It’s a safe bet that Osborne’s Autumn Statement this Wednesday will hail a fracking revolution as the start of a new energy cornucopia for Britain. Like everything else politicians say 5 months before an election, it needs to be taken with a piece of salt. Only one shale well has been fracked in Britain – Cuadrilla’s PH1 at Preese Hall near Blackpool – and that had to be suspended when in 2011 when it caused minor earth tremors. Another attempt was made by Cuadrilla to set up a fracking operation, thistime on the mainland at Balcombe in the Sussex Weald, but that had to be called off as a result of determined opposition by the Tory rural brolly brigade, a resistance group that has now established a widespread network across the country pledged to fight fracking wherever it rears its head.
The Blackpool saga is revealing. Cuadrilla now wants, egged on by the government, to get permission to bore 8 further wells in Lancashire within the next 6 months. The county council is taking its time to consider this and is looking at the history of PH1, as well they might. It is a textbook case of how pathetic is the regulation of fracking: the Environment Agency and Health & Safety Executive visit drilling operations only very rarely, relying instead on the drillers’ own weekly reports and letting them make their own appraisal.
In March this year, 3 years after work at PH1 had been halted and 2 years after an expert report gave an assurance that nothing was wrong except some tremor-induced distortion to well piping deep below the surface, Cuadrilla told HSE it was measuring a build-up of annular pressure (AP) in the well near ground level, caused by seepage of either gas or fluids coming up from the well. What happened then is instructive. Since AP should be prevented by cement that the drillers pump down into cavities between the pipes and side-walls in a well, HSE demanded to see the cement bond log (CBL), only to be told that it had previously informed Cuadrilla that it didn’t need to make one. So now neither Cuadrilla nor HSE knows whether the well has leaked below the surface.
The whole issue over fracking in Britain is now a shambles, not only in terms of the politics and regulation of it, but also crucially in the economics of fracking operations now that the price of oil has dipped below $70 a barrel of Brent crude, and given the structural dynamics surrounding the price (the OPEC refusal to cut output, the global economic stagnation, and the glut in supply) it could even fall to around $50. So fracking could well turn out another white elephant of the Osborne Mad Hatter.