An Intricate Network Of Frackers, Lobbyists and Their Government Backers — 1
This special report will outline the clandestine relationship between fracking companies and the UK Government, using public relations lobbyists to push the shale gas agenda. These PR firms use special advisers (spads) to act as a middle-men between fracking companies and the Government.
This report will outline the tactics uses by these firms as they push to sanitise the image of shale gas to the general public.
Available as PDF soon.
Introduction
In April 2015, Spinwatch published the article Access all areas: Westminster’s (vast) fracking lobby exposed. Spinwatch is part of an organisation called Public Interest Investigations, who’s remit is to carry out ‘cutting-edge research into key social, political, environmental and health issues in the UK and Europe’.
Put simply ‘Spinwatch investigates the way that the public relations (PR) industry and corporate and government propaganda distort public debate and undermine democracy’.
This report will examine the current available evidence on the activities of actors connected with the shale gas industry.
The first part will cover the history of public relations, providing a background on how the PR profession has developed over the past 100 years or so.
The second part looks at two case studies to illustrate how PR firms apply their trade. The first looks at the diamond trade and how one company — DeBeers — managed to monopolise the trade through a slick PR campaign. The second examines how the tobacco industry managed to cover up the dangers of smoking.
Part three looks closely at the interrelationships within the shale gas industry and the various actors involved. There is also an examination of the various tactics used to promote and ‘sell’ the industry
Part 4 is a case study of petro-chemical giant INEOS, which is rapidly becoming the largest player in the UK shale gas industry. Its looks at the background of the company and the tactics employed in order to promote its image.
Part 5 is a study of the All Party Parliamentary Group On Unconventional Gas (APPG) and related Groups.
Part 6 considers the politics behind the shale gas ‘revolution’ in the UK. There is a section that links to political lobbying within the EU, with a significant UK influence.
Part 7 looks at the role of the media and the role it plays relative to the shale gas industry.
Welcome To Public Relations
There has always been PR and propaganda in some form or another. The term propaganda comes from Pope Gregory XV, when he created the Congregatio de Propaganda (“congregation for propagating the faith”).
Modern PR emerged early in the last century. An article from the New York Times looks at some of the pioneers of modern PR in the 20th Century.
Ivy Lee was one of the earlier developers of PR. Lee was hired by John D. Rockefeller, who established the Standard Oil Company, which ultimately became one of the most successful corporate entities in the world.
‘Mr. Lee tried to repackage the industrialist as a humane philanthropist, and in so doing became an important counsel to John D. Rockefeller Jr. as well. Mr. Lee, whose career later foundered when it was revealed that he did promotional work for the Nazis, advised the Rockefellers to be frank and direct when discussing their business practices with the press — a relief to a family averse to the practice, then common, of bribing reporters for coverage.’
Another key figure was Edward Bernays, who was a nephew of Sigmund Freud. Bernays was strongly influenced by his uncles work in psychology and began to apply psychology within the context of PR, seeing PR as an applied social science that uses insights from psychology, sociology, and other disciplines to scientifically manage and manipulate the thinking and behaviour of an irrational and “herdlike” public.
He was the author of several books on the subject, including The Engineering of Consent (1947) (Noam Chomsky later picked up the notion with Manufactured Consent). In addition, the NYT notes that ‘He professionalized the business while introducing other new forms of manipulation, like establishing bogus front groups to promote the benefits of smoking.’
The article The History of Public Relations gives a good overview of the history of PR. The article points out how Ivy Lee placed emphasis on openness and transparency, with the belief that being honest with the public was a sure winner and that way trust could be built. Not-for-Profit Organizations and Social Movements tended towards Lees version of PR.
Edward Bernays by comparison applied the art of persuasion within PR, what to today might be referred to as ‘spin’. As the article notes:
‘Bernays understood that publics could be persuaded if the message supported their values and interests. In many ways, the thrust of his philosophy is made clear in his first book, Crystallizing Public Opinion. At the time, he saw public relations as being more or less synonymous with propaganda, which he defined as “the conscious and intelligent manipulation of the organized habits and opinions of the masses.”’
The post-war period saw the rapid expansion of modern PR. Many proponents learnt their trade during the war from wartime propaganda campaigns. Many of the now well established PR companies cut their teeth during this period. The article outlines how all this came together:
‘…the hallmark of postwar public relations growth took place in the private
sector, in corporations and agencies. A consumer economy made use of both public relations and advertising to market products. Agencies came into full being, providing media relations and media contact capabilities not always available on the corporate side. The need for these skills was driven in part by the explosive growth of media outlets not available before the war — including FM radio, general magazines, suburban community newspapers, and trade and professional association publications. Their services expanded from a base of counselling and media relations to include public affairs or government relations, financial and investor relations, crisis communication, and media relations training for executives.’
Corporate PR — A Case Study
Who are these global PR companies who play such a major role in shaping public opinion and influencing corporate power and political will?
With the emphasis here on fracking, the focus will be on the companies and techniques involved in spinning the industry into a good light. But there are case studies from the past that highlight the lengths that PR companies will go to, to turn dirt into gold (or diamonds).
Case Study 1: Diamonds are forever
One of the most remarkable marketing campaigns ever conducted was initiated by De Beers, the South African diamond cartel. The company was founded in 1888 by Cecil Rhodes of Rhodesia fame.
Its formation followed the discovery of abundant sources of diamonds in South Africa. Prior to this, diamonds were a rare commodity. The objective of the new company was to control the flow of diamonds globally through the creation of an international cartel to maintain the illusion of scarcity.
The idea to associate the diamond with romance emerged in the late 1930’s. With the world teetering on the edge of war, the US became the focal point of an ambitious marketing campaign. The story of this remarkable campaign is told in this article from the Atlantic.
DeBeers had monopolised the market by controlling the flow of diamonds and pushing competitors out of the way. By the end of the war, DeBeers pretty much had the market sewn up.
PR company N. W. Ayer would push the marketing campaign for DeBeers in the US:
‘N. W. Ayer suggested that through a well-orchestrated advertising and public-relations campaign it could have a significant impact on the “social attitudes of the public at large and thereby channel American spending toward larger and more expensive diamonds instead of “competitive luxuries.” Specifically, the Ayer study stressed the need to strengthen the association in the public’s mind of diamonds with romance. Since “young men buy over 90% of all engagement rings” it would be crucial to inculcate in them the idea that diamonds were a gift of love: the larger and finer the diamond, the greater the expression of love. Similarly, young women had to be encouraged to view diamonds as an integral part of any romantic courtship.’
One of the key mediums that Ayer used at the time was cinema outlets. Eventually with the expansion TV during the 1950’s that would become the main marketing medium. Essentially the approach would be the same, subtle messages to influence public thought and culture:
‘Since the Ayer plan to romanticize diamonds required subtly altering the public’s picture of the way a man courts — and wins — a woman, the advertising agency strongly suggested exploiting the relatively new medium of motion pictures. Movie idols, the paragons of romance for the mass audience, would be given diamonds to use as their symbols of indestructible love. In addition, the agency suggested offering stories and society photographs to selected magazines and newspapers which would reinforce the link between diamonds and romance.’
