Why in USA, though anti-fracking-protests exist, many locals populations allowed the execution of hydrofracking drilling for shale gas and oil, and, contrarily, in UK the protest is becoming a national and irremovable issue? The American answer is easy:
Stuff their mouths with cash.
“THERE are many, many more of us than there are of you,” shouted protesters in Balcombe, a village in southern England with an exploratory drilling rig and a population swollen by eco-warriors, to the police and the frackers. Sadly, they are right. Britons are broadly opposed to hydraulic fracturing for oil and gas, or “fracking”—at least if it might happen anywhere near their homes. Cuadrilla, an energy firm, has already been spooked into shutting down its rig.
Fracking has transformed America’s energy market and helped the country out of recession. It can create jobs, lower bills and reduce dependence on unreliable, autocratic oil- and gas-producing countries. Once a well is drilled—something that can be done increasingly speedily—it is scarcely more of a blot on the landscape than a garden shed. Nobody knows whether the earth under Britain can be pummelled into giving up much oil and gas, although the latest estimates suggest there is a lot of the stuff. Why not start looking?
For two broad reasons, say the protesters. The first objection to fracking, favoured by Greenpeace and smaller green groups like No Dash for Gas, is environmental. Hydrocarbons, say the campaigners, are bad; the methane occasionally emitted from wells is a greenhouse gas; fracking can pollute water. The second objection, voiced more often by locals carrying “Frack off” signs, is to the lorries and disruption that come along with mining: pure NIMBYism.
The environmental objections are weak. Natural gas is far cleaner than coal. America’s many wells have produced little pollution—and the danger could be reduced by decent regulation. Technology is making it possible to drill many wells from a single pad and to reuse the water that is pumped in.
Oddly, the NIMBYs have a stronger case. Fracking is indeed a nuisance, particularly while wells are being drilled. Lorries clog the roads. Workers spend money locally—but they also get drunk and fight locally. In western Wyoming, rising crime strikingly tracked an increase in drilling.
Stuff their mouths with cash
Fracking has boomed in America partly because local people have been paid off handsomely. Landowners can sell the rights to the hydrocarbons under their fields. States tax extracted oil and gas, and redistribute much of the revenue to the affected counties, which spend it on glorious schools and fire stations. America has NIMBYs too—and some states have banned fracking outright—but money has proved a powerful salve.
In centralised Britain, by contrast, almost all the proceeds from fracking that do not flow to miners would end up in the Treasury’s coffers. Oil and gas rights are held in effect by the crown, not landowners. George Osborne, the chancellor of the exchequer, sets the tax on shale-gas production: it is 30%, much lower than taxes on North Sea fields. Mining firms pledge to pay £100,000 per well and 1% of revenues to local communities (not yet defined). As a result of a broad reform to business rates, local authorities may also be able to keep a share of the rates paid by energy firms, subject to complex calculations. This is simply too small and too vague a lure.
The ideal solution would be to radically decentralise the tax system and allow local authorities greater freedom to set extraction taxes—which would encourage miners to go where they are least disliked. Unfortunately, the government is unlikely to loosen its grip over taxation. But one simple change would help. Following long protests against wind farms, in April the rules were changed to allow local authorities to keep all the business rates paid by turbine installers. Do the same for fracking.
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