Tuesday, 13 August 2013

On Fracking, David Cameron and The North/South Divide.

Let's be absolutely clear. There is very little to object to about fracking. The issue is almost entirely political. Groundwater contamination can be avoided, and the threat of earthquakes is just grotesquely exaggerated. There are "seismic events" but they're equivalent to someone dropping a bowling ball out of a tree. Detectable, but unlikely to knock your house down. Any objections remaining are "general industrial" objections to plant and machinery moving about. But fracking plants aren't particularly big, or noisy and when plumbed into a grid, don't require much in the way of plant moving about.

The environmental benefits are mainly from replacing coal. Coal is dirty, and produces more particulates and sulphur (things that actually destroy lungs and trees) than gas. Per unit of energy, it also produces more carbon dioxide than gas at the power station. One of the objections to fracking is that leaks of Methane from the process enter the atmosphere. These leaks can almost entirely dispel any benefit to Greenhouse emissions as Methane is a far more potent Greenhouse gas than Carbon Dioxide. However CO2 accumulates in the Atmosphere, whereas methane breaks down quickly. EPA estimates of leaks range from 2% (at which level there are clear greenhouse benefits to Gas) to 14% (at one rig in Utah, which appeared to be an outlier).

Methane leakage is a regulatory and engineering problem. It isn't fundamental to the technology.

Cameron thinks Fracking can reduce energy bills. Well he's half right. If the technology is adopted across Europe, then yes, it will but UK supply will be fed into a European gas network, and will unlikely be enough to significantly alter prices on its own. What will happen is that taxes will be levied on production and the majority of the benefit will flow to the exchequer. Furthermore, the balance of trade will improve, probably strengthening Sterling as we once again become an energy exporter. This will help to reverse the slide in living standards as imports will become cheaper again.

No-doubt Labour, gifted Lord Howell's remarks about the "desolate" North East being suitable for Fracking, then rowing back by saying he meant the North-West (well that's OK then...) will make this about a posh, southern "them" doing fracking to the poor, benighted north. Hence Cameron pointing out that much of the shale is in the South East of England, and his (neighbouring) constituencies had better get used to it.

Fracking. It may make your Gas bill a bit lower, but the main effect will be on helping to close the fiscal gap, reducing the pressure on the rest of the economy, and generate cheap, relatively clean energy. The risks are grotesquely overstated by the sort of people who would object to anything, anywhere, ever.

The US Environmental Protection Agency is due to report in November. But they seem to be saying in their update report that most of the problems so far identified are exaggerated, and soluble. The potential benefits to the UK are far more than lower energy bills, and most of the objections are spurious. Let's just get on with it. Cameron's right. Let's frack, baby frack.


Anonymous said...

Unfortunately I see no credible regulatory incentive such as the threat of massive fines, (or even better pre paid environmental escrow bonds), that would incentivise the frackers to refrain from leaking, either greenhouse gasses, fracking fluids or wastewater.

I posit incentives matter.

Another problematic issue is how to force the frackers to properly line their wells (including "wastewater reinjection" to prevent groundwater contamination. Left to their own devices, they will just do it cheap and reap....

It's like burying any kind of waste, I see the need, please do it somewhere, but not in my water table if possible.

Open to persuasion, but fear our flawed governance system will prevent a bening outcome. I'd much rather the US went first, we wait ten years, the problems should just about become visisble by then.

Jackart said...

The EPA have shown the groundwater contamination problem is so GROTESQUELY overstated it's almost funny. The fact the main environmental problem, Methane leakage, is being ignored demonstrates the political, rather than scientific, nature of the opposition.

Yes. Let's wait ten years... and forgo 10 years of tax, cheap energy and growth. No. Let's go, now.

John Hornby said...

I find your position that because opposition to somethng is political it is invalid. A strange position indeed from someone who is essentially a political blogger.

I do not subscribe to the it's all ok probems can be regulted away view. Perhaps theoretically possible but not borne out by the evidence so far. The few test drillings round the country have already seen the "strict regulation"much vaunted by pro frackers either broken and or simply not enforced.

If you are to convince a sceptical public that fracking (i) is economic ( ii) can be beneficial (iii) is free from political coruption (both local and national.) then this is surely text book case on not how not to go about it.

Some relavant points to the above:
Cuadrilla have broken terms on all 3 of their drilling operations, lied to parliament and been censured by the ASA for false advertising regarding fracking.
The EA have so far not taken samples relying on the companies own monitoring. The EA advice that drilling should not be done near aquifers ( pre any exploratory drilling commencing) was "finessed" by the government.

The economic case is extremely weak. Estimates of recoverable gas are unproven and the rapid fall off in production by Shale wells vs conventional suggest production will not be the "decades" oft quoted in the press, (there is low level discussion in teh financial press as to hwo overly optimistic the fracking drive is.) . Therefore the projected tax take is just for the moment fantasy. This is before we get to the expectation that the whole 'Shale play' is nothing more than an Enron bubble. (Production costs are below market price), see Chesapeake Energy.

Political corruption, I am aquainted with the Balcome situation as I live near but not within the 2 mile radius the press have seemed to deem as "local"so my knowledge is focussedin there rather than Lancashire. (1) applications at Balcome were never discussed at the Parish Council or WSCC level. (2) Maude the local MP appointed Browne who has direct financial interest (Board of Cuadrilla + city energy funds) in direct contravention of the the ministerial code and claims no conflict of interest. Btw he sold his Balcome house before drilling started. (3)Neofeudalism is alive and well, 100 tied cottages on teh Balcombe Estate have been told in no uncertain terms to express no support or be involved in the opposition.(4) Cameron, Osbourbe, Clegg, cable all have links if not direct benificiaries to the industry.

This is before we get onto any discussion of environmental effects. Simply saying "it must go ahead" simply is not good enough, and does not address many valid concerns. The case is far from closed.

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