Earlier in the week the much-awaited independent report into shale gas and fracking in the United Kingdom was presented to the UK government. Ministers have been advised to allow shale gas extraction.
The recommendations which included staged fracking and monitoring are almost certain to be adopted by ministers and this will likely result in thousands of new wells being drilled in the UK and offer the possibility of cheaper, independent energy for the country in the future.
The report concluded that fracking operations conducted by Cuadrilla Resources had caused two minor earthquakes but these are no more severe than similar seismic activity caused by coal mining and the report concludes that the chances of fracking causing a major life threatening quake are effectively nil. Similarly the possibility of ground water contamination from shale gas exploitation thousands of metres below the water table are indeed very very remote.
This measured approach is in stark contrast to the populist ban imposed after protests in France and Bulgaria.
This will not however see an end to the protests. There would appear to be several groups opposed to shale gas for very different reasons. There are those who oppose shale gas because of their general hostility to fossil fuels and these groups are well known. There are those who likely oppose shale gas exploitation because of the damage that such widespread development could have on their existing business.
It was only a week ago that Vladimir Vladimirovich Putin commented to the Russian State Duma that "our country's energy companies absolutely have to be ready right now to meet this challenge" and this at a time when Gazprom is facing tough price negotiations with its western European clients.
Shale gas does offer the opportunity of energy independence, an expanded energy production industry, employment and of course taxes for the payment of much needed social programmes in Bulgaria. Gas is also relatively clean compared to the poor-quality lignite coals exploited for electricity production.
With the release of this report, its time for rational thought, some new legislation to accommodate the conclusion from the British study and an end to the populist ban on fracking. Bulgaria needs the very benefits which shale gas can provide and Bulgaria needs them now.
It’s time to turn to the right!
John C Menzies
Cmi Capital Limited