussion on Thursday.

Labour Party leader Sir Keir Starmer drew attention to a document produced by Kwateng’s previous government department, which described the idea that increasing U.K. gas production could influence wholesale gas prices as a “myth.”

Green Member of Parliament Caroline Lucas concurred with Starmer’s view, stating simply that Kwarteng was “right then, wrong now.”

The resumption of shale gas exploration in the U.K. is set to be accompanied by a broader expansion of oil and gas production in the North Sea. Truss said the government will issue more than 100 new oil and gas extraction licenses to firms.

Along with the announcement of shale, the expansion of fossil fuel extraction in the North Sea poses serious questions as to whether Britain remains committed to its United Nations-mandated carbon emission reduction plan.

Former Prime Minister Johnson was regarded as something of a convert to the climate agenda, after his government hosted the U.N.’s climate conference in 2021. And Kwarteng, the new chancellor, was previously regarded among the most committed in the British cabinet to the government's net-zero carbon emissions plan.

But it is less clear that Truss shares these commitments. She cut subsidies for solar energy during her previous stint as environment secretary, and frequently promised during the prime minister campaign to suspend funding for green initiatives.

In particular, her appointment of the divisive Jacob Rees Mogg, a climate skeptic, as business secretary has worried environmentalists. In the U.K., the business secretary also oversees the country’s energy and climate strategy.

“Anyone who thinks that bringing back fracking will solve the energy crisis is living in cloud cuckoo land. Fracking is a failed industry that’s unpopular and unfeasible," Friends of the Earth said in a statement Thursday in response to the announcement on shale gas extraction, “In the decade before it was banned, the industry only managed to frack two sites, and both were aborted due to earthquakes.”

The group added, “By breaking its manifesto promise on fracking, the government is showing that it’s completely out of touch with communities across the country. They have already defeated fracking once and they’re ready to do so again.”

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