Monday, 28 July 2014

Economics of fracking are not sustainable

Every time environmental concerns surrounding fracking are flagged up its proponents point to the huge economic benefits it will bring.
If you believe the pro-fracking lobby, in 10 years time everyone in counties Fermanagh, Leitrim and Cavan will be millionaires.
The rest of us will be on the pig’s back as well, paying just a few pence for our household energy and earning huge salaries working for multinational corporations attracted by give-away electricity prices.
Much has been made of the vast sums of money that could be invested and the employment opportunities that fracking will bring to rural communities.
Australian company Tamboran, which last week announced plans to begin exploratory drilling in Fermanagh, has in the past proposed making a £6 billion investment in Northern Ireland that would create up to 600 jobs.
However, while 600 jobs is nothing to be sniffed at in times of economic hardship let’s just look at those figures again.
For every £10 million invested, Tamboran would deliver one job. Wao.
Compare that to US blue-chip services firm Concentrix which in April announced that it would create more than 1,000 jobs in Belfast following a £36 million investment, with £3.5m support from job-creation agency Invest NI.
Last month the Newry-based technology firm First Derivatives said it would create just under 500 high-paying jobs, with £3.9m worth of support from Invest NI. That works out at about £7,800 per job.
Neither of those companies will have a long-term impact on our landscape, or pump toxic and highly explosive chemicals into the ground and potentially causing earth tremors. It is also important to remember that Tamboran are only predicting that ‘up to’ 600 jobs ‘might’ be created if they are allowed to frack in Fermanagh. Up to 600 could mean anything between zero and 599.
The ‘could’ has to be offset against the actual.
Fracking would see the large-scale industrialisation of Fermanagh’s picturesque landscape which draws in significant numbers of tourists every year.
There are an estimated 800 jobs in the county’s angling sector and hundreds of employed in tourism in hotels, guesthouses, restaurants, bars and other visitor attractions.
Is anyone really suggesting that we put these actual jobs at risk for a ‘possible’ 600 jobs or less?
Another supposed economic benefit is that Northern Ireland and the Republic will get cheaper gas and electricity.
The suggestion that those nice international conglomerates will sell shale gas to us really cheaply simply because it came from under our land is naive beyond belief.
Profit margins drive exploration companies, not pats on the head and ‘sure here’s a few quid for your troubles’ because we let them destroy our landscape with drilling sites and pipelines.
Ask the people of Scotland if their petrol has been any cheaper than in England or Wales for the past 40 years simply because they produce 65 per cent of Britain’s oil.
A quick online price comparison will tell you that the cost of diesel last week was on average higher in Scotland than in England and Wales.
And the experience of Scotland suggests that being the source of a lucrative income generator is not necessarily going to make the ordinary man and woman on the streets of Fermanagh, Leitrim or Cavan or the rest of Ireland, north or south, any better off.
The Scottish economy generates just over £26,400 per person every year, compared to £22,300 for the UK as a whole. This performance is significantly boosted by Scotland’s North Sea oil and gas industry.
However, when it comes to disposable personal income the average Scot is around £400 per year worse off, at £15,300, compared to the UK average of £15,700.
The world is hurtling towards an energy crisis as oil and gas supplies run out and many have gleefully hailed shale gas extraction as the solution.
But it is a carbon-emitting energy source and the global consensus is that if climate change is to be halted, or at least slowed, emissions must be reduced.
The environmental arguments against fracking and the need to develop renewable energies have been well flagged up but fracking supporters are trying to counter and win public approval with promises of wealth generation.
If the shale gas deposits are viable huge profits will be made by the companies who can get to it.
However, just as a planet dependent on carbon-based fuels is environmentally unsustainable the arguments being put forward by the fracker-backers that it will also bring financial rewards for Fermanagh, Cavan and Leitrim and the island’s two jurisdictions are economically unsustainable.
First published in The Irish News opinion pages on August 28 2014

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