Regulation

Ryedale council votes to extend fracking moratorium indefinitely

190906 RDC moratorium on fracking Ryedale Conservatives

Opponents of fracking outside Ryedale District Council, 5 September 2019. Photo: Ryedale Conservatives

Councillors have voted for an indefinite moratorium on fracking in the North Yorkshire district where Third Energy has permission for the process.

The ruling Conservative group on Ryedale District Council announced last week that it would propose a motion for a five-year moratorium on fracking. This would have continued a previous moratorium, passed in 2015.

But at a meeting of the council last night (5 September 2019), councillors approved an amended version for an indefinite moratorium.

The vote was 18 in favour, 0 against and 8 abstentions.

The revised motion said the council wanted to:

“put on record thanks to the Councillors who have fought against fracking in the courts and at the Public Examination into the North Yorkshire Minerals Plan, and to everybody who had contributed to the anti-fracking cause, including members of the public who engaged in lawful direct action.”

Members also asked the council leader, Keane Duncan, to write to the government setting out Ryedale’s position.

Cllr Duncan had described the motion as a “historic message” to the government and signalled “a significant break” with national policy.

Local anti-fracking campaigners welcomed the vote today.

Steve White, of Frack Free Ryedale, said:

“Ryedale District Council’s motion for a moratorium reflects a growing realisation across the political spectrum that a new intensive gas industry, feeding our addiction to climate-threatening fossil fuels and threaded through our densely populated island, simply isn’t viable.”

Third Energy was granted planning permission in May 2016 to frack the KM8 well at Kirby Misperton.

But the operation has not yet happened. In January 2018, the government ordered an assessment of Third Energy’s financial resilience. There has been no public statement on the outcome of the test.

Since then, Third Energy’s onshore gas business was sold to the subsidiary of a US firm. Last month , Third Energy announced it was focusing on conventional gas in Ryedale.

Local anti-fracking campaigner, Peter Allen, said:

“The recognition by Ryedale District Council that fracking is totally unsuitable for the area is to be welcomed. Let us hope that the enlightened stance of the council is followed by similar actions from the county council and the government.”

“The amended motion also recognises the contribution of campaigners who have fought to prevent fracking in North Yorkshire. Frack Free Ryedale recently celebrated the fact that in the five years since the group formed, no fracking has taken place in the district but they vowed to keep the pressure on until fracking is banned completely.”

Steve Mason, a Lib Dem councillor on Ryedale District Council, said:

“This is great, and a reflection of the hard work and dedication of the anti-fracking campaigners everywhere. You do have to give credit where credit is due, and the Conservative motion was a positive step forward for the council. I’m especially glad they accepted our amendments to make it an indefinite moratorium and also write to the government to set out this position.”

Ryedale District Council is not a mineral planning authority. Any decisions on fracking applications in the district would be made by North Yorkshire County Council.

But Jennee Dixon, of the campaign network Frack Free United, said the motion by Ryedale could have a significant role in influencing future government policy.

“The message that I hope these local Conservatives convey to their colleagues across the country is: ‘Is fracking a price worth paying?’

“Let’s not forget that it is still Conservative party policy to frack the UK. It’s increasingly likely that an election is coming. Fracking, which affects over 170 constituencies, including 40 marginal seats, could be an electoral earthquake for the Conservative party.

“It is clear that developing fracking in the UK will lead to unacceptable negative impacts on local communities, the economy, democracy, environment, health and also hamper efforts to tackle climate change.”

32 replies »

  1. Sorry, but you are incorrect Philip. Is that more to your liking?

    So, if companies that have not brought sites into production ie. no income, can restore sites, why a problem with sites where production has happened and income has been obtained?

    Third Energy have been operating pretty successfully in the area for many years, although recently investment to keep that going has been limited. So, now there are new owners who wish to renovate and revitalise, not to frack.

    If you wish to propose this is something different, and quote Canada as your reason, feel free. Pretty tenuous, and do not expect others to mop it up. There have even been anti “experts” mistake which Barclays owned Third Energy, so excuse me if I do look at what is being posted about this situation with some skepticism and remind some that this situation has required some of us to do our research and those who do not will be challenged.

    Whether there is the ability to refresh this business, we will see, but that is a separate issue. Someone has supplied fresh capital, so obviously there is some confidence this is possible.

    The Achilles heel for the antis who believe one company exiting means the business will cease, even though that has been proven not to be the case many times over.