The UK was a key diamond market. And if you can get the Queen to be part of your PR machine, so much the better. She ‘went on a well-publicized trip to several South African diamond mines’ and was given a diamond during her visit.
The agency recognised the importance of psychology when it came to marketing:
‘…the advertising agency strongly emphasized a psychological approach. “We are dealing with a problem in mass psychology. We seek to … strengthen the tradition of the diamond engagement ring — to make it a psychological necessity capable of competing successfully at the retail level with utility goods and services….” It defined as its target audience “some 70 million people 15 years and over whose opinion we hope to influence in support of our objectives.” N. W. Ayer outlined a subtle program that included arranging for lecturers to visit high schools across the country. “All of these lectures revolve around the diamond engagement ring, and are reaching thousands of girls in their assemblies, classes and informal meetings in our leading educational institutions,” the agency explained in a memorandum to De Beers.’
The campaign pursued by DeBeers became a global initiative and was highly successful. But eventually it became apparent that diamonds weren't forever. A diamond was supposed to be a gift for life and for more expensive stones, an investment.
But by the 1970’s the smoke was starting to clear, with lots of mirrors appearing. Quite simply it was almost impossible to re-sell diamonds. As an investment they were virtually worthless:
‘London-based consumer magazine Money Which? decided to test diamonds as a decade long investment. It bought two gem-quality diamonds, weighing approximately one-half carat apiece, from one of London’s most reputable diamond dealers, for £400 (then worth about a thousand dollars). For nearly nine years, it kept these two diamonds sealed in an envelope in its vault. During this same period, Great Britain experienced inflation that ran as high as 25 percent a year. For the diamonds to have kept pace with inflation, they would have had to increase in value at least 300 percent, making them worth some £400 pounds by 1978. But when the magazine’s editor, Dave Watts,tried to sell the diamonds in 1978, he found that neither jewellery stores nor wholesale dealers in London’s Hatton Garden district would pay anywhere near that price for the diamonds. Most of the stores refused to pay any cash for them…’
Ordinary people would have similar problems disposing of their jewellery, because it was essentially a buyers’ market, influenced by and large by the DeBeers monopoly. But that position would be challenged by the campaign against South African Apartheid and accusations of ‘blood diamonds’, appropriated through exploitation of black workers. And with markets opening elsewhere, DeBeers control of the market would decline.
So, the next time you buy your partner a diamond ring, you’ll now know that the tradition was the result of a slick marketing campaign!
Case Study 2: The Tobacco Industry
The efforts of the Tobacco industry to conceal the dangers of smoking is a classic example of a corporate scandal on a grand scale. It brings into perspective the absolute priority of the bottom line, where profit is completely paramount to everything else. This is no accident. The objective to make money is enshrined in corporate law, as an article from Common Dreams outlines. Although the article is US focused, it is generally relevant anywhere in the world.
The article points out that ‘the people who run corporations have a legal duty to shareholders, and that duty is to make money. Failing this duty can leave directors and officers open to being sued by shareholders.’
The issue is succinctly summed up:
‘Corporate law thus casts ethical and social concerns as irrelevant, or as stumbling blocks to the corporation’s fundamental mandate. That’s the effect the law has inside the corporation. Outside the corporation the effect is more devastating. It is the law that leads corporations to actively disregard harm to all interests other than those of shareholders. When toxic chemicals are spilled, forests destroyed, employees left in poverty, or communities devastated through plant shutdowns, corporations view these as unimportant side effects outside their area of concern. But when the company’s stock price dips, that’s a disaster. The reason is that, in our legal framework, a low stock price leaves a company vulnerable to takeover or means the CEO’s job could be at risk.
In the end, the natural result is that corporate bottom line goes up, and the state of the public good goes down. This is called privatizing the gain and externalizing the cost.’
In a sense, corporate law puts a company into a sort of autopilot state with a pre-determined trajectory.
With regards to the tobacco industry, it was aware of the link between smoking and health since the 1950’s. A paper published by Action on Smoking and health (ASH) examines the evidence concerning the tobacco industry ‘in its own words’.
In short
‘Thousands of internal tobacco industry documents released through litigation and whistleblowers reveal the most astonishing systematic corporate deceit of all time.’
‘In the face of mounting damning evidence against their product, the companies responded by creating doubt and controversy surrounding the health risks, whilst at the same time by responding to the growing public concern by putting filters on cigarettes and promising research into the health effects of smoking. They lulled the smoking public into a false sense of security, because, whilst this had the hallmarks of responsible companies acting in the public interest, it was actually a public relations strategy to buy time, at the expense of public health.’
At the heart of the campaign was PR company Hill & Knowlton (H&K), which also has close links with the fracking industry, being linked to the Parliamentary Group on Unconventional Gas. It is a notorious PR company with some rather unsavoury clients including the tobacco industry and some of the most oppressive regimes on the planet. The company has been accused of corporate criminal behaviour.
Powerbase outlines the company’s involvement in the tobacco industry, describing it as ‘one of the first and most successful examples of crisis management.’
A key strategy H&K employed was to set up front groups to generate a positive and legitimate image for the industry. This was tagged as ‘one of the most formidable PR/lobbying machines in history’.
Eventually the scandal was exposed as the scientific evidence mounted up and the indefensible could no longer be defended. Along with the tobacco industry, H&K also faced litigation:
‘So deeply was Hill and Knowlton involved in the tobacco cover-up that it was prosecuted throughout the nineties in the many of the same cases as the big tobacco companies.’
Sanitising Unconventional Gas Extraction
As noted above, an intricate network of PR companies operating under the radar is pushing the case for fracking across the UK, but as we've seen from the case studies above, its par for the course for PR firms to maintain a low profile. That way they can weave their web of deception without detection.
By understanding the tactics of these firms, it should be possible to push back and expose what’s going on. And as has been laid out above, there’s a rich legacy to tap into.
Lobbying Transparency
One approach is to bring greater transparency to the murky world of PR. As part of a wider campaign, Spinwatch set up the Alliance for Lobbying Transparency (ALT). ALT’s aim is ‘campaigning for decent transparency rules that would let us all know who is influencing government decisions’. But:
‘In practice, lobbying — in the context of the UK’s £2bn commercial influence industry — corrupts our democracy. Corporations and wealthy individuals are spending billions of pounds on lobbying to bend governments to their will. They petition to shape policy in their interests; to delay or water down laws that threaten profits; and to secure government contracts worth billions of pounds.
It all goes on behind closed doors, and the public interest doesn't get a look in.’
ALT has a sister organisation based in Scotland, The Scottish Alliance for Lobbying Transparency (SALT).
ALT is also active in Europe and has joined a widespread coalition of various groups to highlight the issue of lobbying in Brussels via The Alliance for Lobbying Transparency and Ethics Regulation (ALTER-EU). The aim is to address the ‘increasing influence exerted by corporate lobbyists on the political agenda in Europe, the resulting loss of democracy in EU decision-making and the postponement, weakening, or blockage even, of urgently needed progress on social, environmental and consumer-protection reforms’ (see below).
With the UK Government ‘going all for shale’, PR companies have become a vital component in the drive to implement unconventional oil and gas extraction across the UK.
