To Frack Or Not To Frack?
Tom Backhouse, Lead Geologist and founder, Terrafirma looks at the impact of Fracking on property values
It has long been accepted that we fear what we don’t know. Fracking has divided public opinion, with its relatively recent appearance on our shores following an exponential industrial growth in North America, leaving many unanswered questions. A national and political agenda, focused on energy and resource security through what may be volatile years ahead, is somewhat contradicted by local and community-scale worry of a poorly understood industry. Public perceptions have highlighted the lack of academic study into the risks posed to health and the environment, coupled with concerns about the effect on enjoyment of property and the local area and perhaps importantly, the impact on asset value.
Prior to May 2017, the Conservative manifesto was committed to Fracking in the UK. However, following the unexpected General Election results, has Fracking now died in the water? The political uncertainty that followed the results of the 8th June has slowly began to stabilise but now, one month on, have things changed?
It may be anticipated that there will now be a lag period between the Election results and the initiation of a nationwide industrial drive for Fracking. Had the Conservatives won with the majority they sought, it is likely that the industry would have been given the green light and widespread exploration and shale gas extraction would have begun in earnest, particularly across parts of North Yorkshire and West Lancashire. However, with a loss in majority and all other parties, with the notable exception of the Democratic Unionist Party (DUP), opposed to Fracking, it initially seemed unlikely that the Government would obtain the necessary mandate for exploiting our shale gas reserves. The DUP has famously not mentioned the word ‘Fracking’ in their manifestos throughout the past few years, however, the former Treasury spokeswoman, Sammy Wilson, backed the Conservative efforts in 2016 to change the planning laws in support of the shale gas industry. A combined Conservative and DUP majority might just have what it takes to ensure Fracking does not fall at the first hurdle, arguably empowering the UK as a whole in the Brexit negotiations and keeping the Conservatives in power. Even the recent analysis of the voting patterns across the UK did not reveal a significant public disproval of Fracking, with pro-fracking Conservative MPs increasing their majority in West Lancashire and North Yorkshire.
It is now possible that, while it will take slightly longer to appear, we will have a significant Fracking industry in the UK. With between 5 and 26 trillion cubic feet of Shale gas beneath our feet and potentially many decades of energy security, it is important to begin understanding the real risks and how they may impact the property sector.
Kindly shared by Terrafirma