The House of Lords Economic Affairs Committee had another in its long running series of hearings on shale gas today. The first witness, it is fair to say, will have been an eye opener. Chris Wright is the boss of an American shale gas company, someone who has actually done fracking, made it work and made it pay - in other words someone who could, rather than discussing hypothetical opportunities and hypothetical problems, explain the realities on the ground. He exudes all-American get up and go and is therefore a rather different kettle of fish to most of the world-weary Brits who appear to before the committee. Some of the peers seemed to eye him rather suspiciously at first, as if he might suddenly leap up and achieve something tangible without asking first, but they seemed to warm to him as the hearing went on and there were some moments of communal good humour and bonhomie.
I was struck by the fact that several of their lordships didn't seem to have grasped that the impact of shale wells is essentially a squad of drilling rigs moving around the country, leaving behind them lots of wellheads of trivial visual impact. So it was good that Wright was able to correct their misconceptions and they will have got a lot from his appearance, for example his thoughts on the idea that population density might be a barrier to shale gas development in the UK:
I've driven across Northern England...it looks like North Dakota after it has rained...The Barnett shale, where the shale gas revolution began, was under Fort Worth...my company has worked on frack treatments in Beverley Hills and Los Angeles.
On the idea that shale development will not cause gas prices to fall in the UK
I read those [suggestions] and I've been quite puzzled to read it. Obviously the United States is connected by pipeline to Canada and Mexico and our gas market is much larger than the European market, so if it caused a big decline in the US I have trouble imagining why it wouldn't in Europe. If you increase the supply of a commodity it's going to have an impact...The price of gas [in the US] is quite different all across the country. In fact there are places in the country where the price of gas is less than $2.
If you ran 35 drilling rigs in England and you produced the entire UK production from British gas wells, there's no question about it, you'd have a significant drop in British gas prices; probably a dramatic drop
And lastly his certainty that the UK regulatory regime is not currently fit for purpose and, repeatedly, the need for a regulatory regime that will allow operators to try different things without having to get new permissions each time.
Not right now. I'm in favour of strict regulation myself and if you had rigorous but crisp and clear environmental regulations and you had a way to align the community and you had a way to move quickly...I'd do it in a heartbeat, but that's not there today...the shale gas was discovered years ago and none's come to the surface yet...
Every rock is different, every rock you've got to innovate, this didn't work you've got to target the rock in a different place or we need a different frack recipe...you have to be able to move quickly to figure out the right formula to make it work.
To make it work with British rocks...You've got a different stress regime, you've got different microfracturing in the rocks. You don't understand these yet and to make it work is going to require innovation. The first well is going to produce some gas and it's going to have some shortcomings and some problems and you say well, "we should have done this". And the second well...There's going to be a learning curve. And if it takes a year to permit each one of those wells noone is going to be around for the learning curve and it won't happen...if you have some certainty and can move quickly it will happen in the UK. If it is slow and cumbersome, I don't know if it will happen.
Which brings us neatly on to witness two, the Deputy Director General of Environment at EU Commission, whose very appearance led one to a morbid certainty that a slick regulatory regime is nowhere on the horizon.
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