Scotland and Wales have implemented a moratorium on any further developments and a formal ban was announced in Northern Ireland in 2015. On 31 May 2017, the Irish republic announced a full ban on fracking.
The main point of focus then is in England, with the Scottish Government having launched its long-awaited consultation before deciding whether to implement a ban or not. The consultation closed on the same day Ireland announced its ban.
As a result of the UK Government’s push to implement fracking mainly in England, a PR charm offensive has been in full swing. The Spinwatch article outlines a network of revolving doors and vested interests committed to ‘going all out for shale’.
As the article notes:
‘It’s well known that the shale gas industry has spent millions on PR trying to sway public opinion in its favour. Less visible is the extraordinary political influence it potentially wields via some of the world’s most controversial lobbying firms.
You won’t find any such connections listed in the Coalition’s new and much-vaunted official Register of Consultant Lobbyists.
But you can see them here in our new fracking lobbyists and revolving door infographics.’
It should be noted that the revolving door infographic will be out-of-date as the setup would have changed since the 2015 general election and subsequently the 2017 election.
Insofar as revolving doors are concerned. A key connection is the door that leads to the Prime Minister. And there we can see the close links to the fracking industry.
Former BP executive Ben Moxham became vice president of Riverstone Holdings from 2007–2011. Riverstone has a 42% stake in Cuadrilla Resources. He became senior policy adviser to David Cameron and Nick Clegg from 2011- 2013 after the coalition Government was elected.
One of the key figures at Riverstone was managing Director Lord John Browne, who then subsequently became chair of Cuadrilla until 2015. In June 2010, Browne served as Lead Non-Executive Director in the Coalition Government. He was involved in the restructuring and management of various Government departments.
He was very much a fracking proponent. However he did make it clear that the UK should also pursue an energy mix that included renewables, as he was sceptical that fracking would lower energy bills in the UK.
From 2013–2015, following Moxham’s departure, Tara Singh took over as David Cameron’s special adviser. Prior to her appointment, she was a public affairs manager for British Gas owner Centrica. Singh has also worked for lobbyists Portland PR and Hill & Knowlton.
Singh certainly has a very experienced background and was well placed to serve as a spad in the heart of the UK Government.
Lobbying tactics
In 2014, The Guardian published the article 10 ways big business controls government. The article documents key tactics used by PR firms. These will be analysed below.
Control the ground — This is all about controlling the debate ‘steering conversations away from those they can’t win and on to those they can.’ It’s a vital component in the PR armoury, pushing a carefully constructed narrative.
Spin the Media — ‘The trick is in knowing when to use the press and when to avoid it. The more noise there is, the less control lobbyists have.’ The media can be vital in pushing a PR constructed narrative. It also helps when the media itself is under corporate control. As such, the mainstream media can be a useful tool in manipulating public opinion and perception (see below).
Engineer a Following — Creating a ‘critical mass of voices singing to its tune’ help to give credibility to a narrative.
Buy in Credibility — ‘Corporations are one of the least credible sources of information for the public. What they need, therefore, are authentic, seemingly independent people to carry their message for them.’ This means getting third party’s to spread the message. Using academics is a favoured tactic in pushing the credibility of fracking (see below).
Sponsor a Thinktank— These are agencies that usually manifest themselves as ‘not-for-profits’, projecting themselves as independent researchers or consultants. Their remit is to generate misinformation and present findings as ‘factual’ (see below).
Consult your critics —’For some in the business, community consultation — anything from running focus groups, exhibitions, planning exercises and public meetings — is a means of flushing out opposition and providing a managed channel through which would-be opponents can voice concerns. Opportunities to influence the outcome, whether it is preventing an out-of-town supermarket or protecting local health services, are almost always nil.’
Neutralise the opposition —There are various tactics that are employed to do this (see below), ‘Edelman talks of the need for “360-degree monitoring” of the internet, complete with online “listening posts … so they can pick up the first warning signals” of activist activity. “The person making a lot of noise is probably not the influential one, you’ve got to find the influential one,”.’
Control the web — This will be covered in a separate section below.
The web is an important arena where lobbying tactics are deployed. This article from Vice delves into the shady world of online PR. As the article points out:
‘Today, commercial lobbyists operate sophisticated monitoring systems designed to spot online threats. It means that if you bad-mouth a large corporation in 140 characters, chances are they will find it. Their job then is to sift through the sea of online malcontents and find the “influencers”.’
The manipulation of Google is a key method of influencing public opinion:
‘A promotional video for one such company, Reputation Changer, promises to make negative content “disappear”. This is done by creating new, positive content that fools search engines into pushing the “dummy” content above the negative, driving the output of critics down the Google rankings (relying on the fact that few of us regularly click beyond the first page of results).
BP, for example, was found to have been manipulating Google in the wake of the disastrous oil spill in the Gulf of Mexico. What BP appears to have been attempting was to get its message, which was “Learn more about how BP is helping”, at the top of Google searches relating to the spill. NGOs and affected communities with much smaller pockets were therefore blocked from getting their message of, “Look how badly BP has fucked us,” across.
Lobbying agencies are in the search engine optimisation business, too. They will create phoney blogs for clients, which are made to appear as if they’ve been created independently of the client. Press releases are pumped out that no journalist will see, just so there’s something else to read on Google when a client faces hostility.’
Then there is Wikipedia—that great online repository of knowledge. How often have you gone into an article with an ominous warning message at the top of the page. The doctoring of Wikipedia is now widely practised by PR firms.
‘Astroturfing’ has become a widely used tool by lobbyists. This article from the Guardian offers a useful perspective on the practise:
‘Astroturfing is the attempt to create an impression of widespread grassroots support for a policy, individual, or product, where little such support exists. Multiple online identities and fake pressure groups are used to mislead the public into believing that the position of the astroturfer is the commonly held view.’
Astroturfing can take the form of sophisticated online campaigns using ‘sophisticated “persona management software” to create armies of virtual astroturfers, complete with fake IP addresses, non-political interests and online histories. Authentic-looking profiles are generated automatically and developed for months or years before being brought into use for a political or corporate campaign.’
Another very effective method of presenting a narrative is through the use of academics, a practise known as ‘Fracademia’. Talk Fracking has produced the report (PDF version)“Frackademics” — A study of the relationships between academia, the fossil fuels industry and public agencies.
The report cites 6 case studies with infographics included that shows the links between relative parties.
The first case study considers the role of research councils, with a specific focus on the Natural Environment Research Council (NERC).
NERC is ‘Britain’s première science research institute for the natural environment. It is funded by a grant from the Department for Business, Innovation and Skills.’
Research Councils act as Centres for Doctoral Training (CDT), offering students opportunities to engage in research projects. In 2013, NERC set up the CDT in Oil and Gas ‘to train the next generation of geoscientific and environmental researchers in oil and gas.’ An infographic shows the academic and industry links to NERC.
The report notes that:
‘Cuadrilla Resources also has a contract with Salamander — a company founded out of the University of Manchester — to carry out monitoring of their activities in Lancashire. The funding to develop the equipment used in this work, licensed from Manchester through Salamander, was provided by NERC.’
In addtion:
‘Cluff Geothermal — part of the group including Cluff Natural Resources, which has recently signed an agreement with Halliburton to trial underground coal gasification (UCG) in Britain — funds the universities of Glasgow and Newcastle to carry out research. A proportion of this research has application in unconventional fossil fuels exploitation as well as geothermal energy.’
