The fourth energy paradigm - A case for including water security in the energy policy discourse of the United Kingdom

The fourth energy paradigm - A case for
including water security in the energy policy
discourse of the United Kingdom
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A dissertation submitted by Nitin Sukh
MSc. Environment & Development
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The London School of Economics & Political Science
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*Please do not cite, this work is yet to be graded*
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Dedicated to every marginalised environmental activist and rural community member currently
engaged in protecting the U.K.’s water resources and local ecosystems from the potentially
devastating effects of hydraulic fracturing. !!!!!!!!!!!!!!!!!!!!
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Table of Contents: !
Abstract! 3!
1. Introduction and theory 3
2. Literature Review Narrative 4
2.1 Climate change and water 4
2.2 Shale Gas Hydraulic fracturing 5
2.2.1 Environmental impacts of fracking 5
2.2.2 Disrupting hydro-social relationships 6
2.3 The political ecology of energy security in the U.K. 7
2.3.1 Energy paradigms in the U.K. - a brief history 7
2.3.2 The water-energy nexus: A fourth energy paradigm? 8
2.3.3 Conservatives: torn between green and brown? 8
2.3.4 Countering the rhetoric 10
2.4 The U.K.’s water resources - a lurking economic threat 13
2.5 Hypothesis 13
3. Methodology 13
3.1 Survey style 14
3.2 Limitations 14
3.3 Improvements 14
4. Survey Analysis 15
5. Discussion Conclusion 16
5.1. Sharpening Environmental, Social Corporate Governance (ESG) risk analysis 16
5.1.1 Threats to water sector investments and economic growth 16
5.1.2 Shale gas investments 16
5.2 Environmental ethics and justice 17
5.3 Conclusion: Precaution, De-federalisation Integrated Resource Planning 18
Acknowledgement! 19!
Bibliography! 20!
Appendix - Survey Format! 26
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“When the well’s dry, we will know the worth of water”
Benjamin Franklin !
Abstract
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Water security is conveniently decoupled from energy security discourses in the United Kingdom
(U.K.) where it is the position of this paper that transitioning from coal to natural gas by
hydraulically fracturing shale gas formations with the ambition of providing affordable energy to
propel economic growth will further burden water resources, thereby increasing natural capital risks
for water supply and sanitation companies that are legally bound to supply high quality water to
households, businesses and farms. This kind of energy transition epitomises a weak sustainability
approach towards achieving energy security, where the political ecology of energy policy
development in the country is federalised, dominated by a hegemony of policy makers in the
current coalition government and fossil fuel companies, excluding water companies and
communities in the process. Undertaking such a weak sustainability approach in light of climate
change, declines in the global stock of freshwater and incidences of ecosystems collapse is
tantamount to an ecological injustice towards domestic and global communities, potentially
jeopardising human welfare and ecological equilibrium. The environmental impacts of hydraulic
fracturing continue to be hotly debated, therefore a cautious multi-stakeholder approach to energy
policy making is chiefly recommended in this dissertation, taking into confidence the U.K.’s private
water sector at the local level to begin with, in order to develop a more comprehensive energy
policy that is honest to the U.K.’s ambitious climate change goals and to local communities and
businesses that depend on high quality water as a sociological and economic input. !
1. Introduction and theory
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A paradigm is defined by Kuzemko (2012) as ‘socially constructed rules and norms in political
practice which define the very problem of a policy agenda’. The political ecology of energy policy
formation in the U.K. since World War Two, represented by three distinct energy paradigms,
identified by Dieter Helm (2005), provides key insights into how energy security has been framed
by successive British governments. The Conservative party’s neoliberal penchant, being pro-business,
which pushes for privatisation has been historically consistent where the party chiefly
believes that the role of government is to develop frameworks and conducive business
environments to attract private sector capital and thereby drive efficiencies (Helm, 2005). In this
neoliberal endeavour, there still exists an overwhelming need for government to develop policies in
a deeply consultative manner, addressing the concerns of multiple stakeholders to avoid the
possibility of increasing political, economic, environmental and social risks through uninformed
policy making, which do nothing more but to increase inefficiencies and thereby adversely impact
sustainable economic growth. !
The present coalition government, led by the Conservative party, is deeply influenced by vested
interests in the oil and gas sector and has rhetorically positioned shale gas as a ‘bridge fuel to a low
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carbon future’ for the U.K., drawing significant public ire and risking locking the U.K. into a carbon
based energy system for the long term (Unruh, 2000). Therefore, a neo-Gramscian lens is used to
critically analyse the federalised political ecology of shale gas policy in the U.K., indicating that a
hegemonic regime consisting of conservative policy makers and energy companies are exclusively
involved in rationalising shale gas as a means of achieving narrowly defined energy security
objectives with little to no interaction with other strategically important and critical industry sectors,
i.e. the water sector. The author believes it is absolutely vital to ensure that a strongly sustainable
energy policy is developed in cognisance of the holistic ecological costs and benefits of
transitioning to yet another fossil fuel energy source, in this case recognising and understanding the
potential threat to water sources. !
Therefore, this dissertation is guided by the basic tenets of strong sustainability, i.e. positioning
ecological outcomes over GDP (Neumayer, 2013), and stakeholder theory, an outward looking
business philosophy inspired by inclusive governance, of identifying and engaging with a broad
range of stakeholders in a bid to better inform energy policy making, thereby minimising natural
capital risks to the U.K.’s water sector (Siddiqui et al, 2013). To set the context for discussion, the
dissertation commences with an analysis of the political discourse over energy security since the
Second World War up until the present time. The intention is to chronologically narrate the shift in
political intention from renewables to shale gas, thereby highlighting the U.K.’s inconsistent
political ecology which is dangerously shifting financial resources away from renewable energy
adoption (Stevens, 2012). This is followed by an analysis of a qualitative survey conducted amongst
the U.K.’s private water companies to understand their risk perceptions towards the exploration and
extraction of shale gas using the hydraulic fracturing technique and to also confirm whether they
have been consulted by policy makers prior to the issuing of shale gas exploration licenses to
energy companies.
