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Cameron in ‘Bribery’ Blunder

August 10th, 2013

399px-David_Cameron_-_World_Economic_Forum_Annual_Meeting_Davos_2010The most extraordinary thing happened a few days ago. David Cameron, Britain’s Prime Minister, announced that local communities with a nearby fracking site would be rewarded immediately with a million pounds. Aides hastily scrambled to explain that the figure was actually £100,000.

Well that’s marvellous – I’d put up with the sound of drilling 24/7, the disappearance of my local dawn chorus (which has now happened in Balcombe) and the possibility that my water or air might be contaminated for a share of a million, oh I mean £100,000.

Air pollution – you don’t see that mentioned much in the debate on fracking – but Sir David King, the government’s former Chief Scientific Adviser, spoke on the Today programme (BBC Radio 4) this morning, and said that gas leakage into the atmosphere was a real risk – that it happens in the US, and that this contributes to green house gas levels. He believes fracking should only be considered if regulatory processes to cover the risks of water and air pollution are in place. They are not.

Still, a bit of cash…who cares? And maybe I’ll buy some shares in the fracking companies. It’s a poor investment, but… David King again:

Sir David King, former chief UK government scientist, “noted that production at wells drops off by as much as 60-90% within the first year”. To deflect attention from that rapid decline of profitability, the big US companies involved (eg, Eagle Fox in Texas) are having to drill “almost 1,000 wells in the Eagle Fox shale site every year, just to keep production flat”. In consequence, huge losses are being made in the borrowings of such companies, losses from which the companies and banks involved are making great efforts to deflect attention. (From ‘The Environmental Realities of Fracking’)

It’s a bad investment decision, but look – the UK government is giving the companies massive tax breaks so that means they’ll make money! The tax-payer’s money of course, because the profit will come from this licensed tax dodging, but who cares? It’s cash! Usually governments give tax breaks to ailing industries to stop them from dying.

So here’s a prediction: the financial underpinning of this whole fiasco will become more and more known, more and more discussed, and then the industry will have fracked itself. The cracks will become visible, the shaking will be heard – first in the City and in the boardrooms of banks like HSBC who have invested in fracking companies – and then the pollution of corruption and greed will seep to the surface and will become obvious to even the most cynical ‘person-in-the-street’.

Next step – government discredited, Lord Browne’s influence behind the scenes known to all, Middle England decides it prefers clean air, water, and a protected countryside rather than bribe money, and all those ministers and MPs are out on their ears.

28 Responses to “Cameron in ‘Bribery’ Blunder”

  1. Well written Philip, the sooner the Fund Managers start trying to unravel the financial interconnection of the associated companies who stand to gain from this the better. The funds that go into the fund of funds these people have at their disposal include pension funds in a big kitty. This campaign to stop them must embrace the big picture. Economic, industrial, military, environmental and political factors appear to come together in a big scary ‘soup’ when you dig a little deeper.

  2. I think the whole thing is totally outrageous and dearly hope people will rise up and join us in our opposition of it! This government seems hell bent on destroying everything that is beautiful, good or noteworthy about our country. Why? Money of course…. and not in our pockets!

  3. How right you are! The entire shale gas industry cannot support itself financially because it suffers from the so-called ‘red queen effect’. Like the Queen of Hearts in Alice in Wonderland, who had to run just to stand still, the fracking industry requires continuous drilling just to keep output flat (for a while).

    Eventually, of course, the financial ponzi scheme that kept it going for a while will run out of gas (no pun intended), but by then we will have polluted groundwater, blighted landscapes and ruined ecosystems. And the only clean things to be seen will be the heels of those who profited from the whole sorry affair.

  4. Hi Philip, just in case you don’t know Deborah Rogers testified before Senate Committee on Energy in May. Her information is available on her web site it is essential reading and watching for everyone. This whole fiasco is so surreal I would like to believe there is a secret surveillance operation which is going to catch them once and for all…wishful thinking!

  5. Well said! As far as I know Fracking is not planned for my area but many of my friends live in areas that could have their water sources destroyed by it.

    Investment should be
    1. In reducing the amount of energy we need to use.
    2. In genuine renewables.

  6. When will governments get the message: stop messing with the earth and put money into properly developing sustainable alternative energy. The science is there, the resourses are there. What is needed is the political will to do this. Oh I forgot, the businessmen millionaire Tory ministers have all been bought by the Arab producing oil states and the energy companies who hold patents for alternative energy. What will your millions be worth when there is no clean land to enjoy? And when we do finally exhaust all the fossil fuels and have not invested in alternatives… what then? Mad Max scenarios. The earth will heal herself even when homosapiens no longer exists, but do we want to destroy all that is beautiful, creative and loving on this planet for the sake of greed? I mourn for the Earth in the name of my grandchildren.

