Why fracking bribes won’t work

In a desperate attempt to sell more dirty energy to a sceptical public, the UKGovernment is proposing cash bribes to households impacted by fracking.

INEOS has announced the first delivery of US shale gas to its Grangemouth petrochemical plant next month and used this as an opportunity to, yet again, make the case for exploiting indigenous supplies. Unlike the USA there is no commercial shale gas production in the UK as yet, although approval has been given for a site in North Yorkshire. In Scotland, development was halted by the 2015 moratorium, while expert reports are prepared.

The UK government has launched a consultation on plans to distribute payments to the communities affected by the drilling. They are proposing a Shale Wealth Fund, which would distribute 10% of all shale gas tax revenues to local communities. Unlike traditional planning gain, the UK government proposed that payments could be made to households directly – a straightforward cash bribe.

The problem for the government is that even cash bribes might not deliver public support for such a controversial technology. Surveys undertaken by the Department for Energy and Climate Change in April, showed public support for fracking stood at only 19%, while 31% were explicitly opposed.

In a more recent YouGov poll since the government announcement, only a third of those surveyed said they would support fracking in their local area “if individual households received a direct payment in exchange” of up to £10,000. More than 43% said they were opposed, 26% of them “strongly”. Another quarter said they didn’t know whether they supported it or not. The greatest opposition is in Scotland where 51% are opposed. Clearly the INEOS ‘summer offensive’ hasn’t had much impact!

Liz Hutchins for FoE said: “The government are desperate to show support for shale gas exploration, and recent headlines that offered cash payments were meant to bolster, not diminish, support. But when you look at the details of the scheme, any cash for households would only be after shale exploration, and would be derived from taxation on profits. It all seems a pretty unlikely and distant proposition. What we do know is that the more people learn about fracking and what it could mean for their health and environment, the more opposed they could be. And it’s clear from this survey that they haven’t been fooled by the government’s latest bribe.”

Joseph Dutton from the University of Exeter is even sceptical that significant household payments can be delivered. He argues: “that the ultimate value of the fund and therefore the payments it would distribute is wholly dependent on the tax regime in place when production begins, and the revenue a company derives from a shale gas site once costs are taken into account. Until actual gas production begins, it’s impossible to estimate how much tax the operating company will pay – or even if the shale industry would be a success in the UK at all.”

He also makes the point that as the price of oil and gas has plummeted in the last two years, the economic case for developing potentially expensive shale gas deposits has weakened.

The Ferret has highlighted further concerns over another unconventional gas technology, underground coal gasification (UCG). A new report says plans to set fire to coal under the seabed at up to 19 sites around the UK (including east central Scotland) would cause massive climate pollution, groundwater contamination and toxic waste. Cluff Natural Resources has licences for nine potential undersea coalfields amounting to 640 square kilometres, valid until 2018-2020. Two are off the coast near Durham, two off Cumbria, two off Wales and three in the Firth of Forth in Scotland.

Friends of the Earth Scotland says: “Given what we know about this technology’s terrible history around the world, Cluff’s plans to burn coal seams off English coasts are utterly reckless. The UK Government should stop this industry now before Cluff gets his foot in the door.”
So, we have had PR offensives, ministerial lobbying and now bribes to persuade us that these technologies make sense. The problem for the industry is that the public isn’t convinced on safety grounds. The UK is a much more crowded space than the UK, with less room if things go wrong, as they have in the US. It also assumes that unconventional gas is economically viable. Even if it is, should we really be relying on another dirty fossil fuel when renewable alternatives are available?

For now, the answer is no on all counts.

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  • Posted in: Gas

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