Fracking, the oil price crash, and the 'greenest government ever'

An oil rig in the Irish Sea, two hours from Liverpool. Photo: *Psycho Delia* via Flickr (CC BY-NC 2.0).
An oil rig in the Irish Sea, two hours from Liverpool. Photo: *Psycho Delia* via Flickr (CC BY-NC 2.0).

An oil rig in the Irish Sea, two hours sail from Liverpool. Photo: *Psycho Delia* via Flickr (CC BY-NC 2.0).

Faced with climate change, economic doldrums and collapsing oil prices, the government has the perfect opportunity to put Britain on the right track, write Simon Bullock & Tony Bosworth - reduce our dependency on fossil fuels, and invest in renewables and efficiency. So what's it actually doing? The exact opposite.
Instead of colluding with the fossil fuel industry to increase production, a Government genuinely committed to action on climate change would treat the oil price crash as an opportunity to protect the climate, help consumers and protect jobs.

This month, a powerful article in Nature highlighted yet again that most of the world's oil, coal and gas needs to stay in the ground, if we want to prevent dangerous climate change.

This is the 'unburnable carbon' analysis that President Obama and Bank of England Governor Mark Carney have both made mainstream in recent months.

Related, over the last 6 months the world oil price has crashed, catching almost all economists and analysts by surprise. As well as profound economic effects, this crash affects 'unburnable carbon' in two broad and opposite ways.

It's leading to cancellations of potential fossil fuel projects, as they become less or non-profitable. Great for stopping colossally dirty projects like Arctic oil and Canadian tar sands. And in the opposite direction, it makes oil cheaper, meaning people use it more. Bad for climate, though good for people's pockets.

How should Governments react to this? A Government who genuinely thought climate change was a global priority would not sit passively by and let these conflicting effects of the oil price crash on climate sweep over us. It would act. Government surveys show the British public want more action on climate change.

Instead, we're going all out for oil and fracking

Despite this, the sole response to the oil price crash from the UK Government is do the opposite! It announced detailed plans for tax cuts for oil companies to drill another 11-21 billion barrels of oil from the ground - way more than even the three billion barrels in the Government's Wood Review on offshore oil and gas. Climate change impacts got one sentence of dismissal.

Then last week, it drove through a clause in the Infrastructure Bill - with almost no debate - requiring the UK to "maximise economic recovery" of North Sea oil.

These are crystal-clear examples of how Governments do not yet grasp that climate change requires a comprehensive plan. We can't just do a little bit on renewable energy and energy efficiency, and think that this means we don't need to do anything about fossil fuels.

Instead of colluding with the fossil fuel industry to increase production, a Government genuinely committed to action on climate change would treat the oil price crash as an opportunity to protect the climate, help consumers and protect jobs.

And yet, for every announcement of a new wind-farm, or homes insulated, or rail investment, there is a corresponding - and often larger - Government announcement which makes climate change worse.

For example: £15 billion for new roads; whopping cuts in taxes on profits for North Sea oil drillers; consultations on which new airport to open; tax breaks for new fracking industries. High-carbon infrastructure has recently over-taken low-carbon infrastructure in the Government's 'infrastructure pipeline'.

After decades of subsidy, high-carbon industry shouldn't need any more help. Colossally rich oil corporations know the global oil price yo-yos - they should have saved for this moment in the years when oil prices were over $100 a barrel and their profits were sky-high. But like the banks, they want their bail-out, and they know they will get it.

It's shameful - that we have leaders who say climate change is desperately urgent, who call for more ambition, and yet who are still so deep in the pockets of fossil fuel companies they will not act and treat climate change as the emergency it is.

They are up-front about it too - the Government's North Sea oil tax cut consultation is clear on three things - it's derived in discussion with the oil barons; it's being fast-tracked at their request; and the consultation primarily wants to hear from them.

Leaked letter shows the real agenda

They're also not so up-front about it - you can see just how deeply the fracking industry is embedded in Government in this leaked-letter from George Osborne here.

The letter was from George Osborne, sent last September, to colleagues in the Cabinet's Economic Affairs Committee, setting out how he wanted them to prioritise implementing the recommendations of a Cabinet Office report on how to get the shale gas industry going.

