Possible Political Crisis in UK Around 14th Licencing Round
The political push for shale gas explorations could backfire despite the good intentions of the political parties endorsing developments in the United Kingdom. This eventuality stems from the different positions of politicians and population, along with a significant disconnect between the central government and local authorities. According to experts gathered at the Fracking conference on Monday, the situation could even result into political tensions and crisis.
Dan Byles, MP for North Warwickshire and Bedworth and chairman of the all-party parliamentary group for unconventional oil and gas, argued that shale gas could support energy security, price security and the balance of payments. Byles made the case for locally produce gas, but also launched a resounding warning. He said that the 14th licencing round would be a critical moment, as unexpected licences could take by surprise several Members of Parliament (MPs).
“It could be a dangerous political moment in Westminster if MPs that at the moment think that the shale gas debate has nothing to do with them may suddenly find that actually there is a petroleum exploration & development licence in their area that they were not expecting. So we need to be alert and sensible to the possibilities of a political wobble later this year around the time of the licencing round,” Byles explained during the conference in London.
The risk of ‘unexpected surprises’ is quite high, as the Government is expected to offer licences covering 43% of the country, including national parks and cities.
The licencing round will be a central moment for the development of shale gas in the United Kingdom also because it will be a litmus test for companies’ appetite for licences in the country.
“The 14th licencing round will be the barometer for the shale gas sector,” commented the chairman of the all-party parliamentary group for unconventional oil and gas.
Apart from this political risk, the United Kingdom has to cope with other two problems: a clear disconnect between London and regional authorities, and a rising local opposition.
DISCONNECT BETWEEN LONDON AND REGIONAL AUTHORITIES
The distance from London and the rest of the country could equally emerge for what concerns the decision-making process. Local authorities need to find their way through the existing legislation and might need some help from the central government.
According to Matthew Townsend, Partern at Allen & Overy, the legislation is indeed a jungle, a conundrum difficult to solve and interpret, which inevitably paves the way to frictions.
“Planning consent always is in my view a highly political process… I think there is a disconnect between central government… and what is happening on the ground and what local authorities and regulators are having to do with,” Townsend said on Monday.
LOCAL OPPOSITION
Local opposition is another clear problem for shale gas developments. The protests in Balcombe and the following U-turns of Cuadrilla Resources clearly indicate that local communities can change the cards on the table. And things could continue in this direction.
On Monday, the University of Nottingham released its study about the public perception, following similar reports in the last 26 months. The May 2014 survey confirmed that the turn against fracking in the UK has deepened, marking the third consecutive decrease in public support.
According to Tony Bosworth, Climate and Energy Campaigner at Friends of the Earth, the opposition could even represent an additional political risk.
“Fracking is a risk that people are not willing to take. Opposition is growing, … people are realizing that drilling could have electoral consequences,“ Bosworth said in London on Monday.
WHY THOSE RISKS?
In this context, it comes as no surprise that institutions and groups argue and bicker about many aspects connected to shale gas. Also during the conference, some participants excluded significant positive consequences of this energy source, with some experts also questioning the impact of shale gas on prices and on employment figures. And here clearly lies the bone of contention. This lack of clear evidences and scientific certainties intrinsically creates confusing figures and opposing views.
“In terms of potential reserves we will see almost zero scientific information,” said John Loughhead, Executive Director at UK Energy Research Centre.
Given the fact that all the political parties somehow endorsed shale gas explorations, the present confusion poses a serious threat for politicians. Now it is too late for eventual U-turns. It is evident that companies will drill for shale gas in the United Kingdom.
In this sense, the present situation resembles a bet. Politicians are betting on a horse not really knowing its chances to win the race. The only certainty is that some indications of the horse’s chances will emerge with the 14th licencing round. That will be the first lap of a long and probably slow run, which is also possibly connected to the General Elections in May 2015. The destiny of shale gas and the current government could go hand in hand.
Sergio Matalucci