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Why Truss’s Fracking Shake Up Won’t Be Seismic

Truss at No. 10 Downing Street in London.
Truss at No. 10 Downing Street in London. (Bloomberg)

If there was ever a time for a no-stone-unturned policy to secure the energy supply, this is it. Wholesale gas prices had already quadrupled in the six months before the invasion of Ukraine. This week, the new UK government is announcing huge public borrowing to help protect homes and businesses against soaring energy costs. 

It’s no wonder then that even fracking, barred in the UK since 2019, is back on the table. In her first week in office, Prime Minister Liz Truss announced plans to lift the ban, and the government is also considering raising the limits on seismic activity to give the industry more room for exploration. 

The fracking announcement is part of a push to show the government is deregulating in its all-out drive for growth. And it’s another example of Truss pushing against the grain of public opinion as she has on removing the cap on banker bonuses. But, it must be asked, to what end? 

Any payoff, if it comes, will be far in the future and not the domestic energy bonanza many had hoped. A lot depends on the UK having commercially viable reserves and sufficient public support for extracting them. The first is a hard “maybe” and the second runs up against a wall of local opposition that will be hard to displace. The founder and former public affairs director of Cuadrilla Resources Ltd. — the oil and gas exploration company that has been the UK leader in fracking — even say Truss’s move makes little sense under current conditions. 

Hopes for fracking in the UK have long been stoked by the US shale experience, of course. As the American Petroleum Institute put it, “without fracking, there’d be no American energy renaissance — or the array of benefits it is providing to our economy, to individual households, US manufacturers and other businesses.” With its own gas-rich shale formations, it’s tempting to think this could be Britain, too.

Domestic production from North Sea reserves peaked in 2000, and UK dependency on imported gas is expected to rise sharply between now and 2050, to 85%. Proponents have argued that shale gas could provide a secure, stable source of energy and help diversify supply as Britain moves toward net zero by expanding a resource whose extraction is less carbon intensive. It would create jobs and could also have a positive impact on the UK’s balance of payments since it would mean less money going out to foreign suppliers.

Estimates of total gas in place in the north of England are significant, but they don’t tell us what part of the resource is commercially recoverable. In 2018, Cuadrilla Resources Ltd. noted that testing in its Lancashire site brought results indicating “excellent” shale gas reserves. Sand injected into the fractures stayed in place during the flowback phase, and the natural gas that came to the surface had a high methane content, suggesting less processing would be required to deliver it to the local grid. That sounded promising. But the company found that’s a long way to building a viable industry in the UK. 

One big obstacle is public support — or the lack of it. On a densely populated island where environmental awareness runs high, fracking is highly controversial. A moratorium was imposed in 2011 after two tremors with magnitudes of 2.3 and 1.5 around Cuadrilla’s Lancashire site. That moratorium was lifted, but by 2019 the Conservative government suspended all fracking permissions after more tremors near two wells operated by Cuadrilla in Lancashire. Labour, once an enthusiastic supporter, U-turned a few years earlier.

Cuadrilla likened the tremors to “a large bag of shopping dropping to the floor,” but the backlash was enough to send the government into defense mode. The risks got exaggerated in the furor, but if Truss wants to revisit fracking, she’ll first have to redefine “earthquake” in the public’s mind.

Most people prefer zero seismicity in their neighborhood, thank you very much. The UK isn’t prone to noticeable earthquakes, so people are more likely to find them alarming and official limits are lower than other countries, notes Ian Stimpson, senior lecturer in geophysics at Keele University. But fracking works by generating tiny quakes — of magnitudes of minus 1 or minus 2 on the Richter scale — to cause small fractures in rocks that release gas. (Every two notches up on the scale represent a thousand-times increase in energy.) The current magnitude 0.5 limit still can’t be felt at the surface, but a limit that low effectively stops all exploration since operators can’t guarantee they won’t exceed it.

Because of its different geological profile to the US, there are pre-existing geological faults that make earthquakes of magnitudes 2 or 3 more likely, Stimson says. Those faults are too small to be accurately imaged without seismic monitoring systems. But that technology adds a considerable cost to drilling, as do other necessities such as modern wastewater management and finding ways to get community buy-in.

And those costs would need to be piled on top of the other costs of doing business in the UK, which are considerable. “An operation that in the US, Canada and even Argentina is a rapid piece of keyhole surgery is in the UK a ponderous, slow-moving and costly operation,” wrote Cuadrilla founder and geologist Chris Cornelius and former public affairs director Mark Linder, who are no longer involved in the company. 

If shale-gas extraction does go ahead in the UK, it will probably be limited to certain small areas. The Vale of Pickering in Yorkshire, for example, has potential because conventional gas wells in operation are already there. “Boreholes just need to be deeper from the same site to penetrate the Bowland Shale. The lower infrastructure costs might make this more viable,” Keele’s Stimpson says.

The government is holding a report from the British Geological Survey, which is expected to offer scientific support to the new plans. There’s nothing wrong with reopening those wells under the right circumstances. But none of the regulatory changes would get UK shale through the many-step process from estimated reserves to a mature industry overnight.

Nor is the shale debate a replacement for other measures such as increasing investment in renewables, exploring the potential for geothermal heating and reducing demand through better insulation in famously drafty British homes. If anything, it will bring a modest bump in the UK’s energy landscape, but not the once-hoped-for big bang.

More From Bloomberg Opinion:

• Truss Goes the Wrong Way on UK Energy Bailout: Javier Blas

• Windfall Profit Taxes Are Pure Economic Populism: Andreas Kluth

• A Renewable Energy Bubble Is Hit by the Perfect Storm: Chris Bryant

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Therese Raphael is a columnist for Bloomberg Opinion covering health care and British politics. Previously, she was editorial page editor of the Wall Street Journal Europe.

More stories like this are available on bloomberg.com/opinion

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