Shale Gas

Stephen Sykes | 5 years ago

Fracking

It is not only the job of the historian to remember what others forget. There are plenty of vital lessons which today’s environmental policymakers can extract from past successes and old failures of environmental regulation and enforcement.

It is not only the job of the historian to remember what others forget. There are plenty of vital lessons which today’s environmental policymakers can extract from past successes and old failures of environmental regulation and enforcement.
One lesson is that environmental regulation is best when a broad evaluation of costs and benefits is undertaken and a middle course steered. Regulation should not smother underlying commercial activity nor should there be no place in environmental policymaking for an ideological abandonment of government’s responsibility. The middle course means smart regulation – laws which are proportionate, effective, efficient, clear and consistent: developed against the setting of sound science and an evaluation of sustainability.
This imperative is especially acute when new potentially polluting or harmful activities emerge, often due to scientific breakthroughs.  Against this backdrop, the UK Government’s current (mis)handling of shale gas fracking (the topic for a recent Castle Debate) is instructive.
Shale gas (also called unconventional gas) is a natural gas found in shale deposit around the world. It is released by injecting water mixed with certain chemicals into the shale, This gives rise to fracturing or ‘fracking’ which, in turn, releases the gas. It is estimated that the UK has 20 trillion cubic feet of technically recoverable shale gas. On the face of it this looks like a highly valuable resource for the UK which, if exploited, could make a meaningful contribution to our energy mix for several decades. How though should policymakers approach the matter?
Climate change considerations should come first. The burning of any fossil fuel – of which shale gas is an example – gives rise to an increase in greenhouse gases which are driving climate change. This is posing the greatest of threats to the world.  Responsible decision makers take climate change into consideration. A few days after the devastation caused by Hurricane Sandy, New York Mayor Bloomberg said; “Our climate is changing. While the increase in extreme weather we have experienced [in New York City and around the world] may or may not be the result of it, the risk that it may be — given the devastation it is wreaking — should be enough to compel all elected leaders to take immediate action.” The arguments for and against shale gas fracking should be considered in the context of climate change, and the need to support renewable energy generation as well as energy efficiency. It is notable that, notwithstanding its enormous, technically recoverable shale gas reserves of 180 trillion cubic feet, France has banned shale gas fracking due to perceived heavy risks in relation to human health and environmental protection.
If in the face of climate change considerations, the leaders of a country decide nonetheless to support shale gas fracking – e.g. they may say that it is one of the ‘least worst’ energy alternatives – then they ought to understand (and, ideally, measure) the other environmental and societal risks associated with the activity. In the case of the UK, Sir John Beddington, Government Chief Scientific Adviser, must take credit for commissioning an independent expert review by the Royal Society and Royal Academy of Engineering, of the scientific and engineering evidence identifying the major risks associated with hydraulic fracturing to extract shale gas (including geological (i.e. seismicity) and environmental (e.g. groundwater contamination).
The review was published in June 2012 advising Government not to take public acceptability of shale gas extraction for granted. It concluded that shale gas fracking can be managed effectively if operational best practice applies together with strong regulation. The review recommended, amongst other things, the following:
• Allocating lead responsibility for regulation of shale gas extraction to a single regulator (currently there is a multi-agency approach with the Health & Safety Executive and the Environment Agency overlapping);
• Strengthening the UK’s regulators and giving them additional resources; and
• Ensuring that baseline surveys are carried out throughout lifetime of operation, together with regular inspections of the integrity of the wells which are drilled to extract the gas.
At the recent Castle Debate on Shale Gas, Professor Alan Riley of City University identified many important practical challenges for UK and EU fracking companies and regulators alike, including the need to develop tailored, pragmatic and effective regulations and enforcement structures to govern this new activity. He also was concerned about the maintenance of the public’s trust and consent – e.g. he advocated the setting up of a statutory community payment which would compensate those communities most impacted by shale gas fracking activities.
Rather depressingly (but unsurprisingly) when the Chancellor of the Exchequer announced, at the Tory Party Conference on October 8th 2012, that the Government will take action to stimulate shale gas extraction with a ‘generous tax regime’ there was no mention of climate change concerns, or the need for strong regulation which the Royal Society Review had recommended.  In the Treasury’s narrow and indefensible view, shale gas exploitation is just about growth, jobs and bringing in tax revenues for HM Government. As the Treasury’s press release states, “a successful UK shale gas industry should create jobs and support UK energy security, benefiting the economy and taxpayers”.
By contrast, Ed Davey at DECC has sounded a more cautious note. He is overtly aware of and sympathetic to questions of regulatory oversight and the need to involve local communities in decisions relating to the exploitation of gas beneath their homes. Davey also appreciates the need to ensure that the deployment of any new energy source is consistent with the Government’s Carbon Plan and Carbon Budgets. However, it seems inevitable that Davey will have to fight a rear-guard action against the head-in-the-tar-sands, climate and environment sceptic residing at No. 11 Downing Street  and his closest advisors.
So, in the UK at any rate, the short-term economic imperative of securing growth at any price is trumping the card of protecting the planet for future generations against the immense threat of climate change. In the UK, the Treasury is all dominant in driving the policy agenda and DECC plays catch up. To the Treasury shale gas is a simple matter which just requires a straightforward policy:  tax breaks.  But there is a history lesson for the Treasury about the consequences of losing public trust. Shale gas extraction will not succeed – there will be no gold rush, no jobs and no tax receipts for central government – unless public trust is maintained. Government must become more joined up and take heed of the recommendations of independent experts reports which it commissions. In the case of shale gas, there should be a debate about climate protection first, perhaps to be followed by the implementation of strong (or at least smart) environmental regulation.It is not only the job of the historian to remember what others forget. There are plenty of vital lessons which today’s environmental policymakers can extract from past successes and old failures of environmental regulation and enforcement.

