Below is a link to the presentation “Cost: Benefit of fracking in Fermanagh: Is there really a net economic gain?” by Dr. Brenna O’Roarty FFAN Economic Evaluation LEGR Conference
Below is a link to the presentation “Is fracking in Fermanagh economically sustainable? – A cost: benefit approach” by Dr. Brenna O’Roarty Executive Summary Cost Benefit of Fracking in Fermanagh
Below is a link to the presentation “Cost: Benefit Analysis of Fracking in Fermanagh” by Dr. Brenna O’Roarty Cost benefit analysis Summary Presentation May 2014
The Guardian news paper has just revealed that in the event that fracking companies go bankrupt, the costs incurred for pollution to the environment will be burdened onto the UK taxpayer.
Normally, fracking companies would take out a bond as an insurance policy in the event of environmental pollution. However the need for bonds has been rejected by Minister of the Environment Dan Rogerson, who stated:
“We believe that the existing regulatory framework is fit for purpose for the exploration and exploitation of onshore oil and gas activities. There are a great number of checks and controls available to us to ensure that operators comply with the requirements of their permits and deal with the wider pollution risks without adding to existing regulation.”
To read the guardian article in full, click here.
In an interview with Bloomberg News, Minister of State for Environment and Climate Change Matt Hancock expressed his desire for Unconventional Shale Gas Extraction to proceed despite the fact that recent drastic diminishing oil and gas prices may make the energy extraction process even more unprofitable for both government and corporations.
When asked by co-anchor Guy Johnston that current low oil and gas prices may postpone and delay the need to extract methane gas from the strata of the UK, Hancock denied any reduction in what he called a ‘neccessity’ to drill for methane gas as he looked to minimise any fear that gas prices were being hit as hard as oil prices. In response, Johnston gently forced the Minister to confirm that it follows that gas prices diminish soon after oil prices. The minister firmly replied:
“The contracts are tied. This is a long term project for the UK, we’re right at the start of a long term project [that] has cross party support in the UK for the principle of getting this potential that could be enormous out of the ground. Geologists are clear that there is a huge quantity of gas deep underneath the UK. The question is how much of it we can economically recover. There are planning decisions this month…and later this year just to get the first extraction out….. It’s an exciting prospect. It is the duty of the government to [make sure] it happens.”
When challenged again by female co-anchor Francine Laqua on the fact that oil and gas prices are diminishing and that this would reduce the sense of urgency for unconventional shale gas extraction, the Minister replied:
“I don’t think that’s quite right, [as] the benefits are not only obviously just for getting the shale out of the ground for the companies involved, but also [for] the security of supply domestically.”
In an interview that did little to tackle scientifically proven environmental or social liabilities of the practice of Unconventional Shale Gas Extraction experienced elsewhere around the globe, the Minister further reconfirmed that significantly lower natural gas prices in the UK will not have any impact on the desire of the UK government to conduct the controversial process of fracking.
When Anchor Johnston, by way of analogy, stated that if methane was extracted at a price that was higher than the selling price, an economic loss would be incurred, inparticular if gas prices are tied to oil prices. The Minister for Energy and Climate Change stated in response:
“From the government’s point of view….the benefits remain…. In terms of companies who may be looking to take part, we’ve got to make the margins work….we need to change the fiscal regime [to make it] economic.”
Anchor Lauqua questioned if the government planned on giving any benefits to alleviate the [financial] burden [of lower sales price for oil and gas] for the drillers. To view the Minister’s measured response to Anchor Laqua’s question, you may watch the Bloomberg interview in full, click the link below.
The right honourable Matt Hancock not only serves as Minister for the Environment and Climate Change, but also as Minister of State at the Dept. of Business, Innovation and Skills. Previously he gained a Masters degree in Economics from the University of Cambridge.
An independent investigation compiled by national newpaper, ‘The Independent’, has found that the Environmnetal Agency (EA), who are held responsible for regulating unconventional shale gas extraction across the United Kingdom of Great Britainaa nd Northern Ireland, have in fact invested their pension funds in the very energy extraction process that they are held responsible for regulating.
What has resulted from the investigation, is an accusation by the Independant of a conflict of interest between the Environmental Agency’s duties as environmental regulators, and the investments of their pensions in the industry it is charged with regulating.
The Independant report:
In the UK the EA’s pension fund – worth a huge £2.3bn – invests in companies investing in fracking, incineration and nuclear power, all of which the Agency is involved in regulating…….The pension details are contained in a response to a Freedom of Information request from the EA, which lists the companies it had a stake in as of March this year, its latest available audited information. And its investments are in marked contrast to the Agency’s public image of being a leading “responsible” investor that integrates “environmental, social and governance considerations into all decision-making.” The Agency champions its commitment that by 2015 “25 per cent of the fund will be invested in the sustainable and green economy”.
The Independent further state:
It is with issues such as fracking, incineration and nuclear that the EA is probably at its most vulnerable. Its investments could potentially open it up to legal challenges if the it were to grant permits to companies in which its pension pot has a financial interest.
The fund is investing in two companies financially intertwined with fracking giant Cuadrilla, the company that has been the subject of fierce protests in Lancashire and West Sussex. The first is Centrica, which is investing £60m in Cuadrilla’s Lancashire operations and the second is Riverstone Energy, which owns 44 per cent of Cuadrilla.
To read the article in full, click here.
The Concerned Health Professionals of New York just released a compendium that compiles a significant body of scientific, medical and journalistic findings that highlight the experienced health risks associated with the process of Unconventional Shale Gas Extraction.
