Benefits of the gas industry in Ryedale and the future of Ryedale's gas industry
Even if we can bring ourselves at some future point to live among acres of wind farms and solar panels, the planned development of wave and tidal renewables goes ahead, and new generation nuclear powered generating stations are brought online, the fact remains that for the next 50 years at least fossil fuel will play a major role in bridging the energy gap. As we know, from an environmental point of view oil is better than coal and gas is better than oil, so it would seem obvious to utilise the natural resource which sits below Ryedale. With approximately 64 million people living in the UK it is a staggering fact that over 80% of homes and businesses are heated by gas. This is aside to the fact gas is used to create electricity for the Nation. At present the UK is importing gas from Norway, Qatar, Netherlands, Belgium, and to a lesser extent Algeria and Nigeria. Russian company Gazprom has just signed a contract with Centrica to supply gas for the next 5 years. As recently publicised, it is predicted that the UK's energy margin could fall to as low as 2% in the winter of 2015-16, so any spike in demand due to severe weather conditions could lead to power shortages and black-outs. The fracking industry, obviously regulated in the way government requires, can help bolster the UK's energy security and keep the lights on in the future. Consider losing your source of heat by either gas or electric, what would life be like? This is not the Mediteranean, this is the UK with its cold and damp climate which dominates the seasons..
Ryedale as an energy hub
If Ryedale grasps the opportunity to develop energy production from unconventional sources, the perception of Ryedale as dynamic and forward-thinking would encourage new investment and business start-ups in the area.
Immediate benefits to local companies
Gas exploration does not come cheap. Third Energy spends on average £800,000 annually with local suppliers but in addition over the last 4 years it has spent close to £30 million on Seismic and Drilling, a large portion of that spend staying in the UK. There are at present no local fracking companies but other companies that do or could benefit from the fracking industry include:
Well engineering, Wireline Services, Perforating, Mud Engineering, Drilling and workover services, Production Logging, Cranes, Welding, Well integrity & Maintenance Services, Geological Services, Machine Shop & engineering services, Communication, Planning, Permitting, Pipeline inspection, Turbine inspection and Maintenance, Construction, Fencing, Landscaping, Catering, Legal services, HR, Security,accommodation providers, restaurants, cafes, takeaways, newspaper shops, garages, supermarkets, gym and leisure facilities, entertainment venues, hair dressers.
Many of the businesses which provide services will depend on employing staff to carry out the work. This industry would help maintain jobs and create new ones. Where tourism is seasonal if the gas industry developed it could create a year round requirement for accommodation plus all the associated requirements as listed previously, thus creating long term employment with no seasonal layoffs.
If the fracking is successful and the volume of gas being piped to KGS increases, the amount of revenue paid by Third Energy to the government will also rise. This benefits us all indirectly by adding to Treasury funds which pay for our public services, schools, hospitals etc.
Local Council Business Rates
The government has stated that 100% of the business rates paid by the energy company will go to the local council instead of central government as is the normal practice.
The Government and UKOOG (UK Onshore Operators Group) have defined a community benefit scheme whereby energy companies set aside £100,000 for each well site where fracking takes place. This money will be paid into an Escrow account and the energy company has no further say in the management of the funds. Members of the local community can apply to the fund for help with any project once fracking starts on the site.
If the test frack leads to commercial production from the site, 1% of gross revenues from production will also be paid to the fund for community use. That does not mean 1% of the profit, it is 1% from the gross. This could be a significant amount.
This fund can be used for many projects that can help the community, for example here is an extract from Kirby Misperton Parish Council Minutes of Ordinary Meeting held at the Village Hall, Kirby Misperton, on Thursday 27 November 2014 at 7.30pm
"8. Council discussed the provision of a dog bin in the central area of Kirby Misperton following a complaint from a resident as a result of the increase in dog fouling since the removal of the bin from the Shire Grove junction.
Costs for dog bins and stencils were presented but due to budgetary constraints the Council felt unable to add a further bin to the central area."
There is quite a lot being written about the fear that house prices will fall in the vicinity of a fraccing well site. The well site at Kirby Misperton has been in existence for 30 years and the gas has been produced and piped to Knapton for the last 20 years. During this time there have been intermittent bouts of activity, new wells being drilled, side-tracks being done etc. Yet a quick look at the Property/House Prices section of the Gazette and Herald shows that homes in the area have been bought and sold much as they would elsewhere. Third Energy have stated many times that the fracking which they have applied for permission to carry out is less of an operation than the drilling of the original well back in 2013. Why would it be that people are quite happy to buy property one year in the knowledge that drilling operations go on in the vicinity and yet when a lesser operation is about to take place, suddenly no one wants to buy property? If anything is the cause of property prices being reduced, it is the hysteria put about by anti-frackers. 20 years ago when Knapton Generating Station was planned objectors claimed that house prices would fall and that it was going to poison all our crops, kill our livestock and make us all ill. They were 100% wrong. Time will show that the fears put about by those opposed to fracking will not come to pass.
Once this truth becomes known I see no reason why the housing market in the area should not continue as it has done over the last 30 years.
The Sandbanks story: This shows that an onshore gas field can absolutely not affect the values of your home.
Oil wells already in production include those around Stockbridge, Hampshire, and Welton, Lincolnshire. One of the largest onshore gas fields in the UK is in Ryedale, North Yorkshire. The gas was discovered and developed in the 1970s, but many residents and visitors are only vaguely aware of the operations, and it has not caused a cataclysm in the local property market, though that might change now that there is an anti-fracking group in the area.
The largest onshore oilfield in Europe is Wytch Farm in Dorset, where fracking has been undertaken since its discovery in 1973. The derricks are visible above the pine trees across Poole Harbour, yet their presence doesn’t seem to put off buyers on Sandbanks, one of the most expensive places in the world to buy property, and which lies less than two miles from the nearest drilling rigs. A dilapidated bungalow there was recently marketed for £3m.
“I have been selling property on Sandbanks for 20 years,” says Steve Isaacs, director at Lloyds Property Group, “and I can categorically say that no one viewing a property there has ever raised the issue of Wytch Farm. In fact, the hottest properties this year have been on the Glebe Estate, on the other side of Poole Harbour, nearer Wytch Farm.”
If living near a fracking site is okay for billionaires it’s probably okay for everyone else, too. Whether a horde of chanting green activists is as conducive to a healthy property market is another matter.