A Government-Sponsored Industry

Despite what liberals might have us believe, it’s not new for governments to have major conflicts of interest at their heart. The Coalition turned what was a revolving door between various industries and their regulators into a merry-go-round, and Shale gas was no exception. Lord Browne, the former head of BP, was one of Tony Blair’s favourite CEOs, gaining a knighthood and a place in the legislature. In 2010, Browne was both the chairman of fracking company Cuadrilla and working in the Cabinet Office hiring non-executive directors (usually from the private sector) for government departments.

Browne’s presence and continued close relationship with Osborne and Cameron no doubt contributed to the determined support given by the Tories to fracking, with the Liberal Democrats meekly following them along. In 2015, Osborne wrote to ministers urging them to fast-track fracking and set out industry ‘asks’. The same year’s Infrastructure Act introduced a series of deregulatory measures for the industry, and a written ministerial statement asserted that there was a ‘national need for shale gas’, with little reasoning beyond a set of questionable industry figures.

The government tried to move parts of this statement into national planning policy, but they were prevented from doing so in court due to the narrow scope of their consultations. Then, in 2018, the government set out proposals to introduce a special planning regime for shale gas that would bypass local planning authorities. Both the Coalition and subsequent Conservative administration were behind fracking—but their patronage would not be enough, and for three specific reasons.

First, there’s an economic problem for shale gas: it’s an expensive process. It’s even more expensive in the UK, due to the underlying geology and the costs associated with developing wells in a relatively populated areas compared to, say, Texas. The breakeven price for shale gas was estimated to be twice that of imported liquefied natural gas, a third more than natural gas (from the North Sea), and three times more than US shale. For fracking to be profitable in the UK, it needs there to be high wholesale gas and oil prices in the long term.

Fracking company Third Energy found out about the volatility of shale gas production the hard way. They went from being a successful, small-scale conventional gas extraction company to bankruptcy. Financiers had become particularly interested in shale the last time we had a major spike in wholesale gas prices—when Russia invaded Crimea in 2014—but prices plummeted after that. Third Energy’s main creditors pulled out (in part because of the campaign by activists), leaving them unable to begin fracking the well for which they had been given planning permission, as they did not meet financial criteria introduced by the government in response to campaigners.

Second, the anti-fracking movement were incredibly successful at making fracking as difficult as possible at a local and a national level. The movement contested fracking sites within the planning system on the basis of the impact of each site on water, air, noise, traffic, and the potential for earthquakes. They fought fracking in the streets, with a continuous protest camp for over 1000 days at the pivotal Preston New Road site, as well as a presence at every other site across England. The movement won widespread support, and its backers argued against the industry in Parliament.

A coalition of environmentalists, activists, and local residents made the public case against fracking, which only decreased in popularity the more public awareness grew. Protestors experienced sustained police violence, particularly at Preston New Road, and the police, government, and industry worked hand in glove to develop new injunctions against ‘persons unknown’ that would severely criminalise protest tactics at sites. Four activists went to prison after a decision by a judge with family ties to the fracking industry, before their sentence was quashed on appeal.

Ultimately, repressive state forces highlighted how desperate the government was to force an unpopular industry on communities increasingly concerned about fracking. When earthquakes were felt again at Preston New Road, those who were undecided or indifferent became worried. The efforts of the anti-fracking movement were vindicated.

This leads us to the third problem the government faced in delivering fracking: they lacked a sufficient justification for their authoritarian actions. Tory voters had been sympathetic to the ‘opportunity storyline’ of new domestic gas production, even though the promise of jobs and lower bills were soon shown to be inflated. The government promised to change the planning system for fracking, removing local democratic power and handing it to ministers—but when there was observable damage to housing said to have resulted from a fracking earthquake, even Tory voters got jumpy, and the Tory MP for Preston New Road called for an end to fracking in the area.

What the Tories lacked was a crisis like they briefly had after the Crimea invasion in 2014. With gas and oil prices dropping to relatively low levels by 2016-19, and political attention consumed by Brexit, it was hard to create a convincing narrative around why it was worth taking the risk on a new industry, worth all the time and effort spent fighting off those who opposed it, and worth changing the planning system in a way that would set a precedent for further reform that may endanger the sleepy countryside of the Tory shires.

Frack to the Future

Clearly, the political and economic context has changed since the 2019 moratorium. The price of gas and oil has risen rapidly, first in response to supply issues as economies restarted after Covid-19 restrictions were lifted, and more recently after the terrifying invasion of Ukraine by Russia. High prices make fracking more viable and of more interest to venture capital, even if there is every chance the same pattern repeats itself and the global gas price drops to a level where fracking becomes less profitable. Like in the US, fracking here is a major gamble, and those who make money are often the ones who exit the industry at the right time.

However, if investment is forthcoming and the moratorium lifted, the government would still have to face the anti-fracking movement. Movements like this are exactly why the government has been so keen to change the rules of the game, as evidenced by the controversial passage of the anti-protest Police, Crime, Sentencing and Courts Bill. Just like the injunctions used against anti-frackers, this legislation was developed between police and government, to criminalise previously minor acts used by protestors like trespass. If the government wants to pursue fracking, then the inevitable public contestation of the decisions required to make it happen could become one of the first tests of the bill—both legally, and in terms of the political legitimacy of the law.

And legitimacy is what’s in question here. Reports are that the Cabinet themselves are split on fracking: Rees-Mogg leading the reactionary disaster capitalists demanding the industry be rolled out, and Kwasi Kwarteng taking the more pragmatic position—that fracking isn’t really worth the hassle just so a few Tory donors can make a quick buck.

What we cannot be sure of is the extent to which the Ukraine invasion and the sanctions on Russia will override other concerns. There seems to be a broad consensus—one including the energy minister—that fracking would serve neither ecological nor economic needs, and instead lock the UK into the volatile global gas market without damaging Putin much at all. Indeed, the conflict in Ukraine only serves to highlight the need for an increase in the speed and scale of  state investment in renewable energy, to be less reliant on fossil fuels in general.

What is clear is the reactionary character of the Tory hierarchy, unable and unwilling to engage in long-term strategy, reacting with the instincts of a stockbroker rather than a statesperson to world events. If fracking were to be pursued again, with the support of the PCSC legislation and the flimsy pretence of the current crisis, it will require authoritarian state intervention to deliver.

The right wing press have this week been demanding the UK abandon the limited ambition of ‘net zero’, and they would like nothing more than for the government to use the power of the state to fight pitched battles with protestors. As socialists, we need instead to continue to fight for what is both practical and obvious: long-term state investment in publicly owned renewable energy and decarbonisation; and against the vampiric reactionaries determined to extract every last drop of value from the land, whether that is in Russia or the UK.