Saturday, December 29, 2012

Shale Gas In U.K.: The Harmful Nanny-State

In a recent blog, The West Lapsing Into Totalitarian Slump, I argue that government intervention in the economies of the West are ruining those economies and now preventing recovery nearly everywhere. I also said that this "totalitarianism" is even worse in the UK and Europe.  In fact, I predict financial and economic collapse in Europe and The West in this decade.

With big and intrusive governments, central (and local) government interference in the economy limits the country's private, decentralized business atmosphere and blunts individual initiative.  Excessive taxes limit the wealth creation necessary for risk-taking ventures.  High taxes hurt business investment returns to such an extent that there are too few new businesses.  The welfare state has also stunted the self-reliance and initiative of the people.

Little Room For Entrepenuerism In Socialist Britain
If you want to see how government ruins nearly everything it touches, look no further than the recent ban on hydraulic fracturing for shale gas in Southern England due to small, nearly imperceptible tremors that occurred near several hydraulically fractured well operations.  Mind you, northern Europe is not seismically active.

First of all, there is only one group of entrepeneurs, Cuadrilla Resources UK, with the "temerity" to try to develop shale gas in the UK.  They drilled two wells before being shut down after minor earthquake activity.  Contrast this with the full-blown drilling boom(s) underway in US onshore shale basins for years now.  For instance, there was 111 drilling rigs in the state of Pennsylvania in 2011 with nearly 2900 producing wells in 2012.  Shale gas production is soaring. That's just one state!  

But there is only one or two companies trying to develop shale gas in all of the UK.    Why?  In Socialist Britain, almost nothing good or new can happen when the entire country and nearly all it's activities are regulated and controlled by nanny state bureaucrats at the central and local levels.  (We won't even go into the curtailed individuals rights and extensive surveillance there!)

Overreaction to Extremely Small Tremors
In typical governmental overreaction, the UK government banned ALL fracturing activity in the UK due to very small earthquakes occurring near the well sites in April of 2011. The magnitude of the quakes were insignificant at 1.5 and 2.3 on the Richter scale.  Most people in that area wouldn't have even noticed these small quakes.

Just as a typical example, I looked at website for Anchorage Alaska today (December 22), which reports earthquake activity.  There were 4 earthquakes in the area with magnitudes ranging from 2.6 to 3.0 on the Richter scale.  This is typical for this area and occurs nearly everyday.  There is no shale gas drilling in that area.  There were 3 earthquakes in the Los Angeles area on the same day and same magnitude. There are an everyday event in these areas. The Wunderground site doesn't even report quakes of magnitude of 2.5 or less since they are so minor.

So, in typical over-reaction of Nanny State Totalitarian government, the government bans ALL shale gas drilling activity and, after 1 1/2 years, finally allows it to resume.  Now the exploration company has to prove that any future activity won't cause earthquakes. That sounds logical but is impossible to prove or disprove.  All this for nearly imperceptible tremors!  The UK is NOT a geologically active area prone to seismic activity.

And the people wonder why the economy is so slow and that there are so few employment opportunities. I think this single example explains quite a bit.

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