FRACKING is a method of extracting natural gas from under the ground by injecting high-pressure liquids and chemicals to crack the rock and release the hydrocarbons within.
A report earlier this year by PricewaterhouseCoopers claimed that Scotland has £5bn of natural gas reserves that could be extracted using this technique.
The Chancellor, George Osborne, has offered what he calls the most generous tax regime in the world for shale gas firms willing to explore fracking in the North of England, where there is believed to be 1.300 trillion cubic feet of frackable gas – nearly 200 times the natural gas reserves left in the North Sea. Companies will pay only 30% tax against the normal 61-81% tax levied on the extraction of natural gas. The Chancellor says he wants a shale gas "revolution" in Britain, and with this money being thrown at it he might very well get one. However, serious safety and environmental issues have been raised about fracking, both here and in the United States, where the technique is in widespread use. Friends of the Earth Scotland has called on the Scottish Government to impose a moratorium on licences for fracking in Scotland, which it is claimed can cause earthquakes and water pollution and will contribute to CO2 emissions.
It would be wrong, however, to rule out judicious exploitation of onshore natural gas, provided it can be proved to be safe – both for local communities and for the environment. No-one calls for a moratorium on exploration for oil and natural gas in the North Sea. The reality is that it will be some time before the world can rely on wholly renewable energy sources, especially if – as is the case in Scotland – the Government has ruled out the building of new nuclear power station. Fracking may help ease energy prices – as it has in America – and will prevent Britain having to import natural gas. However, environmentalists are right to be concerned about the Mr Osborne's latest "dash for gas". He has offered local communities a sweetener of £100,000 and 1% of future revenues, which looks suspiciously like a bribe (Scotland has never been offered any such direct benefit from the oil and hydrocarbon wealth extracted from the North Sea). This extraordinary behaviour inevitably raises questions about his motives. The Coalition desperately needs a boost to the economy before the 2015 General Election, and this measure looks like an attempt to provoke a short-term boom which could leave more than economic fallout. Fracking in areas of low population density like Texas is one thing, but Britain is a highly urbanised and congested country, and it is not at all clear that fracking can be applied safely here on the basis of current scientific knowledge.
We should beware Chancellors in a hurry. There have been too many energy-related environmental disasters in the past, from the Exxon Valdez to Deepwater Horizon. The message for the development of new energy sources should be to ca' canny.
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