If fracking is just oil which needs tax breaks to compete, what's the point?

If George Osborne likes expensive energy, at least renewables are carbon neutral.

George Osborne has announced that the fracking industry is to be taxed at significantly lower levels than the rest of Britain's extractive industries. The Guardian's Terry Macalister and Fiona Harvey report:

The Treasury has set a 30% tax rate for onshore shale gas production. That compares with a top rate of 62% on new North Sea oil operations and up to 81% for older offshore fields.

The oil industry has high levels of taxation because natural resources are considered collective property: the state owns all oil, gas, coal, gold and silver in the UK. That means that the oil companies ought to make a profit on the extraction of the oil, but not on the ownership of it. In practice, the distinction is long forgotten, but the high tax rates (and requirement for a license before exploitation begins) keeps the spirit alive.

The discount on shale gas production – or "fracking", as it's more commonly known – is to make what might otherwise be an uneconomical method of extraction slightly more business friendly. As such, the question which needs to be asked is whether we actually want this extraction to be business friendly or not. If, as seems likely, we already know about more conventional oil and gas than we could actually burn, then the business case for fracking is irrelevant: we should not extract those fuels, because we should not burn them.

Obviously, George Osborne, several years on from "vote blue, go green", doesn't particularly care about climate change, so that argument isn't going to hold. But there's a curious disconnect between the rhetoric around fracking, even from its supporters, and the practice here.

Fracking was supposed to be the end of peak-oil fears. Rather than running out of easily extractable oil, and being forced to switch to renewables, we can instead make the most of the rising oil price to use more expensive methods of extraction. That puts off the switch just a bit further into the future, and lets another generation of politicos bury their heads in the sand. (Alright, supporters of fracking don't include that last bit)

But if fracking needs financial support to be competitive with conventional oil then it's not really anything other than a more expensive way to dig up fossil fuels. And if we want more expensive forms of energy, we already have some which are carbon neutral and can't run out. Why would we want fracking against them?

Yoko Ono poses with an installation of hers. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

Getty
Show Hide image

Mister Lizard is not at home to bailiffs – he is eating salmon pâté by the river

Why is it that when people answer the question “What’s the worst thing anyone’s ever said to you?” in the Guardian questionnaire they never say, “You’ve been served”?

Summer’s nearly over. I look at the angle of the sunlight as it strikes the back terrace of the Hovel. I have been here long enough to use the terrace as a gnomon marking the passage of the year. I need, like the protagonists of Withnail and I, to go to the countryside to rejuvenate.

Last week when the Perseids were meant to be in full flow I asked frantically on a social medium for people to chum me along on a midnight walk on Hampstead Heath. In the end my new friends A— and her husband, C—, together with his new friend (whose initial I have forgotten, but he is Australian, if that helps), stepped up to the plate and after a couple at the Flask we went on a wide-ranging tour, which was a bust as far as seeing meteors – or my favourite tree – went, but was still hugely enjoyable. At about 2 am they packed me into an Uber and I went home happy, but I still felt as if I could do with more countryside.

The next few days made me even more anxious to get out of London. There are ominous signs that some serious roadworks are going to be taking place outside my bedroom window any day now. A bailiff came and rang the doorbell and I didn’t have the heart, or the nerve, to say that Nicholas Lezard was not at home at the moment and, is, in fact, on a walking tour of Patagonia now I come to think of it, due back some time next year. I just took the piece of paper into my hands as if it were a chicken come home to roost.

The previous day, presumably the same bailiff had come round and asked if Mr Lizard was in, and my housemate gallantly – and quite truthfully – said “no”. (Why is it that when people answer the question “What’s the worst thing anyone’s ever said to you?” in the Guardian questionnaire they never say, “You’ve been served”? Maybe it’s because they haven’t ever been.) In addition, as I said last week, the cleaning lady is on holiday and the Hovel is starting to look distinctly seedy.

So, then I get a call from a person who once featured quite prominently in this column, some time ago. This person is bored and wants me to go to his or her town and alleviate his or her boredom. This person and I parted company in circumstances that were far from ideal some time ago, and only recently have diplomatic relations been resumed.

It is too late, I say, for me to get on the train now; but when I have reviewed the book I am meant to be reviewing, I will hop on the train tomorrow around noon. And so I do, despite some monkey business from the departures board at King’s Cross, which tells passengers the 12:44 has been cancelled, then hasn’t been, then has, then hasn’t after all, while the 12:14 has slipped away like a thief in the night without telling anyone it was doing so.

I wonder if my return to the town of ——— is wise. As a dog returneth to its vomit, so doth a fool return to his folly. And the burnt hand fears the fire. Look, I say to myself, all we’re doing is going to have a picnic by the river. As we buy our supplies, the stallholder at the market asks if I am my companion’s husband. “No, he’s my picnic buddy,” he or she replies. “Never heard it called that before,” says the stallholder.

And the day passes perfectly pleasantly. We have two bottles of wine, cheese and smoked salmon pâté with crusty bread. People in punts drift past us, with varying degrees of competence. I remember it is A-level results day and call the eldest boy to ask how he’s done. He’s done well enough, it turns out, to get a place at university, though he feels obliged to point out that his results came in exactly a year ago. This is the kind of thing that happens when the number of children you have exceeds your mental bandwidth.

Later on, a porter from the college behind which we are picnicking asks me if I am a member, or an alumni. “Alumnus,” I correct him gently, hoping that this should establish my credentials. He asks for my name, and he radios the porters’ lodge to check my veracity. For some reason it takes him several goes to get my name right.

One of these goes is “Lizard”. We offer him some cheese, but he refuses, on the grounds that he has just had a banana and a cup of tea. I could live in a guest room here, I reflect, at not much higher rent than one pays in London. And the beauty of it is that the police, and presumably bailiffs, have to ask permission to go through the gates. 

Nicholas Lezard is a literary critic for the Guardian and also writes for the Independent. He writes the Down and Out in London column for the New Statesman.

This article first appeared in the 25 August 2016 issue of the New Statesman, Cameron: the legacy of a loser