The report sums up:
‘We do not need to undertake research to find yet more fossil fuels — we already have more than enough proven fossil fuel reserves to breach climatic limits. In which case, why does the Government fund institutes to carry out to research to discover or produce yet more fossil fuels? Given the ecological restrictions, fossil fuels production is an industry with no future. Why then do universities devote so much effort to supporting this research?’
In addition to the above, NERC has launched the The ‘UK Geoenergy Observatories (UKGEOS) project …formerly known as the Energy Security & Innovation Observing System for the Subsurface (ESIOS).’
The somewhat ambiguous article states that ‘The UK Geoenergy Observatories (UKGEOS) project will establish new centres for research into the subsurface environment. The knowledge they generate will contribute to the responsible development of new low-carbon energy technologies both in the UK and internationally.’
It goes on to say that ‘The science will feed into energy sectors such as geothermal, carbon capture and storage (CCS), compressed air energy storage, natural gas storage, underground gasification and shale gas.’
At the bottom of the page is a list of the UKGEOS Science Advisory Group membership, which is comprised of academics from universities around the UK.
The second case study considers academic involvement in shale gas studies. The report notes that the UK Government’s case for fracking is based on four studies by Government agencies:
- The Royal Society/Royal Academy of Engineering review of shale gas (2012);
- The Mackay-Stone review of the climate impacts of shale gas (2013);
- The Public Health England (PHE) review of the health impacts of shale gas (2014);
- The Scottish Government commissioned its own expert study on unconventional gas.
The general conclusion of these studies are:
‘that, whatever the impacts, these can be controlled through ‘appropriate regulation’ or by applying ‘best practice’ — is difficult to substantiate with evidence. None of these reports can cite actual evidence as to how such ‘appropriate regulation’ can function within Britain — nor that such regulation has worked effectively elsewhere.’
The report contrasts evidence presented by Quebec and New York State, demonstrating that ‘there is not enough evidence to show that the impacts can be appropriately controlled, and therefore managed and regulated.’
Summing up:
‘In the case of the expert reports commissioned by Government, they each review varying levels and ranges of evidence. To varying degrees, it is possible to make various criticisms of how the academics involved have reflected the whole body of evidence available, and how those conclusions stand given the knowledge gained through more recent research studies.
However, their common conclusion — that we can regulate away the problematic aspects of these processes — is not based on evidence. It is based upon assumption and hearsay. They cite untested codes of practice, or claims that the process will be different here in Britain. If regulatory agencies in other states are unable to eliminate the environmental and health problems created by these processes, it is unreasonable, without evidence, to assume that things will happen differently here.’
The third case study looks at the Mackay-Stone study and how that formed a basis for the UK Governments narrative on shale gas.
The report provides some background on the authors:
‘Professor David Mackay was Chief Scientific Adviser to DECC from 2009 to 2014. He is the Regius Professor of Engineering at Cambridge University.
Dr. Tim Stone was DECC’s Senior Advisor to the Secretary of State until mid-2013. He is a non-executive director of Horizon Nuclear Power, Anglian Water, and is the expert on the board at the European Investment Bank. He was previously the expert chair of DECC’s Office for Nuclear Development, the global senior advisor at KPMG Corporate Finance, and a director/manager at S.G. Warburg, Chase Manhattan and Arthur Andersen.’
In summing up:
‘The Mackay-Stone report is an exemplar of the strategy to use ‘scientists’ to front the national policy for unconventional gas and oil. However, when we pick apart the report’s findings, what we find is a result that is somewhat different — and which contradicts the message communicated by DECC at the time. Was the report an objective consideration of the climate impacts of unconventional gas, or was it designed to use ‘science’ to deflect criticism of Government policy. The high level of ‘revolving door’ relationships between DECC and PR companies should lead the public to question whether DECC serves them, or other vested interests.’
The Mackay-Stone report will be considered in more detail below.
The fourth case study looks at how ‘scientific’ papers are manipulated. It makes reference to the tobacco industry (see case study 1 above). It notes that:
‘During the 1990s there were a number of science controversies in Britain — from GM crops, to nuclear power, to animal testing. In 2000, the House of Lords Science and Technology Committee reviewed the issue of ‘science and society’, and decided that there was a crisis in the public’s trust of science. Out of that came the Science Media Centre (SMC), established in 2002 by the Royal Institution. The SMC became independent in 2011, and is now housed at the Wellcome Trust. The SMC’s funding comes from a variety of sources.’
The SMS’s key role is to ‘ghostwrite information for use by journalists — acting as a PR agency for science.’ As such the SMS is ‘another tool in the panoply of public relations tactics used to influence political and public opinion.’
This process is linked into institutions such as NERC, with the involvement of various academics. For example:
‘On 26th January 2015, Professor Zoe Shipton, University of Strathclyde, commented –
Several independent studies, including that by the Royal Society and Royal Academy of Engineering, have concluded that we have the technological capability to extract onshore unconventional hydrocarbons with relatively little environmental and public health impact.
In fact the RS/RAE report did not comment on public health — it concentrated on the ‘health and safety’ of workers. As discussed earlier, the report was written before the present body of evidence on the impacts of shale gas in the US and elsewhere was available.’
Summing up:
‘In the case of shale gas, the SMC is not providing a balanced view of the available evidence, and uncertainties, on the impacts of unconventional oil and gas. It is providing quotes from academics who mostly represent a ‘UK establishment’ viewpoint, which ignores the whole body of evidence available on this issue from the USA, Australia and Canada.’
Case study five notes an ‘open letter’ that was published in the Guardian. Essentially the letter was mostly hype and served as a PR smokescreen:
‘The letter was drafted and the signatories organised by the North West Energy Task Force (NWETF). NWETF claim that they organised and drafted the letter — which explains why its content is centred around issues related to economic hype rather than geophysical science.’
Summing up:
‘Just as “fracking” is being brought to the UK from the US, increasingly US-style public relations are distorting local and national public debates, and promoting policies which are arguably harmful to the public interest. Whether it likes it or not, academia is being drawn into this process. And the increasing level of funding which ties academia to corporate interests makes it harder for the public to trust that their research information, and government decisions based upon it, are truly impartial.
The Guardian letter is immaterial to the evidence-based debate on unconventional oil and gas — and yet at the same time it is valuable. It highlights how, in order to engineer consent, those promoting these technologies are resorting to bogus and distorted messages. However, their flaw is that, when tested using objective evidence, they can easily be exposed as ‘astroturf’ due to the inaccuracies their that messages contain.’
The sixth case study focuses on The All Party Parliamentary Group on Unconventional Oil and Gas and The Task Force on Shale Gas. This will be covered in a separate section below.
The lobbyists
In this section, the PR firms and the companies they represent will be profiled.
Cuadrilla is very much in the front line and was responsible for the first attempt at fracking in the UK. This led to two small earthquakes after drilling at Preece Hall near Blackpool. After that fracking was banned.