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2. Literature Review Narrative
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2.1 Climate change and water
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The World Economic Forum (2014) and a host of other international organisations have
unanimously concluded that freshwater availability for a rapidly growing and urbanising global
population will be the greatest challenge in the coming century, a scenario unfolding in the
backdrop of climate change which accelerates glacial melting and freshwater evaporation (IPCC,
2014). Lake Chad is an often cited example of how pressures of climactic change and abstraction
from a rising population has exponentially strained a vital water resource in Sub Saharan Africa
where water scarcity has led to the decimation of livelihoods and made militancy seem like an
attractive opportunity to the rational destitute (Fisman et al, 2010). !
Unlike climate change, a systemic, i.e. global, risk, the water crisis is not considered a systemic
problem since scarcity is localised, thereby making it a cumulative risk. Water scarcity is therefore
met with spatial ignorance, where people become concerned about it when they or their community
is directly affected by it, which may lead to its abusive use in geographical regions of relative
abundance. Despite being a public good, the supply and management of water in urbanised societies
is a highly technical job that requires expertise, efficiencies and capital that the private sector can
provide (Galiani et al, 2005). In fact, the privatisation of water supply and sanitation is empirically
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proven to substantially augment quality, improve efficiencies and most importantly sustain a
healthy public (Galiani et al, 2005). Whilst there is lively ideological debate ongoing regarding the
ethics of privatising water because of its pubic good nature, the author underscores the irrefutable
truth of privatisation augmenting public health, which should be the key concern for any policy
maker. Therefore, the remainder of this dissertation proceeds with a neoliberal persuasion, where
the context of the debate insists that an efficiently operating water supply and sanitation industry is
vital to ensuring populations are supplied with clean water, a human right in itself. Within this
context, should any industrial process lead to the potential scarcity and contamination of water
sources, the cost of managing and supplying water may also increase and thereby reflect in the
increased price of water. Centrally positioning water’s public good nature and its role in sustaining
life, ensuring its affordability and quality is critical for long term economic sustainability, arguably
more important that the promise of providing affordable energy in the form of shale gas extracted
by the environmentally contentious process of hydraulic fracturing for short term gain. Therein lays
the policy conundrum and the fine balance that will have to be struck in simultaneously ensuring
water and energy security, which becomes even more necessary in the current U.K. coalition
government’s quest for extracting shale gas in the English countryside, threatening public health,
the functioning of fragile ecosystems and livelihoods (Hussey et al, 2012). !
2.2 Shale Gas Hydraulic fracturing
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hale gas is essentially natural gas, or methane, locked away in shale rock geological formations up
to 4 km below the Earth’s surface. Whilst shale gas can be extracted by various methods, the most
cost effective and widely used is hydraulic fracturing, i.e. ‘fracking’ (DECC, 2014). Fracking is a
process which involves drilling multiple wells on a site, i.e. a ‘frackpad’, followed by blasting a
cocktail of highly corrosive chemicals and freshwater at high pressure to loosen the shale and
thereby release the trapped natural gas. The ‘frackwater’, a by-product combination of ‘produced’
and ‘flowback’ water, is sucked back up through concrete encased pipes, followed by directing the
flow of released shale gas from the fracked formations (DECC, 2014). Frackwater is deemed as
highly toxic and radioactive (Kharaka et al, 2013), underscoring the need for it to be carefully
managed and prevented from contaminating water sources. !
2.2.1 Environmental impacts of fracking
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Water !
Energy companies can apply for water extraction licenses in the U.K., allowing them to extract a
certain amount of water per site, the quantum essentially depending on the size of the operational
requirements (DECC, 2014). However, outsourcing the management of water supply and handling
of frackwater to water supply and sanitation companies is cost effective and preferable. The most
ecologically sensitive manner in which freshwater and frackwater can be handled is if significant
investments are made in piping systems to transport the water back and forth between the wells and
the operational facilities of water management companies, however, considering the average
lifespan of a well is between 5-10 years (Heinberg, 2013) it makes little business sense to invest in
installing extensive water piping infrastructure. Instead, the most cost effective method is adopted
where transporting freshwater and frackwater back and forth is undertaken by trucks. The fear of
the trucks crashing is always prevalent where incidents have been reported, the contents released
into the surrounding water systems causing irreversible ecological damage (Schafer, 2014). In some
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American states, regulation allows operators to simply let frackwater rest in open air evaporation
pits, which can be poorly constructed and thereby lead to leakages which contaminate aquifers
(Rahm, 2011). Untreated frackwater entering into the water cycle can drastically reduce the quality
of groundwater, pose a threat to public health, disrupt ecosystems and hypothetically increase
operational costs for water companies that have to invest in more infrastructure to treat groundwater
before supplying it (Rahm, 2011). According to Mackay et al (2014), fracking for shale gas is not a
particularly water intensive process relative to the extraction of oil and coal, stating that the use of
water in fracking is predominantly at the front end of extracting shale gas where each fracking
operation requires 9-27 million gallons of water. However, Mackay et al’s (2014) claim is vague
where the size of the frackpad is not stated, which is then countered by Wood et al’s (2011) 54-174
million litre estimate to fully frack a 6 well frackpad. Clearly, the scientific debate regarding the
water intensity of fracking and resulting contamination threat is ongoing and beyond the scope of
this dissertation, prompting the author to adopt the precautionary principle. !
Greenhouse Gas (GhG) Emissions !
