Last Friday, due to mounting political pressure, the government were forced to reverse a decision to censor 63 different passages of a controversial 12-page report on fracking’s potential impact on the rural economy. [1]

In July 2014, following a Freedom of Information request from Greenpeace asking the Department of Environment, Food and Rural Affairs (DEFRA) for a copy of the internal report called ‘Shale Gas: Rural Economy Impacts’, DEFRA instead released a heavily redacted report. [2]

The cover-up

In December, Tory MPs Anne McIntosh and Graham Stuart asked for transparency, urging David Cameron to release the report in full. Cameron replied saying he would look into it, adding, “I want to end myths that fracking would be a disaster for the environment.” [3]

Talk Fracking campaigned for members of the public to write to their MPs [4] asking that they demand David Cameron releases the full report before voting on the Infrastructure Bill, which proposed controversial changes to Trespass Laws. [5]

We felt it was vital that MPs could access the report and assess the impacts fracking would have on house prices and communities. By January, a total of ten MPs had called for the report to be released in full, including four MPs from David Cameron’s own party.  At the House of Commons’ Environmental Audit Committee inquiry on the environmental risks of fracking, three MPs made requests to see the complete report; but still the government refused. [6]

DEFRA argued that releasing the government report in its entirety would “mislead and artificially distort the public debate thus hindering the formulation and development of government policy in relation to shale gas.” DEFRA had also claimed the report should not be released because it was an unfinished draft and that it would be “disproportionately damaging”. [7]

In late June, the planning committee at Lancashire County Council unanimously voted in favour of requesting that DEFRA published the report in full “in the interests of transparency.” While deciding on whether or not to green light two of the biggest fracking tests ever contemplated in the UK, Councillors had debated whether to hold off making their planning decision until the report was published in full, but eventually decided to reject bids by Cuadrilla to frack at two sites on the Fylde plain. [8]

On 8th June 2015, the Information Commissioner ruled that DEFRA had “incorrectly withheld the information”, saying their reasons for heavily redacting the report weren’t good enough.The Commissioner stated that DEFRA’s arguments did not “outweigh the weight of the public interest arguments in disclosure.” The ICO demanded they publish the uncensored report within 35 days, concluding that DEFRA failed to explain how or why the information in the report was inaccurate or misleading. [9]

Last-ditch denial 

Upon release of the full report, in a desperate act of denial, DEFRA included a covering note insisting their report was “not analytically robust”; but they failed to actually pinpoint the report’s alleged flaws. The note merely suggests that the cited data from overseas cannot reliably be used to predict impacts in the UK. Instead, the note implies that we should rely on the findings of the 2012 Royal Society and Royal Academy of Engineering report – “that environmental (and health and safety) risks can be managed effectively in the UK if operational best practices are enforced through regulation.”

While at the same time insisting the DEFRA report should be ignored because it was allegedly incomplete, the government has chosen to completely disregard the prematurity of the RS/RAE report which they are begging for us to instead focus our attention to. Compared to what we know about fracking today, there was little evidence of impacts to consider when the RS/RAE report was produced; as explained in our ‘Frackademics’ report published in March. [10] Furthermore, if regulatory agencies in other parts of the world are unable to eliminate the environmental and health problems created by fracking, it is unreasonable, without evidence, to assume that things will happen differently here.

What was the government so desperately trying to hide?

House prices will fall

The DEFRA report determines that property valuation declines will vary based on the proximity to a drilling site. For instance, house prices within 1 mile of drilling operations could potentially fall by up to 4-7%, based on the Boxall (2005) et. al report, if they were within 2.5 miles of wells.

In May, the first extensive estate agents’ survey, carried out by the research agency Redshift, found that two thirds (67%) of estate agents interviewed said fracking operations could bring down house prices.A majority of them estimate the loss in value to be more than 8-11%, with two agents putting it as high as 41-70%. [11] Estate agents in areas in which energy firms have applied to start fracking – in Lancashire, Manchester and Sussex – were questioned and one in four said that buyers had expressed concerns about fracking.More than half of the estate agents surveyed said they were concerned fracking could reduce property sales near potential fracking sites.

In Lancashire, some property owners have already seen 50-100% write-offs in value. Last year, Dianna Westgarth said the price of her house on the Fylde peninsula in Lancashire – just 300 yards from a site where drilling firm Cuadrilla wants to start fracking – had dropped by 70%. [12]

In August, a spokesperson for the Valuation Office Agency – which sets the values of properties for council tax purposes – admitted that commercial activities such as fracking could reduce their value. [13] He said, “Fracking is not widespread yet but if a new site had a knock-on effect on the value of the house then it could also affect the council tax banding.” The DEFRA report states that in the USA, Pennsylvania properties within 1.4 miles of wells, lost up to 12.9% of their value when the frackers arrived.