Following the incidents at Preese Hall, a report commissioned by Cuadrilla was published. The report stated that:
‘We agree with the conclusion that the observed seismicity was induced by the hydraulic fracture treatments at Preese Hall. However, we are not convinced by the projected low probability of other earthquakes during future treatments. We believe it is not possible to state categorically that no further earthquakes will be experienced during a similar treatment in a nearby well. The analyses failed to identify a causative fault, and detailed knowledge of faulting in the basin is poor. In the present state of knowledge it is entirely possible that there are critically stressed faults elsewhere in the basin. It is possible that a 3-D seismic reflection survey could help better characterize faulting within the basin’ (emphasis added).
The report goes on to state that
‘A total of 50 seismic events in the magnitude range -2 to 2.3 ML were detected in the period 31 March to 27 May 2011’
Lack of geological data is a key observation within the report. It is also noted that some damage to well integrity occurred during the seismic events.
Based on the evidence from this report and the recommendations contained within it, it would appear that Cuadrilla were operating with their eyes closed.
Cuadrilla’s response to the report was confident and upbeat:
‘Responding to the expert review recommendations, Cuadrilla’s Chief Executive Mark Miller said:
“We are pleased that the experts have come to a clear conclusion that it is safe to allow us to resume hydraulic fracturing, following the procedures outlined in the review. Many of today’s recommendations were contained in the original expert studies we published in November last year, and our supplementary information sent to DECC in January.
We have already started to implement a number of the experts’ recommendations in the pursuit of best practice and look forward to the final decision by DECC ministers concerning the resumption of hydraulic fracturing following the six week period for public comment commencing on 17 April.”’
Following the problems at Presse Hall, Cuadrilla hired PR consultancy firm PPS. According to Frack Off:
‘PPS is a multi-client lobbying firm specialising in the property and development industry. PPS worked to improve Cuadrillas reputation after it created seismic activity with its first frack at Preese Hall in Lancashire in 2011.’
In 2012 PPS produced a brochure for Cuadrilla, titled Summer 2012 Exploring For Natural Gas: Cuadrilla Resources is exploring for natural gas in Lancashire. In response anti fracking group Refracktion complained to the Advertising Standards Authority (ASA) on the basis that, ‘It contained claims about the safety of fracking which were evidently not sustainable’. So, the Group ‘wrote to the ASA with a list of claims which it believed required scrutiny.’
In April 2013 the ASA made their ruling. 18 issues were investigated, of which 11 were Not Upheld, 6 were Upheld and one was Upheld in part. In other words, part of the brochure was found to be in breach of ASA guidelines, the rest wasn't. It nevertheless vindicated Refracktion’s decision to push its complaint.
Cuadrilla had posted its leaflets out all around the area it was proposing to frack in (the Fylde). The company was engaging in a “fact-based conversation” about fracking. Cuadrilla’s attitude towards protesters was to describe them as ‘extremists’.
Interestingly after the ruling, PPS were keen to keep a very low profile, refusing to have anything to do with the brochure. However:
‘according to the ASA , Cuadrilla did confirm in correspondence with them that PPS were the agency involved, and they are duly listed on the adjudication as “The Agency”.
We wonder why PPS were so keen to distance themselves from this particular publication when they are obviously so proud of other similar “newsletters” produced for Cuadrilla that they even feature on their promotional blurb about the PR Week award they won in 2011 for their “crisis management” work with Cuadrilla.’
Could it be because PPS has been here before? Refracktion seems to think so (more on this below).
On another post, Refracktion quoted what their CEO Francis Egan had to say about the ruling (he had recently replaced Mark Miller):
‘We are disappointed with the minority of adjudications against us. But its important to note that the ASA has confirmed that hydraulic fracturing can be done safely.
We do believe the ASA should have consulted scientific experts before reaching its conclusions.
We are pleased the ASA has validated the majority of points made.’
This was Refracktions reaction:
‘First of all, let’s be absolutely clear that the ASA did NOT in any way confirm that hydraulic fracturing can be done safely, and to suggest that they did is totally misleading. You might think that having had his company caught out misleading the public Mr Egan might be have been a bit more careful with his comments, but it looks as though they can’t really help themselves from coming out with this sort of distortion of reality.
Bizarrely, having stated this, he then goes on to totally invalidate any worth that statement might have had, even if it were the truth, by saying “We do believe the ASA should have consulted scientific experts before reaching it’s conclusions”.
It’s interesting that Mr Egan seems to presuppose that they didn’t do so. I’m not sure what they did during the 9 months or so that this complaint has been under investigation, but it is reasonable to assume that they spent a fair amount of time investigating and comparing the scientific evidence in order to feel able to adjudicate here.’
Perhaps PPS could have clarified the issue for Cuadrilla. According to Powerbase:
‘In November 2012 PPS director Paul Kelly gave a talk at the SMI Shale Gas environmental summit on the subject of ‘Effective Communication — Getting the facts across about the environmental impact of Shale Gas’.
Paul spoke about the need to embrace the concept of winning a social license to operate and set out the key ground rules for effective communication in local communities. He explained how it was vital to fully understand the local community by listening to it while also securing the buy in from all levels of the company seeking the license to operate. Finally he gave some tips on how to present clear factual communication of the issues surrounding on shore energy exploration.’
Let’s go into a bit more detail about PPS’s ability to communicate. As also noted in the Refracktion article, Powerbase highlights how PPS ‘was exposed by Channel 4’s Dispatches programme and the Evening Standard for using ~“trickery, deceit and manipulation”~ to secure planning permission for certain developments.’ The firm was accused of ‘bugging private council meetings, forging letters from residents in support of developers and disguising themselves as students to help builders, St George, obtain planning permission for more than 700 homes in Fulham.’
It was revealed that letters had been sent from non-existent entities, signatures had been forged and that the contents had nothing to with actual opinion on the issues.
PPS was at it again regarding the expansion of Stansted airport in 2006. By curious coincidence ‘BAA’s director of communications for Stansted, Mark Pendlington, is a former managing director of PPS. And PPS, we can reveal, has also been retained by BAA at Stansted to help win its case.’
Because of PPS’s activities, the firm was investigated by the Association of Professional Political Consultants (APPC).
PPS also has links to Celtique Energy and INEOS (see below).
Two other PR companies are linked to Cuadrilla, Westbourne Communications (WC) and Hanover.
WC plays a central role within the fracking industry with links to Centrica, The North West Energy Task Force (NWETF) (funded by Centrica and Cuadrilla) and the UK Onshore Operatives Group (UKOOG).
WC became involved with Cuadrilla towards the end of 2013. WC is alleged to have astroturfed a profracking demonstration targeting Lancashire Country Council. It apparently involved students from Blackpool and Fylde College. The firm denied any involvement:
‘As well as bankrolling the North West Energy Task Force campaign led by Westbourne Communications, Centrica and Cuadrilla have also “supported” the college to become Britain’s main onshore energy training site.
Maurice Cousins, account director at Westbourne Communications, denied that he had deliberately used Lancashire geology students to coerce positive public opinion of fracking.
He said: “We are in no way misrepresenting how students regard fracking. I do not understand what the issue is. We are transparent and not misleading. The students are within their rights to their opinions.”’
