Britain “going all out for shale” while a French firm invests big

posted at 3:21 pm on January 13, 2014 by Erika Johnsen

While certain of their European counterparts have indiscriminately subsidized any and all forms of renewable energy while simultaneously maintaining bans on hydraulic fracturing and drawing down on their nuclear energy sources (resulting in skyrocketing energy prices and the subsequent resurgence of coal-generated power, ahem), British Prime Minister David Cameron has been fighting a long and tedious battle (mainly against vociferously determined groups of eco-radicals) to finally let the shale exploration proceed apace within the United Kingdom.

Britain’s currently bloated electricity prices have become a major political issue and will definitely figure in their upcoming elections, and Cameron has been trying to get out in front of the problem by finally lifting the fracking ban in December and now coming through on the tax incentives he promised for the industry to get the permitting process started. Environmentalists doth protest, of course:

David Cameron is to declarethat his government is “going all out for shale” as he announces that councils will be entitled to keep 100% of business rates raised from fracking sites in a deal expected to generate millions of pounds for local authorities.

In a renewed attempt to win support for the controversial expansion of fracking, the prime minister will also say that revenues generated by shale gas companies could be paid directly in cash to homeowners living nearby. …

Jane Thomas, senior campaigner at Friends of the Earth, likened the decision to grant councils 100% of business rates from shale gas companies to a bribe. Thomas said: “Today’s announcement from the government that councils can keep all the business rate revenue they receive from fracking companies marks a new low in the government’s attempts to curry fracking favour with local people.

Unfortunately for these fastidiously opposed eco-groups, the global energy industry is already starting to show interest in Britain’s natural-gas potential, and a major French energy company just became the first to announce that they plan to invest big, via the WSJ:

France’s Total SA said Monday it bought a 40% stake in two shale-gas exploration licenses in the U.K.—marking the first time one of the world’s major oil companies has turned its attention to Britain’s unconventional gas reserves.

The move is a tiny one by global energy industry standards—representing an initial investment of under $50 million, according to people familiar with the matter. Total didn’t announce Monday the amount it plans to invest. But Total’s decision is a significant vote of confidence in Britain’s shale-gas prospects, and could be a boost to the government in London, which has sought to lure big companies to develop shale. …

Total is planning to spend about $45 million in drilling for appraisal in the two licenses, the person also said.

Britain still has its own green-energy goals and it’s too soon to know if they’ll be able to replicate the successes of the United States’ shale boom, but by finally embracing fracking, they are well on their way to becoming an island of relative energy sanity amidst other European countries’ backfiring ambitions.


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Too many cracks in the hull and that island will sink. Or tip over. Just ask Hank Johnson.

cozmo on January 13, 2014 at 3:28 PM

Canada going for oil in the sand and their left is apoplectic.

Schadenfreude on January 13, 2014 at 3:46 PM

More reasons for Obama to hate the Brits. Does he have anything left in the WH that he can angrily send back to them with a sternly written note attached to it?

Mo_mac on January 13, 2014 at 3:50 PM

…do we care?

KOOLAID2 on January 13, 2014 at 3:52 PM

Mo_mac on January 13, 2014 at 3:50 PM

Well, he does have many more speeches now for the Queen to listen to.

cozmo on January 13, 2014 at 3:52 PM

KOOLAID2 on January 13, 2014 at 3:52 PM

Yeah, we may need them as a base…again.

cozmo on January 13, 2014 at 3:53 PM

I keep hearing about all these “finds” and that we are exporters instead of importers of energy now……and yet the prices at the pump keep rising. Even though the stock price per barrel has fallen. Weird.

Cindy Munford on January 13, 2014 at 4:04 PM

This is beautiful.

I guess from what I read the standard rate’s been 50% and so the Tories are giving the councils 100% on shale.

Good. Appeal to greed. Get the locals out there bashing in the heads of the hairy-armpits traveling protester crowd so the police don’t have to.

