Time for a fracking charm offensive?

Per­fect for puns on plac­ards and front pages, frack­ing is the media-friend­ly short-form name for hydraulic frac­tur­ing, the process of extract­ing shale gas from lay­ers of rock by drilling down and inject­ing flu­id at high pres­sure.

The tech­nol­o­gy has faced vocal and wide­spread oppo­si­tion from “frac­tivists”, includ­ing pub­lic fig­ures and celebri­ties, from Green MP Car­o­line Lucas to Hol­ly­wood actor Mark Ruf­fa­lo, star of the Incred­i­ble Hulk.

The cam­paign against frack­ing is focused pri­mar­i­ly on envi­ron­men­tal issues: big-pic­ture con­cerns about cli­mate-change impacts of fos­sil-fuel con­sump­tion; plus local-com­mu­ni­ty fears for poten­tial ground­wa­ter con­t­a­m­i­na­tion and air pol­lu­tion.

The two most high-pro­file UK test-drilling loca­tions have seen pro­test­ers march­ing in their thou­sands and camped on site. In North-West Eng­land, at Bar­ton Moss, cam­paign­ers won a stay of evic­tion in March. Two month ear­li­er, in the Sus­sex vil­lage of Bal­combe, ener­gy firm Cuadrilla announced it will not now frack the besieged site, due to unfavourable geol­o­gy.

Data for the Bow­land Basin now make it per­haps the largest such shale gas reserve in the world

These flash­points have kept the bad-press band­wag­on rolling since frack­ing-relat­ed earth tremors shook Black­pool in 2011.

Giv­en such a con­tro­ver­sial track record, has the glob­al oil and gas indus­try been deterred from entry into the UK mar­ket? It most def­i­nite­ly has not, says founder, pres­i­dent and chief exec­u­tive of Texas-based Bre­itling Ener­gy Cor­po­ra­tion, Chris Faulkn­er – the self-styled “Frack Mas­ter” – who describes com­mer­cial atti­tudes and investor con­fi­dence as robust.

“The UK is like­ly to become the next shale rev­o­lu­tion, and many com­pa­nies are look­ing close­ly at the coun­try as the gov­ern­ment makes steps towards encour­ag­ing the indus­try through new tres­pass laws and tax incen­tives,” he says.

With strong pos­i­tive sig­nals from key polit­i­cal quar­ters, the busi­ness case is being built on emerg­ing data. The num­bers are big and get­ting big­ger.

Recent reports from the British Geo­log­i­cal Sur­vey have seen orig­i­nal esti­mates for total UK reserves revised upwards sub­stan­tial­ly to 1,300 tril­lion cubic feet (tcf), lift­ing expec­ta­tions for amounts which are eco­nom­i­cal­ly recov­er­able. Addi­tion­al data for the Bow­land Basin region, which stretch­es from Cheshire to York­shire, now make it per­haps the largest such reserve in the world.

“It is ear­ly days, but the UK shows every sign of fol­low­ing the exam­ple of the Unit­ed States,” says Mr Faulkn­er. “Esti­mates of recov­er­able oil and gas are being upgrad­ed as more detailed sur­veys are con­duct­ed and test drilling com­plet­ed.”

Tak­ing a con­ser­v­a­tive recov­ery ratio of 10 per cent, frack­ing advo­cates cal­cu­late 130tcf of gas extract­ed could pro­vide any­thing up to 52 years’ UK sup­ply.

If fig­ures for reserves and recov­er­abil­i­ty remain works in progress, those quot­ed for poten­tial employ­ment are open to even more debate. Esti­mates for jobs to be cre­at­ed have ranged from 74,000 (Cuadrilla), down to 24,000 (AMEC) and back up to 64,000 (EY).

A frack­ing boom had at one point also been tout­ed by Prime Min­is­ter David Cameron as hav­ing “real poten­tial” to dri­ve UK ener­gy bills down, only for the sug­ges­tion to be dis­missed by econ­o­mist Pro­fes­sor Lord Nicholas Stern as “base­less eco­nom­ics”.

On the mat­ter of price, chief sci­en­tist at Green­peace UK Doug Parr argues it is vital to under­stand mar­ket dif­fer­ences either side of the Atlantic. “The sit­u­a­tion in the US is rad­i­cal­ly dif­fer­ent from the UK. We have much small­er land area to sup­ply a denser pop­u­la­tion, stronger pub­lic envi­ron­men­tal con­cerns and an open gas mar­ket. Con­di­tions are the oppo­site of those in the US, where a frack­ing boom in a closed mar­ket led to a gas glut and col­lapse in prices,” he says.

“No ener­gy expert sees the same price falls hap­pen­ing in Europe. The impact on gas costs is actu­al­ly like­ly to be mar­gin­al or non-exis­tent.”

Fun­da­men­tal dif­fer­ences between US and UK reg­u­la­to­ry frame­works are also high­light­ed by Mike Pocock, a part­ner at law firm Pin­sent Masons. “In the US there is no nation­al statu­to­ry frame­work for land-use plan­ning, except for cer­tain envi­ron­men­tal laws and some enabling leg­is­la­tion. By con­trast, the UK has a statu­to­ry plan-led sys­tem sub­ject to both local con­sul­ta­tion and inde­pen­dent exam­i­na­tion. Nine sep­a­rate appli­ca­tions make frack­ing one of the most reg­u­lat­ed activ­i­ties in the ener­gy sec­tor,” he says.

Blamed for exac­er­bat­ing drought con­di­tions in the US, water abstrac­tion demands for frack­ing rep­re­sent one issue where UK under­stand­ing has changed, as head of cor­po­rate affairs at Water UK Neil Dhot explains. “Over­all, the poten­tial amount of water need­ed in the frack­ing process was a big ques­tion raised very ear­ly on. How­ev­er, all the stud­ies and work we have seen in the last few months point to the amount of water need­ed being man­age­able,” he says.

So, look­ing at the strate­gic via­bil­i­ty of frack­ing in the ener­gy mix, might shale gas offer an inter­im means to wean the UK off coal addic­tion and reduce emis­sions in the medi­um term, while oth­er, clean­er forms of gen­er­a­tion, includ­ing renew­ables and nuclear, achieve crit­i­cal mass?

Accord­ing to Dr Parr at Green­peace, such prag­ma­tism is not cred­i­ble in terms of time­frames for deliv­ery, even putting aside envi­ron­men­tal con­cerns and social resis­tance. “Giv­en that shale gas pro­duc­tion will not become sig­nif­i­cant for well over a decade, it is no quick fix for any­thing. It will play lit­tle or no role in dis­plac­ing coal out of the UK pow­er sys­tem. Coal should be most­ly gone by the time shale ever becomes sub­stan­tial,” he says.

There is nei­ther con­sen­sus nor com­pro­mise on how frack­ing will play out in the UK. Depend­ing which side of the police cor­don you stand, the poten­tial is as strong as the protest. The only aspect on which both sides might agree is that the pitch, mar­ket­ing frack­ing to com­mu­ni­ties, has been found want­i­ng so far.

As Mr Faulkn­er con­cludes: “Gen­er­al­ly in Europe, the indus­try has han­dled the pub­lic rela­tions very bad­ly. The ‘bunker men­tal­i­ty’ of putting up bar­ri­cades and get­ting on with it was not right. Engag­ing with com­mu­ni­ties, help­ing them under­stand shale explo­ration, frack­ing and the actu­al risks involved, hear­ing their views, is an approach used in the US, and it has worked.”

If lit­tle else about the future of frack­ing in the UK can be fore­cast with cer­tain­ty, the local “sell” can be pre­dict­ed to change. Expect a charm offen­sive.