However this article proves beyond doubt a close relationship with the college:
‘Daryl Platt, Blackpool and the Fylde College’s Executive Director for Commercial Development, said that being a hub for one of the National Colleges was a privilege and a testament to the high quality skills training as well as their strong relationships with industry-leading organisations such as Centrica Energy and Cuadrilla Resources.
“Crucially, it will drive long term investment in the region and meet the demand for highly skilled labour and secure local jobs. This is very positive news for Blackpool, the Fylde Coast and the whole of Lancashire. We will deliver a comprehensive range of advanced qualifications, up to and including honours degree programmes, aimed at producing the next generation of highly skilled engineers and technicians.”’
Then there was a previous campaign by WC related to the proposed high speed rail link. Refracktion pointed out close similarities between this and the student protests:
‘The High Speed Rail link is significant given what we already know about Westbourne’s tactics for “shitting up (sic)” their opponents and using “guerilla tactics” to silence their client’s opposition. The insights into Westbourne’s tactics with relation to HS2 detailed here will be very familiar to some fracking protesters on the Fylde, where we have seen several local astro-turfing groups trying to suggest that opposition to shale is just “posh people standing in the way of working class people getting jobs”.’
Then there is the role of the NWETF as a front Group for WC and its clients. Refracktion offers some useful background here.
A Greenpeace investigation though has found that NWETF aren't quite what they seem. As Greenpeace notes:
‘Of the 343 small and medium sized enterprises (SME) that support the Cuadrilla-funded North West Energy Task Force, less than half, 149, are based in Lancashire. They represent 0.3% of VAT registered Lancashire businesses.
In Fylde, the district in which Cuadrilla is planning to drill for shale gas, just 14 businesses back the task force.
The various businesses signed up as supporters of the task force include: a music shop in Manchester, a residential home in Yorkshire, Morecambe and Lonsdale Conservative Association, London-based industry trade body Oil & Gas UK and several sports equipment shops.’
Recently, the NWETF has regrouped as a different entity as this article from Spinwatch reports:
‘…NWETF appears to have been superseded by a new pro-shale group called ‘Lancashire for Shale’ (LCS).
Albeit now more locally focused, this new group still includes many former NWETF people on its volunteer steering group and, like NWETF, names Cuadrilla and Centrica as among its supporters. And while it lists no staff (or PR admin) on its slick website, it posts regular blogs, press releases and tweets, including strong criticism of anti-fracking campaigners.
NWETF meanwhile has all but wound down, last tweeting last July to promote Lancashire for Shale’s launch. Although it is unclear whether Westbourne still have a role, campaigners remain unconvinced that LCS is anything but another ‘front group’.’
Drill or Drop reports further on the transition and the people involved with the new Group, which is largely the same outfit that ran the NWETF.
Another of Cuadrilla’s posse of PR firms is Hanover Communications. Noted for its political connections, Hanover has an active revolving door as reported by Powerbase:
‘In April 2014 former Department of Energy and Climate Change (DECC) policy adviser Alison Woodhouse joined the firm as head of its energy and resources division. A month later Hanover bagged as a senior policy adviser Julia Goldsworthy, who was previously a longstanding Treasury SPaD to Danny Alexander and former shadow Lib Dem, chief secretary to the Treasury. Goldsworthy has been re-selected as Lib Dem candidate for Camborne and Redruth, a seat she lost by just 66 votes to the Tories in 2010.
Former Hanover associate Penny Mordaunt was a minister at the Department for Local Government and Communities from July 2014 until May 2015 when she was appointed as the UK’s first armed forces minister.
Hanover handles two high-profile accounts for controversial firms Cuadrilla and Irish shale explorer Tamboran. Both companies also use other lobbying firms.
It also lobbies for other members of the All-Party Parliamentary Group on Unconventional Oil and Gas (APPGUOG) such as Tata Steel. In July 2015 former DECC civil servant turned Hanover energy resources head lobbyist Alison Woodhouse attended an APPG meeting.’
Despite all the PR, Cuadrilla is making a substantial loss, as DeSmog reports:
‘Fracking company Cuadrilla operated at a £3.4m loss over the course of 2016, its latest accounts show. That makes the company about £1m less well-off than a year before, and returns it to the same level of loss it experienced in 2014.
The accounts also show that Cuadrilla received £134,000 handout from UK taxpayers over 12 months in the form of tax breaks.’
Seems protesters are to blame for Cuadrilla’s plight:
In the “strategic statement” section of the accounts, Cuadrilla’s CEO Francis Egan pulls no punches when talking about the protestors at the Preston New Road site.
He said Cuadrilla and its local partners “remain engaged and undeterred despite the irresponsible, intimidating behaviour of a few activists”, of which “sadly a small minority are choosing to make their protests unlawfully”.
Obviously there’s nothing intimidating about threat that fracking poses to the local community:
‘campaigner Dianne Westgarth from the Preston New Road Action Group told DeSmog UK:
“Our homes are unmarketable and we are living in fear of what will happen to our livelihoods and communities: we’ve lost so much already, yet Cuadrilla have managed to gain handouts from our hard-earned taxes to fund a dirty industry we do not want or need. Any other company with such bad management and repeated losses would face liquidation.”’
The article also sheds some further light on Cuadrilla’s ownership:
US investors Riverstone/Carlyle Global Energy and Power Fund IV, a Cayman islands registered subsidiary of The Carlyle Group, own 45 percent of the company. The Carlyle Group famously profited handsomely from arms deals in the wake of the Iraq war.
Australian mining company AJ Lucas also owns 45 percent of Cuadrilla.
In amongst the setup is Centrica with a 25% stake via Aj Lucas.
Third Energy was given the go-ahead to frack in North Yorkshire, where the local authority completely ignored - what was essentially a sham public consultation - almost unanimous opposition to fracking in the region.
The decision by the council to approve fracking comes in the wake of the consultation that voted overwhelmingly against fracking. According to Frack Free Yorkshire, 99.2% of respondents were against fracking. This breaks down to 3,907 against and only 32 in favour. The decision therefore tramples over the wishes of the local community and adds insult to injury on the democratic process.
Chair of the Council, Peter Sowray, had this to say about the outcome:
‘It will take time for it to calm down, for some people it never will but we have made a decision today, the majority of members voted that way, and I’m comfortable with the outcome.
People said they’d come to live in a beautiful area and they want it to stay that way but fracking this one well is not going to affect that beautiful area.
It’s just one well, one existing well that’s going to be fracked. It’s not going to be hundreds of wells, it’s just one well, that’s all we’re talking about.’
Mr Sowray’s ignorance of how Fracking operations work is breathtaking. Such operations do not consist of individual wells, they take the form of well pads which can consist of around 10–12 wells. It is huge industrial undertaking.
Friends of the Earth (FoE) offers a much more conclusive overview of the entire operation. Apparently ‘Third Energy wants to drill up to 950 wells at 19 sites.’
The article completely debunks the claims of the council, the Government and industry by citing evidence from those very same protagonists.
The evidence presented by FoE will be covered in more detail below. But first, who is Third Energy?
The company was owned by Barclays bank, having been set up by former bank employees, who worked for the former Barclays Natural Resource Investment (BNRI).