Once the frackwater is extracted from the well, the released shale gas is guided back to the surface
using the same concrete encased piping systems. Howarth et al (2011) suggest that faulty concrete
casings have led to fugitive natural gas emissions of between 3.6 to 7.9% of the extracted amount
which when compared to coal, the GhG footprint of shale is at least 20% greater over a 20 year
horizon. The findings of Howarth et al’s (2014) study is based on the American fracking experience
where the vast majority of wells in the USA suffer fugitive emissions since operators engage in cost
cutting in the casing process followed by a lack of regulation enforcement by the Environmental
Protection Agency. Anecdotal reports also suggest that faulty pipe casings have led to groundwater
aquifers becoming contaminated with methane. Wood et al (2011) substantiate the anecdotes by
highlighting the worrying rise of a range of neurological diseases amongst community members
whose properties sit on top of horizontal fracking wells as well as a range of ecosystem disruptions
caused by methane contaminated water and noise pollution. !
2.2.2 Disrupting hydro-social relationships
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‘The cultural meanings and values associated with water are very powerful and have proved
remarkably consistent over time. All out experiences of water are involved, and water is central to
some of our most important social rituals. Baptism is an obvious example, but many ordinary
activities, such as bathing or watering the garden, are highly ritualised too, and reflect ideas and
beliefs about water as well as practical needs’ !
- Veronica Strand, Evaluating Water: Cultural Beliefs and Values, (Water UK, 2005) !
Discussing water merely as an factor input into a neoliberal economic order devalues its
anthropological value in communities and its keystone importance in ecosystem stability (Finewood
et al, 2005). Water has played a pivotal role in the development of society, inspiring religion, art and
literature which combined are the prolific building blocks for civilisation. Permanently removing or
defiling such a metaphysically important and finite centrepiece that binds community and
ecosystem threatens their very existence, something that must from a deep ecology and strong
sustainability perspective be kept at the very forefront of energy policy making and economic
planning (Perrone et al, 2011). Removing water from the equation of life would render it
unbalanced and therefore nonexistent.
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British communities affected by the issuing of exploration licenses to shale operators have taken to
the streets over the past two years, protesting against the very idea of fracking the countryside and
potentially disrupting rural economies and ecosystems. Protests in Balcombe, West Sussex and
Barton Moss, Lancashire, have often become violent with the police using heavy handed tactics to
remove protestors from streets and the properties of landowners who are complicit with energy
companies (Star, 2014). The community of Balcombe filed for a legal block on fracking in its
locality (BBC, 2014) preceded by high profile lawsuit filed by Greenpeace (Greenpeace, 2013),
indicating that communities and civil society are becoming more vocal and very effective in halting
fracking progress. Given that communities are significant political stakeholders, a lack of
engagement coupled with suppression and marginalisation through the state security and the
conservative media apparatus seems politically suicidal, especially in light of the upcoming 2015
elections and a recent yougov.com poll that suggests that more the 47% of the nation is against
fracking (Vaughan, 2014). !
2.3 The political ecology of energy security in the U.K.
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2.3.1 Energy paradigms in the U.K. - a brief history
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The industrial revolution was fuelled by rapid innovations in energy production where combustion
of coal was a breakthrough, driving an engine of economic growth and subsequently leading to
improvements in the quality of human life never before experienced in history. Energy catalysed the
transition from agrarianism to industrialisation in the U.K., where manufacturing jobs led to rapid
urbanisation and the growth of iconic cities (Unruh, 2000). Urban growth has led to greater
demands for affordable and more efficient energy as well as water supply and sanitation services.
Food, housing, healthcare, energy and water emerge as key public goods without which it becomes
virtually impossible to sustain an agglomeration of humanity and the new economic order. Hence,
energy security is framed as a national security agenda where the formation of energy policy
becomes federalised, removed from public debate and wider stakeholder consultation (Helm, 2007). !S
ince the end of the Second World War, the U.K. has undergone three energy paradigms, the first
one being nationalisation and the governmental priority to provide affordable energy as a right to
every household (Pearson et al, 2012). The second paradigm was triggered by Thatcherite
privatisation policies where overcoming public sector inefficiencies with neoliberalism was the
strategy du jour, leading to deregulation and the monumental rise of the private energy market
which ushered in nuclear power to replace inefficient coal (Kuzemko, 2012). The third great ‘gestalt
switch’, or radical shift, into the next energy paradigm occurred post the signing of the Kyoto
Protocol where the U.K. along with other Annex 1 countries stated GhG emissions reduction targets
where the term ‘low carbon’ began to surface in political dialogue, especially in the context of
electricity production (Pearson et al, 2012). Further entrenching the sustainability concern of
energy security, by 2002 there was a substantial decline in North Sea oil and gas production which
made the U.K. a net energy importer after decades of being an exporter, therefore burning a hole in
the country’s balance sheet (Fudge et al 2011). A ‘Review of Energy’ was commissioned by the
Cabinet Office, where low carbonisation of energy in lieu of declines in the country’s oil and gas
reserves was suggested (Cabinet Office, 2002). Therefore, ‘low carbonisation’ as a strategic
paradigm shift in U.K. energy policy was viewed from the angles of preventing climate change as
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well as meeting rising energy demand in an affordable manner whilst ensuring the country’s books
stay in the black. !
The ambition of low carbonisation defines the third and currently prevailing energy paradigm,
where the U.K. has made significant strides in the production of renewable energy through onshore
and offshore wind, hydropower and more recently solar energy (Helm, 2007). These three distinct
periods of energy policy development in British history post world war 2 when combined form
what is known as the UK’s energy ‘trillema’ (Bolton et al, 2012), where each government in power
is now primarily concerned about three key factors when formulating energy policy: ‘Affordability,
Efficiency and Low Carbonisation’ (Fudge et al, 2011). Missing from the discourse on energy
paradigms in the U.K. so far is the increasing water intensity of energy production. Whilst
affordability, efficiency and low carbonisation remain key energy security concerns for policy
makers, the lack of political discourse on water security in the context of energy security is
concerning considering the current quantum of water required for energy production and the threat
of contaminated water from fracking entering the water system. !
