frackingWEB-200x200Many observers, supporters and detractors alike of onshore natural gas and oil, talk of the US example of private mineral rights as providing an example for the emergence of US shale while at the same time providing yet another support for the the “it will never happen here, so let’s not bother trying” school.

Also at the same time, as Laszlo Varro of the International Energy Agency recently pointed out, US producers may be becoming complacent about public acceptance under their own backyards. I’ve consistently said common resource ownership could solve more problems than it raises in Europe. Could it also solve some US issues?

The idea that the UK, or most anywhere else, could enable public acceptance of shale via private mineral right ownerships is a blind alley no less fantastic than the notion we can have a decarbonised future using the technologies of today. Firstly, the rather obvious point is how the US private ownership model is virtually unknown anywhere else. Hydrocarbon and mineral resources alike have come out of the ground world-wide. Canada provides only the nearest  example of a country with a long history of state owned resources and commercial exploitation. 

Secondly, private mineral rights might just work in the Eagle Ford Shale, where places like McMullen County have a jaw dropping population of 707 people sharing over a thousand square miles. That makes the relatively wide open places of  Chojnice County Poland, home to the upcoming if long postponed Gdansk Basin shale revolution, where over ninety one thousand people  live within less than half of McMullen’s size look like Hong Kong.  

Moving to the UK, given that multi well pads can cover over 100 square K, it would ridiculous to divide up shale gas benefits to the hundreds of of thousands of property owners in Lancashire or Sussex.  Any royalty checks would be barely worth the stamp cost in  most areas. The freehold/leasehold system could see cheques going to people like the Duke Of Northumberland or worse.  At best, it would enrich UK farmers already encumbered by any number of EU agricultural payments and could divide communities as much as unite them. 

Finally,  any legislative change to the process would slow down shale development far more than it already does. The UK and EU are not the USA and in this part of the shale revolution, and perhaps others, US analogues simply don't apply.

Moving to the US, I’m often reposted at Natural Gas Now, a site promoting shale gas in upstate New York. There in a rural area with bigger, and far poorer, farms than in Europe, the situation is different, but incredibly confusing to European eyes. I used to live in New York, although much close to New York City or within it, and let me assure you dear reader, that the politics behind UK, Irish, Polish or even French shale gas are as nothing compared to those in New York State.

The fundamental dysfunction of New York State is that something that looked good on a map in London in 1686 doesn’t work today.  However strange the form of ancestor worship known as the US Constitution looks to us Europeans, it won’t be changed any sooner than our mineral ownership would be. This means New York State can be neatly divided, according to where you live, as  “them” or “us”.  The vast majority of people live in the New York City metropolitan area, and are overwhelmingly Democratic. The minority of people live upstate, so we see situations where as some State Assembly members can literally walk across districts in a few blocks, people in upstate counties like Tioga share their representatives within a huge physical area.

From downstate “them” are Republican red necks. From upstate, “them” are New York City liberals. This leads to an us versus them narrative that transcends politics which explains a lot of how places like Tioga or Broome County, just above Susquehanna and Bradford Counties in Pennsylvania, (producing almost 40 BCM of gas between them), have sat the shale revolution out, despite their sharing the sweet spot of the Marcellus with their neighbours across the state line.

I have to cheekily point out here, that if the benefits of New York State’s mineral riches were more widely distributed then the issue might be closer to resolution. Indeed given the importance of the shale debate in the US emanating from the “liberal” centres of not only Ithaca New York, home to Cornell University but from Manhattan,  the entire debate in the US, and thus in Europe, could be said to stem from this historical accident.

Returning to the UK, the fact that shale energy belongs to all of us isn’t made clear enough in our debate. Individual citizens won’t become as rich as the Ewings or the Clampetts, but, for only one example, the single mother in a high-rise in Hackney will benefit as equally as the bourgeois of Balcombe or the nimby’s of Lytham St Annes. 

The issue in New York might actually be resolved if the single mother in the Bronx high-rise saw 62% of the value of the natural gas transferred to the New York State government. I suggest that the perpetual arguments between the state capitol in Albany and everyone else over spending would be helped by a change in the tax and or mineral rights ownership system.

But, just as in Europe, we won’t see that happening so it’s pointless to point that out too.

My heart goes out to the New York State landowners, but the failure of the shale debate in New York State provides some negative examples of US shale analogues - and some of those examples are turning up in surprising places. There’s been push back on shale drilling in Dallas, judicial setback in in Pennsylvania itself, and big battles between the two cultural tribes of very left and very right who share Colorado:

A coalition of activist groups has submitted language to the Colorado Legislative Council for a constitutional amendment to give local governments authority to regulate oil and natural-gas development. 

The US shale industry mostly provides very positive models of shale development for the planet, but we should also be aware that not all analogues are easily transferrable. Europeans are used to coalitions and the US model, which sometimes writes off huge parts of the electorate simply because they’re in the wrong place, or the wrong political party, is not only inapplicable in Europe, but may need to be rethought at home.

The guys at Natural Gas Now are great guys, but it's shale that unites us, even as any discussion about guns or Obama might easily divide us. We need to include as many people as possible in the European gas debate, especially including those who we may disagree with on everything else. In the run up to the UK election next year, we especially need to reach out to all sides. Shale, despite the exaggerations of the Greens, won't really appear on the radar of most voters. But we can't afford to let it drop off entirely either.  

Most of all we need some exploration and the results of it. Then we can move on or if people wish it, move out. 

 

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  • Andy

    One of these days someone will read the Constitution and realize only Congress can regulate interstate commerce and the oil and gas industry is the most interstate of all industries and these local opponents will have to disappear from the courts. (Yes, i realize it is not that simple.)<br /><br />Also, the public benefit you see in the European states owning mineral rights can still be acheived in the US on the other end. North Dakota has a Legacy fund that is filled with oil and gas industry taxes. The latetest Bakken Breakout at bismarcktribune.com has a good review of the past year in the Bakken, and the operation of the legacy fund.

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