The British government has announced that it is imposing a moratorium on fracking over earthquake risks, ending shale gas plans in the UK.
The amount of actual production that was going to come out from fracking in the UK was going to be very small, Justin Urquhart Stewart, director at Seven Investment Management in London, told New Europe by phone on 6 November, adding that the government put the controls on the potential vibrations from the fracking to be so tight that it was never going to be lasting very long.
Fracking involves extracting gas from rocks by breaking them up with water and chemicals at high pressure. “All it took was the slightest of shakes and they would be reporting a shut down in production so it was just a matter of time the UK was either going to change the rules or effectively make sure fracking was going to be a dead duck here,” Urquhart Stewart said, noting that it was highly they were going to change the rules.
Moreover, the British government was pleasantly surprised that the percentage of non-oil, non-coal related production, including solar and wind power, is now so high that it is much more successful than they thought it was going to be, he said.
The moratorium leaves the UK government with an option to restart fracking in future years but Urquhart Stewart said it is highly unlikely shale gas production will ever be supported by any government following the December election. “I don’t think any of the parties are going to be backing fracking at all,” he said. “There has been a change in environmental attitude in the past 12 months in the UK which is quite remarkable not just because of the demonstrations that they had. Some of them were related to the television programmes of David Attenborough – they had very significant impact with plastic usage and the like that parties now would regard it as very risky anything in their policies that is not seen to be suitably green and therefore fracking, nuclear power will be at the bottom of the list,” Urquhart Stewart said.
According to the London-based expert, there are also doubts regarding the UK government’s choice to build the Hinkley Point nuclear power plant (NPP), which is not yet complete. “I think probably is going to be a question whether Hinkley is actually going to go forward because they probably think there is such a high proportion of non-carbon related renewable energy that they probably won’t need the nuclear power. All of all of these are coming into question now and the government whichever we end up with after the election is going to be extremely reluctant to put any more capital into backing them,” Urquhart Stewart said.
Turning to UK energy security, he said Britain can meet its gas needs through imports from Norway and the Netherlands. “I think the truth is not being told to what extent Britain may also still rely upon continental, which also means Russian gas coming through the interconnector from Holland but also getting now more connection coming through from Norway,” Urquhart Stewart said. “There is a question to be asked about the security in the United Kingdom but none of the politicians are going to raise it I don’t think at the moment because to be raising the issue of nuclear power, let alone fracking, he added.
He noted that the Nord Stream-2 natural gas pipeline from Russia to Germany could also be a potential source for Britain. Urquhart Stewart said the construction of Nord Stream-2 is inevitable and that would mean therefore the ability for Britain to tap into what Germany is having access to in an apolitical manner, explaining: “It’s not as though Britain would have to announce that is actually building a pipeline or … make it particularly newsworthy. It would just say is that it’s tapping into European gas supplies from Germany which it means from Russia but no politician is going to say that.”
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