Wednesday, 25 June 2014

"5 Fracking Myths Busted" - Busted


A new anti-fracking initiative, Talk Fracking, is currently touring the country. Their website has a thin veneer of balance, claiming to seek an "open debate" on fracking, but you don’t have to scratch too deeply to see their true motivation.

I’ll consider one particular video in detail, which claims to have “busted” all of the reasons to support shale development in the UK.

Before addressing the substance of the video, however, I will address the style. Talk Fracking say that they want to open up a balanced debate on fracking. Yet the video has this strange, childish, mildly insulting caricature of an “industry representative” to present the pro-fracking case. If you’re looking for a balanced debate, putting up insulting straw-man caricatures of your opponents is hardly the best way to start.


Now, to the content. The first “myth” is the impact (or not) that shale gas will have on energy prices. My view is that the only realistic position to take is that we simply don’t know what impact it’ll have on prices. It also depends heavily on whether the rest of Europe also develops shale gas. I suspect that the impact is unlikely to be dramatic as we’ve seen in the USA. Some studies have indicated it will have little impact, while others have suggesteda possible price reduction of up to 25%.

The Talk Fracking video argues that fracking will “keep a monopoly of energy with the big six companies”. In fact, Centrica’s farm-in to Cuadrilla’s Lancashire acreage aside, current operators in UK shale have no connection with the big six, so I’d really like to know how shale development strengthens their monopoly. In reality, the big six monopoly is unlikely to be affected whether or not we develop shale gas. However, one of the most fundamental rules of economics is that producing more of something can only have a downward impact on prices.


The second “myth” is the impact of shale on jobs and the economy. The latest figures on this come from EY, which comes up with similar numbers to the 2013 IoD report. EY estimates 6,000 direct jobs, 39,000 supply-chain related jobs and 19,000 induced jobs. As we have seen in in my “Spotlight on SMEs”, there are a lot of UK businesses that stand to benefit from shale development - in the supply chain and providing ancillary services - beyond those working directly for Cuadrilla and IGas.

The Northwest Energy Task Force now has over 400 business supporters who see the benefits of shale development in Lancashire. This includes the Chairperson of “Stay Blackpool”, which represents over 200 hoteliers and guesthouses. The “induced” jobs created in the hospitality trade may not count as far as Mr Mobbs and Ms Rothery are concerned, but I bet they count to the people holding down these jobs.

This is exactly what we have seen in the USA: the economic benefits of shale development extend far beyond the drillers themselves. Hotels are booked out all year round. Restaurants are full. There are jobs created in haulage and construction.

Finally, note the sleight of hand where Ms Rothery switches attention to sex workers in the jobs total. Rest assured, the IoD and EY reports don’t consider sex workers in its jobs figures.


“Myth” 3 is energy security.  Joseph Corre invites us to “ask yourselves what energy security really means for you”. I would suggest that it means that when you press the light switch, the lights come on. We saw over the winter, when storms affected power supplies for several days, the level of disruption that resulted. Keeping the lights on is no laughing matter.

We’re already in a situation where electricity generation capacity is getting perilously close to the margin. The National Grid are looking for volunteers to receive payments in return for being the first to be switched off in the event of outages. At best, this is additional cost on our bills. At worst, put yourselves in the shoes of a high-energy industrial user, such as a factory. Would you be likely to invest in the UK knowing that you might be asked to shut down if demand spikes? Energy security has impacts across the economy, even if it’s just a buzzword for Mr Corre.

Current projections suggest we will be importing 76% of our gas, at a cost of over £15 billion per year, by 2030. The question is not whether or not we will burn gas, but where that gas will come from – domestic shale or imported. Even Caroline Lucas accepts this. If gas is imported, that £15 billion is lost from our economy – it creates no jobs and pays no tax. If gas is produced domestically, the jobs and tax stay at home, benefitting the UK economy.

Any yes, Dame Westwood is correct that we don’t presently import gas from Russia. However, Talk Fracking want to have their cake and eat it. The impact of shale development on UK prices will be modified by the fact that we are part of an interconnected EU market. However, they then ignore these interconnections when it comes to considering the impacts of events in Eastern Europe. Much of the rest of Europe does import much of its gas from Russia. As they are so fond of pointing out, we are connected to this market. So we are impacted, even though none of the gas in our pipelines actually comes from Russia. 

Moreover, we are importing substantial amounts from Qatar instead. There are environmental implications of liquefying gas and shipping it halfway around the world as well, and the middle-east is hardly the best place to be sending £15 billion a year if we can really help it. Producing domestic gas is a better option than importing Qatari LNG, for a whole host of reasons.


“Myth” 4 is the “gold standard” regulatory system in the UK. I’ll be honest and say that I’m not sure exactly what counts as “gold standard”, and who gets to decide whether something meets that standard. But it’s pretty safe to say that regulations in the UK are significantly stronger than they are in the USA. Anyone who thinks otherwise simply cannot be familiar with the industry.