JEM on January 13, 2014 at 4:07 PM

@Cindy Mumford – in the US you still have a substantial shortage of refining capacity in some areas, and where the demand is isn’t necessarily where the refineries are.

JEM on January 13, 2014 at 4:09 PM

Weird.

Cindy Munford on January 13, 2014 at 4:04 PM

I’m glad others are beginning to notice.

The price of gas should be lower than it currently is.

cozmo on January 13, 2014 at 4:10 PM

…do we care?

KOOLAID2 on January 13, 2014 at 3:52 PM

A little, since fossil fuels are globally traded commodities

DarkCurrent on January 13, 2014 at 4:23 PM

Speaking of global trade, I was hoping Erika would report the big story in world trade this week…

DarkCurrent on January 13, 2014 at 4:37 PM

This probably means war

South Korea demands that China change

DarkCurrent on January 13, 2014 at 5:11 PM

Good for them.

Too bad Obama et al here are too f*cking stupid to do the same.

Midas on January 13, 2014 at 5:16 PM

JEM on January 13, 2014 at 4:09 PM

Yeah, and they are switching over from gasoline to heating oil. I’ve heard it all before. Gee, maybe it’s a good thing The Won won’t let us have the pipeline afterall since we are ill equipped to handle any more.

Cindy Munford on January 13, 2014 at 5:30 PM

But the price per barrel of oil hasn’t really changed since ~April 2011 (fluctuations, but has remained fairly close to current levels on average).

Midas on January 13, 2014 at 6:06 PM

I keep hearing about all these “finds” and that we are exporters instead of importers of energy now……and yet the prices at the pump keep rising. Even though the stock price per barrel has fallen. Weird.

Cindy Munford on January 13, 2014 at 4:04 PM

@Cindy Mumford – in the US you still have a substantial shortage of refining capacity in some areas, and where the demand is isn’t necessarily where the refineries are.

JEM on January 13, 2014 at 4:09 PM

And also the refineries are getting ready to switch over to refining the “summer” gas blends instead of the winter blend. It’s still mid-January, but warm weather is only 6 or 8 weeks away in many places.

Here in New Hampshire the pump price for regular “petrol” has actually gone down a tiny bit recently, but the price of diesel has gone up a few cents.

Del Dolemonte on January 13, 2014 at 6:50 PM

Cindy Munford on January 13, 2014 at 4:04 PM

Depends on where you live. If you live in the southern half of Florida, ocean tanker freight rates are climbing due all the tankers hauling crude oil from Corpus Christi to East Coast refineries. You get all of your gasoline and diesel via tanker, which includes ocean going barges.

Even without the interruptions by the Feds, the entire pipeline system built over 70 years is all about reconfiguring itself right now. Propane pipelines have been flipped to carry lease condensate to Canada, for use as diluent, to enable the heavy crude flow to the U.S. to be increased, and so many more changes underway which takes lots of money and time.

Kermit on January 13, 2014 at 6:58 PM

JEM on January 13, 2014 at 4:09 PM

Yeah, and they are switching over from gasoline to heating oil. I’ve heard it all before. Gee, maybe it’s a good thing The Won won’t let us have the pipeline afterall since we are ill equipped to handle any more.

Cindy Munford on January 13, 2014 at 5:30 PM

Heating oil? That was more than 10 years ago now.

It’s the type of crude being produced near types of refineries which does exactly fit.

Overall we have excessive refining capacity and more is being demolished as uneconomical and shuttered for several years now.

Kermit on January 13, 2014 at 7:02 PM

What color is my wind?

WryTrvllr on January 13, 2014 at 9:30 PM

All I know is that on the drive up to VA I paid $3.05 a gallon for gas and with lower oil prices I paid $3.21 on the way back (same area). I don’t think our refinery capacity changed in those two weeks.

Cindy Munford on January 14, 2014 at 1:30 AM