The state of affairs followed a move by Barclays to hive off BNRI, forming Global Natural Resource Investments (GHRI). The Financial Times explains the background:
‘Barclays has spun out its natural resource private equity investing arm to managers, ending another legacy of the Bob Diamond era as the British bank’s new chief executive takes the helm.
The bank agreed on Wednesday to sell the right to continue Barclays Natural Resource Investments as a business in return for remaining as an investor in its existing portfolio. Terms of the management buyout were undisclosed (emphasis added).
GNRI’s launch as a standalone manager comes as natural resources private equity investors are grappling with both the implosion of the shale gas boom in the US and the prospect of oil and mining majors selling unwanted assets.’
Initially the company Viking Energy was taken over. This was then renamed Third Energy and incorporated as a new company.
FoE goes into more detail in an action guide that was produced during the Stop Barclays Fracking campaign that took place in October 2016.
The Guide notes the relationship with Barclays and Third Energy:
‘Third Energy has a complex company structure involving some interesting financial twists: Third Energy Holdings Ltd, for example, is registered in the Cayman Islands. But according to the latest available company accounts for Third Energy UK Gas Ltd, filed in October 2015 and made up to December 2014, “in the opinion of the directors, the ultimate parent company of Third Energy Holdings Limited is Barclays PLC.
Barclays’ website also has a webpage detailing their position on fracking, here.
In 2015, the website for Barclays Natural Resources Investments (BNRI) — a subdivision of Barclays PLC, and not a separate company — held details of their investment in Third Energy. But on 31st October 2015, according to the BNRI site, “the Barclays Natural Resource Investments (“BNRI”) team has acquired the BNRI business from Barclays and is now operating as an independent private equity business known as Global Natural Resource Investments (“GNRI”). GNRI will continue to administer the existing portfolio on behalf of Barclays and other investor partners.” The GNRI website has minimal information on their portfolio of investments and on who they ultimately operate for; the small print reveals they are actually registered as GNRI Manco Ltd. Companies House accounts for this entity show the directors to have all shared the same address as Barclays Plc — 1 Churchill Place.
It appears, therefore, that GNRI Manco Ltd, as a private equity firm, continues to manage a portfolio of gas investments on behalf of Barclays, and that this includes Third Energy.’
But now Barclays and Third Energy have decided to part ways. DeSmog reports that ‘At the bank’s annual general meeting last week, its chairman John McFarlane confirmed Barclays’ plans to ultimately sell the subsidiary that owns the Third Energy stake.’
According to a Barclays spokesperson:
‘…the chairman’s comments did not mean the bank has changed its stance on fracking.
They said Barclays would sell the subsidiary that owns part of Third Energy because the investment was not part of the bank’s “core business strategy”, and was not “a business priority”. There was no timeframe for the sale, they said.’
Third Energy is now planning a £500m stock market float. It ‘hopes to raise £250m from the move as its owners Global National Resource Investment (GNRI) are believed to have appointed investment bankers from Lazard to explore a listing’.
The change in status is unlikely to change Third Energy’s operations. As such, the PR drive behind the company will no doubt continue.
Third Energy has hired lobbying firm Newgate Communications (NC). NC is part of the Porta Communications Group. In 2014, PPS was bought out by Porta and merged with NC to bolster the company.
NC doesn’t have a significant track record. NC (and Porta) was founded by David Wright, who left Citigate to set up the company. Wright was a founding member of Citigate.
One of Citigate’s former clients was ConocoPhillips, who’s claim to fame was a considerable investment in the Canadian tar sands. However, along with other major players in the region, Conoco has sold significant assets in tar sands.
Another less known legacy for ConocoPhillips was its stake in post Iraq war oil assets, part of a clandestine plan hatched by the UK/US coalition before the invasion.
Although Wright left Citigate in 2011, interestingly the firm played a key role in the establishment of GNRI. As such, the firm would have played an indirect role in the establishment of Third Energy.
Another key player here is UKOOG, who also use NC and are also linked to PPS — now merged with NC.
Freedom of Information Requests (FOI) submitted by Greenpeace offers an insight into UKOOG’s influence. The Guardian picks up the story:
‘Shale gas executives and government officials collaborated in private to manage the British public’s hostility to fracking, emails released under freedom of information rules reveal.
Officials shared pre-prepared statements with the industry last year before major announcements and hosted high-level dinners with “further discussion over post-dinner drinks”, while the industry shared long lists of “stakeholders” to be targeted. Critics said the government was acting as an arm of the gas industry” and was guilty of cheerleading, but officials defended the discussion said facilitating discussions was “right and proper” as “right and proper”.’
Many of the emails are informal and chatty. But taking centre stage is the UKOOG and Centrica, which owns British Gas and has a 25% share in Cuadrilla worth £100m.
One of the emails from the Department of Energy and Climate Change (DECC) stated that ‘We are confident that there is robust and appropriate regulation in the UK to ensure safe operations that minimise impacts to human health.’ Yet ‘[David] Cameron has rejected the need for specific shale gas regulations and has seen off EU proposals for binding rules for shale gas exploration.’
Then there was the question of how to sell the shale gas ‘revolution’:
‘Centrica also met Decc to discuss “managing national and local stakeholders”, and shared a list of stakeholders, as did IGas, the company facing fracking protests in Salford. In another email, Centrica told Decc it was planning to line up academics to make its case: “Our polling shows academics are the most trusted sources of information to the public, so we are looking at ways to work with the academic community to present the scientific facts around shale.” Decc told Centrica the discussions between the two were “really useful”.
Centrica emailed Decc a figure of 74,000 potential jobs linked to shale gas development, a number later repeated by Cameron and ministers despite Decc’s own study estimating a peak of 16,000 to 32,000 jobs.’
Caroline Lucas summed up the mood:
‘Green party MP Caroline Lucas said: “This is yet more evidence of the creepily cosy relationship between Decc and big energy. Apparently it’s not enough to give fracking companies generous tax breaks, the government also has to help them with their PR. Instead of cheerleading for fracking, the government should be working with community and renewable energy to move us towards a low carbon future.”’
UKOOG pivots itself as the representative body for the UK Onshore Oil and Gas industry. They have been engaged in a major PR campaign to sell the benefits of shale gas:
‘The company has organised the ‘Let’s talk about shale’ events because they say the public are subjected to a stream of information from a range of sources and much of this information is wrong.
Ken Cronin, chief executive of UKOOG, said: “There are a lot of people out there who don’t know what natural gas from shale is and have questions about how it’s extracted.”
“‘Let’s talk about shale’ offers the public an opportunity to get to know the facts, rather than being forced into listening to what others think they should hear,” he added.’
According to UKOOG’s website:
‘The organisation’s objectives are to:
- enhance the profile of the whole onshore industry (both conventional and unconventional);
- promote better and more open dialogue with key stakeholders;
- deliver industry wide initiatives and programmes; and
- ensure the highest possible standards in safety, environment management and operations.
UKOOG is a membership organisation fully funded by its members. Full membership is open to all UK onshore licence holders and operators, and associate membership is open to all suppliers to the UK onshore oil and gas industry.’
The UKCOOG setup is as follows:
Advisers
Corin Taylor, senior adviser seconded from energy giant Centrica between 2014–15, where he was communications research director. Now a UKOOG director. Taylor was a co-author of a widely-quoted Institute of Directors report that claimed 74,000 jobs would be created if shale gas development were to go ahead in the UK.
