The UK is trying to replicate the US gas boom. It will fail

Tax incentives won’t help.

Chancellor George Osborne’s announcement last week that the UK will offer what he is calling the world's "most generous" tax relief regime, of 30 per cent, down from a typical 62 per cent, to hydraulic fracturing companies, has sent a clear signal that it’s not a case of if we should frack in the UK, but when.  

In the US the hydraulic fracturing revolution has seen gas prices tumble from around $14 per million BTU in 2008 to around $3 in December 2012 ( a fall of around 90 per cent) and according to the International Energy Agency, the US could be independent in oil and gas by 2035.

This is something Osborne says he wants to replicate; however, his enthusiasm may be premature.

The British Geological Survey estimates there may be 1,300 trillion cubic feet of shale gas present in the north of England– but it is important to remember this is as yet unproven and we don’t know how much of it is actually accessible.  As yet, companies have only "fracked", as it is commonly known, a few wells; a process which involves removing natural gas trapped in shale formation deep underground by mixing gallons of water with a cocktail of chemicals and injecting them into the earth.

With a 50 per cent tax break Osborne seeks "to create the right conditions for industry to explore and unlock that potential [of shale gas]," as he says. However, though a bonus for shale gas companies if they do succeed in extracting gas, it isn’t going to make production come any quicker or current conditions for the industry any better.

Companies have already said it is not taxation that is putting them off investment but planning permissions and public resistance.

This is because unlike the US, which is a vast sprawling country, the UK is relatively small and compact meaning fracking will inevitably take place much closer to communities, resulting in a high possibility of public opposition. The strong aversion to wind farms in the UK’s countryside gives you a clue as to the opposition fracking companies are likely to encounter. In 2012 approvals for onshore wind farms were down to 35 per cent – in the same year a Guardian poll said opposition had tripled – from 70 per cent in 2008.

Fracking wells won’t only be an eyesore for communities but there are other issues, such as a small risk of earth quake tremors, water contamination and methane leaks – in Pennsylvania, USA, residents complained of finding methane in their water, along with up to 27 other chemicals.

The government has said fracking will boost local communities with jobs and that they will give them £100,000 per well and up to 1 per cent of all revenues from production, but will this be enough to temper possible widespread resistance?

In the US, farmers, in often economically repressed areas, can directly lease their land to fracking companies agreeing a fee and often a royalty payment on top, meaning they have much more of an incentive to accept fracking.

If the government is hell bent on Fracking, engaging with communities and getting them onside with rock solid incentives and reassurance of strict regulation is likely to speed things along and be more beneficial for everyone in the longer run than slapping a tax break on profit not yet earned.

Also, as the UK’s shale gas reserves are as yet unproven, offering a deal similar to what Norway offers to oil and gas exploration companies – a promise of a 78 per cent refund of cost if a company drills a dry well – might show more confidence and incentive to fracking companies, if the government is so sure the UK can replicate the US’s success. But as it stands fracking is still a long way from fruition, and, if it ever does get off the ground, it is still uncertain it will match the shale gas boom the US have seen.

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Photograph: Getty Images

Heidi Vella is a features writer for Nridigital.com

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How to think about the EU result if you voted Remain

A belief in democracy means accepting the crowd is wiser than you are as an individual. 

I voted Remain, I feel sick about this result and its implications for what’s to come. But I’m a believer in democracy. This post is about how to reconcile those two things (it’s a bit unstructured because I’m working it out as I go, and I’m not sure I agree with all of it).

Democracy isn’t just fairer than other systems of governance, it’s smarter. It leads to better decisions and better outcomes, on average and over the long run, than countries that are run by autocrats or councils of wise men with jobs for life. It is simply the best way we have yet devised of solving complex problems involving many people. On that topic, if you’re not averse to some rather dense and technical prose, read this post or seek out this book. But the central argument is that democracy is the best way of harnessing ‘cognitive diversity’ — bringing to bear many different perspectives on a problem, each of which are very partial in themselves, but add up to something more than any one wise person.

I don’t think you can truly be a believer in democracy unless you accept that the people, collectively, are smarter than you are. That’s hard. It’s easy to say you believe in the popular will, right up until the popular will does something REALLY STUPID. The hard thing is not just to ‘accept the result’ but to accept that the majority who voted for that result know or understand something better than you. But they do. You are just one person, after all, and try as you might to expand your perspective with reading (and some try harder than others) you can’t see everything. So if a vote goes against you, you need to reflect on the possibility you got it wrong in some way. If I look at the results of past general elections and referendums, for instance, I now see they were all pretty much the right calls, including those where I voted the other way.

One way to think about the vote is that it has forced a slightly more equitable distribution of anxiety and alienation upon the country. After Thursday, I feel more insecure about my future, and that of my family. I also feel like a foreigner in my own country — that there’s this whole massive swathe of people out there who don’t think like me at all and probably don’t like me. I feel like a big decision about my life has been imposed on me by nameless people out there. But of course, this is exactly how many of those very people have been feeling for years, and at a much higher level of intensity. Democracy forces us to try on each other’s clothes. I could have carried on quite happily ignoring the unhappiness of much of the country but I can’t ignore this.

I’m seeing a lot of people on Twitter and in the press bemoaning how ill-informed people were, talking about a ‘post-factual democracy’. Well, maybe, though I think that requires further investigation - democracy has always been a dirty dishonest business. But surely the great thing about Thursday that so many people voted — including many, many people who might have felt disenfranchised from a system that hasn’t been serving them well. I’m not sure you’re truly a democrat if you don’t take at least a tiny bit of delight in seeing people so far from the centres of power tipping the polity upside down and giving it a shake. Would it have been better or worse for the country if Remain had won because only informed middle-class people voted? It might have felt better for people like me, it might actually have been better, economically, for everyone. But it would have indicated a deeper rot in our democracy than do the problems with our national information environment (which I accept are real).

I’m not quite saying ‘the people are always right’ — at least, I don’t think it was wrong to vote to stay in the EU. I still believe we should have Remained and I’m worried about what we’ve got ourselves into by getting out. But I am saying they may have been right to use this opportunity — the only one they were given — to send an unignorable signal to the powers-that-be that things aren’t working. You might say general elections are the place for that, but our particular system isn’t suited to change things on which there is a broad consensus between the two main parties.

Ian Leslie is a writer, author of CURIOUS: The Desire to Know and Why Your Future Depends On It, and writer/presenter of BBC R4's Before They Were Famous.