On Monday, concrete will be poured into Britain’s last two shale gas wells in Lancashire. Cuadrilla Resources, which owns the license at the Preston New Road site, is being forced to destroy the wells by the North Sea Transition Authority (NSTA), which has ordered that the wells be ‘plugged with cement and decommissioned’ by 30 June.
This is not for safety or environmental reasons. Cuadrilla has offered to keep the wells secure at its own expense. It is to ensure that the wells can never be used to extract natural gas at any point in the future. In other words, the NSTA requirement is an act of economic vandalism, reflecting the extreme anti-fracking position of Ed Miliband, the Energy Security and Net Zero Secretary.
Reacting to the news last month of the discovery of a massive gas field under Lincolnshire, a spokesman for Miliband declared that it was the government’s intention to ‘ban fracking for good’. In any other age or country, this response would be greeted with incredulity.
A huge energy windfall is discovered. It would make Britain wealthier. It would produce jobs and generate a huge stream of royalty payments for the Treasury. Speaking directly to Miliband’s job description, it would reduce Britain’s dependence on imported energy. He should be happy. Yet Miliband is miserable. His reaction to what should be a positive development in an otherwise grim economic landscape of near-zero growth, household budgets squeezed by rising energy costs and a Chancellor facing painful fiscal choices? He didn’t want to know.
Cuadrilla’s Lancashire site sits atop of the Bowland shale formation, a seam rich in natural gas that according to one estimate could provide Britain with fifty years of natural gas. Its two wells at Preston New Road confirmed the presence of high quality natural gas. Britain is going to require natural gas for the foreseeable future. Wind power cannot be relied on to keep the lights on. Over the next few years, more nuclear capacity will be retired than will be connected to the grid. Battery storage remains extremely expensive and is measured in minutes and hours, not days and weeks.
Moreover, more than 80 per cent of British households use gas for heating and hot water, which together account for over three-quarters of household energy consumption. Forcing households to switch to electricity will push up their energy bills, not least because it’s much cheaper and more efficient to transport energy as natural gas through a gas transmission network with a regulatory asset value of £6.6 billion compared to transmitting energy as electrons through the electrical grid, which requires £58 billion of additional investment.
Even in terms of decarbonisation, permanently banning fracking makes no sense. If there’s demand for natural gas, fracked gas from Lancashire has a much smaller carbon footprint that shale gas from the Permian basin in Texas and New Mexico, which has to be liquified by cooling it to -162°C, shipped 5,500 miles and then re-gasified. Should domestic demand for natural gas decline, Britain is connected to mainland Europe’s gas distribution network, so British shale gas could displace Russian piped gas and shipborne liquified natural gas (LNG).
Miliband’s anti-growth eco-zealotry pits him squarely against the Prime Minister and Chancellor. Only last month, Keir Starmer was telling Sky News that growth is number one priority of his government – ‘economic growth, wealth creation, making sure people are better off’, all three of which would be boosted by fracking. Rachel Reeves was also telling her colleagues last month to conduct a full audit of the regulators on their watch to ensure they are working to boost growth.
Pouring concrete down a wealth-producing well is Miliband’s way of signalling that fracking is dead in Britain. How could a future Labour manifesto open the door to it without having first dispensed with the services of the minister who did everything possible to stop it?
Boris Johnson fought the 2019 election on a manifesto that said the Conservatives would not support fracking. After Putin invaded Ukraine, Kwasi Kwarteng reversed NSTA’s order to abandon the shale wells. ‘In conversation with the Prime Minister’, the then business secretary told MPs in March 2019, ‘we were clear that it did not necessarily make any sense to concrete over the wells’. The wells were given a three-year reprieve, which has now almost expired.
Why is Miliband petrified of fracking? Because a successful shale oil and gas industry in Britain would destroy the arguments he uses to justify net zero. Energy prices keep on rising not because of expensive, inefficient wind power but because, according to Miliband, using fossil fuels keeps Britain in the grip of global markets controlled by petrostates and foreign dictators. Presumably Miliband is referring to the United States, as the world’s largest exporter of hydrocarbons. But it was fellow climate-enthusiast Joe Biden who imposed a moratorium on LNG export approvals at the behest of the climate lobby, which Donald Trump quickly reversed.
Miliband’s argument is hardly conducive to good relations with Washington, where his opposite number is Chris Wright, the founder of Liberty Energy and one of the pioneers of the shale revolution. Instead, Miliband’s loathing of fracking tells the Trump administration that Britain is not serious about rising to the challenges of a dangerous world and generating the resources needed for increased defence spending. The logic of Miliband’s position is that given a choice between Treasury revenues from fracking or welfare cuts, he picks the latter.
Miliband’s hostility to fracking isn’t only endangering his career. It’s endangering Britain.
Comments