2.3.2 The water-energy nexus: A fourth energy paradigm?
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Water and energy already have intertwined destinies, where the public provision of each one of
them depends on the availability of the other. The U.K.’s electricity sector is responsible for 32% of
the country’s carbon dioxide emissions, and has been identified as a key component of the UK’s
low carbonisation efforts (Byers et al 2014). Surprisingly, the largest user of water in the U.K.,
accounting for 45% of resources used, is the energy sector, which currently relies on direct
abstractions from aquifers, rivers and the sea (Water U.K. 2005). The bulk consumption of water for
energy production is essentially assigned to coal powered thermal stations, nuclear power stations
and combined cycle gas (CCG) turbine stations (Byers et al, 2014). To produce 1KW of electricity
requires approximately 140 litres of water in fossil fuel plants and 205 litres for nuclear power
plants (Water U.K. 2005). It is therefore alarming when Byers et al (2014) state that ‘water
availability and use is not normally considered within UK energy strategy’. Siddiqui et al (2014) go
further to state: ‘The interdependent relationship of water and energy - referred to as the water-energy
nexus is of growing importance in resource planning and policy’. With the advent of
renewable energy technologies like wind and solar, the prospect of decoupling water and energy
production seemed possible where water usage for generating solar and wind power is significantly
minimal compared to extracting and processing fossil fuels (Byers et al, 2014). Therefore, the
water-energy nexus becomes incredibly relevant in the context of the coalition government’s dash
for shale gas and the existing water intensity of energy production in the U.K. !
2.3.3 Conservatives: torn between green and brown?
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Starting strong !
The Conservative party’s pre-election campaign leading to its victory and formation of a coalition
with the Liberal Democrats was awash with promises of ushering in a sustainable future where the
Conservative party temporarily but symbolically changed its logo’s iconic navy blue colour to a
light green brandishing images of the now Prime Minister, David Cameron, riding a bicycle
(Huhne, 2013). The coalition government is noted for auspiciously beginning its term by ushering
in ‘the green deal’, providing significant policy support for renewable energies by introducing a
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range of incentives such as attractive feed in tariffs and tax subsidies for offshore and onshore wind
farm and solar developers (Pearson et al, 2012). !
‘Cut the green crap’! !
The subprime crisis of 2008-2009 plunged the U.K., along with the United States, into a protracted
recession, the fiscal effects of which is still being felt today. In line with the Conservative party’s
additional pre-election promise, a substantial reduction in public spending in a bid to achieve fiscal
austerity and discipline ensued. The Chancellor of the Exchequer, George Osborne, naturally
focused the fiscal austerity lens on the landmark ‘green deal’ indicating that promoting renewable
energy adoption was creating havoc in the country’s balance sheets (Huhne, 2013). In light of
detailed scientific reports emerging from the Royal Society et al (2012) and conservative leaning
think tanks that confirmed the U.K.’s significant shale gas reserves, bolstered by a shale gas ‘energy
revolution’ taking place in America, shale gas began being positioned in cabinet circles as an
important component in the U.K.’s low carbon energy security strategy, with the promise of
delivering immediate economic results since the U.K. already has a mature oil and gas industry
along with a gas ready heating infrastructure. Renewable energy started being characterised as a
drain on public finances and people’s energy bills, a long term bet with limited political mileage
where shale gas was hailed as the fiscal saviour that will attract domestic and foreign direct
investment. In the heat of a frustrated moment, in November 2013 David Cameron reportedly
exclaimed, ‘Cut the green crap!’ (Mason, 2013), which triggered adverse reactions from offshore
wind farm developers who took it as a clear sign that the coalition’s initial financial support will
thin out sooner rather than later. As a result, investors immediately pulled out of one of the U.K.’s
largest offshore wind farm, the Atlantic Array project (Chazan et al, 2013). The future of renewable
energy adoption in the U.K. currently hangs by a thread that could snap at any given time where
clean energy investments declined from £8.62 billion in 2012 to £7.9 billion by the end of 2013
(Goldenberg, 2014). Whilst writing this, British solar developers have filed a lawsuit against the
coalition government, demanding a lump sum payout for £130 million for the expected loss in
revenue from the revocation of the solar feed in tariffs agreements. The party’s brand colour has
stubbornly reverted to a stoic navy blue and no mention of its pre-election green promises can be
found on its official website. Also coming increasingly under the austerity lens is local government
spending, substantially reducing direct public expenditure in rural communities (Watt, 2014), a
point that will be expanded upon in the conclusion from the perspective of environmental ethics and
justice. !!!
Vested Interests !
Key to undermining the ‘green deal’ is the Chancellor of the Exchequer, who is vehemently pro
shale gas, absolutely convinced that it will stir an economic miracle in the country. George Osborne
sits in the centre of a cronyism charge by the liberal media where is father in law, Lord Howell, a
conservative peer who serves as a minister in the foreign office also serves as the president of the
British Institute of Energy Economics (BIEE), an influential industry body that is funded by British
Petroleum and Shell (Merrick et al, 2012). For a Chancellor concerned about public spending
austerity by citing the green deal as a drain on the country’s financial resources, Mr. Osborne is
evidently inconsistent in the application of that argument in the context of shale gas policy. Case in
point, £500 million tax breaks for energy companies is one of the many concessions being offered
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to establish the U.K. a ‘gas hub’ (Merrick et al, 2012). The Conservative party’s attitude towards the
fossil fuel industry is hardly surprising considering a significant portion of party donations are
received from the oil and gas industry as well as the financial sector made up of banks and hedge
funds which are deeply invested in energy companies (McClenaghan, 2011). A clear example of the
oil and gas sector’s direct influence in Whitehall is characterised by the presence of Lord Browne,
ex-CEO of British Petroleum and currently the Chairman of Caudrilla Resources, a significant shale
gas operator in the U.K, whilst serving as a member in the House of Lords and as a key energy
advisor to the Prime Minister (Carrginton, 2013). !
