Pound signs were flashing in the eyes of many in the shale gas industry when the prospect of bringing hydraulic fracturing (fracking) to Blighty first raised its ugly head a few years ago. But things haven’t exactly gone to plan.
The health and environmental dangers, such as contaminated water supplies, noxious odours, light and sound pollution, have been acknowledged in a recent government report. Fierce political opposition has led to fracking projects repeatedly failing to get off the ground, with Lancashire County Council the latest to reject a proposal by shale firm Cuadrilla. Public opinion has turned firmly against the idea, with a recent YouGov poll showing 32% support the practice compared to 43% opposed, a reversal since 2013. All this, and yet the newly elected Tory government has pledged to push on with its support for the shale industry. But why is it so keen?
The official party line is that fracking will create jobs, reduce gas prices, contribute to the economy and ensure Britain’s energy security. The economic argument seems a little spurious especially given that the chancellor, George Osborne, has promised to introduce a tax regime that is, in his own words, “the most generous for shale in the world”, something reiterated in the Tory manifesto. If shale will be such a money-spinner, then why does the industry need such generous tax cuts?
A cross-party report by the Environmental Audit Committee concluded that there is “little evidence to suggest that fracking could be undertaken at the scale needed to be commercially viable in the UK or that it will bring gas prices down significantly”. In terms of energy security, shale is a poor option, as there is little agreement on how big the UK’s reserves actually are, and investment in renewable energy surely makes more sense for long-term security.
Despite these considerable environmental, economic and even political risks, the Conservatives seem set to push ahead. Their latest measure would strip local councils of the right to decide on whether to approve fracking proposals if they are deemed to be taking “too long” to decide. Is there something more clandestine behind the Conservatives’ seemingly ostrich-like stance on the shale industry? Certainly, there are some links between the party and the industry.
Party funding is a contentious issue because it stands to reason that politicians will not want to implement policies that risk scaring off their major backers.
Party funding is often a contentious issue because it stands to reason that politicians will not want to implement policies that will risk scaring off their major backers. Energy magnate Ian Taylor has donated some £550,000 to the Conservatives over the last 10 years, which definitely puts him in the category of a major funder. Donors who give more than £50,000 to the Tory party join the “Leaders Club” and are invited to personally meet David Cameron at exclusive parties.
Taylor is CEO of the energy firm Vitol; in 2012 two of the firm’s top executives bought a considerable stake in Dart Energy, a shale company. Dart was in turn bought by the even larger IGas, one of the companies at the front of the queue for the UK’s fracking licences. Tory MP, Alan Duncan, worked for Vitol in the 1990s and performed consultancy for another company part-owned by Vitol. This demonstrates how the links between business and politics are rarely too obvious and direct, but instead make up a complex interplay of mutual influence and benefits to both sides, in a diffuse manner that is hard to pin down.
Another such link between the Conservatives and the shale industry exists via Lynton Crosby, the party’s election campaign advisor. Crosby owns a lobbying firm, Crosby Textor, and one of its major clients is the Australian Petroleum Production and Exploration Association (APPEA). APPEA has lobbied staunchly on behalf of fracking and Dart Energy is one of its member companies. Crosby clearly has influence within the Tory party and eyebrows were raised when the timing of his appointment in 2013 coincided with Osborne’s announcement of tax breaks for the industry.
Three senior advisers to the last government also had strong ties to shale firms. Lord Browne, a cross-bench member of the House of Lords, sat within the cabinet office while he was chair of Cuadrilla. Meanwhile, Sam Laidlaw worked in the Department of Transport while he was CEO of Centrica, which owns a large stake in Cuadrilla. Baroness Hogg was an adviser in the Treasury while also being a non-executive director at BG Group, a firm with strong shale interests in the US.
Rather than industry “buying” politicians, the relationship is far more intertwined and incestuous.
Do these multiple links explain the Tory party’s policy towards fracking? Perhaps not on their own. But they do give an insight into the closeness of the relationship between business and politics. Rather than industry “buying” politicians, the relationship is far more intertwined and incestuous. While industry representatives are frequently given advisory roles in government, politicians are in turn often offered well-paid jobs within industries they have given a leg up to while in power.
Earlier this year, former Tory transport minister Stephen Hammond bagged a lucrative second job at transport firm Immarsat, while disgraced former energy minister Chris Huhne walked into a six-figure salaried job at US company Zilkha Biomass Energy months after his release from prison. Thanks to this revolving door between business and politics, don’t be surprised if top politicians land jobs in the shale industry a few years down the line if a fracking frenzy is brought in under this parliament.
But as much as these individual threads might seem alarming, it’s important to note that the real relationship between business and politics is structural. In much the same way as Naom Chomsky and Edward Herman describe in their Propaganda Model – which explains why the mainstream media consistently supports corporate interests – there is no need for any conspiracy theory. Both mainstream politics and business are conducted within the largely unquestioned paradigm of neoliberalism. Big business funds political parties (Tory funding comes from both business and very wealthy individuals) and in theory provides tax revenues to governments. Culturally, business leaders and politicians tend to be from similar social backgrounds and run in the same social circles.
The Conservative party is openly a pro-business party and the shale industry has the potential to be big business in Britain. In concert with the individual links and structural forces, it is therefore ideologically consistent with Tory values to support the shale industry. It has long been the role of Tory politicians to oil the cogs of business as generously as possible without alienating their core voters. It is rural communities that stand to be worst affected by the negative impacts of fracking, which is where Tory support is strongest. Although they are pushing ahead with their backing for the shale industry now, the Conservatives are, after all, pragmatic power-seekers. If public opinion is firmly against the move, particularly in Conservative heartlands, they may yet have to reconsider.