I’m not sure how what has happened in the banks or our supermarkets has any bearing on shale gas development. It’s not the same people regulating these very different industries. I’ll admit that I have no idea the regard to which our food industry is held, but prior to the banking crash I remember hearing more about light touch regulation than gold standard regulation. But apparently “the banks went bad” is a good argument to ban fracking.

Liz Arnold goes on to regurgitate the SLB Oilfield Review, which examines well integrity in the Gulf of Mexico. Anyone who thinks deep-water GoM data is relevant to onshore drilling either doesn’t understand drilling or is intentionally looking to mislead. Anyone who argues that the numbers in the SLB report show wells “leaking” either doesn’t understand well construction or is intentionally looking to mislead. When someone is presented as an expert, flown over from the USA specifically for her expertise, I lean strongly towards the latter conclusion.

Wells are constructed with multiple layers of steel and cement to isolate the well from surrounding rocks, preventing gas from getting into shallower layers. Sometimes, one of these barriers develops an issue of some kind, but this does not mean that gas is able to leak from the well. Actual well leakage is very rare. King and King summarise the issue better than I can, so I’ll quote: 
while individual barrier failures (containment maintained and no pollution indicated) in a specific well group may range from very low to several percent (depending on geographical area, operator, era, well type and maintenance quality), actual well integrity failures are very rare. Well integrity failure is where all barriers fail and a leak is possible. True well integrity failure rates are two to three orders of magnitude lower than single barrier failure rates.”
Ms Arnold also makes the erroneous claim that well integrity issues have allowed frack fluid to leak into shallow aquifers. In fact, fracking fluid is dense, and therefore unlikely to rise from deep formations. So even if a well has experienced a total loss of annular integrity, you wouldn’t expect to see frack fluid in shallow formations. This has been the case in the USA – even where methane migration has been attributed to well integrity, such as at Dimock, or in the Duke PNAS paper, no evidence for fracking fluid chemicals has been found.
Finally, the best place to look when considering the efficacy of existing regulations in the UK, whether they are gold standard or not, is to look at the existing onshore industry and its environmental impact. Over 2,000 wells have been drilled onshore in the UK, over 200 of which have been hydraulically stimulated in some manner. No significant environmental impacts have been noted.
While modifications to the regulatory system might be appropriate to address the increases in frack fluid volumes and the number of wells associated with shale gas development, I think in general past experience points to a regulatory regime in which we can place confidence.     


The fifth and final myth is that of gas being a bridge fuel. It is true that greens where advocating gas as a fuel decades ago, because its CO2 footprint is substantially lower than that of our dominant fuel, coal. This argument still holds true today: and is recognised by the IPCC, which states that 
"In mitigation scenarios reaching about 450 ppm CO2eq concentrations by 2100, natural gas power generation without CCS acts as a bridge technology, with deployment increasing before peaking and falling to below current levels by 2050 and declining further in the second half of the century (robust evidence, high agreement)."
While in the press conference associated with the report's release, the IPCC spokesman said
"We have in the energy supply also the shale gas revolution, and we say that this can be very consistent with low carbon development, with decarbonisation. That's quite clear."
I would like to know whether the organisers of Talk Fracking dispute the IPCC’s conclusions, and if so, why?

In the closing stages of the video we learn that Talk Fracking's position runs far deeper than just shale gas extraction – in fact, Talk Fracking believe that our whole model of industrial civilisation, and all the developments we’ve made in the last 200 years, needs to be changed. I’m not about to be drawn into an argument over the benefits or issues with this sort of debate – resource use and limits to growth are hugely complex issues. However, I don’t think that this as a reason to abandon shale gas development will chime with the wider public. If Talk Fracking’s true manifesto goes far beyond the fracking issue to a wholesale reorganisation of our economic system, then I believe they should be honest about this to the general public.  





12 comments:

  1. "Their website has a thin veneer of balance, claiming to seek an "open debate" on fracking, but you don’t have to scratch too deeply to see their true motivation."

    You don't need to waste energy 'scratching', simply read the petition on the right of the home page.

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  2. Interesting reading as ever. As a supplier to the onshore petroleum sector i'm keen for an open and balanced debate to be had based upon credible, science based information.

    Surely 'Talk Fracking' should also have a 'pro-fracking' petition upon the same page in order to provide some sort of balance?

    I'm all in favour of more open debate but it seems that the 'Talk Fracking' is yet another 'anti' website masquerading as a 'credible' source for info.