Company directors
Mark Abbott 16 Apr 2013 ⇒ Present day (3 Years ) (as at August 2016). Director of Egdon
Stephen Bowler 2 Jul 2015 ⇒ Present ( 1 Year ) Director of Dart Energy (now owned by IGAS)
Andrew Austin 17 Oct 2012 ⇒ Present day (3 Years ) Director of Igas
Graham Dean 2 Nov 2013 ⇒ Present day (2 Years ) (Reach Coal Seam Gas
Francis Egan 2 Nov 2013 ⇒ Present day (2 Years ) Director of Cuadrilla
Gary Haywood 2 Jul 2015 ⇒ Present ( 1 Year ) Director of INEOS Upstream
Mark Lappin 17 Oct 2012 → 2 Nov 2013 and then 2 Jul 2015 ⇒ Present ( 1 Year ) Director of Centrica, Bowland resources, Elswick Energy
Paul Mason 2 Jul 2015 ⇒ Present ( 1 Year ) Director of E.F oil & gas limited (Owned by Total)
David Robottom 17 Oct 2012 ⇒ Present day (3 Years ) Third Energy
(Source: Powerbase)
UKOOG sees Britain as a European shale gas powerhouse. As Euractiv reports:
‘Studies on the impact of shale gas extraction in Europe’s economy and energy security are mushrooming in the wake of the Ukraine crisis. The latest from the UK Onshore Operators Group (UKOOG) claims that the development of shale gas in the UK could generate “€40.2 billion” and “create up to 64,000 jobs” in Britain.
The industry-funded study is based on the “high-case scenario” from a May 2013 report by the Institute of Directors (IoD) of “what a shale pad could look like”, estimating that 4,000 wells would be drilled between 2016 and 2032. Both highlight the benefits of shale gas development over job creation, tax revenues and potentially lower carbon emissions than imported gas.’
As with anything from the pro gas lobby, the boundless optimism is as mind boggling as the endless possibilities. But with Brexit now on the cards, even if the unlikely scenario of a shale bonanza did materialise, precisely what markets would the UK link up with?
Low gas prices are one of the favoured mantras of the shale industry. However, Blomberg has knocked that on the head:
‘the impact on the UK gas market and wider economy is likely to be quite different to the US experience. Two factors are likely to combine to limit the development of shale gas in the UK compared to that seen in the US. First, shale gas will cost more to exploit in the UK than in the US. Second, a host of legal, planning and environmental factors will slow down the rate of development of UK resources. As a result, the rate of expansion of shale gas in the UK is likely to be too slow to offset fully the need to import gas. Even if UK shale gas can be produced at a cost below that prevailing in international markets, it will be higher-priced imported gas that will continue to set the price in the UK gas market.’
In July 2016, the Chair of UKOOG, Averil MacDonald, gave an extensive interview with Carbon Brief at the offices of Newgate Communications.
Many of the points raised could be regarded as typical industry speak. There was the suggestion that people are ill informed about shale gas, appearing to imply that once they did then they might be more supportive:
“There’s a lot of information out there that is not as accurate as I would like. It’s important that the information is correct because only then can people come to a sensible conclusion of their own. If they still think it’s not an acceptable industry, that is fine.”
One intriguing point MacDonald made was the idea of extracting ‘green’ hydrogen gas from shale gas, the idea being that the carbon can be extracted and stored avoiding release into the atmosphere:
‘…shale gas …can be decarbonised by steam reformation of methane, which is a process where through steam, that’s the energy input, breaks the carbon out, takes the carbon away. There are now processes where that carbon can be stored into a solid form, carbonate, which can then be used to create building materials so we don’t have to worry about pumping huge quantities of carbon dioxide into wells, which is the process that people think of when they capture carbon dioxide. We then have carbon sequestered into a building material which means basically we can trap our carbon and use it to build our houses. The hydrogen is then created.’
She also talks about how essential shale gas will be to heat homes etc. and the immense difficulties of restructuring infrastructure to accommodate an energy supply based on electricity.
No mention though of the need for energy conservation through insulation and greater efficiencies of use.
It is unlikely that this interview will project public confidence in the shale gas industry. There appears to be no shortage of greenwashing. And the concept of extracting ‘green’ hydrogen from shale is an oxymoron.
It seems then that UKCOOG offers a forum for the key shale gas developers in the UK. And if this evidence presented by Frack Off is anything to go by, it would appear there is a spirit of cooperation between the shale gas companies:
‘How is Cuadrilla connected to Third Energy’s foray into Shale Gas? One look at the drilling rig which is being used to drill the Kirby Misperton Deep well provides the answer. It is actually Cuadrilla’s Drillmec HH220 drilling rig which they have been using to drill in Lancashire. Drilling contractor Geometric Cofor does havea Drillmec HH220 rig though its ancillary equipment is painted considerably differently, but if any doubt remains it can easily be dispelled by closer inspection. On one side of the rig a temporary sign has been taped, in the position that Cuadrilla’s logo would be on their rig. Poking out from behind that sign are three yellow stars, part of the arc of stars which are in Caudrilla’s logo (see below).’
Shale gas needs a market and two customers stand out — Centrica and INEOS.
As noted above, Centrica has a major stake in Cuadrilla and has played a key role in marketing the shale gas ‘revolution’.
Centrica established a foothold in North America in 2000 when it took over Canada’s Direct Energy. In recent years Direct energy has become a major player in the Shale gas industry in North America.
In 2013 Centrica secured a deal that would import shale gas directly to the UK, as reported by the Financial Times:
‘The deal by the owner of British Gas follows predictions from Sam Laidlaw, Centrica’s chief executive, last month that growth in shale gas production in the US over this decade could allow for the export of liquefied natural gas to the UK, “providing a competitive source of fuel for our customers”.
The deal with Cheniere Energy envisages first exports from its Sabine Pass project in Louisiana by 2018 under the terms of an initial 20-year contract. Under the terms of the arrangement Centrica will purchase 89bn cubic feet of gas a year from the Sabine gas liquefaction plant — the equivalent of annual gas demand for about 1.8m UK homes.’
Along with INEOS, this means that Centrica will become a key importer of shale gas from the US. This effectively means that British Gas customers will be burning natural gas from shale production from 2018.
This article from Centrica’s website details the arrangement the company has with Cuadrilla. According to Mark Hanafin, Managing Director of Centrica’s International Upstream business:
“With North Sea gas reserves declining and the UK becoming more dependent on imported gas supplies, it is important that we look for opportunities to develop domestic gas resources, to provide affordable sources of gas to our customers, and to deliver broader economic benefits to the UK.
“The Government’s clear commitment to developing the UK’s shale gas industry is creating the right environment for companies to invest and to deliver those benefits.
“This transaction presents an attractive opportunity for Centrica to explore the potential and commercial viability of natural gas from shale in the UK, while utilising its expertise as a responsible operator and developer of UK gas resources.”
It’s perfectly clear that Centrica (through British Gas here in the UK) now has both feet firmly planted in the shale gas industry on both sides of the Atlantic.
This article has been edited slightly since publication. Some duplicate links have been removed as well as minor corrections to the text.
