We are all frackers now

Hydraulic fracturing

Schematic depiction of hydraulic fracturing for shale. Hydraulic fracturing is the propagation of fractures in a rock layer by a pressurized fluid.  (see interesting opinion piece below by UK journalist Maria Cosimo). The discovery of fracking – the extraction of shale gas by hydraulic fraction – is set to have a revolutionary effect on energy supply. By providing energy companies with a new way to access fossil fuels and thus increasing their availability, fracking will have consequences far reaching indeed. Whilst the import of this discovery has been somewhat stymied by Britain’s voluble liberal-green alliance, it is vital that companies start to consider the implications of a rebalancing of energy supplies. Firms need to think about how the public perception of green energy will be affected by such a viable alternative. A small but growing voice in the wilderness can be heard, the general tenor of which is thus: green energy has been expensive and not altogether effective. Wind power contributes only 0.4% of Britain’s energy requirements, and the cost of disposing of spent nuclear power rods exceeds the value of the energy they have produced in the last sixty years. We are faced with a collection of anaemic solutions which, as Boris Johnson has said, would encounter difficulty in pulling "the skin off a rice pudding". James Dellingpole has written recently for The Spectator accusing the BBC of adopting a profoundly alarmist attitude to climate change, and increasing numbers of people now question the national curriculum’s wholehearted embrace of climate change to the exclusion of nearly every other geographical topic. The question posed by this subtle shift in attitudes is as follows: will companies continue to invest gargantuan sums of money in their green agendas, when the adulatory fanfare around the green agenda itself begins to fade? Companies should also consider the geopolitical repercussions afoot. As a result of fracking, natural gas in the USA now costs a quarter of China’s $12 per unit, rendering the Chinese less competitive than one might think in key industries such as fertiliser and chemical production. If it wasn’t dependent on Arab oil, would America pay $80 billion a year patrolling the Persian Gulf? If China itself was self sufficient, would it still support Iran? Will Putin’s Russia be threatened, as oil rich oligarchs are destabilised? Firms would do well to keep an eye on the alternative geopolitical trajectory presented by fracking, the one which doesn’t count on China’s indomitable rise as the West slithers into oblivion. Fracking is yet to receive the attention it requires, perhaps because of the furore with which green activists have greeted it (a furore ironically buttressed by increasingly uncomfortable oil interests). The financial and geopolitical gains to be gotten, however, ensure that it will soon become difficult to ignore. article by                                                              Maria Cosimo