Weak leadership in the state’s environmental regulatory apparatus !
Charles Hendry, ex-Minister of State for the Department of Energy and Climate Change (DECC), is
on public record stating that the UK should not ‘bet the farm’ on shale gas in an attempt to mimic
developments in the USA (Hendry, 2012). Mr. Hendry was removed from his position replaced with
a more pliant Ed Davey. In July 2014, Owen Paterson, the Secretary of State for Environment, Food
and Rural Affairs, resigned from the post in the Prime Minister’s turbulent cabinet reshuffle where
Mr. Paterson claimed the he was sacked in order to appease ‘the green blob’ (The Huffington Post
UK, 2014). George Monbiot, a prominent environmental author and activist, proclaims that Mr.
Patterson was as the worst environment secretary the U.K. has ever had the privilege of hosting. A
noted climate sceptic (Huhne, 2013) and vociferous shale gas proponent claiming that shale gas is
an ‘unexpected and huge windfall’ (Watt, 2012), never once has he publicly raised caution
regarding the potentially adverse impact its extraction could have on water resources, biodiversity,
public health and rural economies which should have been his primary concern as the country’s
environment secretary. The recently retired Environment Agency (EA) chief, Chris Smith is on
record stating that fracking should be allowed in the country’s national parks (Dearden, 2014),
despite the known threats to water sources, as stated earlier. !
2.3.4 Countering the rhetoric
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he promise of strong environmental regulations !
The nodal governmental departments involved in shale gas policy formation in the UK have been
identified as the Department of Energy and Climate Change (DECC) and the Department for Food,
Environment and Rural Affairs (DEFRA). Within the DECC, the Office of Unconventional Gas and
Oil (UOGO) sits within the energy development unit of the DECC where it overseas the licensing
of oil and gas exploration and production of natural resources. Within DEFRA, the EA is
responsible for approving shale gas operations basis the submission of an environmental impact
assessment and disclosure of chemicals used in fracking fluids. The EA is also responsible for
conducting site inspections to ensure the shale gas operators are in ecological compliance. The
Drinking Water Inspectorate (DWI) is another agency within DEFRA that periodically assesses the
quality of water in from various sources in the water catchment area. The DWI and EA mandates
are not only informed by best practices developed domestically, but are additionally compliant to
European Environment Agency (EEA) guidelines. With regards to the EEA’s position on shale gas
and hydraulic fracturing, it has disclosed a set of best practices and leaves the decision of extracting
shale gas to national governments since the determination of energy security is a sovereign issue
(Potocnik, 2014). OFWAT is the price regulator for the U.K. water sector. !
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DEFRA declined a recently filed request for information which asked the government to disclose
how shale gas policy is being formed, stating: ‘We have had to balance the public interest in
withholding the information against the public interest in disclosure. We recognise that there is a
public interest in disclosure of information concerning policy development in relation to shale gas.
On the other hand, there is a strong public interest in withholding the information because it is
important that officials can consider implications of potential impacts and scenarios around the
development of the shale gas industry and to develop options without the risk that disclosure of
early thinking, could close down discussion’ (DEFRA, 2014). It further states: ‘DEFRA’s
responsibility in respect of shale gas is primarily in respect of mitigation of potential environmental
impacts and not to consider the economics of shale gas development’. ‘DECC are the overall lead
department for shale gas’ (DEFRA, 2014). Bearing in mind this response, the relationship between
the DECC and DEFRA on shale gas seems one way, instructional. Given the ecological sensitivity
of onshore oil and gas extraction, it is unnerving that DEFRA has been relegated to simply
mitigating environmental impacts instead of helping developing a strong sustainability pathway for
energy security, especially with regards to shale gas and water. !
Undeniably, the U.K. has a strong environmental regulatory framework to ensure shale gas
operations are safe and do not negatively impact water quality where the disclosure of fracking fluid
contents has been made mandatory, a progressive step when contrasted with the American
regulatory scenario (DECC, 2014). However, during Mr. Paterson’s leadership at DEFRA, the EA’s
ability to regulate shale gas operations and other matters like flood prevention and environmental
emergency responses was to be substantially weakened with the announcement of a 15% staff cut
by October 2013 and further budget cuts as part of the Chancellor’s public austerity drive
(Shankleman, 2014). Weakening the EA in any form in the backdrop of rising global concerns
towards climate change, freshwater availability and dwindling biodiversity is tantamount to bad
governance, a glimpse of which came into view in the lacklustre and delayed response to the UK
floods in late 2013 which caught a substantially weakened EA on the back foot, deeply
embarrassing the coalition government and eventually leading to Mr. Patterson’s resignation
(Shanklemen, 2014). Therefore, in light of DEFRA’s diminished role in establishing shale gas
policy and notable reductions in enforcement capabilities, one can justifiably question the
regulatory capability of the EA in the context of fracking and the expected quality of response to
related ecological emergencies. !
Natural Gas is a ‘low carbon fuel’ rhetoric !