Using the data from the DEFRA report, Talk Fracking have calculated that if the average property price valuation slumps by just 2% across fracking zones in 65% of the country, that would wipe off an average of £75 billion from UK residential homes’ property valuations. Even if just 20% of the country was fracked, this would still trigger a £23 billion fall out. The calculation is based on a £5.75 trillion value of UK residential homes (Savills 2015), which is 2.7 times to UK’s GDP. [14]

Ray Boulger – Property Expert

With respect to our calculations and in light of the newly released report, Talk Fracking consulted with property expert Ray Boulger from the UK’s leading independent mortgage broker, John Charcol. Mr Boulger told us, “Perception is everything in the property market and from the limited evidence already available it is clear that there will indeed be a negative impact on house price valuations in areas with the prospect of fracking happening. The prospect of fracking in your area is a bit like putting a motorway or railway, like HS2, through your front garden – it’s going to have an impact on the valuation of your property.”

Richard Sexton, a director of Esurv, the UK’s biggest provider of residential valuation services, forecast that as awareness increased, fracking would affect house prices, “blighting properties in the areas perceived to be affected.” [15]

The DEFRA report states that properties near fracking operations may incur an additional cost of insurance to cover “losses in case of explosion on the site.” Based on this information, home insurance providers should be asked what effect fracking might have on insurance premiums, considering the high risk of earthquakes. Last week, the Oklahoma State Supreme Court has decided that homeowners whose dwellings suffer damage due to fracking-related earthquakes can sue the companies responsible. [16]

In addition, mortgage providers should be asked how property valuations for mortgages would be effected by fracking. Some mortgage providers in the USA refuse to consider properties within fracking zones. [17] One of the lenders involved, Quicken Loans, said, “In some cases conditions exist, such as gas wells and other structures in nearby lots, that can significantly degrade a property’s value.” [18] If you can’t get a mortgage on a property, it pretty much becomes unsellable.

The government has not only failed to further investigate the potential extent of damage caused to the economy; upon producing this report, they have then proceeded to sweep their own findings under the carpet and plead ignorance.

Local businesses could suffer

The DEFRA report finds that tourism and other sectors may lose business due to increased congestion and noise, and new perceptions about the region; reducing the number of visitors and an associated reduction in spend in the local tourism economy. It states that rural community businesses such as agriculture, tourism, organic farming, hunting, fishing, and outdoor recreation, which rely on clean air, land, water, and/or a tranquil environment; may suffer losses.

Government figures show that in 2010, tourism in predominantly rural areas was valued at £10.7 billion Gross Value Added (GVA) – the amount of goods and services that have been produced by this sector, minus all expenses directly attributable to the industry. Any decline in tourism would have a massive impact on rural economies because tourism accounts for 5.1% of the total GVA in rural areas. [19]

Workers at a natural gas well site near Burlington, Pennsylvania.

The problem with fracking jobs

Despite the government’s claims about fracking providing rural communities with jobs, the DEFRA report revealed that the workforce may not have the skills to take on jobs in this industry. The report says that the majority of local jobs created are likely to be indirect jobs that support the sector rather than directly related to fracking. The government report admits these are likely to be small, on a per well basis, and of lower value than the more highly skilled jobs created within the energy industry.

The number of jobs generated by the industry has indeed been exaggerated. According to a 2013 report by the Multi-State Shale Research Collaborative, a group of US state-level research organisations tracking the impacts of fracking, while shale-related employment growth has made a positive contribution to job growth, the number of jobs created is far below industry claims and remains a small share of overall employment in the region. [20] In West Virginia, shale industry jobs are less than 1% of the state’s employment mix. [21]

The fatality rate in the US oil and gas industry exceeds the rate for all US workers by more than 7 times. From 2003 to 2009, 27.5 occupational deaths occurred per 100,000 oil and gas industry workers. [22]

The National Institute for Occupational Safety and Health (NIOSH) recently collected 116 air samples from 11 US fracking sites to evaluate worker exposure to crystalline silica, which causes incurable lung disease. [23] 31% of the samples exceeded the NIOSH Recommended Exposure Limits (REL) by a factor of 10 or more. The significance of these findings is that even if workers were properly using half-mask air-purifying respirators, they would not be sufficiently protected. [24]

In Pennsylvania, shale gas workers are exposed to more than 1,000 chemicals, most of them known carcinogens. They are also exposed to radioactive waste, brought up from more than a mile in the earth, the effects from inhaling silica sand, protective casings that fail, and to explosions that are a part of building and maintaining a system that has explosive methane as its primary ingredient. Workers are treated as disposable assets in the fracking industry. [25] These are the jobs the government wants to provide for the UK.

