BEIS has not calculated cost of support for fracking industry

Written by Nicholas Mairs on 24 October 2019 in News
News

NAO finds £32.7m of public spending so far, but BEIS says full calculation of costs to back shale gas extraction would not yet be "meaningful"

Policing of anti-fracking campaigners contributed to public sector costs, say auditors. Photo PA

The National Audit Office has criticised government after finding that the Department for Business, Energy and Industrial Strategy does not know what the full costs of its policy to support shale gas development will be.

In a report looking at the development of the government’s policy on shale gas extraction, auditors found at least £32.7m of public money had been spent in support of developments since 2011. This includes £13.4m spent by three local police forces on managing protests around shale gas sites, but does not include the cost of appeals, judicial reviews, or the time and expenses of public servants.

Fracking seeks to extract gas and oil from shale rock wells by using highly pressurised water, sand and chemicals – and the report comes amid environmental and health concerns about the practice.


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The NAO said that “because of the uncertainty over how much shale gas can be extracted, the department has not estimated how much public investment will be required to support the production of shale gas at scale”.

The government has committed to developing a shale gas industry in the UK, but the watchdog found progress to get it up and running had been slower than planned.

The watchdog found that although a 2016 Cabinet Office analysis expected up to 20 fracked wells by mid-2020, just three have been opened to date.

The NAO also pointed out that ministers “have not analysed the benefits or costs” of supporting the industry, since the uncertainty about how much can be extracted would not make such a study “meaningful”.

Furthermore, the report flagged that the government could not explain whether taxpayers would be forced to foot the bill if operators or landowners were no longer able to afford to decommission sites.

It also revealed that the government’s own public attitudes survey revealed opposition to shale gas has increased from 21% to 40% between 2013 and 2019.

And NAO said that while the department believes that pursuing the policy will not hamper the government's goal of reaching net-zero emissions by 2050, “it has not yet developed the necessary technology” to carry out the work in a way that does not generate high carbon emissions.

Responding to the report, a BEIS spokesperson said: “The government has always said shale gas exploration can only proceed as long as it is safe and environmentally responsible.

"The Oil and Gas Authority will soon publish a finalised scientific assessment of recent industry data and we will set out our future approach as soon as we have considered the findings.”

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Nicholas Mairs
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Nicholas Mairs is a news reporter for PoliticsHome, where this story first appeared. He tweets @Nicholas_Mairs

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