    • I’m very interested to hear that, quote ‘Someone has supplied fresh capital, so obviously there is some confidence this is possible.’ I’m most interested to know who that someone is, and how much. Is this capital ‘real’ money, or just funny money in the form of extra borrowing from those desperate to get some return on their ever increasing losses?

      • New tone much appreciated, Mr Collyer. By all means be sceptical . Third Energy never made a profit in any of the years since its acquisition of Viking. The accounts are on line with Companies House. Eight years of losses is not my definition of “operating pretty successfully.” but nobody actually died , that’s true.

        IGAS – which restored the site at Tinker Lane – has lost 97.5 % of its equity value in five years. I don’t think I would put that record in the category of companies ” operating pretty successfully. ”

        We all know that oil and gas exploration is highly speculative but the latest advances in financial engineering make it hazardous in a different way, especially when there are legacy issues to consider. The Oil and Gas Authority quite rightly has a test of Financial Resilience before Fracking can commence. Third Energy – the pretty successful company – failed the test and was obliged to remove its equipment. I am sure I haven’t invented that but by all means continue with your scepticism.

        I think if you understood more about corporate finance you would realise that the Fracking Industry has been captured by the banking industry. Supplying debt in the form of junk bonds is highly lucrative and the credit derivatives arising from unsecured lending are even more so.. Fracking in America has replaced Housing as the new sub prime lending. It’s brilliant if you are on the right side of the bet.

        Energy Policy and Environmental damage are too serious to be the playthings of bankers.

  2. Mr.Tate, please do not patronise me. What were you saying about tone?

    Your very selective comments are very obviously-selective!

    We have had Canada, now we have “captured by the banking industry”. Please explain that within the context of INEOS!

    Third Energy under previous ownership, were failing to invest, very obviously, because Barclays Bank, like most banks, had an asset they were not interested in long term and were, like most banks, being pressured to dispose of non core assets. It is no more complicated than that.

    The current “lot” have stated they wish to refresh those assets. They have stated they do not wish to frack.

    Whether there is enough gas left to have success within that intention, only time will tell. This is exactly the same across much of the N.Sea, where it is seen as environmentally sound to extract gas and oil from assets that may otherwise have been abandoned with resource still left. Big Oil is being replaced there by some who think they can do that. Where are Big Oil going? See my next sentence.

    Fracking in USA is increasingly being funded by Big Oil, such as Shell. Yes, it’s brilliant if you are receiving their dividends.

    “Oil majors get claws into Texas wildcatters”: James Dean, Times, August 28th, 2019.

    Mike-borrowing is funny money? Suppose it depends on where you borrow the money. Most with mortgages see it as an investment. I am of an age where my “funny money” is pretty low, but I recognise many less ancient find borrowing is the way they progress to what they wish to achieve. Some will make the wrong selections and find it may produce problems, others will state in later years, it was the best thing they ever did. Start up businesses may prosper, or fail. I really do not see that oil/gas exploration is any different in that respect. If you want to see how long a business can run on “funny” money, without making a profit, take a look at Tesla! (How is their equity doing Mr. Tate?)

    • I make no pretence about understanding financial machinations. I’ll leave that to you and Philip. However, I do realise there’s a big difference in borrowing real money against the risk of losing collateral such as a house. Entirely different than complex offshore tax avoiding company structures borrowing against nothing more tangible than the prospect of a nice return. A cursory glance at TE’s accounts doesn’t reveal much in the way of tangible assets to be repossesed by Barclays bankers.
      Surprisingly, you seem to have overlooked my question: I’m very interested to hear that, quote ‘Someone has supplied fresh capital, so obviously there is some confidence this is possible.’ I’m still most interested to know who that someone is, and how much.
      Do you really know that ‘someone has supplied fresh capital’ or was it just one of your usual comments that sound vaguely plausible but cannot be backed by factual information?

  3. We will see if and when the investment that has been spoken about happens, Mike. Could it be the Norwegian Wealth Fund?? LOL

    However, it does seem borrowing against-as you put it-the prospect of a nice return- is not too difficult when a business plan supports that. Tesla has found that out, even though their business plan has failed repeatedly.

    Mind you, there are always projects where the business plan doesn’t do that-The Swansea Lagoon comes to mind-and then the ” compulsory mug punters” ie. the tax payer,s are expected to fund “superb” projects that are rejected by everyone else who looks at the business plan.

    It’s a funny old world.

    I note the remaining subsidies on electric vehicles are to be withdrawn. That should excite a few more business plans, and probably send money rushing to the safe havens-like Shell.

