Fears grow over Conservatives' links to fossil fuel lobbyists

Sacked energy minister warns Britain must not 'bet the farm' on shale gas extraction

The Guardian, Jamie Doward and Toby Helm, The Observer, Sunday 21 October 2012

Anti-fracking campaigners in Southport last year. Environmental groups are
 increasingly concerned over links between Conservative ministers and fossil
fuel companies. Photograph: Mar Photographics/Alamy

Government backing for new forms of gas extraction such as "fracking" are coming under acute scrutiny, after a sacked energy minister warned against "betting the farm" on them and green groups expressed alarm at links between the fossil fuel lobby and the Tories.

An Observer investigation has established that energy trading giant Vitol, whose boss has given more than £500,000 to the Conservatives, has emerged as a major shareholder in a company bringing "hydraulic fracturing", commonly known as fracking, and a related technology, coal bed methane (CBM) extraction, to the UK.

But doubts are growing over whether such technologies can deliver the cheap energy prices the gas lobby claims.

Writing in the Observer former energy minister Charles Hendry, who lost his job in the reshuffle, warns that shale gas "cannot bring the UK the same benefits as in America, where consents are much easier and prices are kept artificially low by the lack of export facilities".

After a week in which David Cameron staked his credibility on reducing energy bills, Hendry claims a dash for gas could backfire. "We may face a golden age for gas, but don't assume it will be cheap," Hendry writes. "Last year's energy price rises owed more to rising global wholesale gas prices than anything else, so betting the farm on shale brings serious risks of future price rises."

Vitol's previously unpublicised interests in what are referred to as "unconventional gas extraction" assets suggests the company believes they could be a major source of energy. But the trader's close links to the Tories will be studied closely by green groups, who fear the government is being seduced by the claims made for gas extraction.

The international development minister, Alan Duncan, worked for the firm in the 1990s and was a consultant for another company part-owned by Vitol.

Its chief executive, Ian Taylor, who has donated around £550,000 to the Conservatives, was a guest at an intimate dinner party with David Cameron in his Downing Street flat last November. Weeks after the private dinner – for people who had donated more than £50,000 to the Tories – it emerged that the Foreign Office had brokered a deal for Vitol to supply oil to rebel forces in Libya opposed to Colonel Gaddafi.

Last month Vitol admitted it had bought and sold Iranian fuel oil. The Swiss-based company said: "A Bahraini subsidiary company purchased a spot cargo of fuel oil from a non-Iranian counterparty in July 2012. The fuel oil delivered … was of Iranian origin. Vitol Group companies no longer purchase any product of Iranian origin."

Joss Garman, a campaigner with Greenpeace, said: "Call me cautious, but these don't sound like the kind of people we want to be entrusting with our land, countryside and climate. The government urgently needs to kick the UK's gas habit in order to stabilise energy bills."

Taylor is not the only energy boss to enjoy close links to the government. Lord Browne, the former chief executive of BP and now chairman of Cuadrilla, one of the UK's main shale prospectors, is an adviser to the government. He is also managing director of Riverstone Holdings, which has oil and gas investments in the North Sea. Ben Moxham, who worked for Browne at BP and Riverstone, is now Cameron's energy adviser.

A Cuadrilla site in Lancashire was forced to suspend test fracking in 2011 after two small earth tremors; in April a panel of experts appointed by the government ruled that test fracking could continue under stringent conditions.

Vitol and two venture capital firms acquired a 16% stake in a company called Dart Energy after selling it a company called Greenpark that has a licence to conduct exploratory fracking at a site on the Anglo-Scottish border. Next February, Dart plans to start drilling 22 CBM wells in Airth on the bank of the River Forth, the largest venture of its kind in the UK.

Dart is a member of the Australian Petroleum Production and Exploration Association, which employs the services of Australian lobbyists Crosby Textor. A former Crosby Textor lobbyist, Guy Robinson, is now special adviser to the new environment secretary, Owen Paterson. Paterson, accused by green groups of being a climate-change sceptic, has voiced support for fracking, describing Britain's shale reserves as "one unexpected and potentially huge windfall".

Both fracking and CBM extraction are fiercely opposed by environmental groups. Fracking involves injecting fluid under high pressure to crack rocks underground and release the natural shale gas inside. The technique, which is banned in a number of countries including France, has prompted concerns about water contamination, as has CBM.

"The sites planned for Airth will be just the beginning of a nightmarish industrial transformation for the UK as a whole," said Elsie Walker, a campaigner with the environmental group Frack Off. "Dart's own estimates of the gas under their licence block suggest that roughly 600 wells might be drilled in the area, with thousands more likely across Scotland and the rest of the British Isles."

Supporters of both processes say they are subject to extensive regulatory oversight and will help the UK secure energy supplies, generate significant contributions to the exchequer and create jobs.

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"Recalibration of Free Choice"–  Mar 3, 2012 (Kryon Channelling by Lee Caroll) - (Subjects: (Old) Souls, Midpoint on 21-12-2012, Shift of Human Consciousness, Black & White vs. Color, 1 - Spirituality (Religions) shifting, Loose a Pope “soon”, 2 - Humans will change react to drama, 3 - Civilizations/Population on Earth,  4 - Alternate energy sources (Geothermal, Tidal (Paddle wheels), Wind), 5 – Financials Institutes/concepts will change (Integrity – Ethical) , 6 - News/Media/TV to change, 7 – Big Pharmaceutical company will collapse “soon”, (Keep people sick), (Integrity – Ethical)  8 – Wars will be over on Earth, Global Unity, … etc.) - (Text version)

“…  4 - Energy (again)

The natural resources of the planet are finite and will not support the continuation of what you've been doing. We've been saying this for a decade. Watch for increased science and increased funding for alternate ways of creating electricity (finally). Watch for the very companies who have the most to lose being the ones who fund it. It is the beginning of a full realization that a change of thinking is at hand. You can take things from Gaia that are energy, instead of physical resources. We speak yet again about geothermal, about tidal, about wind. Again, we plead with you not to over-engineer this. For one of the things that Human Beings do in a technological age is to over-engineer simple things. Look at nuclear - the most over-engineered and expensive steam engine in existence!

Your current ideas of capturing energy from tidal and wave motion don't have to be technical marvels. Think paddle wheel on a pier with waves, which will create energy in both directions [waves coming and going] tied to a generator that can power dozens of neighborhoods, not full cities. Think simple and decentralize the idea of utilities. The same goes for wind and geothermal. Think of utilities for groups of homes in a cluster. You won't have a grid failure if there is no grid. This is the way of the future, and you'll be more inclined to have it sooner than later if you do this, and it won't cost as much….”