Only in Britain – indeed England specifically – could a controversy about shale oil and gas development start to read like the plot of a Tom Sharpe novel.
In the last edition of Gastech News, we reported how excitement was building in the UK about the prospects of shale gas becoming a big contributor to the nation’s energy supply, with some even daring to suggest that onshore shale gas development could be the UK’s next “North Sea”.
Shortly afterwards, the government announced its intention to improve fiscal incentives for shale gas development, by slashing the rate of tax that would apply.
On the 19th July, George Osborne, the UK’s Chancellor of the Exchequer – a quaint title for what most other countries call their “finance minister” – pledged to create the world’s most generous tax regime for shale gas. He proposed to cut tax on shale gas production to 30%, down from the 62% paid by most of the oil and gas industry.
“Shale gas is a resource with huge potential to broaden the UK’s energy mix,” he said. “We want to create the right conditions for industry to explore and unlock that potential in a way that allows communities to share in the benefits.”
“Battle of Balcombe”: Then came what was inevitably dubbed the “Battle of Balcombe” – Balcombe being a leafy village in Sussex, not far from where I live.
As Cuadrilla Resources – the only company to have made on start on much-feared hydraulic fracturing, or “fracking” onshore in the UK – attempted to begin drilling in Balcombe, it encountered days of disruption as protestors gathered to stop it. That fact that Cuadrilla was drilling for oil and not intending to do any fracking at the Balcombe site was largely ignored.
(The real focus of Cuadrilla’s activities is not in Sussex but in Lancashire, in the Bowland shale project, as we reported in our last issue, following Centrica’s decision to acquire a 25% interest in the Bowland exploration licence from Cuadrilla Resources and AJ Lucas.)
What followed was a rapid descent into the kind of farce that was the trademark of Sharpe, most famous for his novel Blott on the landscape, which, clearly, is how the residents of Balcombe and their various supporters – some less welcome than others – regard Cuadrilla.
At the end of July the farce ramped up a couple of notches when Lord Howell, a former minister who happens to be Osborne’s father-in-law, suggested that fracking should be concentrated in the north-east of England, in “uninhabited and desolate” areas – drawing a predictable storm of protest from the people who live there.
And not just them. Justin Welby, the Archbishop of Canterbury, felt obliged to weigh in, commenting that “north-east England is very beautiful, rugged, welcoming, inspiring, historic and advancing – not ‘desolate’ as was said in the House of Lords”.
Sticking point: It all came to a head in early August, when Cuadrilla began actual drilling in the face of protests from, amongst others, Bianca Jagger, former wife of Rolling Stone Mick, and Natalie Hynde, daughter of Pretenders musician Chrissie Hynde, who superglued herself to her boyfriend.
There is, of course, a serious side to all this. Successful shale gas – and more recently shale oil – development in the US has led to an unexpected economic renaissance there. It is this that has got the UK government so excited about the opportunities that shale gas might present on the other side of “the pond”.
Despite the government’s excitement, and the tempting estimates of potential shale gas resources recently published by the British Geological Survey, developing shale gas in the UK is clearly not going to be straightforward from a political perspective.
In case the government hasn’t yet noticed, the leafy villages of Sussex are nothing like the North Sea.
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