Lord Howell of Guildford on fracking

i Oct 21st No Comments by

Screen shot 2014-10-21 at 11.44.50In May this year, Lord David Howell published this short opinion piece on fracking, in the Journal of Energy Security.

He opens by saying that he had recently attended two key meetings, that between them “gathered just about all the expertise in the planet on shale oil and gas and fracking issues.”

And then he summarises the current situation, and lessons learned from the USA, before drawing five conclusions for fracking in the UK.

I’ve summarised his points below, though to be honest his piece is very short and you would likely be better off reading the whole thing here.

And what I think this means for us in Ryedale is:

  1. Ryedale must be very close to the top of the target list for fracking, since our population density is so low.
  2. They know fracking damages the water supply, and has other ‘environmental’ impacts, but they want to go ahead anyway.
  3. Fracking in the UK is currently only borderline achievable, physically, financially, and politically.
  4. They believe (or Lord Howell believes) that people have the potential to stop fracking in its tracks, physically, and economically, and politically.

Remember also that since this article/viewpoint was published,

i) Rather than trying to negotiate, the government has chosen the path of confrontation, seeking to impose fracking via the so called ‘Infrastructure Bill’,  currently before the House of Lords.

ii) Third Energy has made planning applications to NYCC to put in place some of the critical infrastructure without which it would not be able to frack.

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Drumming up investment for shale oil and gas

i Oct 11th No Comments by

Click to read Bloomberg article

Stock exchanges around the world have rules for what you are allowed to tell prospective investors about how good your business plan expectations are.

Bloomberg have done an analysis of the recoverable reserves that shale oil and gas companies have told investors they have, as compared to how much reserves those same shale oil and gas companies have told the Securities and Exchange Commission they have.

As you can see from the chart, across the industry as a whole, the companies have told their investors that their reserves are five times bigger than what they have told the SEC.

No wonder investors have poured funds into this sector, expecting huge returns.

The SEC requires drillers to provide an annual accounting of how much oil and gas their properties will produce, a measurement called proved reserves, and company executives must certify that the reports are accurate. But no such rules apply to appraisals that drillers pitch to the public. Indeed, many company presentations remind investors that “publicly announced estimates are more speculative than the numbers the drillers file with the SEC.”

Nevertheless, as John Lee, a university professor who helped to write the SEC rules on reporting, puts it: “They’re running a great risk of litigation when they don’t end up producing anything like that [level of output]. If I were an ambulance-chasing lawyer, I’d get into this.”

You can read the full story on Bloomberg.

Or a very dismissive analysis of the whole situation on the more tabloid Daily Kos.

 

Why shale oil stocks are dropping in value

i Oct 11th No Comments by

Screen shot 2014-10-11 at 18.50.06

In the past three months ‘West Texas Intermediate’ oil has fallen from $105/barrel to $85/barrel. This has caused the stock price of shale oil companies to “tank”.

Here in Ryedale, the likelihood is that companies would be drilling for shale gas rather than oil and the prices of oil and gas are less tightly correlated than they used to be. But understanding how the shale oil market works can still help us to understand the implications for shale gas.

One reason that share prices of shale oil companies have fallen so far is that the companies now get less money for every barrel of oil they extract.

The other reason is the way shale companies are financed. (more…)

Economic analysis of US shale gas and implications for the EU

i Sep 29th No Comments by

Click to visit IDDRIThe Institute for Sustainable Development and International Relations (IDDRI), a non-profit policy research institute based in Paris, has published an economic analysis of US shale gas and implications for the EU.

Key points include:

  • “Despite very low and ultimately unsustainable short-term prices of natural gas, the unconventional oil and gas revolution has had a minimal impact on the US macro-economy”
  • “There is thus no evidence that shale gas is driving an overall manufacturing renaissance in the US.”
  • “The US shale revolution will not lead to a significant, sustained decarbonisation of the US energy mix nor will it assure US energy security”
  • “Oil imports continue to rise in monetary terms.”
  • “There is also the risk that the unconventional oil and gas revolution further locks the US into an energy- and emissions-intensive capital stock.”
  • “It is unlikely that the EU will repeat the US experience in terms of the scale of unconventional oil and gas production.”
  • [If plans went ahead] “Shale production would not have significant macroeconomic or competitiveness impacts for Europe in the period to 2030- 2035.”

Fracking industry will be minimally regulated in UK

i Sep 23rd 1 Comment by
Fracking in McKittrick, California.

Fracking in McKittrick, California.

The Government has repeatedly claimed that there would be a ‘gold standard’ of regulation for the fracking industry. However, letters obtained by the Guardian show that the industry will be minimally regulated, there is confusion within the government about which department is responsible, and that no government body has overall control over the industry.