Of real interest here are the agreed plans between Government and fracking company Cuadrilla if their planning permission for fracking is turned down - which is exactly what Lancashire's planners have recommended councillors to do.

According to the letter It is agreed that "if permission turned down ... Cuadrilla to respond to concerns and appeal asap." When that has happened, the Government will "Prepare PINS to respond promptly to appeal or SoS recovery if appropriate."

In layperson's terms, that means the Government will make sure the Planning Inspectorate fast-tracks the appeal or that Communities Secretary Eric Pickles intervenes. This stands in stark contrast to the line taken by the Prime Minister's official spokesman that such decisions "should be up to local authorities".

And how were these 'asks' made? Has Cuadrilla been meeting Ministers and officials, or has it been a few quiet words in the right ears? For let's not forget that Cuadrilla's chairman Lord Browne works in the Cabinet Office as a Non-Executive Director.

Moving to 'full exploration'

The letter is also very revealing about longer-term plans for "moving to full exploration". The Government clearly knows it's losing the argument at the local level. Two recommendations stand out here:

  • "A cross-Government and industry group should be established ... to assess the value and viability of focusing on a small number of sites in less contentious locations."
  • "Public sector land (particularly MoD owned) should be mapped to potential sites and explored for possible concept testing."

And the Government seems to accept that the bribes - sorry, benefits - it is offering top local communities to accept fracking aren't working. The solution: it looks like offer them more. They plan to: "examine the nature of benefits to be offered to local communities where shale developments take place."

They know they're not winning the wider battle for hearts and minds either, so the Government is going to carry on doing the industry's PR job and "build on existing network of neutral academic experts available to provide credible evidence-based views of matters of public concern", and "develop a national communications plan on shale exploration."

This isn't the first evidence of collusion. Lord Browne has already intervened with the then chair of the Environment Agency, Lord Smith, to try to exempt Cuadrilla from compliance with drilling waste regulations.

On another occasion, after a separate personal intervention by Lord Browne, Lord Smith "offered to halve the consultation time for a waste permit", and "agreed to intervene with a county council over Cuadrilla's planning permission and to identify further risks to Cuadrilla's plans."

Here's how the government should be acting!

Instead of colluding with the fossil fuel industry to increase production, a Government genuinely committed to action on climate change would treat the oil price crash as an opportunity to protect the climate, help consumers and protect jobs. It would say:

  • We need a 'just transition' plan to get jobs and growth and industry out of North Sea Oil, and into North Sea Renewables like off-shore wind. There will be no economic devastation as when the coal mines closed. But we need to move away from oil, not prop it up. We will do all we can to help people and businesses build new, clean industries in the North Sea.
  • We will put in place a plan to keep demand for oil low, to help keep prices low, and ensure undrilled oil stays in the ground. We'll put in place a proper strategy to make public transport, walking and cycling decent alternatives to motoring. We'll drive far stronger standards on car and lorry energy efficiency. We'll invest in a national electric vehicle network. We'll act at EU and International level to persuade our fellow nations to do the same.
  • We will make sure the oil and gas price falls don't damage the growing renewables industry. We'll reassure investors by setting a clear 2030 power decarbonisation target, with policies to ensure we meet it.
  • We will reverse our fossil-fuel strategy to "maximise recovery" and focus instead on 'minimising demand' - in every part of the economy.
  • We will treat climate change as an emergency, and make tackling it a priority across all departments of Government.

People want more action from Government on climate change. Not less. Not a botched half-plan, and half-truths about their commitment to action.

The inadequate, partial, feeble responses on climate change are yet another expression of why so many people feel alienated from Westminster governments - they do not act on their promises, or sufficiently in the public interest.

It's election time soon. Which parties will put people's interests ahead of propping up fossil fuel companies, and put in place a proper plan to tackle climate change?

In short, who will step up and show they are a party worth voting for?



More information on the impact of the oil price crash on climate change: Friends of the Earth briefing.

Simon Bullock is Senior Campaigner, Policy and Research Co-ordinator for Friends of the Earth UK.

Tony Bosworth is Energy Campaigner at Friends of the Earth UK.

This article is a synthesis of two articles published on the Friends of the Earth Policy & Politics blog:


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