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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Heidi Vella is a features writer for Nridigital.com

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Why the Liberal Democrats by-election surge is not all it seems

The Lib Dems chalked up impressive results in Stoke and Copeland. But just how much of a fight back is it?

By the now conventional post-Brexit logic, Stoke and Copeland ought to have been uniquely inhospitable for the Lib Dems. 

The party lost its deposit in both seats in 2015, and has no representation on either council. So too were the referendum odds stacked against it: in Stoke, the so-called Brexit capital of Britain, 70 per cent of voters backed Leave last June, as did 62 per cent in Copeland. And, as Stephen has written before, the Lib Dems’ mini-revival has so far been most pronounced in affluent, Conservative-leaning areas which swung for remain. 

So what explains the modest – but impressive – surges in their vote share in yesterday’s contests? In Stoke, where they finished fifth in 2015, the party won 9.8 per cent of the vote, up 5.7 percentage points. They also more than doubled their vote share in Copeland, where they beat Ukip for third with 7.3 per cent share of the vote.

The Brexit explanation is a tempting and not entirely invalid one. Each seat’s not insignificant pro-EU minority was more or less ignored by most of the national media, for whom the existence of remainers in what we’re now obliged to call “left-behind Britain” is often a nuance too far. With the Prime Minister Theresa May pushing for a hard Brexit and Labour leader Jeremy Corbyn waving it through, Lib Dem leader Tim Farron has made the pro-EU narrative his own. As was the case for Charles Kennedy in the Iraq War years, this confers upon the Lib Dems a status and platform they were denied as the junior partners in coalition. 

While their stance on Europe is slowly but surely helping the Lib Dems rebuild their pre-2015 demographic core - students, graduates and middle-class professionals employed in the public sector – last night’s results, particularly in Stoke, also give them reason for mild disappointment. 

In Stoke, campaign staffers privately predicted they might manage to beat Ukip for second or third place. The party ran a full campaign for the first time in several years, and canvassing returns suggested significant numbers of Labour voters, mainly public sector workers disenchanted with Corbyn’s stance on Europe, were set to vote Lib Dem. Nor were they intimidated by the Brexit factor: recent council by-elections in Sunderland and Rotheram, which both voted decisively to leave, saw the Lib Dems win seats for the first time on massive swings. 

So it could well be argued that their candidate, local cardiologist Zulfiqar Ali, ought to have done better. Staffordshire University’s campus, which Tim Farron visited as part of a voter registration drive, falls within the seat’s boundaries. Ali, unlike his Labour competitor Gareth Snell and Ukip leader Paul Nuttall, didn’t have his campaign derailed or disrupted by negative media attention. Unlike the Tory candidate Jack Brereton, he had the benefit of being older than 25. And, like 15 per cent of the electorate, he is of Kashmiri origin.  

In public and in private, Lib Dems say the fact that Stoke was a two-horse race between Labour and Ukip ultimately worked to their disadvantage. The prospect of Nuttall as their MP may well have been enough to convince a good number of the Labour waverers mentioned earlier to back Snell. 

With his party hovering at around 10 per cent in national polls, last night’s results give Farron cause for optimism – especially after their near-wipeout in 2015. But it’s easy to forget the bigger picture in all of this. The party have chalked up a string of impressive parliamentary by-election results – second in Witney, a spectacular win in Richmond Park, third in Sleaford and Copeland, and a strong fourth in Stoke. 

However, most of these results represent a reversion to, or indeed an underperformance compared to, the party’s pre-2015 norm. With the notable exception of Richmond’s Sarah Olney, who only joined the Lib Dems after the last general election, these candidates haven’t - or the Lib Dem vote - come from nowhere. Zulfiqar Ali previously sat on the council in Stoke and had fought the seat before, and Witney’s Liz Leffman and Sleaford’s Ross Pepper are both popular local councillors. And for all the excited commentary about Richmond, it was, of course, held by the Lib Dems for 13 years before Zac Goldsmith won it for the Tories in 2010. 

The EU referendum may have given the Lib Dems a new lease of life, but, as their #LibDemFightback trope suggests, they’re best understood as a revanchist, and not insurgent, force. Much has been said about Brexit realigning our politics, but, for now at least, the party’s new normal is looking quite a lot like the old one.