This week Cuadrilla announced they had discovered 200tr cu ft of shale gas below Lancashire, and is hoping to drill thousands of gas wells. However, local residents, environmentalists and engineers fear that shale gas extraction could potentially devastate water supplies near where fracking takes place, because methane or chemicals used in the process could leak into ground water.

Robert Howarth, professor of ecology and environmental biology at Cornell University, called for a moratorium on drilling: “The best evidence indicates widespread contamination of drinking water wells within 1km of gas wells. A moratorium is necessary to step back and better study the risks to water quality, air quality, and global warming.”

Read the full details in the Guardian article.

And it’s also interesting to read George Monbiot’s comments on the role of climate change minister Charles Hendry.

Myths and Facts on Fracking

i Sep 22nd No Comments by

FFR LogoI have been learning about fracking off and on for over a year now, and have been heavily involved in Frack Free Ryedale for just over two months.

I thought it would be useful to summarise some of the key learnings I have made during this time – a summary of the “myths and facts about fracking”, if you like.

I enclose it below, with links to some of the key sources I have found.

I hope it is a reasonably comprehensive and well-referenced source. (And it barely even begins to talk about the health impacts, or the volumes of traffic and water, or…).

Myth 1: Fracking is a 60-year-old, proven technology

Fact: The way fracking is currently being done is a new combination of four different technologies that has only been tried since 2007. There are still problems with it.

Source: http://tinyurl.com/q256zzf
(Dr Anthony Ingraffea, Professor of Engineering at Cornell University, talk to Sierra Club, March 2012)

Myth 2: Fracking is a ‘green’ fossil fuel

Fact: While it is true to say that burning methane (natural gas) obtained by fracking produces less carbon dioxide than burning coal, this is not the full story. During the drilling process, methane is also released into the atmosphere, or burned off by ‘flaring’. If these full impacts are considered, then the greenhouse gas / climate change impact of fracked gas is even worse than coal.

Source: http://tinyurl.com/qy8ewmj
(Dr Anthony Ingraffea, Professor of Engineering at Cornell University, talk to Sierra Club, March 2012)

Myth 3: Fracking is a cheap source of fuel

Fact: The price of solar electricity is falling fast. Citibank, UBS and other banks have recently issued reports advising investors to get out of fossil fuels. Citibank says that solar electricity will achieve “grid parity” even in Britain, by 2020. UBS, the world’s largest private bank, says big power stations in Europe could be redundant “within 10-20 years.”

Sources:
http://tinyurl.com/q5vo8mm
(“UBS urges investors to join renewables revolution”, Guardian, August 2014)
http://tinyurl.com/q8sorn2
(“Oil industry on borrowed time as switch to gas and solar accelerates”, Daily Telegraph, August 2014)
– http://tinyurl.com/kkemuhn
(“Solar has won. Even if coal were free to burn, power stations couldn’t compete”, Guardian, July 2014)

Myth 4: Fracking creates jobs

Fact: Fracking does create some jobs, in the oil and gas industry. These do not benefit local people. Friends in the USA (near the Canadian border) have described how the economy of their small rural town was affected when large numbers of single men moved in.

Fracking also destroys jobs. The main industries here in Ryedale are farming and tourism. Animals and crops in the USA have died after coming into contact with waste fracking water. And you can guess what the impact on tourism would be if there were eight fracking pads per square mile in Ryedale (which is standard, and which was requested in the planning applications for 3,000 wells in Sussex.)

Sources:
http://tinyurl.com/l3pqcap
(Website of frack-off (UK), section on Agriculture and Animal Health, September 2014)
http://tinyurl.com/kawlo87
(“Fracking’s Toll on Pets, Livestock Chills Farmers”, Bloomberg, February 2012)
http://tinyurl.com/k7dkeqm
(“Fracking frontline as Sussex has 15 licences to drill”, The Argus, December 2012)

Myth 5: Fluid migration from faulty wells is rare

Fact: Fluid migration from faulty wells is a well known long-term problem, with an expected rate of occurrence. About one in twenty wells fail in their first year of operation. With 8 well pads per square mile, and 6-20 wells per pad, that is a lot of failed wells. After 15 years 50% of wells will be leaking. And eventually all wells fail. A recent report in Pennsylvania listed 243 cases in six years where companies prospecting for fracking were found by state regulators to have contaminated drinking water.

Sources:
http://tinyurl.com/puo8b7h
(Dr Anthony Ingraffea, Professor of Engineering at Cornell University, talk to Sierra Club, March 2012)
http://tinyurl.com/ouv3pz7  http://tinyurl.com/l76ztgp
(“Online list IDs water wells harmed by drilling”, Wall Street Journal, August 2014)

Myth 6: Fracking only uses fluids you would find in most households

Fact: While many of the chemicals used in fracking are probably also found in households, the point is do you want them in your drinking water?

The fact is also that the USA has passed legislation forbidding people from disclosing what chemicals fracking companies use. And when the water is pumped out of the ground it contains a variety of heavy metal salts and radioactive elements that it has picked up underground. When these are pumped back underground they can cause earthquakes and contaminate drinking water.

