This piece was written before the news of the draconian jail sentences passed on those opposing fracking in Preston, Lancashire … but that bitter ruling does not destroy the reality that shortly before that decision we celebrated a Victory! The News of an Amazing Victory! We wrote of it as follows …
The permission to continue work at the Bury Hill Wood fracking site at Leith Hill near Dorking has been refused to Europa Oil & Gas! A ten-year epic struggle to prevent drilling on this Area of Outstanding Natural Beauty in the Surrey Hills has been won! This is an incredible achievement by an incredible campaign to defend these hills and the springs of the Black Brook that feeds the River Mole which flows on into the Thames. The news was celebrated on Saturday 8th September by Dorking being one of the myriad locations where 350.org’s Rise for Climate took place around the world.
The victory is testament to the Protectors that maintained the Save Leith Hill camp for 16 months through a harsh winter, eviction and intense aggression from the private security forces hired by the fracking companies. It is testament to Leith Hill Action Group, Voice for Leith Hill, some local councillors, Friends of the Earth, the Green Party and most of all the thousands of others who blockaded the drill site, lobbied politicians locally and nationally, petitioned the companies and built networks of solidarity across Britain and internationally. We are inspired by our long term Platform friends, Heather Ackroyd and Dan Harvey who live in Dorking and have given so much time and imagination to this fight, making it part of their ever provoking artwork. We salute you!
The victory at Leith Hill, which came with an announcement from the Minister for Environment, Michael Gove, that Europa Oil & Gas would not have a lease enabling drilling on Forestry Commission land renewed, is galvanizing not only in Surrey but also across the UK. Europa’s project was a joint venture with Egdon Resources, Angus Energy, Union Jack Oil and UK Oil & Gas, and this partnership will consider drilling the Holmwood Oil Prospect from another location, but this does appear to be the end for the project. Patrick Nolan of Leith Hill Action Group wrote to members:
“Over the last ten years, we at the Leith Hill Action Group have been told by many people in many circumstances that we were just fighting the inevitable. It has been put to me in radio interviews that it was pointless to keep going and that we should just let Europa get on with it. We have faced attitudes from public officials that we were just delaying the unavoidable. However, today’s announcement shows the value of continuing the fight.”
Whilst Lucy Barford, of Voice for Leith Hill, said:
“There will be other battles ahead, oil drilling is still planned for other sites across the Weald, but for now we will be celebrating the fantastic news that there will be no oil drilling at Leith Hill.”
She is correct of course, for the battle against fracking continues to rage across the country, with iconic fights at Balcombe in Sussex, Rydale in North Yorkshire and, most infamously, at Preston New Road in Lancashire.
The Leith Hill victory came in the same week that Platform, in collaboration with Friends of the Earth, Friends of the Earth Scotland and 350.org, published a powerful new report – ‘Divest Fracking – How UK councils are banking on dirty gas’
These two key events allow a chance to review the situation for fracking in Britain and ask some basic questions including: Why is the oil & gas industry doing this? And why now? Who is driving this?
In 1964 the Tory government of Sir Alec Douglas-Home began to license areas of the UK North Sea for oil and gas exploration. Initially interest from the oil industry was half-hearted, but when gas was discovered at West Sole in September 1965 the pace picked up, and when oil was found at the Forties Field in October 1970, the gold rush was on. The UK sector of the North Sea became, alongside the Norwegian sector, a ‘site of speculation’, a place where money could be made, where capital could be invested and profit generated. The UK North Sea became a ‘profit centre’ for the western oil corporations and remains so today. To make this possible a new infrastructure had to be created.
In order for oil to be extracted from 11,000 feet beneath the seabed and transported through hundreds of miles of pipeline, as in the case of the Forties Field, the physical infrastructure had to be built. In order for this to happen the financial infrastructure had to be constructed, with government financing of everything from ports to air-sea rescue teams, with the world’s lowest oil taxes topped up with tax breaks, and with grants for a myriad of manufacturing processes. In order for the oil rigs and Treasury rules to become ‘common sense’ a political infrastructure was necessary, the active support for North Sea oil came from every corner of the House of Commons and the engine of Whitehall was put to work. Finally, there had to be the infrastructure of culture, a sense in the general population of the UK that ‘developing’ North Sea oil was a ‘good thing’ and that this resource would miraculously ‘save Britain from economic ruin’ in the 1970s. I have been searching for any evidence of British civil society opposition to exploiting the oil & gas in its opening decades, and until the 1980s there appears to have been none.
