The Scotsman conference

I spent yesterday at the Scotsman conference on unconventional oil and gas. This was very much an industry affair, with nobody on hand to put the green point of view. To my mind this was a missed opportunity, since it's rare that environmentalists appear before an audience that has the knowledge to answer back. Having said that, in the audience we did have Maria Montinaro, the Falkirk Community Councillor who has been highly visible in the campaign against Dart Energy and she was given plenty of opportunity to ask questions.

The speakers were pretty high profile, including Chris Masters, who had led the Scottish Government's expert panel on unconventional oil and gas, Gary Haywood, a high heidyin at INEOS, Ken Cronin of the Onshore Operators Group and Gordon Hughes.

The headlines have been generated by Gary Haywood, who was fairly clear that if the UK doesn't develop an indigenous shale gas industry then Grangemouth is toast. But there was much else of interest too. A number of themes were common to several of the speakers. There was dismay at the Scottish Government's moratorium, although tempered by a suggestion that SNP energy minister Fergus Ewing was not stupid. There was an expectation that things would change after the election. Everyone assumed that the speed of progress would be glacial however.

Several speakers touched on the campaign of misinformation from the greens, but there was also much talk of a "social licence to operate", a concept that seemed to be widely accepted among the panel members. IMHO, if ever there was a triumph of democracy over liberty, this is it, and a surer way to economic paralysis is hard to imagine.

The solution, most seemed to think, is public consultation. Jen Roberts from Strathclyde University said that it was not acceptable to ignore objectors. I would have liked her to set this idea in the context of the misinformation campaign from the greens and also the fact that fracking is a venerable technology. Ken Cronin's talk included a defence of UKOOG's decision to welcome the Scottish moratorium.  I'm not sure I'm entirely convinced that another expert panel or another review is going to make any difference though. He spoke about an information campaign that the group had put together and the thousands of responses it had had. I wasn't entirely convinced.

As with many of the speakers, Cronin gave the impression that diplomacy and the need to suck up to the politicians is uppermost in their minds. I was reminded of Dan Hannan's remarks about free-market capitalism being the only system ever devised where you could be successful without sucking up to people in power. Regulatory capitalism is thus clearly in the other camp. Gordon Hughes started out by saying that he didn't have to be diplomatic in this way, and I heard someone behind me mutter "Good". Gordon's talk was suitably forthright, setting out stark choices about our energy options, "Poor, cold and green" being the one favoured by the political classes. His point about putting better incentives in place for the locals affected by shale developments seemed sound to me.

I was also interested in the talk by Melissa Thompson, a solicitor from Pinsents, the conference sponsors. She seems to have carved out a nice niche for herself as advisers to unconventional operators under attack from greens. She noted that many of those involved were professional protestors who often did not know what they were protesting about. More "direct action" is apparently being planned to coincide with the Cuadrilla planning decision in Lancashire.

We watch with interest.

Comments

[John Brady]

Having also attended the conference, I thought there were a few other interesting points to pull out.

There was a great deal of frustration at the way the expert report had been treated by Holyrood.

The social licence was discussed by many of the speakers. I cringed the first time the phrase was used, but I thought in context it wasn't unreasonable. It was another way of saying that the argument won't just be won using scientific facts or engineering risk assessments; it must be won by addressing the genuine concerns of public - even when such concerns have been distorted by misinformation. The problem is that no-one seemed to have any great ideas on how to do this!

Gordon Hughes emphasised that any development - whether it is shale gas or renewables - has both benefits and downsides. The public need to make an informed choice, but they must recognise that whatever choice they make they need to accept the downsides if they want to get the benefits. He made some interesting points about incentives; our heavily centralised planning system screws up the incentives. Amusingly, he made the point that the best practices for developing mineral rights which the UK government champions for developing countries are not actually used in the UK; e.g. royalty payments to landowners. He felt it was important that gains were not captured by distant bodies but were captured by local communities.

There was much talk of engineering tradeoffs. If we want lower seismicity, we need to drill and frack more frequently. Do the public really want that or would they accept some (trivially low-level) micro-earthquakes for less surface disruption?

It made for an interesting day out, but there was certainly a sense that we were some years away from any meaningful development.