Relentless local protests and a damning report have dealt a double blow to a fledgling fracking industry, but the companies aren’t going to go away

Attempts to create a commercially viable fracking industry in the UK were dealt fresh blows this week, with the refusal of planning permission for a key site, and the revelation of an unpublished government report showing fracking could cause falls to people’s house values.



The setbacks, cheered by jubilant anti-fracking campaigners, highlight the struggles that fracking backers still face in the UK, where for several years the pioneering Cuadrilla has been trying to drill gas wells, now joined by several other companies with similar plans.

So far, no viable fracking wells have been built in the UK, and local campaigns against the prospect of fracking have stepped up markedly. In Lancashire, where Cuadrilla had applied for two new licences, councillors were under pressure from protesters. While one licence had been recommended for refusal by planning officers because of noise and nuisance issues, the other had cleared the first part of the process, only to be struck down by councillors.

Caroline Lucas, the Green MP who was arrested two years ago at a Cuadrilla site, told the Guardian: “This week has been hugely damaging for the fracking industry and uplifting for those of us campaigning for clean, renewable energy. Not only did local people win an historic victory on Monday, when Lancashire County Council rejected the fracking proposal, but the government has now been forced to release a report which shows the clear local environmental dangers of fracking.”

She added: “The fight against fracking has taken a big step forward this week but much more work is still to be done to convince this government to abandon its obsession with fossil fuels. Ministers know that both the evidence and public opinion are stacked against them. It’s down to them to decide whether they’re willing to listen to reason.”

The unpublished report found that the leaking of waste fluids could harm the natural environment and water sources, and fracking operations were likely to have a dampening effect on house prices – likely to fall by up to 7% within a mile of wells, while households within a five mile radius could find their insurance costs rising significantly.

Tony Bosworth, energy campaigner at Friends of the Earth, said: “It’s been a bad week for fracking, but a tremendous one for local democracy and the environment. Publication of this secret government report will surely strengthen the resolve of local communities and their representatives to resist fracking in their backyards. With strong opposition springing up wherever fracking is proposed, it’s becoming increasingly hard to see a future for this beleaguered industry in the UK.”

The fracking industry brushed off the setbacks. Ken Cronin, chief executive of UKOOG, which represents fracking companies, said: “The fact that planning officials stated that all of the environmental, safety, health and local issues had been addressed in Cuadrilla’s application bodes well for future applications elsewhere in the country, two of which are due to be submitted shortly.”

He also pointed to polls that consistently show the country is divided on the issue of whether fracking is necessary or desirable. Cronin said: “Greenpeace’s own polling shows more people support fracking than oppose it. We trust that the views of the silent majority will prevail over noisy protesters.”

Francis Egan, chief executive of Cuadrilla, told the Guardian: “Natural gas will remain an essential part of the UK’s energy mix for decades to come. Exploring our own shale gas resources in a safe and responsible way will happen not least because it makes environmental, economic and security sense to do so. “



Despite the setbacks, ministers are likely to press ahead with their declared plans to open up new areas to fracking across the UK, and with support for the fledgling industry. In the last parliament, that included revisions to allow fracking under other people’s land, while the chancellor has installed tax breaks, and sought to dampen local opposition to fracking by forcing companies to offer sweeteners – cash, or new infrastructure or services – to local residents.

What could prove yet more effective, however, are plans to further loosen planning rules so that key parts of the decision-making process are removed from local councils. That could prevent future setbacks such as the Lancashire decision this week. But this rule revision would prove controversial in terms of encouraging local democracy and decision-making, both professed aims of the Conservatives.

Lord Deben, chairman of the government’s advisory Committee on Climate Change, and former Conservative environment minister, told journalists this week: “I think both ends of this argument are wrong on fracking. The people who are saying fracking is a mortal sin are not sane or sensible, and those who say fracking is our saviour are also not sane or sensible.”

Many experts, including the oil companies Shell and BP, agree with him. The UK could have a modest fracking industry, but it is not likely to be a “game-changer” as it has been in the US.

America was where the modern techniques of fracking – which involves blasting dense rock with water, sand and chemicals to release tiny bubbles of methane gas trapped within it – and its essential counterpart, horizontal drilling – which allows miles of fracking operations to branch from a single vertical well – were pioneered early this century. The ramping-up of production of shale gas sent US gas prices tumbling, and the expansion of shale oil production has since contributed to the falling oil price, too.

In the US, several factors combined to produce a massive industry: a vast shale resource; low population density; and loose rules on environmental impact.

Although the UK has been proven to have a sizeable shale gas and oil resource, most of it is in populous areas and rules governing ownership and environmental regulations are more constraining. Equally importantly, environmental campaigners have also mobilised far sooner, and with far more effect, than in the US.

These factors push up the cost and complexity of exploring for shale gas in the UK, putting a far greater pressure on potential profit margins.

Cuadrilla is the only company yet to have used modern fracking technology in the UK, at its site in Lancashire. That site has been closed since it was found to have caused a small earthquake.

Subsequent investigations also revealed that the company had known for some months of a deformation to the well it had drilled, while failing to tell the government of its findings. The failure prompted a letter from the then energy minister, and provided further ammunition for activists and experts who have argued that the UK’s regulatory system is inadequate.

Meanwhile, the company has been funding expensive technical operations and exploration, including at its site in Balcombe, where it has so far failed to find viable supplies of reachable oil. These ongoing costs amount to well over £100m spent so far, without a single well yet producing gas.