Source:
http://tinyurl.com/chkk7cn
(Physicians for Social Responsibility website, June 2012)
http://tinyurl.com/q858ulo
(Catskill Mountaineer website, undated, viewed September 2014)

Myth 7: Fracking only causes tiny earthquakes

Fact: The process of fracking does cause small earthquakes. What causes bigger earthquakes is reinjecting the dirty fracking water back into ground, (in the same way that Third Energy is applying for planning permission to inject large amounts of waste water at Ebberston Moor near Pickering).

In Oklahoma, injecting waste fracking fluids is now causing hundreds of earthquakes per year, where there used to be very few. The largest so far registered 5.6 on the Richter scale and caused millions of dollars worth of damage. Could the roller-coaster at Flamingoland or the Temple of Winds at Castle Howard withstand a 5.6 earthquake?

Source:
http://tinyurl.com/mc7luak
(“Why fracking may be responsible for increased earthquakes in Oklahoma”, GlobalNews.ca, May 2014)

Myth 8: Fracking is good for the economy

Facts: The growth of fracking has been financed by debt, not profits: speculators are gambling on a return.

In the meantime, the reality for people who own homes close to actual or proposed fracking sites in the UK is that house values have plummeted dramatically. The value of one woman’s house in Lancashire fell by 70% as a result of a nearby proposed fracking site. When the government was called upon to publish its own report into the likely effect of fracking on house prices and rural communities, it blanked out all of the key predictions.

Sources:
http://tinyurl.com/kp3dbek
(“Drillers Piling Up More Debt Than Oil Hunting Fortunes in Shale”, Bloomberg, September 2014)
http://tinyurl.com/lyjzp9d
(“Fracking threat wiped £535,000 off my home’s value”, Daily Mail, August 2014)
http://tinyurl.com/ps99xwj
(“The fracking cover-up: Defra censors key report 63 times in 13 pages”, Daily Mail, August 2014)

And a last-minute addition: on why fracking is a ponzi scheme: http://tinyurl.com/olhwbe3
(“Shale Fracking is a “Ponzi Scheme””, GlobalResearch.ca, September 2014)

And here’s a list of just some of the people and animals harmed so far by fracking:
– http://tinyurl.com/6oz29yq
(“Pennsylvania Alliance for Clean Water and Air, Dedicated citizens fighting to protect our most valuable resources”, September 2014)

Pro-fracking newspaper ad banned by Advertising Standards Authority

i Sep 6th No Comments by

Anti-fracking protest in BlackpoolA newspaper advertisement by American Energy company Breitling Energy has been banned by the Advertising Standards Authority, the organisation that monitors standards of advertising in the UK.

A reader complained to the ASA that the claims were misleading because they exaggerated the extent of Britain’s gas shortage, the supposed benefits of fracking were not known, and Russia did not supply gas to the UK.

The ASA ruled against Breitling on all counts. It told the company it must not make its claims again and that future ads should be supported by hard evidence. Read the full article here.

Five hidden costs of fracking

i Aug 22nd No Comments by
Fracking in McKittrick, California.

Fracking in McKittrick, California.

News articles about fracking often focus on perceived benefits and ignore the costs. The vision of an energy-independent Britain, free of the growing problems of overseas fuel dependency, is deeply alluring. However, many people don’t realise than if fracking were to take hold in the UK, the gas wouldn’t all be ‘ours’ to use as we please – it would have to be sold on the open market, just like any other commodity, and would be sold to the highest bidder. Indeed, many other countries such as France are already lining up to buy fracked UK gas if it ever materialises.

Furthermore, as is being increasingly reported in financial newspapers and blogs, problems are emerging with the shale narrative. An article in the Guardian Economics Blog identifies five hidden costs to fracking: economic risk; local environmental cost; global environmental cost; social cost, and opportunity cost. To find out what these are, please read the article by clicking here.

Experts reject economic boost of shale, insist jobs could be lost

i Aug 6th No Comments by

“Experts’ report rejects economic boost of shale and insists jobs could be lost.”
fracking-drill

“Research by US and British scientists and medics warns fracking could unleash health and environmental disasters while failing to deliver the promised economic boom.”

The experts warn of “potentially lasting damage to tourism and agriculture while bringing only short-term jobs and doing little to cut long-term energy costs.”

Each report “makes for uncomfortable reading for anyone living near a potential fracking site.”

Source: Daily Mirror

You can read the full original reports also on our website, here and here.

Economics of fracking

i Aug 4th No Comments by

fracking_2599026bFrom the Daily Telegraph.

“Rather oddly, hardly anyone seems to have asked the one question which is surely fundamental: does shale development make economic sense?

“My conclusion is that it does not.”

The author  was global head of research at Tullett Prebon 2009-13

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