    Have to let you think about that for a while, as I have someone arriving to collect a great stack of firewood I have for friends and neighbours. They obviously heard about the predictions of a harsh winter on the way, and have decided to get their truck load before it is all gone.

    • A business plan that supports a nice return hardly described the English fracking industry at the moment. Only a crumbling and shambolic Tory govt supporting it centrally, with the wider membership revolting, seismic issues, Wall St calling time on the US industry and their very questionable economics, greater momentum countrywide against fossil fuels and single use plastic, a credible forecast that the amount of gas under our feet was drastically overestimated etc etc.
      I’ll take your continued lack of response to my question as meaning:
      1. I just made up the bit about someone supplying fresh capital to sound knowledgeable and to imply that the industry is on a sound footing really, or
      2. I’m remarkably well informed about precisely who is funding the fracking companies, but not at liberty to disclose such commercially sensitive information.
      If it’s the latter, I’m surprised someone so important and so deeply involved with the fracking and investment businesses has the time or inclination to spend huge amounts of time on Drill or Drop.

  4. Well, that was all Alice, wasn’t it Mike!

    Third Energy are NOT a fracking company, anymore. So, you seem very interested in their funding, for something they are not intending to do! As far as funding for INEOS is concerned, that is quite straight forward-funded out of current profits and maybe debt-just like the £50m plus they have invested in their vehicle business although they have yet to make one unit.

    Cuadrilla funding is pretty easy to identify as well, so is that of Igas.

    You could be “remarkably well informed” if you looked into the reality of those companies who are planning to frack-at the moment-rather than conflating with those who are not.

    I did respond to your question, but it was you who ignored the response. Let me try again. Third Energy have outlined their plans for investment. If, and when, they conduct those plans you may see where the funds have come from. Until then, I suspect they are not that inclined to share them with you.

    “Wall Street calling time”!!! You mean Occidental who just invested $38 BILLION in US fracking, 3 other $20 BILLION take over deals/mergers forecast, Exxon, Chevron and Shell expanding their operations, BP and INEOS evaluating options. Come off it Mike, you are either commenting on something you have not researched or you believe others will be fooled.

  5. I am sorry if my earlier post came across as patronising, Mr Collyer. I think I was advising you not to put your money where your mouth is. Destruction of shareholder value is widespread in the Fracking Industry. Even those companies providing support services have suffered : in the last five years, Halliburton shares have tanked from $65 to $20 and Schlumberger have gone from $103 to $46. This may be “selective” but it does bear examination.

    Occidental has not ” invested” $38 billion in US Fracking. It has consolidated its position by buying Anadarko. And how has it done this ? It has raised $13 billion on the bond market and by doing so added $40 billion of debt to its balance sheet : debt.that previously belonged to Anadarko. Good news for the Banking Industry. Like all companies that are forever merging and consolidating it is hoping that the future increased cash flow will be sufficient to service its debt. The form book is not good. Occidental shares have fallen from $94 to $45 in the last five years.

    Returning to Third Energy, the original wing of Barclays that supplied debt never had a long term interest in the Company. The strategy was always to exit within a 5 – 7 year window. Actually Barclays was extremely successful in sourcing funds for a business which in its last accounts had a turnover less than the local family business that delivers my milk and paper – The Times, obviously. Third Energy burnt 100% of its share capital and became wholly dependent on debt to fund its day-to-day operations. With insufficient income to service an accumulated debt of £68 million ( some of it secured on assets of about £3 million ) it was “Time Gentlemen, please “.

    You may well be a cheerleader for the Fracking Industry, Mr Collyer , but not all of us who have grave misgivings about an unnecessary industry that not only increases the consumption of fossil fuels at the same time as harming our natural environment – not all of us are as ignorant as you so regularly suggest. And here’s a prediction : Cuadrilla will have gone by Christmas.

  6. But, Third Energy has nothing to do with the fracking “industry”-or testing of such- now, Mr.Tate. You can meander around the subject as much as you like, but that is the reality.

    In terms of how companies raise money for acquisition/takeover/merger it rarely comes out of profit, usually out of banks or other financial bodies, who have seen a business plan and reckon it is a good investment. They utilise your savings account money and generously give you around 0.2% return for that whilst they pocket over 10% that they make if the business plan succeeds, and often if it does not. I’m not sure of the point you are making that somehow fracking companies are unique in that, as the example of Tesla clearly shows they are not.

    I would even suspect the £50 million plus INEOS have put into their vehicle business so far, may come along exactly the same route.