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  3. We have a great deal of experience with hydraulic fracturing here in the states and It's safe to say that most of the problems the anti-fracking crowd claims it causes (i.e. water catching on fire, contamination of aquifers, etc.) have all been disproven. Nevertheless, fracking - like any other type of human activity - comes with risk and should not be completely dismissed. So long as sound science (and sufficient governmental oversight) is applied in the drilling process, the public should not worry that fracking will cause any environmental catastrophes.

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  4. Your usual sage comments JV. Why Vivienne Westwood's comments should have any credence eludes me. She is a fashion designer who panders to the wasteful whims of the fashion industry I believe. The credentials of so many who are against this well researched the technology are very poor. Perhaps they found science hard at school? We rely on so much high tech stuff these days yet when fracking is discussed its all a disaster waiting to happen. Proper research indicates that all of the anti arguments are without foundation.

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  5. Blackpool Resident28 June 2014 at 09:13

    I would have emailed this, but I can't find an immediately available email address for Dr JV. The BBC has commissioned research on reporting of rural affairs (or lack of it). Audience research undertaken touched on fracking as a rural issue subject to discussion by the BBC. Page 45 onwards: http://downloads.bbc.co.uk/bbctrust/assets/files/pdf/our_work/rural_impartiality/audience_research.pdf

    What's notable is what is revealed about reporting of anti-frackers beliefs. Audiences seem to feel that the activists are able to articulate their fears to the media, but don't present a scientific basis for them. What jars somewhat is that this is something the audience has picked up on as a point of further discussion, but BBC journalists and editors haven't.

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  6. I think this is a great response from a pro fracker. It is a lot less full of hyperbole and accusation than most, and some of the charges stick.
    i am an anti fracker and i wrote a longer post but lost it, so apologies if this is mildly incoherent as i am rushing it.
    I was mildly involved in Talk Fracking.
    Faced with an industry no show it seemed reasonable to mildly caricature the industry and put them in a position where they would have to answer questions because they are refusing to have open debate.
    Of course they don't need to with Lord Browne as a non executive minister, but the £800 a seat events they throw are not only exclusive (as opposed to free to attend open to all events) but they are dangerous for investors.
    Ther have been large losses made in the US, and accusations of a ponzi scheme element to the fracking industry, a lot of big oil wont touch it.
    i am interested from an economic view what is the justification for this industry. We wont find out when they are just holding pep rallies and sales shows.
    I would encourage pro frackers to get the industry to engage in open debate, to allay fears and honestly represent the industry, because at the moment it is open to ridicule and it is reliant entirely on government influence that may disappear after the 2015 elections.
    There needs to be national support for it, or it will fail.

    All the best
    Tom

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    Replies
    1. Hi Tom,

      Thanks for your comment, I'm glad you found the post useful.

      With respect to the "no show", I'm not aware of anyone from industry who was invited to the first 5 regional debates. I'm on speaking terms with a few people who would be considered media-friendly pro-fracking advocates, all say they didn't get any invite to the first debates. I myself have done a fair amount of media work from a pro-fracking perspective, and didn't get an invite to the regional debate.

      More generally, each company seems to be more interested in their individual license areas than persuading the country as a whole. So they're more likely to host smaller scale village-hall type events near to their operating sites than to engage in the national-level debate. That seems like a short-term view for me, but having engaged with a few operators, that does seem to be the way they think - their principal focus is their licensed area.

      With respect to the economic argument and the "ponzi scheme" in the USA, the reason that some companies have struggled is because gas production soared, bottoming out the price. This is excellent news for consumers, both domestic and industrial, but at $3/mmbtu any gas production is going to be marginally economic, whether shale or otherwise.

      Incidentally, this speaks to the point often made by anti-frackers that Lord Browne has categorically stated that gas prices would not be affected by shale. Remember that he is talking to more than one audience, and the thought that UK shale production will crash prices might scare off potential investors.

      In reality, I doubt we'll see prices crash to the extent that they have in the US, meaning that it is likely to remain economic in the UK. What happens in the rest of Europe is significant. If we're the only country producing shale gas then we might not see much of an effect, while if France and Germany look to develop as well then I expect we would see an influence on price.

      Remember though that an effect on prices is only one part of the economic argument. UK shale development will create jobs both directly and in the supply chain. Moreover it will pay tax at a higher rate than almost any corporation other than the major North Sea oil producers (normal corporation tax is 20%, shale will be taxed at 32%). Every tcf of shale that we do not produce domestically, will instead be imported as LNG. This has a higher CO2 footprint (it has to be compressed and shipped around the world from the middle east), and the cost (estimated to be £14 billion per year by 2020) is money lost to the UK economy, paying no tax and creating no jobs.

      With regards to government support, I've often seen opposition to shale gas framed in terms of opposition to the Tory Party. In fact, the Lib Dems have made their support for shale gas clear as part of the coalition, while Labour have indicated that, while they might tinker with some of the regulations and fiscal regime, this is mainly rhetoric: they are also broadly supportive of shale development. UKIP are also favour shale extraction. The only party explicitly opposed to shale gas is the Green's, whose share of the vote dropped at the recent EU elections.