Natural gas, i.e. methane, is certainly cleaner than coal and has been repeatedly dubbed as a ‘bridge
fuel to a low carbon future’ which will facilitate the U.K.’s goal of 80% emissions reduction by
2050 and thereby legally adhere to the 2008 Climate Change Act (Stevens, 2012). This assertion is
based on the belief that more efficient combined cycle gas (CCG) turbines and large gas power
plants will steadily replace heavily polluting coal power plants coupled with the ambitious
proliferation of carbon capture and storage (CCS) technology, which has yet to be commercially
proven and implemented in the U.K. (Smith, 2010). Given the reality of fugitive emissions
observed at fracking wells, as discussed earlier, the rhetoric of natural gas being a ‘low carbon fuel’
deserves to be separately investigated through a life cycle analysis (LCA) and is beyond the scope
of this dissertation. Nonetheless, scholars like Howarth et al (2010) are beginning to conduct LCAs
at various sites where the results indicate that shale gas extraction using hydraulic fracturing is not
as low carbon as claimed to be. !
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Jobs! and lower energy bills !
The American shale gas boom is repetitively cited by the coalition government, industry groups like
the Institute of Directors and right wing think tanks as an inspiration for tapping the U.K.’s shale
gas reserves, corroborated by the Wood Report (2014) and earlier by the Royal Society et al (2012).
Undoubtedly, shale gas has revolutionised the American energy landscape, enabling that country to
not only become a net energy exporter thereby earning substantial foreign revenue by selling gas on
the international market, but also to drop the price of natural gas domestically and facilitate an
economic resurgence post the subprime crisis (Taylor, 2013). The prospect of job creation by the
shale gas energy sector brings on board substantial political support required to push forward
legislation and fast track energy policy shifts. The age old ‘jobs and GDP’ political rhetoric is
therefore seeing a resurgence in the U.K. It is important to note that the oil and gas sector has
historically been the heavyweight used to balance the U.K. budget (Porter, 1986), coupled with it
being a key Conservative party constituent, it is not surprising that job creation is still narratively
pegged to a strong fossil fuel economy. At a time when a rapid proliferation of low carbon or green
collar skills should be a priority given of the urgency of climate change (Jagger et al, 2012), the
notion that more carbon intensive jobs through a shale gas revolution will be created only further
deepens the British economy’s carbon lock in. !
‘Shale gas will lead to a reduction in energy prices for consumers’ is another political claim made
by the Prime Minister, being denounced by academics and prolifically expanded on by the liberal
and conservative British press (Martin et al, 2013). Since the U.K. participates in a common
European gas market, any natural gas extracted in the U.K. will be pooled in with gas from other
European countries and bought back at the market rate, hence, there is practically no guarantee that
consumers in the U.K. will enjoy lower energy prices in the medium to long term. Unless the
Conservative party’s noted Eurosceptism actually materialises into a British withdrawal from
binding European agreements, factors like the current conflict between Russia and the Ukraine will
continue to affect European gas prices since the supply of a vast bulk of gas depends on that
geographical region’s stability. Charles Hendry, ex-head of the DECC publicly stated, ‘We may face
a golden age for gas, but don't assume it will be cheap. 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’ (Doward et al, 2012). This point has also been publicly corroborated by
Lord Browne (Carrington, 2013), earlier identified as the Prime Minister’s energy advisor and key
influencer with significant vested interests in shale gas.
Dealing with geopolitical realities !
Given the current geopolitical climate characterised by the Russia-Ukraine conflict coupled with the
civil turbulence in Iraq, which threaten future gas and oil supply respectively, it is only natural for
any responsible government to be concerned about sustaining fossil fuel dominated energy security
where securing a steady supply of cheap gas is clearly imperative for the coalition government.
Balancing present and medium term demand for gas in the country with longer term climate change
concerns may validate an ‘all of the above’ approach to energy planning, however, as discussed
earlier, fracking shale gas is not free from environmental concern nor does it comprise a strong
sustainability pathway. !!!!
! ! Page 12 of 29

2.4 The U.K.’s water resources - a lurking economic threat
!
The British water sector was privatised in 1989 (Water U.K., 2014), another Thatcherite move,
where 10 public regional water authorities were sold off to private investors and OFWAT and DWI
were created as regulatory agencies. Water U.K., the main industry body representing the U.K.’s
water supply and sanitation companies, succinctly states the value of the UK water sector while also
stating the quantum of available freshwater resources: ‘Water assets have an estimated replacement
value of over £200 billion having been built from Roman times. The U.K. has over 400,000
freshwater ponds and lakes, covering 190,000 hectares and 70,000km of rivers. Drinking water
comes from 1584 boreholes, 666 reservoirs and 602 direct abstractions. Water is treated at 2,500
water treatment works and delivered through 325,000 km of water main’ (Water U.K., 2005). Water
supply and sanitation companies are legally bound by the government to provide high quality
drinking water to the public and inform the public accordingly if there is any change to the high
level of quality that is expected (Water U.K., 2005). !
Whilst the U.K. certainly has ‘water stressed’ areas, as a country it by no means water deficient
(Environment Agency et al, 2013). Nonetheless, any contamination threat to water sources from
shale gas operations must be met with a stringent regulatory regime, where on the surface the
country seems institutionally and legally prepared, but as highlighted earlier, may not be equipped
to regulate effectively. With regards to the issue of scarcity and over abstraction of freshwater, the
Environment Agency et al (2013) state, ’119 water resource catchment units in England and Wales,
18% and 15% already find themselves in the categories of over licensed and over abstracted, with
the consequence of unacceptable environmental damage at low flows’. A further 35% of catchment
units have ‘no water available’ for further water abstraction licensing at low flows (Environment
Agency et al, 2013). !
The pricing of water is clearly determined by the capital expenditure on building and operating
water assets where returns on investment are then dependent on the rate charged to households,
industry and agriculturalists. Therefore, any hypothetical increase in operational costs, say on
account of accommodating the activity of hydraulic fracturing for shale gas, will naturally pose as a
challenge to the U.K.’s water companies that are legally bound to supply high quality water to
households, businesses and farms. !
2.5 Hypothesis
!