Economic boom to bust

The Fracking Industry in the United States is one quarter of a trillion dollars in debt with the majority of operators now losing their shirts. [26] Meanwhile, the UK government’s previously censored report states it’s “unclear how sustainable the shale gas investments will be in the future”.

After Lancashire County Council refused Cuadrilla’s application to frack, shares in iGas plummeted. On 26th June 2015, iGas declared a loss of £18.5 million and after the Coucil’s refusal on 29th June 2015, the share price dropped a total of 80% since it’s 52wk high, from £130 to just £25.25. [27] At the time, Damian Carrington, head of the environment at the Guardian newspaper, wrote “The prospects for UK shale gas have never looked bleaker.” Meanwhile, the Financial Times added, “the nascent fracking industry in the UK may never recover from this blow.” It’s difficult to see how anyone involved with fracking will make any economic gains, but the government insists on taking enormous risks at the expense of the public purse. [28]

Health impacts

The report cites very serious “adverse health effects” resulting from Volatile Organic Compounds such as benzene polluting the air, which contribute to ozone and smog formation in the US. “Noxious odours from venting gases can also impact on air quality for local residents,” it adds. The report warns that leakage of fracking waste fluids could affect human health through polluted water or the consumption of contaminated agricultural products.

So why haven’t the government addressed how they intend to mitigate these risks or how they might clean up the devastation of the environment? How can they possibly clean the air of benzene so it doesn’t make people and animals sick? In light of DEFRA’s report, the medical insurance industry should be questioned on their policies for people living within fracking areas (and inhaling benzene).

On climate change, the report says that fracking could cause a gross increase in global CO2 emissions if the liquefied natural gas or other fossil fuels that would otherwise be burnt in the UK are burnt elsewhere — and we are still emitting from burning fracking gas.

Before October 2011, radioactive waste water from Cuadrilla’s fracking operations was dumped into the Manchester Ship Canal.

Fracking waste

In their report, the government admits that treatment of some fracking waste fluids may produce solids that would typically be disposed of via landfill. The report fails to acknowledge the vast amount of fracking wastewater that would be produced per site, or where this would be dumped – an issue the government has continued to neglect.

In his analyses of water treatment and waste management associated with fracking, researcher and consultant Paul Mobbs, forecasts a 50% increase in hazardous waste landfill, a staggering quarter of a million tonnes. [29] Just over a quarter (26.1%) of all waste entering final treatment in the UK in 2012 was landfilled. [30] With 633,203 cubic metres of capacity left in a total of just 594 landfill facilities, the UK are expected to reach its limit by 2018. [31]

Where will we dump the toxic wastewater derived from fracking operations that cannot be treated once UK landfills have reached their capacity? If we do not tackle the problem of toxic landfills, many more of us will come to harm like 7-year-old Zane Gbangbola, tragically killed in February 2014 at his home in Surrey after floods caused poisonous gases from a nearby toxic landfill to consumed his home. [32] Due to climate change increasing the likelihood of more floods in the UK [33] and 80% of the UK already living within 2km of a landfill site, [34] there is a rising threat of being harmed by landfill containing solidified toxic waste from fracking operations.

In 2001, the biggest study of it’s kind by the British Medical Journal showed that pregnant women have a 7% higher risk of having a baby with a congenital defect, if they live near a landfill site containing hazardous waste. [35]

Fracking is toxic for rural economies

With 65% of the UK lined up to be fracked, property values and rural economies could be decimated. If the government knew from this report produced by DEFRA that property values and rural economies were so badly impacted by fracking in other countries, far less densely populated than the UK, surely they should have looked further into and reported fully on the risk. Instead we have had a deliberate cover up and censorship of this – their only honest attempt to look into those risks.

Why have they tried to bury the truth? To admit the harm caused by fracking would be to admit that these risks couldn’t be mitigated with any amount of ‘gold standard’ fracking regulations. Let’s face it, knowing what we now know, who would want to live anywhere near to a fracking site?