    Your prediction regarding Cuadrilla follows many others who have done the same. You may be correct, but I suspect, if so, they will be replaced by someone else-politics allowing. Just like the way Third Energy was going to disappear (and others) but have not, or have and been replaced.

    Why would UK fracking increase consumption of fossil fuels? It is now intended largely to produce hydrogen, which will still be produced somewhere. Surely, you are not contradicting the antis hymn sheet and suggesting it will make that production so much cheaper that there will be the equivalent of a feeding frenzy? I can’t see it other than in addition to hydrogen fuelled buses, trains and heating systems we could see many more hydrogen fuelled cars. As long as the carbon removed is either utilised or safely stored what is the issue?

    Meanwhile, I watch with horror the TV news regarding issues such as the devastation in the Bahamas, and wonder how the reporters always manage to avoid the key component for rescue and to get these poor people back to as they were, and how they travelled there. It’s called fossil fuel, Mr.Tate-the stuff that gets the rescue ships, helicopters there, the heavy machinery fuel to clear the debris, the generators to replace any electric structures destroyed, the chain saws to clear the way for all of that to happen, the plastic sheets for shelter etc.,etc. That is why, if you look, you will find that the level of mortality from such disasters around the world is so much lower than it used to be, although still a tragedy for those caught up. Even a fleet of carbon fibre yachts will not change that one iota.

    But, nuclear so much better! Ohh-today Japan about to discharge water into the ocean and EDF having more problems with the engineering of their new reactors.

  7. Quote: But, Third Energy has nothing to do with the fracking “industry”-or testing of such- now, Mr.Tate. You can meander around the subject as much as you like, but that is the reality.
    How wonderful that you have such implicit trust in the word of Third Energy, the O&G industry generally, BEIS, OGA, UKOOG etc. Personally, I have found so many weasel words, half truths, strategic silences and occasional downright lies, that I’m somewhat more sceptical.
    It was certainly interesting when TE suddenly declared their damascene conversion from unconventional to conventional, only days after Ryedale DC opposed their application for a 17 year extension to the already expired permissions for the majority of their infrastructure on the grounds that the justification for extension was about retaining this infrastructure for future fracking operations. Sadly, this bore no relation to the original permissions and was therefore seen as not permissible in planning terms – completely new applications would be required for fracking. Rather a slow, costly and strongly opposed process I would imagine. Something of a dilemma for TE. No money and no permission to frack and the possibility of having to restore their existing infrastructure after conventionally producing less gas in recent years than the flatulence of a small local dairy herd. With no evidence of any ability to produce gas and no generator to burn it in within the next couple of years (oh dear, more significant investment needed), it won’t be easy to convince sensible investors to pump yet more money in, unless there could be a return from future fracking. In such a cleft stick, they’d need someone very clever and convincing to attract continued investment. Have you thought of applying Martin?

  8. I thank you for your high opinion of my abilities Mike, but I suspect my fees may be too high.

    Besides which, there are many companies who have recently obtained funds in the UK on shore oil and gas sector without the need to resort to such extremes! It really comes back to the strength, or otherwise, of a business plan. You may like to suggest that would be enhanced by some sly little reference to a distant frack. I suspect if that was the case a business plan to invest until then would be sunk. Jam many tomorrows away is hardly convincing, especially given the current political situation.

    So, yes, I would expect TE to try and show how they will reinvest and develop what is there. Whether they are able to, remains to be seen.

    Meanwhile, others can get paid for telling them they don’t want them to do, what they don’t want to do!

    Perhaps I could do better as a Councillor? Like my local ones who agreed an hours free parking a few years ago to help retain local shopping, now want to stop that to assist climate change and will receive less income from local shops once they close and locals will increase on line shopping so climate change is not helped!! Sales of Bourbon biscuits and delivery vans triumph once again.

  9. Could you just try and get your ball on the green , Mr Collyer? Your posts are nothing more than random swipes in the undergrowth. INEOS, TESLA, the Bahamas, Nuclear Power, Hydrogen and local Parking Charges. Could you remind us of your central thesis ?

    My original argument was that Fracking is bad business and I have given examples of the destruction of shareholder value. You have not provided a single example of a Fracking company whose share value has increased . I have also explained why Private Equity is an unsatisfactory entity to engage in an industry that has “legacy” issues. You laughed at my reference to Canada. The State Legislature of British Columbia and Canada’s Supreme Court are not so easily amused as they address the difficulty of dealing with 10,000 “orphan wells”.

    These are serious points and I would welcome a serious and informed response.

    Just stick to the point and demonstrate the understanding of Financialisation that you claim to have.

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