This paper’s key hypothesis is that the U.K.’s water sector has not been consulted by the
government agencies involved in developing policy for shale gas before the issuance of exploration
licenses to energy companies. Secondly, the author believes that water companies will view the
extraction of shale gas using the hydraulic fracturing technique as a significant business risk.
Finally, the author proposes that the water sector is under confident of the EA’s and DWI’s
capabilities to enforce strict environmental regulation. !
3. Methodology
!
! ! Page 13 of 29

In order to engage with as many of the U.K.’s private water companies the author chose to conduct
an online qualitative multiple choice survey using www.surveymonkey.com. A list of private water
sector companies was compiled and corroborated with a list available on the Water U.K. website.
The sector comprises of twenty three large, medium and small water companies in terms of the size
of their network areas and of the range of services they provide. A total of eleven companies
responded to the survey and have been assured by the author that their identities will not be
disclosed. !
3.1 Survey style
!
The survey was designed in a manner so as to evoke simple ‘yes’ and ‘no’ responses to questions
that are designed to prove the hypotheses. Since this dissertation is primarily focused on identifying
the lack of water sector inclusivity in the political ecology of energy policy setting in the U.K., the
survey takes a design that facilitates a qualitative analysis where averages of the results are used to
infer conclusions. In order to forward the online link to the survey to the appropriate personnel
within the identified companies, the author called central switchboard lines to establish primary
contact with the appropriate department and authorised representatives.
!
3.2 Limitations
!
Repeated attempts to contact Water U.K.’s policy expert who leads all coordination with
environmental managers working at all of the U.K.’s private water companies were met with a lack
of response. The author believes that with guidance from Water U.K., the water industry body that
chiefly lobbies the government in the interest of the water industry, would have greatly aided the
refinement of the survey and added more nuance to this study considering the organization recently
signed a memorandum of understanding with U.K. onshore oil and gas (UKOOG) industry group to
facilitate dialogue between water and shale gas energy companies on national and regional levels
(Water U.K., 2013). To its credit, Water U.K. has repeatedly and publicly raised the importance of
making private water companies statutory consulters prior to shale gas policy formation to the
government and shale gas operators (Marshal, 2013). As the official voice of the U.K. water sector,
additional insights on Water U.K.’s interactions with UKOOG, individual shale gas operators and
concerned government agencies would have better informed the author in shaping the narrative.
Lastly, due to the paucity of time, the author was unable to meet the survey respondees in person to
further substantiate their responses and thereby add more qualitative nuance to the analysis. !
3.3 Improvements
!
Whilst the survey is useful to draw inferences to supplement the dissertation’s neo Gramscian
narrative, the results are not definitively conclusive and deserve further analysis to draw factorial
correlations. In hindsight, the author believes the survey could have been designed more carefully
to evoke more detailed responses and encouraged all of the companies to disclose information,
since some of the responding companies skipped answering certain questions. Nonetheless, the
author believes that the results are fairly representative of the sector since it elicited responses from
47% of the U.K.’s private water companies. !P
lease refer to Appendix 1 to view the survey format.
! ! Page 14 of 29

!
4. Survey Analysis
!
Whilst all the companies surveyed supply water, 90.9% of them also offer water treatment services
and just 45.5% of them are engaged in sewerage and sanitation and wastewater treatment,
indicating that not all private water companies provide the broad range of water management
services. Considering aquifers are most at risk from hydraulic fracturing operations, it is important
to highlight that all the surveyed companies abstract a portion of their water from aquifers where
63.4% admit to operating in ‘water stressed areas’. Three companies declined to answer questions
relating to the issuance of shale gas exploration licenses, nonetheless, 62% of the remaining eight
companies indicate that shale gas exploration licenses have been granted to energy companies
operating in their network area with 25% indicating that they are unsure if licenses have been
granted at all. All of the eight companies that proceeded further with the survey state that the DECC
had not consulted them before issuing exploration licenses, with 75% stating that neither has
DEFRA. Considering these stark results, the author’s first hypothesis regarding the exclusion of
water companies from the shale gas policy formation process stands confirmed. !
Going further, all eight companies indicate that none of the shale gas operators that have received
exploration licenses have contacted them to discuss abstraction, supply and flowback water
management, thus further strengthening the author’s first hypothesis. Overwhelmingly, 87.5% of
the eight companies suggest that shale gas extraction using hydraulic fracturing presents a mildly
negative, i.e. low risk, to their business models, with only one company indicating that it presents a
mildly positive business opportunity. Whilst the risk perception amongst water companies is
prevalent, albeit low, the author’s second hypothesis can stand firm but must be further
substantiated with follow up interviews and research. !
87.5% indicate that they have the operational capabilities to supply freshwater or collect or process
frackwater from shale gas operators, which does allay some fears regarding their preparedness.
87.5% of the eight companies state that their customers are concerned about fracking and have
expressed concerns to them, indicating significant public interest regarding fracking and
confronting DEFRA’s rebuttal to not providing information regarding policy formation. The rating
average of the eight companies regarding their overall concern regarding shale gas fracking lies
between ‘mildly concerned’ and ‘neutral’, suggesting that the perception is somewhat measured and
not alarmist. Despite not being full consulted by the DECC or DEFRA, 50% of ten companies
suggest that they are satisfied with the current consultation process regarding shale gas policy with
the remaining 50% suggesting that they would like to be involved in the process. This statistic must
be treated with caution since a recent consultation feedback undertaken by the EA concluded that
the water sector demanded greater interaction with regards with shale gas policy development
(Environment Agency, 2014). Nonetheless, with such an even split in opinion, it can be inferred that
the water sector is not experiencing a heightened sense of panic with energy policy developments,
but are concerned nonetheless. !