    • might I remind you that millions of dollars are being supplied to the anti-fracking movements by both the UAE, Qatar & the Russians – so how would Tory Ministers & (Lib Dem) ministers be purchased in order to frack the countryside ? That sort of doesn’t make sense.

      • Ron can you give me the source/ref for yr statement “millions of dollars are being supplied to the anti-fracking movements by both the UAE, Qatar & the Russians” ?

  7. This is especially interesting to me as fracking is being forced upon us here in the San Joaquin Valley of California where I live. I recently watched the movie Gasland II by Josh Fox, and the images of the countryside in areas where fracking is prevalent are heartbreaking. Even on the surface, it will never be the same. (Well, “never” is a long time!) But to think what’s under the surface makes me shiver. And now here, on an earthquake fault…that just seems like a brilliant idea, doesn’t it? Let’s add to that the nuclear power plant they’re planning to build as well. Philip: May I have your permission to share this blog at the next meeting of “Fresnans Against Fracking”?

  8. Hello Phillip. Hope everyone is well today. Just a couple of comments. Can’t comment re: bribes in politics today – something that would have been unthinkable 30 years ago is commonplace today. As an outsider with experience in the UK – educated in England, worked and lived in London for several years. Daughter who graduated from Uni in Scotland and is now married to a good young man from Hampshire, I do have more than a passing interest in your fair country – my grandchildren will be British and my retirement plan is to find a nice seaside cottage near Looe in southern Cornwall. Putting aside the process for just a second and commenting on 2 things – community or impact fees and profitability of shale gas wells.

    I think one of the major differences between the US and UK is that citizens own the mineral rights under their private property in the US which of course means that they benefit directly if the property is leased or purchased by the Operator. This of course creates an income tax stream – federal, state & local Plus any corporate income tax paid by the operator to the federal state and local governments as well. In addition to this most states have enacted an Impact fee which goes to the community for use in development in healthcare, education, etc. This has made a huge difference in the quality of life in some of the poorer counties in Appalachia. I think the problem in the UK is that their is a very cozy relationship between the government, royalty and operators who control these mineral rights (gas&Oil) If the money was closer to the people there would be more control and also more sensitivity (unfortunately) from operators to the citizenry.

    The notion that shale gas companies are not making money because the gas runs out is just not the case. The Gas is under pressure and it is produced over the “life” of the well. Like all things under pressure it comes out faster in the beginning and slows down over time – this is called a declination curve. Not sure about UK but the declination curve in the Marcellus (Hyperbolic) is quite steep – in other worlds probable 70-80% of the gas in a well exits within the first 4-7 years. flattens out and then produces at a steady, more exponential decline. This is all taken into the account as it relates to finance and operations expenses. Depending upon geography & geology it costs between 3-5 million ($) to frack and put a well on line. That is typically paid back within 1-2 years (conservatively) on a producing well. A well will continue to operate for up to 15 years. Even at $3.50 per gas contract in the US – money is being made. A lot. Pennsylvania and Pittsburgh in particular are re-entering 1880 2.0 (I invite you to check your history books) So this argument about the economics is really off the mark (especially when gas in the Euro mkt is $8.00 a contract.) The bigger argument is with all this profit to be made (and there will be billions) How will it get to the people? Having watched inside dealings as it relates to Canary Wharf, 2012 Olympics, etc. I do agree that people should be concerned about a share of the profits being turned towards the people in measurable ways. To recap the point – the operators are not going to make as much as they say they are argument will not wash.

    Another comment is methane leakage. again technology takes care of this since no one wants to lose any of the product that they are looking to sell. We even deal with it since our first stage biofilter consumes what is present in the production water. Also the massive increase of natural gas in US industry has now brought us below Kyoto levels (without signing the treaty( back to 1992 CO2 levels.

    Last thing and I am only giving you my opinion on what I strongly believe will happen – fracking will go forward – the government is too invested.

    • Also, what about the documented fact that a certain number of wells — I believe it is 5% — fail within the first year, thereby leaking more ozone-damaging methane into the atmosphere than coal production ever did? And that percentage increases over the life of the wells? And what about contamination of groundwater and other life-sustaining resources? This is only about profits to the industry and the politicians, Mr. P.; to the vast majority of the people on this earth, it is about something far more important and far mote precious…life itself.

      • once again I think there are valid questions to be asked but the hysterical tone that is often taken lessens the perceived import of your question. Where did the documented fact of 5% failure in the first year come from. – there is either gas or no gas. also there is typically 5 verticals and 6 x 5 horizontals so a failure if tested and know is next to impossible. If a well is not performing the company can always cap it which means no gas would be emitted. All industrial processes have contaminated groundwater – the sainted miners worked in an industry which contaminated enormous amounts of groundwater and aquifers in Yorkshire and beyond – Billions of gallons of AMD (acid mine drainage) water which is in your watershed.

