A nation that is self-sufficient in energy gains diplomatic clout. No country epitomises this more than the United States. Hydraulic fracturing, or fracking, has greatly boosted its oil production and transformed it into the world’s largest producer of natural gas. So great is this capacity that the US has become the biggest source of oil imported by Britain for the first time in more than 60 years.
Britain, too, could benefit from fracking. Yet regulatory zeal and misguided legal challenges have delayed shale production and threaten to stymie it altogether. As Britain faces the economic and diplomatic uncertainties of Brexit, this is a self-defeating course. The government should make it a priority to ease the regulatory regime on fracking and encourage the rapid development of a domestic shale industry.
The economic case is overwhelming. Like it or not, Britain relies on oil and gas. These sources provided 72 per cent of the UK’s primary energy in 2017. Britain’s energy industry has many decades of experience and expertise in exploration for and extraction of oil and gas. Yet North Sea oil production is in long-term decline. Britain has been a net importer of gas since 2004 and of petroleum since 2006. The most recent figures, for 2017, show that net imports make up 24 per cent of oil used in Britain and 45 per cent of gas supply. If the country relies on exploiting solely conventional fields onshore and offshore, it is inevitable that its trade deficit in energy will widen.
Compare that with the position of the United States. The world’s leading democracy has within the space of a few years become an energy superpower. It is an extraordinary transformation in geopolitical influence as well as national wealth. In the 1970s President Carter notoriously likened the nation’s energy crisis, caused by a quadrupling of the price of oil by the Opec cartel, to “the moral equivalent of war”.
Even 15 years ago America imported 60 per cent of its oil. Fracking has changed that equation. The technique involves drilling deep into the earth and directing a high-pressure mixture of water, sand and chemicals at dense shale rock to release the oil and gas within it. Official projections suggest that the US will become a net exporter of oil and gas within three years.
Britain’s shale reserves are as yet unknown but the British Geological Survey suggests that they may be substantial, not least in the Bowland-Hodder shale formation that crosses much of northern and central England. Last year the energy firm Cuadrilla, the first to gain a UK fracking permit, resumed drilling in Lancashire. This was the first activity since fracking was halted in 2011 after a legal challenge.
The apprehensions behind that challenge concerned the risk of earth tremors. This week Cuadrilla warned about the effects of strict regulations that require work to be halted if it leads to tremors above a certain magnitude. The warning should be heeded. There is almost no evidence of earth tremors in the US, where thousands of wells have been sunk. In 2013 the coalition government announced tax incentives for shale gas, cutting the levy on profits. Theresa May’s government appears unwilling to let developers earn profits at all.
Fracking in the US has cut energy bills, created jobs and rejuvenated depressed regions. It could do the same in Britain, as well as helping low- income families with fuel costs. Frack on!