Back off, nimbyists, or fracking will benefit Beijing more than Balcombe

The fracking debate has been brought to a new heat by David Cameron’s message to Home Counties nimbyists and eco-crusties that he wants ‘all parts of our nation’ to share the shale gas bounty, not just lucky northerners. But the argument is proceeding in almost total ignorance of how the controversial extraction technique works and how soon it’s likely to happen. So I asked one of Britain’s top energy executives this week whether shale is really the game-changer it’s fracked up to be. It certainly looks that way in the US, he said, because gas-based energy costs have been cut by two thirds, energy representing 10 per cent of all production costs. But the US has three built-in advantages: 2,000 land drilling rigs already in place; an extensive network of pipelines; and ‘if you own the land you own the mineral rights’. In the UK and Europe, ‘We don’t have 2,000 land drilling rigs, we’re not criss-crossed with pipelines, and unless you’re Latvian, you don’t own the mineral rights if you own the land. So it’s going to be a lot slower over here.’ And what should worry us most, he added, is that there’s a formidable competitor to the east that has plenty of shale and plenty of drilling rigs and can fix the ownership of mineral rights any way its autocratic government wants. The bad news if the nimbyists don’t back off is that Beijing will reap this bonanza long before Blackpool or Balcombe get a look-in.

Escape velocity

Hard to keep track of so many positive economic indicators. Growth was 0.6 per cent in the second quarter and may be revised upwards; it’s now likely to beat 1 per cent for the year and should head towards 2 per cent next year.