One lesson is that environmental regulation is best when a broad evaluation of costs and benefits is undertaken and a middle course steered. Regulation should not smother underlying commercial activity nor should there be no place in environmental policymaking for an ideological abandonment of government’s responsibility. The middle course means smart regulation – laws which are proportionate, effective, efficient, clear and consistent: developed against the setting of sound science and an evaluation of sustainability.

This imperative is especially acute when new potentially polluting or harmful activities emerge, often due to scientific breakthroughs.  Against this backdrop, the UK Government’s current (mis)handling of shale gas fracking (the topic for a recent Castle Debate) is instructive.

Shale gas (also called unconventional gas) is a natural gas found in shale deposit around the world. It is released by injecting water mixed with certain chemicals into the shale, This gives rise to fracturing or ‘fracking’ which, in turn, releases the gas. It is estimated that the UK has 20 trillion cubic feet of technically recoverable shale gas. On the face of it this looks like a highly valuable resource for the UK which, if exploited, could make a meaningful contribution to our energy mix for several decades. How though should policymakers approach the matter?

Climate change considerations should come first. The burning of any fossil fuel – of which shale gas is an example – gives rise to an increase in greenhouse gases which are driving climate change. This is posing the greatest of threats to the world.  Responsible decision makers take climate change into consideration. A few days after the devastation caused by Hurricane Sandy, New York Mayor Bloomberg said; “Our climate is changing. While the increase in extreme weather we have experienced [in New York City and around the world] may or may not be the result of it, the risk that it may be — given the devastation it is wreaking — should be enough to compel all elected leaders to take immediate action.” The arguments for and against shale gas fracking should be considered in the context of climate change, and the need to support renewable energy generation as well as energy efficiency. It is notable that, notwithstanding its enormous, technically recoverable shale gas reserves of 180 trillion cubic feet, France has banned shale gas fracking due to perceived heavy risks in relation to human health and environmental protection.

If in the face of climate change considerations, the leaders of a country decide nonetheless to support shale gas fracking – e.g. they may say that it is one of the ‘least worst’ energy alternatives – then they ought to understand (and, ideally, measure) the other environmental and societal risks associated with the activity. In the case of the UK, Sir John Beddington, Government Chief Scientific Adviser, must take credit for commissioning an independent expert review by the Royal Society and Royal Academy of Engineering, of the scientific and engineering evidence identifying the major risks associated with hydraulic fracturing to extract shale gas (including geological (i.e. seismicity) and environmental (e.g. groundwater contamination).

The review was published in June 2012 advising Government not to take public acceptability of shale gas extraction for granted. It concluded that shale gas fracking can be managed effectively if operational best practice applies together with strong regulation. The review recommended, amongst other things, the following:

• Allocating lead responsibility for regulation of shale gas extraction to a single regulator (currently there is a multi-agency approach with the Health & Safety Executive and the Environment Agency overlapping);

• Strengthening the UK’s regulators and giving them additional resources; and

• Ensuring that baseline surveys are carried out throughout lifetime of operation, together with regular inspections of the integrity of the wells which are drilled to extract the gas.

At the recent Castle Debate on Shale Gas, Professor Alan Riley of City University identified many important practical challenges for UK and EU fracking companies and regulators alike, including the need to develop tailored, pragmatic and effective regulations and enforcement structures to govern this new activity. He also was concerned about the maintenance of the public’s trust and consent – e.g. he advocated the setting up of a statutory community payment which would compensate those communities most impacted by shale gas fracking activities.

Rather depressingly (but unsurprisingly) when the Chancellor of the Exchequer announced, at the Tory Party Conference on October 8th 2012, that the Government will take action to stimulate shale gas extraction with a ‘generous tax regime’ there was no mention of climate change concerns, or the need for strong regulation which the Royal Society Review had recommended.  In the Treasury’s narrow and indefensible view, shale gas exploitation is just about growth, jobs and bringing in tax revenues for HM Government. As the Treasury’s press release states, “a successful UK shale gas industry should create jobs and support UK energy security, benefiting the economy and taxpayers”.

By contrast, Ed Davey at DECC has sounded a more cautious note. He is overtly aware of and sympathetic to questions of regulatory oversight and the need to involve local communities in decisions relating to the exploitation of gas beneath their homes. Davey also appreciates the need to ensure that the deployment of any new energy source is consistent with the Government’s Carbon Plan and Carbon Budgets. However, it seems inevitable that Davey will have to fight a rear-guard action against the head-in-the-tar-sands, climate and environment sceptic residing at No. 11 Downing Street  and his closest advisors.

So, in the UK at any rate, the short-term economic imperative of securing growth at any price is trumping the card of protecting the planet for future generations against the immense threat of climate change. In the UK, the Treasury is all dominant in driving the policy agenda and DECC plays catch up. To the Treasury shale gas is a simple matter which just requires a straightforward policy:  tax breaks.

But there is a history lesson for the Treasury about the consequences of losing public trust. Shale gas extraction will not succeed – there will be no gold rush, no jobs and no tax receipts for central government – unless public trust is maintained. Government must become more joined up and take heed of the recommendations of independent experts reports which it commissions. In the case of shale gas, there should be a debate about climate protection first, perhaps to be followed by the implementation of strong (or at least smart) environmental regulation.

 

About the author

Stephen Sykes

Stephen is an entrepreneur. He has built businesses in the following sectors: data, insurance, remediation and consulting.  With a background in environmental law, Stephen is the Chair of the UK Environmental Law Association, director of the Castle Debates and a Visiting Fellow at Birkbeck's Centre for Innovation Management Research.