Fracking the UK
As Cuadrilla Resources and its corporate backers were getting excited by last week's announcement of significant quantities of shale gas in Lancashire, climate change campaigners were getting organised to resist an extraction process increasingly recognised as environmentally destructive. Meanwhile, in the House of Lords, an amendment to the Planning Act was tabled that, if passed, will help open the door for a “shale gas revolution”.
Last Wednesday, energy company Cuadrilla Resources announced its tests for shale gas had found an estimated 200 trillion cubic feet of gas “in place”, underground in Lancashire. What percentage of this can be classified as recoverable will not be known until some time next summer, when the exploration has been completed. However, Cuadrilla already has plans to drill five to seven wells in the next year and has suggested 400 wells could be created in Lancashire over the next nine years, rising to a possible 800 wells over the next 16 years.
Over-estimates are common in extractive industries, particularly as this can be necessary to attract initial investment to begin operations. In the US for example, recent estimates of the Marcellus shale reserves vary dramatically, with widespread suspicion of vested interests influencing the figures. However, Cuadrilla's announcement is still a major cause for concern.
Shale gas, natural gas trapped in bubbles within shale, is being promoted in the UK by companies and the government as a major energy source but there is an increasing body of evidence that suggests shale gas will substantially increase carbon emissions, perhaps even releasing more greenhouse gasses than other fossil fuels.
In addition, its extraction requires a hydraulic fracturing technique ('fracking'), which involves setting off small explosions along a borehole, then injecting a mixture of high-pressure water and chemicals to fracture the shale and release the gas. Fracking has been linked with poisoned water supplies, earthquakes, leaking gas and radioactive contamination when it has been used in other countries. The technique has been met with strong local opposition across the world, particularly following the success of the documentary film Gaslands.
Earlier this year, Cuadrilla had to suspend any fracking after two small earthquakes occurred near their previous site, also in Lancashire. Links between the injection of high pressure fluids and seismic activity have been confirmed by investigations in other parts of the world (see here and here). If the current investigation into the earthquakes concludes that the tremors were linked to Cuadrilla's fracking activity, the Department of Energy and Climate Change may be forced to halt the company's plans in Lancashire. The results of the investigation are expected to be submitted to DECC some time in mid-October, but as the 'independent experts' carrying it out were assembled by Cuadrilla, critics of fracking are not hopeful. In fact when announcing the results of its recent tests, the company said it hoped to recommence fracking in mid to late-October).
Concerns have also been voiced over minimal regulation of the industry. While the DECC, the Environment Agency (EA), and the Health and Safety Executive (HSE) monitor various aspects, none has overall responsibility; self regulation is largely relied upon.
Local and national opposition is building in the UK. The news of Cuadrilla's announcement came just days after a protest camp brought together over 100 people from around the country, including locals, on a site close to Cuadrilla's operations, near Hesketh Bank Village, to the south of Blackpool. Camp Frack, organised by a number of groups including Frack Off, REAF and Campaign against Climate Change, saw a weekend of organising meetings, workshops and film screenings and culminated in a march on the drilling rig.
When asked by Corporate Watch about future fracking sights in the UK, a DECC spokesman played down current plans for fracking, saying Coastal Oil and Gas was “moving forward with plans to drill exploration wells in South Wales, mainly for coal bed methane, as well as for shale gas” but that “they have no current plans for fracking.” According to DECC Coastal has also submitted a planning application “for a test site in Kent” and that fracking “could potentially be used if further phases of exploration are pursued.”
This could quickly change if an amendment to the Localism Bill tabled last week by Lord Berkeley, who has a history of opposition to legislation on climate change (see his record here), is passed. The amendment will include the hydraulic fracturing of underground rock in the “nationally significant infrastructure projects” contained in the 2008 Planning Act. These include energy, transport, water and waste projects above a certain size (see the present list here) and inclusion on this list would give applications for fracking projects a streamlined planning process, decided on by government ministers.
The Localism Bill and the proposed changes to planning regulations already contain measures to ensure local decisions conform to national policy, and the chance of future fracking projects gaining approval will be further increased if they are classed as "nationally significant" (see this Corporate Watch article for more on the changes to planning law).
It is unknown why Lord Berkeley has chosen to table this amendment at this particular time. When contacted by Corporate Watch, he was unavailable for comment.
If passed, the increasing number of investors putting their money into fracking and shale gas will be pleased. Much attention has been given to ex-BP boss Lord Browne's involvement in Riverstone, an energy investment company founded by two ex-Goldman Sachs bankers, which has invested heavily into Cuadrilla. The Lancashire find will also have been welcomed by AJ Lucas, the Australian drilling and infrastructure company that owns 41% of Cuadrilla. This year, AJ Lucas reported an $11.5m full-year loss and its shares have been suspended from trading on the Australian Stock Exchange since May). Lucas had announced a “major recapitalisation” of its business, which saw Hong Kong-based private equity firm Kerogen Capital investing $110 million in the company (see here).
The Lancashire exploration was a major factor in the deal, with AJ Lucas' director Martin Green saying Kerogen's investment would “introduce strength to the AJ Lucas balance sheet, minimise dilution for shareholders and allow AJ Lucas to maintain its shareholding in Cuadrilla.” This decision was announced just two days before the results of the Lancashire tests were announced. A bit of a fracking coincidence.
SEARCH THE WEBSITE
- 1 of 5
- next ›