Navigating NIMBYs
British High Court Green Lights Fracking

Back in May, a local council awarded the UK’s first fracking permit since 2011, but greens concerned about the controversial drilling practice challenged that decision in court. Today, that challenge was dismissed, giving a green light for Britain to finally start plumbing its estimated 1.3 quadrillion cubic feet of shale gas. Reuters reports:

Britain’s High Court ruled on Tuesday that a fracking permit awarded by a local council to developer Third Energy was legal, after it was challenged by environmental campaigners, opening the way to shale gas extraction in the UK.

Substantial amounts of shale gas are estimated to be trapped in underground rocks and the British government wants to exploit it to help offset declining North Sea oil and gas output, create some 64,000 jobs and help economic growth.

The contested permit in Yorkshire, in the north of England, was the first approval for shale gas fracking since a moratorium was lifted in 2012. “The substantive claim for judicial review is dismissed,” Justice Lang said in her written verdict on the case, ruling that the permit remains valid.

The UK’s experience with shale has been a long and tortured one. Public support has ebbed and flowed, and despite strong top-down support for fracking, local opposition (of the NIMBY variety) has stymied all comers over the past five years. It’s possible that companies will finally begin to start tapping the UK’s considerable reserves of shale gas, but don’t expect the protests to stop.

NIMBY opposition has been much stronger in the UK than here in the U.S. for two reasons. First, the population density of the parts of America that contain our most productive shale formations is relatively low (see these maps for proof). Having fewer stakeholders to appease makes it demonstrably easier to negotiate with local communities.

But there’s another key to America’s shale success: mineral rights. Landowners here in the U.S. also own what’s underneath their properties, and are therefore compensated directly by companies seeking to tap shale oil and gas reserves. In the UK, the government owns those resources, which removes the financial incentive for property owners to welcome fracking operations into their communities. The British government has worked to ameliorate this, setting up a slush fund to pay out to these communities, but this tacked-on mechanism is neither as simple or straightforward as America’s system of mineral rights.

Britain’s shale experience has been halting, characterized by fits and starts, but this latest court approval could be the regulatory nudge that our allies across the pond need to start their own shale boom.

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