Opinion: UK Fracking Ban Mired in Uncertainty

To frack or not to frack is undoubtably a topical question in the U.K., especially as new Prime Minister Rishi Sunak, who took office on Oct. 25, is poised to resurrect a previous ban on fracking that was briefly lifted by short-term former Prime Minister Liz Truss.

Sunak in just his first week in office has already proclaimed in parliament to stand by a 2019 manifesto commitment to ban fracking.

The resource-short U.K. has limited options to procure additional domestic energy supply, but many groups there remain steadfast against fracking. Opponents there claim it can cause earth tremors, contaminate groundwater supplies and negatively impact air quality.

“Even if the central government were to allow fracking, the local opposition would be massive. The U.K. is not the wide-open spaces of North Dakota or Texas, and all the massive logistics (i.e. huge trucks) crushing their way through Lancashire villages is, in my view, a non-starter,” Andy Parums, a consultant with Energy Strategy International Consultant in London, told Hart Energy.

“So, it’s just political posturing until and unless a system is created whereby local communities get direct royalties from any gas produced or other very tangible benefits in kind.”

Parums said many local communities across the U.K. can’t see a connection between fracking and lower gas bills. He argued that a “bigger, faster impact in practice would come from enhanced licensing and permitting of offshore gas (and oil) in U.K. waters.”

Just three years ago, “The Conservative and Unionist Party Manifesto 2019,” published by former Prime Minister Boris Johnson, revealed the minister’s plans to ban fracking, the result of his audience with local communities. Johnson said at the time that the technique would only be supported if “the science shows categorically that it can be done safely.”

Fast forward to February 2022 and Russia President Vladimir Putin’s decision to invade Ukraine. The move has jeopardized energy supply flows into the U.K. and mainland Europe and forced leaders there to pivot fast to replace lower supply flowing from sanctioned Russia.

Fast forward again to September 2022, and the U.K.’s fracking ban was briefly lifted under the brief tenure of Truss. She resigned on Oct. 20, after only 45 days of leading the government, leaving the status of U.K. fracking uncertain.

U.K.’s underlying problem is that it’s a net importer of oil and, more so, gas, according to bp Plc’s “Statistical Review of World Energy” report.

As such, the U.K. relies on Norway and other countries to cover almost half of its gas needs and a third of its oil demand, according to the industry group Offshore Energies U.K. Prior to the start of Putin’s war in Ukraine, the U.K. relied on Qatar, the U.S. and Russia for 87% of its LNG imports, according to bp.

No surprise then that the U.K. is caught in a quagmire related to fracking, energy supply and energy security.

“While fracking may not produce results for several years, the banning of the technology eliminates one way to diversify the U.K.’s energy sources,” Andy Lipow, president of Lipow Associates, told Hart Energy. “In an era where consumers are demanding more—and affordable—energy, the U.K. will continue to rely on LNG imports for many years. With the U.S. increasing its LNG export capacity by over 40% in the next three years, U.S. natural gas producers can benefit.”

Domestically, and further out in the future, the U.K. could rely on production that could come from 898 blocks recently offered in its 33rd U.K. offshore licensing round, which is part of the North Sea Transition Authority’s “ongoing work with industry to ensure security of supply.”

“Even when the Ukraine crisis is resolved, there is going to be lingering sentiment to avoid importing hydrocarbons from Russia into Europe for a long time,” Steve Hendrickson, president of Ralph E. Davis Associates, told Hart Energy.

“So, I think it’s appropriate for them to start thinking about longer-term solutions because there probably will be a longer-term problem, and LNG [especially from the U.S.] probably plays a pretty big role in that for them.”

The only thing certain in the U.K. is uncertainty on a host of key topics: the current energy crisis, whether or not to frack, the staying power of the current government—and the crucial question of England’s chance of making the finals in the 2022 World Cup in Qatar, where it could earn another star for its football team jersey.