Quantcast
Popular
Kristian Buus / Greenpeace

Fracking Companies to Government: We Are 'Suffering' as Financing Dries Up

By Richard Anderson

Fracking companies in Britain privately admit they are "suffering" and struggling to secure finance, according to government documents obtained via freedom of information.

In a meeting last May with then-business minister Anna Soubry, the Onshore Energy Services Group (OESG) said raising the money needed to develop a wide-scale fracking infrastructure was proving difficult.


"Industry are finding it a challenge to get support from British banks ... all funding therefore comes from overseas and self-growth," the group said, according to the government's minutes of the meeting.

"British banks are saying the companies are too small."

The documents were released just weeks after leading UK shale explorer Cuadrilla posted multimillion pound losses for the third year running.

The trade association, which represents small and medium-sized oil and gas companies [SMEs] in Britain, also raised concerns that if fracking takes off, supply chain companies won't be ready to provide the equipment needed to build the infrastructure to support the industry.

It told government that "incremental gains" will be made in making individual fracking sites operational, but that the "social license will be more important when this industry scales up."

In other words, getting public support will be key.

"We will go nowhere if [companies] are fought at each stage," the group said.

The OESG also expressed concern about delays in drilling exploratory wells and the knock-on effects: "Operators are struggling, [it's] taking so long for them to get off the ground that SMEs are suffering."

Refused Loan

The meeting's minutes, obtained by fracking researcher Russell Scott, suggests that Barclays London refused an industry player's loan request, forcing them to approach Barclays Kenya—at a higher interest rate.

Barclays in London said it was unable to comment on specific loan requests, not least because the name of the individual company asking for finance is unknown.

The bank is in the process of selling its stake in fracking company Third Energy, simply saying that this investment is no longer part of its "core business strategy."

It has released a specific statement on fracking, emphasizing that if done properly, the process poses minimal risks.

However, the bank's Environmental and Social Risk Briefing, which outlines its overall approach to lending, says "significant environmental concerns have emerged regarding the hydraulic fracturing of shale rock," highlighting in particular heavy water use and the possibility of methane leaks.

UK Finance, formerly the British Bankers Association and the body that represents the UK banking sector, declined to comment on banks' policies on lending to the fracking industry.

Public Opposition

Energy expert Prof. Paul Stevens, Distinguished Fellow at the Chatham House think tank, said that financing is key to fracking in the UK:

"This is a very important point. It's why the U.S. has had a shale revolution, because the banks were willing and happy to lend to frackers.

"The U.S. revolution was based on Mama and Papa companies that were extremely reliant on access to credit.

"Without access to finance, fracking is simply not going to happen in the UK."

However, he said it was the public's view on fracking that would ultimately decide its fate.

OESG members were "absolutely right" to focus on public opposition, he said.

"Irrespective of the pros and cons of fracking, and I've never been convinced it's as bad as the NGOs say, they have convinced the world [that fracking is dangerous], and nothing is going to change that.

"The shale industry is never going to take off because of public opposition."

When contacted by Energydesk to discuss the views expressed by its members at its meeting with Anna Soubry, the OESG said it was unable to respond in time.

The meeting was held on May 15, 2016. The members of the OESG present were Remsol, Clear Solutions International, Moorhouse Drilling and Completions, Ground Gas Solutions, atg UV Technology, PR Marriott Drilling, Zetland Group and FBG.

Show Comments ()
Sponsored
African elephant. USFWS

Lawsuit Challenges Trump Administration Over New Elephant and Lion Trophy Policies, Still in Effect Despite Trump's Tweets

The Center for Biological Diversity and Natural Resources Defense Council sued the Trump administration Monday for allowing U.S. hunters to import elephant and lion trophies from Zimbabwe. The lawsuit aims to protect animals and resolve confusion created by the administration's contradictory announcements in recent days.

The suit comes days after the U.S. Fish and Wildlife Service abruptly reversed an Obama-era ban on elephant trophy imports based on catastrophic elephant population declines. Fish and Wildlife also recently greenlighted lion trophy imports from Zimbabwe, despite the controversial killing of Cecil the Lion in Zimbabwe in 2015.

Keep reading... Show less
Below the Mackinac bridge runs Enbridge Line 5, transporting 23 Million gallons of oil and liquid gas every day. Conor Mihell

Four Questions About the New Line 5 Pipeline Report

By Beth Wallace

In June, the state of Michigan released a draft report on alternatives to Enbridge's Line 5 pipeline, which pumps up to 23 million gallons of oil and natural gas liquids (NGLs) per day along the bottom of the Straits of Mackinac. The draft report, written by Dynamic Risk, was met with heavy criticism from all sides, and the National Wildlife Federation joined with many others to suggest numerous and substantive changes. On Nov. 20, the final alternatives report was released to the public. As per an agreement with the state to obtain funding for the report, Enbridge has had five days to review this report before it is released publicly.

