Lord Howell’s return to the desolate North
Well, desolate and derelict actually
Alan Tootill has summed up what has actually been said by Lord Howell below and, beneath the hype it is quite interesting and revealing. The atmosphere at Mr Osborne’s next family gathering may be a trifle frosty.
On consideration, he has the right idea but comes to the wrong conclusion that fracking can be done at all in the UK.
Howell’s points in abbreviated form.
1. It has taken a long time in the US for fracking to mature. The only way it took off was by exempting fracking from clean water regulation.
2. The price of gas fell in the US to the point at which most of the drilling enterprises were losing money. Prices may pick up when exports start, but exports to Europe will be above our current price. It will be cheaper for Europe to import from Algeria, Angola, Qatar and Russia.
3. The rapid pick-up in the US only happened because of their vast and available infrastructure. The UK lacks the rigs and machinery, the widespread gas pipeline network, and roads to carry heavy transport. The US also has a different rights and royalties system with significant benefit accruing to landowners.
4. Where landowner incentives don’t work, the US industry only goes to areas which want fracking, well away from communities and in areas with no nature or environmental significance.
5. The US industry warns that in the UK it will take longer than suggested to get fracking going, that it will be a struggle to get costs down to commercial rates. A drop in oil price will deter investors and make shale operations uneconomic.
1. The government view is far too optimistic. The American experience can not be repeated here.
2. Huge infrastructure spending would be needed in the UK, with much new controversial legislation.
3. Bribing communities to accept fracking is a complete waste, and will lose rural votes on a major scale. Those who have visited the US know even after installation, “the thump of compressors can be sensed up to two miles away, as well as the whiff of diesel from the compressor pump engines”.
4. The argument is not against starting fracking, but doing it in the wrong places and misleading people about timing and effect.
“Trying to start in Southern England, and in the Home counties, or in rural and countryside areas anywhere, north or south, is a guarantee of longer delays, higher costs and increased hostility from both green left and countryside right.”
5. The claims that off-shore coal gasification may well be cheaper than on-shore fracking, and certainly far less controversial environmentally, should be carefully examined.