Debate Magazine

The Topsy Turvy World of Fracking

Posted on the 13 January 2014 by Markwadsworth @Mark_Wadsworth
No links because this is all general knowledge/you'll have to take my word for it.
I've no particular strong opinion about fracking one way or another, but what I notice is that the usual rules of Georgists one side vs Home-Owner-Ists on the other, with the Greenies sometimes coming down on one side and sometimes on the other with no particular coherence, no longer really apply.
Exhibit One
Michael Fallon, arch-Homey and eternal LVT-opponent ("Poor Widows In Mansions being hounded by Armies Of Surveyors" ad infinitum) was on Radio 4 this morning to "sell" the Tories policy of allowing local councils to keep a relatively large share of fracking revenues (a Georgist principle and a good one).
He had prepared a rather strange answer to the stock question "Why?", which he trotted out more or less word-for-word twice, it went roughly like this: "Local councils should be glad that fracking will lead to more investment and jobs in their areas, so it's important that we allow them to keep some of the tax receipts to pay for the investment required to cope with the new investment and jobs."
The presenter asked him straight out, "So to whom does the shale gas belong?" to which he promptly and accurately replied: "It belongs to the government."
The presenter's follow up question was "In the USA, the shale gas usually belongs to the landowner, but seeing as it belongs to the government, why are you being so niggardly? Why not let local councils keep a half or even all the tax revenues, i.e. the value of the gas?"
Fallon replied that he thought the government had got the shares between local and central government "about right" but did not disagree with the general principle, he did not say that the Yanks have a much better system (which you'd normally expect him to say).
Exhibit Two
Fallon was then on Channel 4 News at 7 o'clock, up against some Greenie, who came out with the usual Homey/NIMBY spiel: "Britain is a small island, we have no room for this, it's going to ruin our land, the countryside etc.", which all of a sudden Fallon didn't seem to think was a problem.
Unusually, it turns out that our enemies' enemy is also our enemy, it was the sort of feeble TV debate you wanted them both to lose.
Exhibit Three
Normally, the Greenies and Lib Dems are thoroughly pro-EU, but all of a sudden they are not. Channel 4 News had some professor guy of that persuasion who disputed the claim that fracking would mean lower gas prices (which is the case in the USA, gas prices have fallen by two-thirds, it is said), because, he said, that gas would be freely traded with other European countries, so instead of us saving two-thirds, that saving would be diluted among all EU countries, which means that gas prices would only fall by five per cent (or whatever).
Well ho hum.
a) Either you are in favour of us being in the EU or you are not, you can't pick and choose.
b) If you are in favour of the EU, you must also be in favour of share-and-share alike, share the gains and share the losses.
c) From the Greenies' and Lib Dems' point of view, low gas prices are inherently A Bad Thing, because that means more fossil fuel will be used, which in turn causes Catastrophic Climate Change, innit? So they ought to be seeing the negligible price fall as a plus.
d) It doesn't actually matter. The total value of the shale gas (minus extraction costs) is whatever it is. If we have an export ban, then our prices fall a lot and the tax receipts will be correspondingly low. If we sell it for a higher price abroad, then prices will only fall slightly but tax receipts will be much higher.
On the whole, the Greenies and Lib Dems are in favour of higher taxes (in this case, they would be correct, land and natural resources are the perfect subject for taxation). So assuming that tax receipts on natural resources are spent for everybody's benefit equally, it actually leads to a better outcome if the shale gas is sold for the highest price on the international market - what you don't save in gas bills you'll save in lower other taxes (in principle - in practice we are going to get stiffed either way).
Exhibit Four
It is widely reported that fracking caused a minor earthquake up near Blackpool, this is accepted unquestioningly and trotted out by Channel 4 yet again.
But I'm thinking, they've detonated colossal multi-megaton nuclear bombs, underground, overground, Wombling free, and I've never seen much evidence that this causes earthquakes (even though I'd happily believe it, being rather anti-nuclear weapon by instinct).
So is it really possible that some people pumping a bit of high pressure liquid down into what is not exactly an inter-tectonic plate fault line caused an earthquake?
Exhibit Five
They showed the usual clips of Yanks lighting gas coming out of their taps, which they blame on fracking. I doubt whether it's that simple, but even assuming it is, so what?
We know that the Americans have an absolutely appalling attitude towards health and safety, accidents etc. Their economy/population is a bit smaller but otherwise as developed as Europe, but in terms of road deaths, rail crashes, industrial accidents, oil spills, pollution, explosions of unsafely stored flammable materials, friendly fire incidents, they are barely above Third World levels.
So however awful their record on fracking might (or might not) be, it's pretty much irrelevant as far as I am concerned.

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