Keep reading... Show less
USDA

Thanksgiving Dinner Is Cheapest in Years, But Are Family Farms Paying the Price?

By Sarah Reinhardt

Last week, the Farm Bureau released the results of its annual price survey on the cost of a typical Thanksgiving dinner. The grand total for a "feast" for 10 people, according to this year's shoppers? About 50 dollars ($49.87, if you want to be exact). That includes a 16-pound turkey at $1.40 per pound, and a good number of your favorite sides: stuffing, sweet potatoes, rolls with butter, peas, cranberries, a veggie tray, pumpkin pie with whipped cream, and coffee and milk.

After adjusting for inflation, the Farm Bureau concluded that the cost of Thanksgiving dinner was at its lowest level since 2013. Let's talk about what that means for farmers, and for all of us.

Keep reading... Show less

Would More People Ride the Bus if It Looked and Felt Like a Train?

By Jeff Turrentine

It moves through city thoroughfares, towering above automobile traffic. It makes frequent stops to pick up and drop off passengers. It has places to sit, places to stand, and—yes—rubber-tired wheels that go 'round and 'round, all through the town.

But don't call it a bus. It's a "trackless electric train."

Keep reading... Show less
Sponsored

Electric Car Sales Surge 63% Globally

Electric vehicles (EVs) continue to gain momentum on the world market.

Global sales of electric and hybrid cars are 63 percent higher than the same quarter last year, and up 23 percent from the second quarter, according to a Bloomberg New Energy Finance (BNEF) report.

Keep reading... Show less
Harvesting sugarcane in Brazil. Jonathan Wilkins / CC BY-SA

Jet Fuel From Sugarcane? It’s No Flight of Fancy

By Deepak Kumar, Stephen P. Long and Vijay Singh

The aviation industry produces two percent of global human-induced carbon dioxide emissions. This share may seem relatively small—for perspective, electricity generation and home heating account for more than 40 percent—but aviation is one of the world's fastest-growing greenhouse gas sources. Demand for air travel is projected to double in the next 20 years.

Airlines are under pressure to reduce their carbon emissions, and are highly vulnerable to global oil price fluctuations. These challenges have spurred strong interest in biomass-derived jet fuels. Bio-jet fuel can be produced from various plant materials, including oil crops, sugar crops, starchy plants and lignocellulosic biomass, through various chemical and biological routes. However, the technologies to convert oil to jet fuel are at a more advanced stage of development and yield higher energy efficiency than other sources.

Keep reading... Show less
Sponsored
Renewable Energy
"Eólica" or wind power plant in Guanacaste, Costa Rica. ICE Group / Twitter

Costa Rica Runs Entirely on Renewable Energy for 300 Days

Costa Rica has charted another clean energy accolade. So far this year, the Central American country has run on 300 days of 100 percent power generation from renewable energy sources, according to the Costa Rican Institute of Electricity (ICE), which cited figures from the National Center for Energy Control.

With six weeks left of 2017 to go, Costa Rica could easily surpass 300 days.

Keep reading... Show less
Popular
iStock

Starbucks Falls Short on Environmental Commitments

By Davis Harper

Since the early 1970s, Starbucks has held a special place in cupholders. Widespread infatuation with the company's caffeinated beverages has earned the coffee giant a storefront on almost every corner. With outposts in 75 countries and a whopping 13.3 million people enrolled in its loyalty rewards program, Starbucks has scorched nearly all of its closest competitors among major U.S. food brands (most of which aren't even coffee chains) in total market value.

With such reach and power comes tremendous responsibility. Starbucks touts its own corporate responsibility—claiming to be climate-change-aware and cognizant of its environmental cup-print—but how many latte-sippers know that their paper cup actually isn't recyclable and that it'll likely end up in a landfill? Might the knowledge that Starbucks's meat supply is pumped with antibiotics alter the market's appetite for the popular chicken and double-smoked bacon sandwich? Although the company prides itself on environmental awareness and progress toward sustainable products, multiple reports point to the mega-corporation's failure to live up to its own purported standards.

Keep reading... Show less
Sponsored

mail-copy

The best of EcoWatch, right in your inbox. Sign up for our email newsletter!