Articles from 2013
Public support for shale greater in UK and Poland than in US
- Written by Nick Grealy
- Published: 04 October 2013
The most damaging myths for the commercialization of UK/EU shale are not those held by green opponents, but the ones held to be perceived wisdom by the financial community. They are the guys with the cash, and for now they’re mostly holding on to it. This is the first of a series confronting the reality of those myths. There will be more to come on infrastructure, services availability, well economics, geology, future UK gas price trends, and local support.
Local support is tied in with another key indicator. Often the most widely cited reason why Europe won’t be able to access shale gas is that the US system of property rights allows local landowners go have a direct interest in the benefits. That in turn leads to today’s mythbuster, lack of public support.
Quite apart from the success of jurisdictions such as Alberta and Australia in accessing mineral wealth even as it’s Crown property, it’s time to study not the perceptions but the reality. Invariably the prime reason cited as hindering European and UK shale is the lack of public support. As we move deeper into exploration, lack of public support is cited as a universal truth among one key community, institutional investors. The lack of investment is a key issue in converting speculative resources into producible reserves. Many upstream consultants tell me that public acceptance is an as great, if not greater, issue than geology constraints. In short, we can have great rocks, but can’t prove them because the public perception issue is strangling investment in Europe. Although the US still has the most attractive potential (although increasingly not for service companies). due to factors such as data, infrastructure and regulatory certainty, the US is perceived as having far greater public acceptance. In short, private mineral rights directly translate into the social license to operate.The US success lies on a bedrock not only of favourable geology, but one of wide public support, and it's such a lack of support in Europe that hinders investment.
Several recent opinion polls provide the most readily available metric proving this concept should be consigned to the dustbin of shale history along with taps on fire and the other discredited concerns over methane leaks and water use. In short, this is another shale gas mythbuster.
The factual reality immediately apparent in the most recent polling is that public approval of shale is significantly higher in the UK and Poland than in the US.
The University of Nottingham has been conducting polling on UK perception for several years. They asked me, among others, for ideas on what to ask, but the polls are as independent as US academic pollsters, Siena College, Pew Research, University of Texas (March 2013) and Quinnipiac University. (April) From Poland we have to depend on a September poll by for the Ministry of the Environment.
Any financial analyst loves a chart. Here’s mine based on the big question common to al respondents who identified the process: Do you support shale gas?
Somewhat counterintuitively, in general more people had heard about shale gas in the UK than in the US Polls. Given the unrelenting description of shale gas with that particularly British kiss of death “controversial”, one would expect that those who had heard about shale wouldn’t approve. The trend in the Nottingham polls has been both upwards and completely unreported. Except here at No Hot Air, and despite numerous attempts by Nottingham and myself to get any media to publish them, the polls have never made it to the press. Until now that is, when The Guardian jumped on the recent drop of support from July to September as some sort of victory
Protests against fracking by thousands of people in Sussex over the summer appear to have reversed the growth in British public support for shale gas for the first time.
Polling by the University of Nottingham has shown support for shale gas extraction in the UK steadily rising for more than a year, peaking at 61% in favour in July. But that number fell in September, to 55%.
Bizarrely, the Guardian misreported support figures upwards, this from the poll results themselves:
The public have also been asked whether shale gas extraction in the UK should be allowed, a question intended to capture people’s 'all-things considered’ judgement on shale. This question was first asked in June 2012, with 52.6% in favour and 27% against (+25.6%); in July 2013, these figures stood at 58.3% and 18.8% (+39.5%).
More on the truly dangerous myths, those held by investors, coming up. Along with some big changes at No Hot Air over the course of this month.