Fracking has cost taxpayer £32 million, says report

A report from the National Audit Office (NAO) has revealed that progress in fracking has been much slower than the government initially expected. Having cost the taxpayer more than £32 million since 2011, 40 per cent of the public are now in opposition to the hydraulic fracturing of shale gas.

Well head on a UK fracking site
Well head on a UK fracking site

Joshua Doubek / Wikimedia Commons / CC BY-SA 3.0

Imogen Benson

A report published by the National Audit Office (NAO) today (23 October) has revealed that fracking has cost the taxpayer at least £32.7 million since 2011.

This figure, which includes £13.4 million spent on managing protests, is likely to be much higher when considering the costs of legal appeals, judicial reviews and the time and expenses of civil servants working on these cases.

Entitled ‘Fracking for shale gas in England’, the report highlights that public support for fracking has fallen substantially over the past six years, with opposition to shale gas development increasing from 21 per cent to 40 per cent between 2013 and 2019.

The report claims that this low public acceptance has slowed progress and restricted developments in shale gas extraction – although the government predicted in 2016 that it would have fracked up to 20 wells by mid-2020, only three have been fracked so far. 

Public concern has predominantly centered around the environmental impacts of shale gas extraction, including fracking-induced earthquakes. This has proven to be a legitimate risk – fracking was suspended in August 2019 at Cuadrilla’s Preston New Road site in Lancashire after the shale gas extraction resulted in three earthquakes over five days, including one of 2.9 magnitude.

The NAO’s report also discredited the common claim that fracking will reduce the price of gas, as, according to the report, shale gas production is not expected to lead to lower energy prices. Demand for gas is also expected to fall between 2020 and 2035, with the Department for Business, Energy and Industrial Strategy (BEIS) forecasting that the use of gas for electricity generation will halve by 2032 and its use in domestic heating will decline significantly by 2040.

In terms of decommissioning wells, there appears to be ambiguity over who is liable for clean-up costs, with the government providing no solid answers on whether the financial burden will fall on taxpayers. 

Commenting on the report, Steve Mason from Frack Free United said: “What we have here is a truly independent verification of the facts and questions posed by the anti-fracking campaign. This report has exposed the fragilities of the government’s policy on fracking, leaving so many unanswered questions. 

“The government has no idea how much gas they can extract, what the economic benefits are and they do not have the technologies available to limit emissions if we frack.

“It is highly likely that taxpayers will have to pay for the clean-up costs. Anyone reading this report must surely be thinking: ‘What on earth is going on? How can the government support this industry that is fast becoming more fantasy than facts?’ We advocate an urgent ban on this dirty fossil fuel industry.”

Gina Dowding, Green MEP for the North West of England, said: “I think the first thing that the public would be interested in in this report from the NAO is what is actually going to happen to energy prices. 

“What is clear is that the NAO has finally called out the cheap gas prices myth and that energy prices are not expected to fall: that’s because the shale gas industry cannot be easily compared to the North American model both because of difficult geology here and how our communities are much more densely populated.

“Aside from the myriad issues surrounding fracking, to even think of progressing with a new fossil fuel industry during a climate emergency, is nothing short of stupidity.”

Nick Danby from Frack Free Lancashire added: “This report from the NAO reveals what we have always suspected: this government’s support for fracking is ill-considered, reckless and based upon ideology rather than cold, hard facts. 

“BEIS appears to have little idea as to how much gas there is, how much is recoverable and what is the potential contribution to the UK energy mix.

“It is very worrying that our government should have such little regard for facts and figures and it is especially concerning that it should continue to champion a new fossil fuel industry in the face of the threat of climate breakdown. We urge the government to stop subsidising fossil fuels and to ban fracking with immediate effect.”

A spokeswoman from Preston New Road Action Group, the residents’ campaign group closest to Cuadrilla’s site, said: “This report demonstrates that the cost-benefit case for shale gas has not been made satisfactorily. It is not clear how much shale gas can be extracted and without this knowledge, the benefits cannot be fully calculated.

“The technologies to manage risk from emissions are still not available. There could also be a huge cost burden on taxpayers in the future if they have to fund the decommissioning of sites. 

“However, from the fracking that has taken place to date, some of the dis-benefits such as earthquakes and greenhouse gas emissions have been proven. Shale gas extraction just does not appear to have a sound business case.”