When you weigh up the desperately overhyped benefits against the risks, the economics of fracking just don’t stand up. What we are being fed instead is a trumped up PR exercise invented by the notorious fossil fuel PR company Edelman, in the guise of the Task Force on Shale Gas headed up by former environment agency head and fracking enthusiast Chris Smith.

It’s very clear from the government’s own report which assesses the potential impacts, that fracking will leave a severe toxic legacy both for the economy and the environment. Now that this report has finally been laid bare, we should put fracking in the bin where it belongs.

Talk Fracking

#DefraCoverUp

 

Media Coverage:

http://www.express.co.uk/news/nature/591985/Fracking-house-value-collapse-environment

 

References:

[1] https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/440791/draft-shale-gas-rural-economy-impact-report.pdf

[2] http://energydesk.greenpeace.org/2014/08/11/energy-files-social-impacts-fracking-redacted/

[3] http://www.yorkshirepost.co.uk/news/main-topics/politics/pm-urged-to-release-rural-fracking-report-that-had-63-redactions-1-7007860

[4] http://www.talkfracking.org/news-archive/why-we-should-bin-the-fracking-infrastructure-bill/

[5] http://www.talkfracking.org/news-archive/why-we-should-bin-the-fracking-infrastructure-bill/

[6] http://www.publications.parliament.uk/pa/cm201415/cmselect/cmenvaud/856/85602.htm

[7] http://energydesk.greenpeace.org/2015/06/18/energy-files-information-commissioner-says-censored-fracking-report-should-be-made-public/

[8] http://www.bbc.co.uk/news/uk-england-lancashire-31649989

[9] https://ico.org.uk/media/action-weve-taken/decision-notices/2015/1431897/fer_0562043.pdf

[10] http://www.talkfracking.org/frackademics/frackademics-case-study-2/

[11] http://www.greenpeace.org.uk/media/press-releases/estate-agents-warn-fracking-will-hit-house-values-20150501

[12] http://www.dailymail.co.uk/news/article-2733336/Fracking-threat-wiped-535-000-home-s-value-Five-bedroom-home-valued-190-000-drilling-site-proposed-nearby.html

[13] http://www.thesundaytimes.co.uk/sto/news/uk_news/fracking/article1450469.ece

[14] http://www.savills.co.uk/blog/article/185397/residential-property/uk-housing-market-rises-to-5-75-trillion.aspx

[15] http://www.theguardian.com/money/2012/jun/23/fracking-undermine-value-home

[16] http://www.nytimes.com/2015/07/01/us/oklahoma-court-rules-homeowners-can-sue-oil-companies-over-quakes.html?_r=0

[17] http://www.wtae.com/investigations/Couple-denied-mortgage-because-of-gas-drilling/12865512

[18] http://www.theguardian.com/money/2012/jun/23/fracking-undermine-value-home

[19] https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/389046/Productivity_Tourism_Final_2010.pdf

[20] http://www.multistateshale.org/

[21] http://ecowatch.com/2013/11/21/study-confirms-job-exaggerated-by-fracking-industry/

[22] http://www.aflcio.org/content/download/28091/347761/version/1/file/safetyhealth_05222012.pdf

[23] http://blogs.cdc.gov/niosh-science-blog/2012/05/23/silica-fracking/

[24] http://gasvets.org

[25] http://truth-out.org/buzzflash/commentary/workers-disposable-assets-in-the-fracking-industry/18518-workers-disposable-assets-in-the-fracking-industry

[26] http://www.forbes.com/sites/christopherhelman/2014/12/19/who-will-get-caught-when-the-oil-debt-bubble-pops/

[27] http://www.independent.co.uk/news/business/sharewatch/market-report-shares-in-fracking-firm-igas-energy-have-run-out-of-steam-10354195.html

[28] http://www.spinwatch.org/index.php/issues/climate/item/5787-serious-doubts-over-uk-fracking-industry-after-seismic-vote

[29] http://www.talkfracking.org/news/the-lethal-threat-of-fracking-landfills/

[30] https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/416471/UK_Statistical_release_UPDATEv6_19_03_2015.pdf

[31] http://www.independent.co.uk/news/uk/home-news/uk-warned-it-will-run-out-of-landfill-sites-in-eight-years-2021136.html

[32] https://you.38degrees.org.uk/petitions/call-for-a-public-debate-into-the-death-of-7-year-old-zane?bucket=+via+%4038_degrees

[33] http://www.theguardian.com/environment/2014/apr/30/climate-change-extreme-rainfall-england-flooding

[34] http://news.bbc.co.uk/1/hi/health/1494567.stm

[35] http://www.theguardian.com/uk/2001/aug/17/environment.research