The intention of the fracking companies presently at work across England, such as Europa and Union Jack Oil in Surrey, Cuadrilla in Lancaster, UK Oil & Gas in Sussex or INEOS in South Yorkshire, is that these fields and woods, these villages and hills, should become ‘sites of speculation.’ All of these companies are interested only in one thing, making money. This is not about carbon this is about cash.
The PR departments of these companies spout the line that fracking will make the UK secure in energy, that the UK’s ‘energy security’ becomes evermore important with Brexit and the unreliability of Russia as a source of gas. They point to the ‘fracking revolution’ in the US, which has apparently reversed the inevitable decline in American oil & gas production and altered the geopolitical map of the world. Despite some national politicians mouthing this rhetoric, the idea that fracking could do what it has done in the US is blatant nonsense. About as nonsensical as the argument that gas from fracking will ‘help the UK address climate change.’
Fracking in the UK is not about ‘keeping the lights on’ or ‘saving the planet’, rather the bogeymen of ‘energy insecurity’ and the ‘environment’ are used by the oil companies to help create the political and financial conditions that make it possible to remake the UK onshore as a ‘site of speculation’.
But there is something different in the way that the UK North Sea was exploited in the 1960s and 1970s and the way the industry is trying the exploit onshore Britain in the 2000s and 2010s. Fifty years ago the charge into offshore drilling was led by massive corporations – BP, Shell, Esso (todays ExxonMobil), RTZ, Texaco and a few smaller US companies such as Amarada, Hamilton Oil and Occidental. Today the big companies are nowhere to be seen in the UK.
Famously Bob Dudley CEO of BP said in 2014, when asked why the company was not pursuing fracking in Britain, “We think we would attract the wrong kind of attention.” However he did promote the industry by saying “It does look like there is shale in the UK … It would seem right for the country to see whether there is shale gas.” Meanwhile BP gets ever deeper into fracking for both oil and gas around the world, in Argentina, in Oman, in Canada, in China and Russia, as the ‘Divest Fracking’ report elaborates.
It is important to remember that when BP finds it profitable to pursue fracking gas in Oman, or Shell does similarly in Argentina, this is not because those countries have booming markets in gas consumption, for the gas exploited in these lands is not largely for domestic use but for export. As the LNG ships that traverse the oceans bear testament, there is an international market for gas. In theory, gas fracked in the UK is the same as gas in Oman or Argentina, and it would be perfectly possible for it compete on the global market with these products.
Why is this not possible? Why does Bob Dudley say BP is not drilling because it would “attract the wrong kind of attention”? Of course he’s trying to avoid adverse publicity, but if BP really wanted to frack in the UK it would set about determinedly trying to do so, despite the bad press. Dudley doesn’t want BP to frack in Britain because the cost of production is still so much higher in the UK than elsewhere. And this is because of the opposition to fracking and the fact that the industry has failed to build the infrastructure of speculation – the physical, political, financial and cultural infrastructure. This is not the 1960s and 70s, the construction of the infrastructure is proving far harder, for resistance is strong.
As ‘Divest Fracking’ explains, in the UK public support for fracking is low, only 18% of the population say they do so. This stands in stark contrast to the public’s support for renewables which is strong at 85%. A Scottish Government consultation on fracking last year attracted more than 65,000 responses, of which 99% of respondents opposed fracking. The cultural infrastructure necessary for fracking to work is not being easily constructed in Britain.
