A Review of the Nigerian Energy Industry

Fracking facing crisis of trust from public

06 July 2015, News Wires – Proponents of hydraulic fracturing faced disappointment on both sides of the Atlantic last week, with shale drilling plans blocked by a local authority in the UK and New York state formalising its ban on the technology across the water.

Of the two cases, the decision by Lancashire County Council in England to block drilling and fracking plans by private operator Cuadrilla Resources at two locations is likely the more significant.

Ignoring the advice of their own planning department in one case, council members voted, apparently across party lines, against Cuadrilla’s scheme to drill shale wells at two separate locations.

The rejection came despite strong backing from the UK government for an upsurge of investment in a shale sector that it sees as offering huge potential for jobs and growth, to say nothing of increasing domestic energy supply.

The government has said it won’t be perturbed by this setback and reckons the potential of the shale gas sector “will be realised”.

The trouble is, that won’t happen if nobody is allowed to drill and, whatever reasons are used publicly to explain the decisions by Lancashire council officials for voting against Cuadrilla’s plans, most observers will pin them on huge and well-organised public opposition to fracking.

That opposition is strident even if many in the industry believe that fracking has been proved safe in long-running and exhaustive studies in the US, such as that by the Environmental Protection Agency that concluded only last month that operators using best practices are unlikely to contaminate water.

The trouble is, many people don’t trust the industry and don’t trust fracking. For many climate campaigners fracking has become a lightning rod issue that has allowed them to build momentum in campaigns against fossil fuels in general.

Successes for opponents such as that in Lancashire will only encourage that approach. In the US, shale resources are so abundant that few, perhaps apart from those in areas of the state where jobs from energy production would be welcome, would argue that shale production from New York is desperately needed anytime soon.

However in the UK, as throughout Europe, where Germany is reported to have just pushed back a vote on whether to keep its own ban, things are different. Energy prices are higher and energy security is a major concern at a time of poor relations with major pipeline gas supplier Russia.

ExxonMobil chief executive Rex Tillerson said last month that Europe needs to loosen restrictions on the sector, saying operators have fractured more than 2 million wells in the US and Canada and the process has been shown to be safe.

The fact that shale opponents have had such a significant victory in the UK despite the government’s strong backing shows just how tough the challenge of growing the industry has become.

Proponents will argue that it is only fracking that has reduced carbon dioxide emissions in the US.

They can argue that later this year, when US liquefied natural gas exports start from Cheniere Energy’s Sabine Pass project, fracked gas will be used to help provide supplies to European consumers who are turning their own backs on the technique.

They may be right but it remains to be seen how committed companies such as Cuadrilla and its partner UK utility Centrica will be to pursuing development when the time and energy taken is so great and the opposition so strong.

– Upstream

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