The Labour Party and Greenpeace are just getting desperate over shale gas
by Tim Worstall | 5th, March 2013
THIS is an absurd complaint about shale gas:
The shale gas energy boom which critioooocs say will scar the countryside could line the pockets of foreign firms rather than boosting the British economy.
Most of the companies licensed to drill for the fuel using the controversial technique known as fracking are not UK-owned, it can be revealed.
Err, yes, and?
David Cameron wants to see Britain at the heart of the ‘shale gas revolution’. But analysis of Department of Energy and Climate Change data by Greenpeace indicates that six out of ten licences are held by companies with a foreign firm as their only or main investor.
Barry Gardiner, Labour’s special envoy for Climate Change warned that shale gas will be much harder to exploit in Britain than in the US.
He said: ‘In an age of international contracts, inevitably you are looking at multi-national concerns being involved.
‘It is never the case that the benefits are going to end up back in the domestic country unless there is a state monopoly. But the concern is that the ultimate beneficiaries will end up being elsewhere.
Just imagine, no, go on, just pretend, that shale gas is actually there in large quantities. Further, that some people know how to get it up and out and into the gas pipelines.
So, who is going to benefit from this then? Who are going to be those ultimate beneficiaries?
Well, the first lot are clearly going to be you and me. An increase in gas supplies is going to mean more gas that we can use. Excellent, we can stay warm and toastie then. And given that gas is expensive to transport, producing gas in this country is going to be cheaper than importing it which is our only other potential source. So it’ll be cheaper too: so we’ll be warm, toastie and richer. I would regard those as benefits but clearly the Labour Party and Greenpeace don’t.
Perhaps there’s some moral reason why we should be colder and poorer?
After that, well, it’s actually the Crown that owns the gas. This is really the Government these days, so they’ll get a whacking great payment for the value of the gas that Johnny Foreigner is able to pump up. As an example, British Gas pays 75% of its profits from its North Sea gas fields directly to the Treasury. So either we can have more ‘ospitals’n’schools without digging into our own pockets or we can have the same number with less government digging into our pockets. So, the hard pressed taxpayers would be beneficiaries as well then.
It’s only then, after all this, that the foreigners get to take their profits home. After we’ve taxed them of course. And this seems fair enough really, after all, they will have used their capital to drill the wells, those wells that benefit us as consumers and taxpayers.
The real implication of this story is that the greenies know they’ve lost the battle over shale gas and are now thrashing around, desperately, trying to find any lie or cock and bull story that might slow it down.
Oh, and the “it’s harder in the UK than the US” part? Poppycock. The UK shales are much deeper (several times deeper) than the US ones so we’ll get more gas from each well. And, given that we are indeed a smaller country, with a better gas pipeline network, each and every well will be closer to a pipeline. On that point they’re not just thrashing around, they’re lying.
Tim Worstall
Posted: 5th, March 2013 | In: Money Comment
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