As someone who owns a field in the Kent Weald, I may no longer have a dispassionate interest in the shale gas debate. Whether there is any energy underneath all the brambles, I have no way of knowing. But the MP for nearby Sevenoaks, Michael Fallon, has already speculated that the rich seams of gas discovered in nearby Sussex may well extend to this county as well. The local Green party is already up in arms, challenging local MPs to state whether they support fracking or not, no doubt hoping to stir up some political trouble for them. So it is by no means impossible.
Instinctively, I’d be more than happy to sell my field to anyone who wants to throw up a few rigs on it. I’m as keen on making a quick buck as the next person. There is a problem, however. Under existing UK law, I don’t own the mineral rights under the field – the government does (this doesn’t apply to all minerals, but it certainly does to petrochemicals). And that makes me a lot less keen to invite the drillers in.
You can argue – as the government does – that the new shale gas industry is in the public interest. But surely there is a simpler – and more Conservative – solution to this problem. If people owned the mineral rights under their land, and could make money from shale gas, the opposition to its development would melt away faster than you could say ‘frack off’.
There is no longer any doubt that the UK is potentially sitting on a lot of shale gas – and that exploiting it would give an immediate boost to an economy which, even with the faint signs of growth emerging, still looks in deep trouble. In America, shale gas has led to a big drop in energy costs and a manufacturing revival. Cheap energy could do the same in Britain – and give us a useful competitive advantage over neighbours such as France, where fracking has been banned.
There is a problem, however. People don’t like it – at least not in their backyards, which unfortunately is where most of the shale gas happens to be. In America most gas is in remote areas (although there is potentially a lot in New York). Here, while some of the gas is in what one Tory peer unhelpfully called the ‘desolate’ north, much of it is under the wealthy Home Counties. That stirs up opposition, seen most dramatically in the West Sussex village of Balcombe, where exploratory drilling has already started, and where there have been widespread protests.
Prime minister David Cameron has gone on the offensive to support the industry. In an article urging people to embrace fracking, he said it is in the national interest. Jobs and wealth would be created for the whole country, he argued. At the same time, energy companies would be required to give £100,000 to any community where wells were drilled, and 1% of the revenues generated from a field would go to the local community. The boy scouts will no doubt get a new hall, and the village fete may get a bit smarter.
But hang on. What about the other 99%? Why shouldn’t people own all the gas under their land? One reason the industry has developed so fast in America is that, under US law, the gas is owned by the landowners. If a developer finds it under your property, you make a lot of money. In this country, you only own the first few feet, which isn’t any use. The remaining mineral rights – when it comes to shale gas, at least – are owned by the government, which licenses them out to developers.
True, the developers have to buy or license your land to sink the drills, so you will make some money. But the drills can be sunk sideways, so even if the gas is under your land, it can be extracted from your neighbours’ property. The money to be made is far less than if you owned the mineral rights. So it is hardly surprising there is opposition. The drills and rigs may spoil the landscape, and reduce the value of your house, but you don’t make any of the real money.
Asking people to let it go ahead because it’s in the national interest sounds like the Soviet Union circa 1960. Surely the right response for a Conservative government that supposedly believes in free markets and property rights is to extend ownership of mineral rights to the centre of the earth, as in America. The exploration companies would then buy them directly from whoever owns the land.
True, the government would lose some of the revenues it might expect to earn. Selling exploration licences was lucrative in the North Sea, and will be for shale gas – and the government needs all the money it can find. But the North Sea didn’t belong to anyone, and the only creatures who could be upset about it were the cod – and they don’t vote or wave placards. There wasn’t any local opposition to overcome.
If shale gas gets going, it won’t be the exploration licences that bring in the big revenues. It will be the taxes on the energy extracted, the jobs created directly in the industry, and the far larger number of jobs created by having significantly lower energy costs than our main industrial competitors. That is far more valuable in the medium-term than the revenues generated from exploration licences. Just let people own the mineral rights, and the industry will develop in no time. Surely a Conservative government must be able to see that?