UKSIF analyst seminar: Fracking – are we prepared?
Unsurprisingly perhaps, like many SRI enthusiasts I have found myself firmly in the ‘sceptic’ camp over the years when it comes to the fracking debate…
The implications for (and of) water usage, ground water contamination, leakages, flaring – potential damage to property and health – and of course climate change – all add up to it being an area of concern, in my humble opinion….
Yet last week’s UKSIF ‘Fracking – are we prepared?’ event hosted by Threadneedle Investments did make me stop and think more than once. Indeed I came away thinking that there may indeed be advantages to being just a touch more open minded.
The speakers were from a wide range of disciplines. Most had at least reservations or concerns, yet there were also a number of very sensible comments made. These comments offered genuine cause for reflection, particularly with regard to the possible upsides of trying to progress a well regulated, well managed UK fracking industry.
The following comments were those that I found must thought provoking:
On the ‘pro fracking side’:
83% of UK homes are heated by gas and that gas has to come from somewhere. Apparently the UK stopped being self sufficient in 2004 and around 80% of UK gas will be imported by c2030. In shorthand – we may need to consider our ‘least worst’ scenario ie import gas from unreliable and/or dubious regimes (who may pay no attention to environmental and other impacts) vs supporting a regulated UK based fracking industry.
Lots of very highly regarded bodies have supported the need for fracking but they are not getting the press coverage that the ‘anti’ lobby attracts. To add to this there is a view that the high profile ‘anti’ lobby does not always represent local feelings as they are regularly infiltrated by ‘rent-a-mob’. (Sound familiar?)
Trail blazers Quadrilla have spent over £100m in the UK already and have only drilled one well thus far. In the light of such figures fears of the fracking industry dominating our green and pleasant land may be just a touch overstated. (ie The maths needs to stack up and our planning rules (at present) are reasonably robust.)
On the ‘anti fracking side’:
We must not be pompous about our ability to do things better than in the US. Just because a lot has gone wrong there does not mean all will be well here (so don’t be fooled by those who imply otherwise). We need to work hard to learn from the US in order to not make the same mistakes…
The fracking industry got off on the wrong foot in the UK and will have to make up much ground if they are ever to win even low level public support. As yet they have not got their act together, but if bigger players enter the market they just might (although bigger players bring deeper pockets so this may be a good thing.)
And probably my favourite (Chatham House) quote, to précis: ‘The problem is that we are short on space in the atmosphere, not short of fossil fuels’. In other words we (mankind) are fast approaching the maximum levels of greenhouse gasses we can pump into the atmosphere without threatening our own wellbeing. We will hit our emissions ceiling well before we run out of fossil fuels – so by investing time and effort (& money) into the fracking industry we are ‘barking up the wrong tree’… we need to look elsewhere.
To conclude the event the audience were asked to vote ‘yes’ or ‘no’ with regard to whether or not the UK, or indeed UK investors, were ‘ready’ for fracking.
Some of the audience were no doubt ‘died in the wool greenies’ like myself – but most appeared to be mainstream investors with an interest in understanding this area better…
Not a single participant thought we were yet ready…