One of the most thorough reports of its kind, the compendium draws upon scientific evidence and experience from across the globe, including USA, Canada and Australia, where Unconventional Shale Gas Extraction has been most predominant, drawing upon information provided by medical journals such as The Lancet, the British Medical Journal and the Medical Journal of Australia.
Topics covered by the compendium include:
- Air Contamination
- Water Contamination
- Engineering Problems
- Radioactive releases
- Occupational Health and Safety Hazards
- Noise pollution, light pollution and stress
- Earthquakes and Seismic Activity
- Abandoned wells
- Flood risks
- Threats to Agriculture and soil quality
- Threats to the Climate
- Inaccurate job claims, increased crime
- Inflated oil and gas reserves
- Medical and scientific calls for more study
A compilation of studies and findings from around the globe, the compendium provides irrefutable evidence of the risks, harms, and associated negative trends demonstrated by the process of Unconventional Shale Gas Extraction, a process earmarked for County Fermanagh.
To read the compendium in full, click here.
On the 8th of April 2014, Russia Today‘s ‘Keiser Report’ takes a look at proposed law changes that will allow fracking companies to drill and frack under private property without seeking permission and in exchange for 100 pounds.
Also given consideration is the fact that the energy input for unconventional shale gas extraction is higher than the energy output, resulting in an energy negative process, which increases national debt.
You may view the full article here.
‘Conservation charity the RSPB and two other leading environmental organisations are warning the Northern Ireland Executive not to push ahead with ‘fracking’ (a controversial method to extract gas) until sufficient evidence shows that it is safe to do so.
In County Fermanagh, the idyllic surroundings for the G8 summit, a licence has already been issued to explore for shale gas, but it is still unclear what the economic, social and environmental impact will be.
The RSPB, Friends of the Earth (FOE) and the Chartered Institute for Environmental Health (CIEH) are deeply concerned about the environmental and health risks posed by ‘fracking’. The group believe more research is needed to understand the extent and impact of fracking on this beautiful habitat. John Martin, RSPB, stated that “Shale gas exploration and extraction should only be allowed within a strict regulatory and policy framework that is fit for purpose, and in Northern Ireland this does not exist.” In addition, Mr Martin continued “we believe that an independent Environmental Impact Assessment (EIA) should be required for all developments here. This has not been the case for other UK sites and problems have followed.”
Co Fermanagh is known for its excellent agricultural produce and wonderful natural heritage which attracts valuable spend from tourists travelling here from around the world. Much of the local economy has been built around this and as yet it is not known what impact fracking will have on these rich natural assets. Declan Alison, FOE stated “2050 is the cut-off date given by Tamboran, the company issued with the licence for exploration. No provision is given by the company on what will happen next but as temporary exploitation, shale gas is not an answer to economic uncertainty in the long term.”
A 2007 study commissioned on behalf of nine leading NGOs and the Northern Ireland Environment Agency found that economic activities relating to the environment contributed over half a billion to our local economy and the equivalent of over 32,000 jobs. “It would be foolish to threaten this already existing green economy in such uncertain times”, concluded Mr Alison.
The controversial method involves geological risks and can be responsible for triggering earthquakes as happened in Lancashire. Fermanagh has a unique geology which is rich in caves (map in annex): the group believe the seismic risk associated with fracking must be fully assessed as this could introduce unnecessary risks.
“Shale gas will also endanger NI’s ability to deliver on its climate change commitments within the UK Climate Act3 and move towards a green economy added Gary McFarlane of CIEH and Chair of Stop Climate Chaos NI. “Northern Ireland has some of the best features nature has to offer- wind, wave and tidal. These invaluable assets should be the future of the NI green economy and developing renewable energy could create thousands of new jobs”.
France, Bulgaria and South Africa have suspended the search for shale gas until research uncovers the potential long-term impacts on human health and the environment.’
In a fascinating report for the Energy Research Forum, Shale and Wall Street: Was the Decline in Natural Gas Prices Orchestrated? Deborah Rogers has examined the relationship between the shale gas industry in the US and Wall Street investment banks. As she explains (our emphasis):
“As documented in this report, emerging independent information on shale plays in the U.S. confirms the following:
Wall Street promoted the shale gas drilling frenzy, which resulted in prices lower than the cost of production and thereby profited [enormously] from mergers & acquisitions and other transactional fees.
U.S. shale gas and shale oil reserves have been overestimated by a minimum of 100% and by as much as 400-500% by operators according to actual well production data filed in various states.
Shale oil wells are following the same steep decline rates and poor recovery efficiency observed in shale gas wells.
The price of natural gas has been driven down largely due to severe overproduction in meeting financial analysts’ targets of production growth for share appreciation coupled and exacerbated by imprudent leverage and thus a concomitant need to produce to meet debt service.
Due to extreme levels of debt, stated proved undeveloped reserves (PUDs) may not have been in compliance with SEC rules at some shale companies because of the threat of collateral default for those operators.
Industry is demonstrating reticence to engage in further shale investment, abandoning pipeline projects, IPOs and joint venture projects in spite of public rhetoric proclaiming shales to be a panacea for U.S. energy policy.
Exportation is being pursued for the differential between the domestic and international prices in an effort to shore up ailing balance sheets invested in shale assets.
It is imperative that shale be examined thoroughly and independently to assess the true value of shale assets, particularly since policy on both the state and national level is being implemented based on production projections that are overtly optimistic (and thereby unrealistic) and wells that are significantly underperforming original projections.”
Is UK and Northern Ireland policy being led by the same unrealistic projections? Has the Northern Ireland Minister for Enterprise, Trade and Investment considered the implications of this research? To find out how to contact her, visit our What Can I Do? page.
Read the full report here
Image from report.