The oil industry privately admits that carrying out a ‘fracking revolution’ in the UK equivalent to the US is likely to be impossible. This is not because the geology is unfavourable, but rather the human geography is challenging. As many say ‘this is a small and crowded country, this is not Texas or North Dakota’. Fracking in the US has depended upon the ability of drillers to rapidly move rigs and support facilities, but there is simply not the same network of roads nor the same vast blocks of single landholding in the UK. In tight country lanes and with a patchwork of myriad landowners, combined with lack of support in the wider culture, the fracking process can be constantly obstructed as the history of Leith Hill shows.
Political support is not unequivocally behind fracking. The UK government supports it and Whitehall machine assists it. (Although the decision by Gove and Defra could indicate a change of tack in some sections of the Tory Party?) However, the Scottish Government has instituted a moratorium, and similar halts are in place in Wales and Northern Ireland. The Green Party, the Liberal Democrats and Labour are largely opposed or at best ambivalent. If this is the case at the national level, then it is far more so at the local level. The battle over Leith Hill was powerfully assisted by Liberal Democrat local councillor Hazel Watson, for Dorking Hills ward of Surrey County Council.
The financial infrastructure of fracking is complex. Much of the money behind the likes of Europa, INEOS and Cuadrilla is from private equity funds who see fracking as a high-risk investment, in which there is a good chance that companies and projects will fold but the possibility of high returns if they succeed. However the security for private investors is decreased if institutional investors go cold on fracking. This is part of the importance of the campaign to make local authorities divest their pension funds from companies that conduct fracking.
This campaign took a major step forward with the release of the ‘Divest Fracking’ report and the powerful media response that covered it. BP and Shell may not be fracking in the UK but if local authorities divest themselves of shares in these companies because of fracking, then it sends a powerful signal to the capital markets that the risk of investing in UK fracking grows higher as opposition grows. Divestment also undermines the political support for fracking.
As the report points out, Surrey County Council Pension Fund has £256,604,881 invested in fossil fuels and 4.29% of its portfolio is held in companies that frack. There is a strong campaign led by Divest Surrey to push the council to divest its pension funds. The sustained pressure is making progress but there is further to go. However this is the council that oversees parts of the planning process for projects such as Europa’s Holmwood Oil Prospect. If the council divests this helps undermine the political support for oil exploration projects in the county.
Why then does the pressure to frack continue? Partly it is a manifestation of the fragmentation of the oil industry in the UK. The presence of the oil majors in the Britain’s industrial economy has been in rapid decline. BP and Shell have closed down or sold on all their petrochemicals plants, their refineries, their lubricants factories, all but a fraction of their petrol stations and most of their offshore fields. Largely these oil corporations that have dominated swathes of British society for a century are ‘leaving Britain behind’. Despite this seismic shift they remain among the largest companies by capitalisation on the London Stock Exchange and so have a substantial presence in the UK’s finance sector.
In their wake come a myriad of small companies to run the offshore fields, the oil & gas terminals, the refineries, the road tanker fleets, the pipelines, the service stations and the fracking projects. Many of these small companies are privately owned, or not listed on the London Stock Exchange, or are registered for tax abroad. All of this despite having patriotic names like Union Jack Oil or UK Oil & Gas and using slogans on their website home pages such as ‘Energy for Britain’ or ‘Meeting the Energy Demands of the United Kingdom’. INEOS is a fine example, led by Jim Ratcliffe who has just shifted his base to Monaco, it is also an ardent Brexit supporter.
These smaller companies are addicted to risk, for the private equity funds that finance them need high-risk high-return investments to add spice and appeal to their portfolios. While interest rates remain historically low, there’s plenty of private equity around the world that can be lured by the outside chance that money might be made from drilling in Surrey or Lancashire.
For the companies, this is not about carbon, it is about cash. So the fight against fracking is a fight against a model of finance – a model that fuels other ‘sites of speculation’ such as housing in London – which constantly seeks out places of risk. It does so cocooned from the world – insulated with its private income, its private education, its private healthcare, its houses and villas, its jet travel – wilfully ignoring the greater risk that speculating on fossil fuels poses to the Earth’s climate and the myriad of other species and peoples of the world.
Midas is blind.
But the resistance to Midas is strong, growing stronger.
(Many thanks to Heather Ackroyd & Dan Harvey, and Sakina Sheikh)