        The bottom line is this is happening. Around the world. Shale gas is a 100 year event. literally in 10 years the OPEC nations will be rendered irrelevant – and thats a good thing. It doesn’t matter what the UK does – you are a natural gas economy and even with alternatives you will be one for at least another 30-50 years. You will buy gas from somewhere yourself, the US, Chinese, etc. etc. or you can become aware of technologies that exist that make shale gas exploration cleaner than industrial processes that are in your own backyard. You just need to know what questions to ask. And you can call me Ron. My father is Mr. P.

        • Although the industry’s claim is that 1%-2% of its wells leak, a report by the Pennsylvania Dept. of Environmental Protection, which tracked gas leaking from wells across the state, found that 6.2% of new gas wells were leaking in 2010, 6.2% were leaking in 2011, and 7.2% were leaking by June 2013. ( Fracking is Hardly Leakproof) A letter to the NY Times Opinion Pages claimed that rate to be as high as 8.9% in April of 2013. ( Revisiting the Facts on Fracking). Stating the the industry would simply cap a well that was leaking is laughable, since it is clear that the industry places profits above all else, including the health and welfare of the public. This has been proven time and again, not only in Pennsylvania, where the wells continue to operate in spite of obvious leaks and failures, but also in the case of the BP coverup in the Gulf of Mexico, where we (the U.S. and the world) have lost an entire ecosystem, and the lives of the people (not to mention animal life) dependent on it will never be the same.

          Speaking of coverups, in Texas, the December 6, 2012 Energy & Environmental Reporting for Texas stated on the website that UT Professor Charles “Chip” Groat, who was involved in a University of Texas fracking study, had failed to disclose his involvement by way of significant financial ties tot he drilling industry. Needless to say, his resignation and retirement was imminent. The industry is rife with corruption; these kinds of things are brought to light on an almost daily basis. I don’t need to go into all of them here.

          The fact that all industrial processes have contaminated groundwater is exactly why so many of us are saying it has to stop. The corruption has to stop. The coverups and lying about the kinds of chemicals used in the fracking process have to stop. The lying about the gas leaks and the extent to which the groundwater and surrounding land has been contaminated has to stop. The continued destruction of our planet — our only home — has to stop. Profits will do nobody any good without a planet to live on.

          It is a tactic of all profiteers to call such comments “hysterical”. In an article from, June 21,2012 by Iris Marie Bloom, the author states that a scientist named Rachel Carson was targeted by chemical industry spokesmen as being “hysterical”, called a “fanatical defender of the cult of the balance of nature” because they were trying to undermine the data and the failure rates of the fracking industry. I’m not sure if you can defend the “balance” of anything and be “hysterical” at the same time. I think the chemists gave themselves up on that one.

          I would be honored to be considered among that “cult of the balance of nature.”

  9. Thank you Ron for your very full responses. I really appreciate this. Just to focus in on one point: if the industry is so profitable why is the UK government giving firms tax breaks? Over to you!
    PS A cottage near Looe – how nice!:)

  10. Because they demand it. In the US there are no tax breaks other than what is normally available to exploratory businesses. Plus standard writeoffs for expenses in the first years. Not sure how its done in the UK but at the same time once you know your field – imagery gives you a very good sense of what is down the hole so the calculation of what you will get and how much you will make is pretty easy – simple financing solution. I still think the bigger issue is who controls the mineral rights under “your”property.

  11. Actually Seaton is the exact place but anywhere near Looe would be just fine. Live the rest of my days as a beekeeper & honey maker!

  12. Garangwyn:

    You didn’t mention that the Times Union article is from Albany NY – not sure what their involvement is in PA since NYS has put a moratorium on drilling. Also the article “Fracking is Hardly Leakproof” is an Op-Ed written by none other than Josh Fox the producer of Gasland 1 and 2. Both of which are laughable forms of paid (those HBO checks are nice) propaganda – flaming water? not uncommon in areas where large deposits of gas exist. Dimock Creek – EPA could not find any contamination. Cabot was stupid not to test water prior to any activity. Many underground water sources are undrinkable naturally because of high mineral/metal content. Also what does Rachel Carson have to do with all of this? Her ability to get DDT banned which many experts believe led to the deaths of millions of Africans from needless infection from malaria.

    • I believe the facts speak for themselves, regardless of who is writing or stating them. I think we have used Philip’s blog quite enough to debate this issue, which has only served to show that we do not agree on the subject of fracking. Thank you for your honest opinions Ron.

      • Facts do not speak. They are or they are not. but putting that aside – what I had offered was for people who are against fracking to ask me – someone who is directly in the middle of the water issue any question they would like. I think I have also expressed my concern that especially in the case of the UK there are serious questions that should be asked but my worry is that there are certain people and groups looking to make a show vs. asking serious questions. In the last 3 days the CEO of Cuadrilla, Francis Egan, has received death threats. I mean really.

  13. Just a thought Sir David King ‘former chief govt advisor’ is apparently Scientific Advisor to UBS Investment Bank too and appears to have links with the oil and gas industry too…..

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