Prime Minister puts gas policy at top of his personal agenda

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UNTIL quite recently, there was little public interest in fracking this side of the Atlantic beyond internet videos – hotly disputed – apparently showing Americans igniting gas emerging from their kitchen sink taps.

But now the creation of a thriving UK shale gas industry is not just Government policy, it is wholeheartedly and vocally backed by the Prime Minister himself.

It is a well-worn tactic in Whitehall to leave more junior Ministers to talk about controversial subjects and diffuse their political potency by making them the subject of endless reviews and commissions.

But not fracking. David Cameron nailed his colours firmly to the mast earlier this month when he said “we’re going all out for shale”.

And it is undoubtedly the US experience which is driving the UK’s enthusiasm.

While Whitehall contemplates increasing dependence on overseas energy sources – sometimes found in unstable parts of the world – and rising wholesale prices and watches North Sea oil output fall, it looks enviously across the Atlantic to the US, There the shale gas boom has been credited with lowering domestic fuel bills, creating thousands of jobs, generating billions of dollars in tax revenues and making industry more competitive by lowering its cost base to the point where companies which once moved operations overseas are returning them to the US.

Having long been known as the world’s energy guzzler, the US is now expected to become a net energy exporter.

Momentum behind moves towards UK fracking really began to grow with the publication of a British Geological Survey report last year looking at the potential for shale gas suggesting there could be 1,300 trillion cubic feet of gas trapped in a geological formation known as the Bowland Shale which stretches across much of northern and central England.

The key word, though, is potential – until companies drill exploratory wells and discover exactly what is underground where and whether it can be extracted safely and profitably.

And even before better data emerges from drilling, there are experts sceptical about the prospects for a UK industry of significant size.

Although not tough enough for anti-fracking campaigners, some analysts say the industry is likely to find it harder to satisfy regulators in this country. And on a practical level it is far easier to drill for oil and gas in the wide open spaces of the United States than in the UK where any kind of activity is likely to have an impact on someone.

The industry has certainly not made the start in the UK it would have wanted.

Drilling in the North West was suspended for a time amid concern over earth tremors. Attempts to drill a test well in Balcombe become the focus for fierce protests which saw Green Party MP Caroline Lucas among those arrested and a bill running into millions for policing.

And just as it is the US experience which is undoubtedly the driver behind support for
 the development of a UK 
fracking industry it is also the motivation for many of those 
who are lining up to oppose the move.

Campaigners question whether the economic rewards from shale gas justify the impact they argue fracking has on the environment and potential risks to public health.

Academic research published last year found water around fracking sites had been contaminated with chemicals with the potential to cause infertility and birth defects.

Higher than expected methane levels have also been documented although these are often disputed because of the lack of data before fracking begins.

Opponents also point to the attitude of countries such as France where fracking is banned and ask why the UK has confidence when other countries are being far more cautions.

And some critics see the enthusiasm for shale gas as a symbol of the West’s addiction to fossil fuels and argue that to spend time and money developing shale gas only diverts resources away from creating a long term renewable energy industry while adding to greenhouse gases in the atmosphere.

Across the country, anti-fracking protest groups are springing up before serious exploration and exploitation has even begun.

But the controversy has not deterred the Government, or the industry which offer the prize of jobs, taxes and greater energy independence as the prize.

Exploratory licences have already been awarded to companies in Yorkshire, North and North-East Lincolnshire and Nottinghamshire and the Government says there is a significant appetite for more.

Having previously been the preserve of exploratory companies, the energy giants began to take an interest last year when Centrica took a 25 per cent in an exploration licence in Lancashire owned by Cuadrilla.

And earlier this month, French energy giant Total announced plans to invest £12.7m in fracking licences in Lincolnshire.

A report published by the Government last year suggested further swathes of the country, including much of this region, could be the subject of a further licensing round and Ministers are holding a consultation on how that process will work.

The Government might have been expected to play the role of neutral referee but the Coalition has thrown its full weight behind shale gas extraction.

While admitting there are legitimate concerns about fracking that need to be addressed through regulation, the Government is in no doubt it can be done safely.

Chancellor George Osborne set the tone last year when he announced tax breaks for onshore shale gas production.

Communities have also been offered £100,000 for each test well and a 1 per cent share of proceeds once a well goes into production which could amount to between £5m and £10m over its lifetime.

The Prime Minister upped the ante further this month telling councils they would keep all the business rates generated by fracking in their area, a source of income potentially worth £1.7m per year.

Now, Yorkshire is becoming the focus and any signs of activity by oil and gas companies in the region now attract significant attention.

Rathlin Energy conducted test drilling operations near Beverley and West Newton last year and is currently analysing the results.

But a spokesman told the Yorkshire Post it was not interested in shale. “We are looking at conventional formations underground.”

The sight of a drilling rig in Kirkby Misperton last year aroused local concern but the company responsible, Viking UK Gas and parent Third Energy, say that while shale was tested the well was connected to its existing conventional operations in the area rather than a precursor to fracking.

Dart Energy, which has exploratory licences around York and in the south of the region, is considered one of the most likely to move forward following investment from GDF-Suez last year.

However the Yorkshire Post understands speculation that Dart will start exploratory drilling near York soon is wide of the mark with an application for planning permission unlikely this year.

However, Dart is expected to carry out tests shortly at a site at Sutton cum Lound on the Doncaster – Nottinghamshire border looking for coal bed methane which – in other countries – sometimes involves a process with similarities to fracking but the industry insists geological differences in the UK make that unlikely.

Yorkshire Post Big Debate: Fracking

YOUR CHANCE TO TAKE PART IN A PUBLIC DEBATE ON FRACKING

The Yorkshire Post is to hold a public debate on fracking – and we want you to take part.

The event will be held on February 12 at the Cedar Court Grand Hotel in York, starting at 6pm. The panel will include Mark Hill, head of development management at the North York Moors National Park Authority, Linda Cowling, leader of Ryedale District Council, and Friends of the Earth.

To attend please email Jayne.Lownsbrough@jpress.co.uk. Please include your name and a contact telephone number and a question you would like to ask. Please also put fracking debate in the email header. Alternatively please write to Jayne Lownsbrough, Editor’s Secretary, Fracking debate, Yorkshire Post, No 1 Leeds, 26 Whitehall Road, Leeds, LS12 1BE.