Tuesday, 24 May 2016

Fracking in Ryedale, a guide to Tory style "democracy".


On Monday the 23rd of May 2016 the Tory dominated planning committee of North Yorkshire County Council voted to approve fracking in the village of Kirby Misperton in Ryedale despite a massive groundswell of public opposition to the plans.

The Council received 4,735 objections to the application by Third Energy to begin fracking in Ryedale and only 36 letters of support, but the Council decided to ignore the concerns of the local community in order to turn the scenic village into the first testing ground for the fracking business
since fracking tests on the Fylde coast in 2011 were found to be the probable cause of local earthquakes.

North Yorkshire is a stunningly beautiful area, but it suffers from a chronic infestation of Tory voters. Perhaps all of the locals who voted Tory in local and general elections imagined that the unelected Tory peer David Howell was referring to some other part of the north when he declared that "there are large and uninhabited and desolate areas, certainly in part of the North East where there's plenty of room for fracking, well away from anybody's residence"? Maybe they thought that fracking rigs would be imposed on lowly Labour voting "scum" in places like Sunderland or Middlesbrough, not in a scenic Tory village that lies just a few miles south of the North York Moors national park?

Economic concerns

There are plenty of legitimate environmental concern over the fracking business, ranging from land and groundwater pollution to earthquakes, however some of the biggest concerns are economic in nature.

One huge concern is that fracking is only economically viable if energy prices remain high. Even with George Osborne's extraordinary tax breaks for fracking companies
, if energy prices fall, it ends up costing more to extract shale gas than it can be sold for. This is the case because fracking has a very low level of Energy Returned on Energy Invested (EROEI), meaning the margins are very fine indeed.

Another really big concerns is the way that the Tories exempted fracking companies from paying liability insurance to cover the cost of cleaning up fracking sites should the companies go bust. This means that if fracking causes some kind of environmental disaster the company responsable can just "cut and run" leaving the taxpayer to cover the entire cost of cleaning up their mess.

It's remarkable that the Tories decided to give the fracking industry such a huge incentive to set up small shell companies that can be abandoned if they end up creating a costly fracking mess, especially given the situation in Wyoming where hundreds of fracking wells were simply abandoned by their operators who chose to disappear into bankruptcy rather than clean up their mess. When gas prices were high these companies were happy to extract shale gas, but when prices fell they chose to forfiet their $50,000 per fracking well liability bonds and leave the entire mess for the US taxpayer to clean up.

The fact that US fracking companies chose to cut their losses when the bonds were $50,000 suggests that the figure was way too low, but instead of setting the UK bonds at a higher rate to prevent the kind of "cut and run" environmental catastrophe suffered in Wyoming, the Tories decided that fracking companies in the UK should pay no bonds whatever!


Third Energy

The Company that was granted the licence to begin fracking in Ryedale looks an awful lot like the kind of small shell Company that would cut and run if their fracking tests caused any kind of expensive environmental damage. The main company is called Third Energy Holdings Ltd and is based in Portland House in Westminster and have  capital holdings of just £21.4 million. However they have established three subsidiaries based at the same address in North Yorkshire; Third Energy UK Gas Ltd, Third Energy Onshore Ltd, and Third Energy Trading Ltd. The fracking licence has been given to Third Energy Onshore Ltd, so no doubt that entity will be folded up and abandoned if  their operations end up causing costly environmental damage.

It is interesting to note that Barclays Bank are investors in Third Energy and have also made individual donations to a number of Tory party MPs. This is hardly an isolated case of conflicts of interest between the Tory party and the Fracking industry.

Tory promises

Before the 2010 General Election David Cameron made a huge fanfare of signing a "Contract with the Electorate" that promised to "give communities the power to take charge of the local planning system". It eventually became clear that the Tories were going to break pretty much every single clause in their so-called contract, so they simply deleted it from their website and relied on the mainstream press to not bother mentioning it at all in the run-up to the 2015 General Election.

Apparrently this Tory commitment to give communities the power to take charge of the local planning system involves completely ignoring a 131:1 scale of opposition to the plans to frack in Ryedale, and swearing to use central government powers to over-rule local councils that decide not to fast-track approvals for fracking rigs in their communities.

So much for Tory promises eh?

Conclusion

The potential environmental impact doesn't matter. The economic frailty of the fracking industry doesn't matter. The fact that fracking companies don't have to pay liability insurance in case of economic problems or environmental damage doesn't matter. The huge 131:1 local opposition to the plans doesn't matter. The conflicts of interest between numerous Tory politicians and the fracking industry don't matter.

All that matters is that the Tories want to allow their mates to use North Yorkshire as a testing site for fracking, and they're determined to have their way, even if it means exposing their contractual promise to empower local communities as the absolute bullshit that anyone with any sense saw it as from the very beginning.


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