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Why shale oil stocks are dropping in value

i Oct 11th No Comments by

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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…)

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)

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.

Summary of UK situation for Fracking

i Jul 31st No Comments by

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This July 2014 report by Scientists for Global Responsibility and the Chartered Institute of Environmental Health and  concludes:

In this briefing, we have summarised key evidence concerning the environmental, health and wellbeing, and socio-economic aspects of fracking for shale gas in the UK. In particular, we have critically examined some of the most common industry and government claims, drawing extensively on independent academic and expert literature. We have found several areas of concern.

Regulation of the industry in the UK is currently inadequate, although it is stricter than in the US, thus somewhat reducing the potential for local environmental impact by comparison. With technological advances and an improved regulatory environment, groundwater contamination risks could conceivably be reduced to an acceptable level, although there is much to do to reach that point. Furthermore, the requirement for vast quantities of freshwater (expected to become scarcer under climate change), which require road transportation, is unlikely to be resolved. Confidence in the practice is undermined by a series of disingenuous claims made by both the Government and industry.

Virtually all economic analysts refute the claim that fracking will reduce energy bills in the UK. Instead, it will lock us into continued reliance on fossil fuels and the increasingly volatile and expensive international gas market. Although fracking will generate jobs, job leakage is probable, and it may result in job losses in other industries, for example, agriculture and tourism. The job creation potential has been substantially exaggerated, and is also significantly less than that of the low-carbon energy sector, which itself may suffer from diversion of investment to shale gas. Community benefits have also been exaggerated, while the substantial policing costs do not generally feature in the discussion. There is also some evidence of house prices having fallen near fracking sites.

Given that, even without shale gas, proven global reserves of fossil fuels are five times higher than can be burned without risking a 2°C global temperature rise, the exploitation of shale gas is dangerous and unnecessary. It is true that, assuming minimal methane leakage, shale gas might have a lower carbon footprint than coal. However, in the absence of a global cap on emissions, the use of shale gas will undoubtedly be in addition to, not instead of, coal, and will therefore result in an overall increase in emissions. Until such a  constraint on emissions is in place, this problem remains unresolved.

You can read the full report here or download it here.

All fracked out before we’ve begun?

i Jul 28th No Comments by

fracking_2986949bSource: Daily Telegraph

“The 130 resistance groups around the country have dealt a blow to those at the heart of shale gas and oil exploration.”

“The industry increasingly fears that, here, too, it is losing the ‘social licence’ of public support needed to operate successfully.”

“Forget all the hype about fracking bringing down gas prices here, as in the US (even the industry no longer believes that); or creating tens of thousands of jobs (you’d get far more per unit of energy from insulating buildings).”

Source: Daily Telegraph