      Remember that the estimated gas in place in the Bowland shale is over 1,000tcf. If we can access 10% of that (a typical, some would say conservative, recovery rate), that's 100tcf. 100tcf is worth something like £1 trillion at today's prices. It would be a very irresponsible government indeed not to at least look at whether it can be extracted safely and economically. Hence the cross-party support.

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    2. Blackpool Resident30 June 2014 at 16:13

      I'm not involved in the industry and I don't come from a profession relevant to it. I'm a resident who takes a keen interest in it, on multiple levels. It's on that basis that I offer my opinions and ideas. I came off the fence after evaluating the arguments and cases put forward. In short, I was put off by the dishonesty and the tactics used by the anti-fracking activists, whilst I've been more assured by those science and engineering bloggers who are able to articulate issues calmly and with evidence to make convincing claims. I don't think I've ever taken the time to find and consider anything put forward directly by the Government or Cuadrilla. In an ideal world, the case for shale would be bolstered by not having the Government's cack-handed management anywhere near it.

      There are two factors for my assumptions about why the industry does not perceivably engage. First is that, at least in Cuadrilla's case, it's a small company with a culture rooted in engineering. In my limited experience, scientists and engineers do not necessarily have the wherewithal to manage public affairs or even give consideration to it - even with the backing of large and established businesses. In the UK, shale is evidently a new phenomenon which pushed the boundaries of the public's imagination in a new direction. The anti-fracking groups were able to very quickly occupy the ground opened up and set the terms of the issue almost from the beginning. Cuadrilla was beset by what should have been very minor, unnecessary issues in the beginning which affected relations with some local people.

      Second, I think that the industry is disadvantaged by the complexities of the issue. It is so, so easy to throw around accusations, innuendo and supposition based on fear and base human irrationality. All you need to do is put together leaflets showing industrial equipment on rural landscapes or show video clips of flaming taps. It is so much harder to put together a reasoned argument for something which draws on science which so many of us cannot begin to understand. How do you even begin to do that, when you're competing against a glossy leaflet or an entertaining (in the broadest sense) video? Gordon Brown didn't overcome this problem. Each time at the Dispatch Box he would reel off statistics, reports and terminology, but we only really remember him for being weird and fumbling.

      I suspect the industry is aware of this problem. It knows it cannot (easily) win, so it remains frozen like a rabbit caught in headlights. On another level, what would be the point of engaging with people and groups who are absolutely opposed to your existence, regardless of what you say or evidence you can provide? As Dr JV has experienced, it's easy to try to engage constructively, only to have critics attempt to trash your reputation and disregard anything you have to say that might add to a 'debate'. I can imagine there are many people in industry, let alone academia, who don't want to have that happen, or even worse, become a 'de facto' spokesman and attract the fruit loops who come with such a responsibility.

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    3. It doesn't add up...4 July 2014 at 13:34

      It's a pretty tough call when you have the BBC all lined up with the fracktivists. I didn't see the news report, but apparently on July 3 the BBC did a segment which was evaluated by a poster at the Bishop Hill blog as follows:

      the BBC was at it again last night in a news report about "fracking" which seems to be the only part of shale oil & gas production they've ever heard of.

      It was all there:
      the graphic showing the water table equidistant between the surface and the shale, gross distortion.
      the "what if?" graphic of fractures extending all the way up to the water table. About as likely as a crack in the Tate Modern extending to BBC Shepherd's Bush.
      The overlaid map of groundwater and shale reserves.

      The worry about the surface part of the drilling releasing methane "which is a greenhouse gas" - you mean at the depths where water wells, foundations and rail tunnels go, none of which use casing and pressure control technology remotely as good as hydrocarbon drilling? Well I never!

      the running for comment to an "expert" - not on drilling, fracking, geology, shale production - no, some effin greenie obstructionist.

      the US experience - only info shown was from some anti-shale zealot from Texas."It's an industrial process!" No kidding mate. Fancy that.

      The Question: are the benefits worth THE RISK? No explanation that THE RISK of water contamination is near to zero, although they did discount the earthquake RISK after first giving it a long exposure c/w scary graphics.
      Jul 4, 2014 at 5:21 PM | Unregistered Commenterkellydown


      http://www.bishop-hill.net/blog/2014/7/4/the-bbcs-reeducation-programme.html?currentPage=2#comments

      The BBC could, if it had bothered, have contacted our host here and been given some real expert guidance. He is not completely unknown to them.

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  7. Blackpool Resident - I think you've really got to the heart of the issue here. The industry would benefit from improving not just what they say to the public, but how they say. As you say, this is all difficult stuff, and not at all familiar to a lot of people from a science and engineering background.

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