In terms of whether the water companies believe that the EA and DWI are capable of enforcing
strict water regulation, 70% of the ten companies believe in the EA’s and DWI’s enforcement
capabilities with 20% expressing doubt and 10% declining to comment. This revelation negates the
author’s assumption and third hypothesis of the water sector displaying under confidence in the
! ! Page 15 of 29

EA’s and DWI’s capability to enforce strict regulation. Finally, out of the ten companies that
answered the question, all of them are engaged in making capital investments to optimise water
quality, 70% engaging in direct biodiversity conservation projects and 20% are experimenting with
payments for ecosystems services. !
5. Discussion Conclusion
!
5.1. Sharpening Environmental, Social Corporate Governance (ESG)
risk analysis
!
5.1.1 Threats to water sector investments and economic growth
!
As the survey indicates, all water companies incur capital expenditures to optimise water quality.
Therefore, with the advent fracking, short to medium term increases in capital expenditures and
operational costs could be experienced by water companies, which may impact future profitability
in the sector. Whilst the results of the survey are not conclusive on this point, investing in the
private water sector, in light of the shale gas phenomenon, must be treated with caution and
scrutiny. Inevitably private water companies will pass on rising costs to customers and since water
as critical public good that has an inelastic demand curve, customers are theoretically willing to pay
any amount for its consistent and high quality supply (Dinar et al, 2002). However, there may be an
optimal price beyond which water becomes absurdly unaffordable to households and businesses.
Should OFWAT be able to enforce strict pricing regulation, the challenge to stay profitable and
competitive in the water sector may prove harder and thereby force significant consolidation in the
industry where smaller water companies are bought out by well capitalised behemoths. In short,
increased water demands in energy production coupled with scarcity pressures exacerbated by
declining water quality on account of shale gas hydraulic fracturing can potentially put inflationary
strains on household budgets, manufacturing competitiveness, ecosystems vitality and ultimately
profitability in the water sector (Glassman et al, 2012). On the other hand, some investors see the
scaling up of capital expenditures and expansion of service provision by water companies on
account of fracking occurring in their network area as a valid investment opportunity (Impax,
2012). Scholars may therefore further expand on this note by forecasting future increases of water
prices in the U.K. in lieu of decreasing water quality on account of the proliferation of fracking near
prominent aquifers, thereby further investigating the broader threat to economic growth from
fracking for shale gas. !
5.1.2 Shale gas investments
!
Heinberg (2013), a known peak oil and peak shale gas proponent, highlights rapidly declining shale
gas yields and increasingly unfavourable energy return on energy invested ratios at various
American shale formations, substantially reducing the lifespan of each pad and thereby potentially
affecting returns on investments. In the U.K. significant hype in the energy industry was created
about the expected quantum of shale gas locked in the Weald Basin located in the South East of the
country, however, recent findings of the British Geological Survey conclude that the shale
formation in question holds an insignificant amount of gas, not enough for any fracking operation to
become commercially viable (Macalister, 2014). Having said that, shale formations across the
! ! Page 16 of 29

British geography vary significantly in terms of size and density, so it would be unfair to assume
that the rapid declines in production will be experienced at all plays. Nonetheless, reports of shale
gas plays initially thought to contain vast quantities of natural gas experiencing rapid declines
indicate an inherent long term financial risk in investing in the shale gas sector, therefore
demanding temperance in exuberant expectations. !
The distinct possibility of the ‘stranded assets’ hypothesis actually being realised in the near future
also raises concerns for the investment community. The ‘stranded assets’ theory asserts that oil, gas
and coal company market capitalisation may face significant devaluations since their stated fossil
fuels reserves may have to remain in the ground should governments adopt stricter GhG emissions
targets and budgets (CarbonTracker et al, 2013) given the threat of irreversible climate change
ensuing the doomsday scenario of global average temperature shooting beyond 2 degrees Celsius,
the point of no return (IPCC, 2014). Whilst oil and gas lobbies fight tooth and nail to prevent
governments from adopting strong and radical measures in order to protect their interests, the
International Monetary Fund’s recently declared strategy to engage with finance ministers to reduce
fossil fuel subsidies in a bid to become more fiscally disciplined (IMF, 2013) may tip the scales
against their favour. According to the Overseas Development Institute, the U.K. government
continues to subsidies the coal, oil and gas sectors by £2.6 billion per annum (Whitley, 2013).
Furthermore, large investment houses, like Blackrock, are already beginning to sharpen focus of
their ESG risk lenses by accommodating the stranded assets theory and developing fossil fuel free
funds and indices (Clarke, 2014). !
ESG risk analyses in financial institutions is putting pressure on companies, investors and
governments to adopt strong sustainability pathways, building significant momentum over the years
(Glassman et al, 2011). Financial institutions are also becoming increasingly concerned about
natural capital risks, factoring in water related risks into their overall analysis and thereby adhering
to voluntary ESG commitments through disclosure initiatives like the Carbon Disclosure Project
and the Natural Capital Declaration. Clark (2014) indicates that transnational corporations have
already begun factoring in water scarcity as a natural capital risk and are making significant
investments to secure future supplies. Therefore, if we are indeed beginning to see investment
bubbles appear in the shale gas extraction sector, sharper ESG and natural capital risk focus at
financial institutions and corporations engaging in water sensitive behaviour then increasing water
risks for the sake of pursuing short term energy security through shale gas is deeply misguided and
economically shortsighted, hence weakly sustainable. !
5.2 Environmental ethics and justice
!
The U.K. may not face water scarcity issues as grave as Sub-Saharan Africa, the U.S.A., South
America and Asia, but pursuing shale gas will involve tradeoffs where energy security is sought at
the expense of wider economic security, as discussed and highlighted throughout this dissertation.
In the run up to the 2015 Paris COP where countries are expected to outline bold initiatives to
radically address climate change in light of the ominous findings of the IPCC’s fifth assessment
report (2014), the collective response of nations needs to be urgent. In 2013, the UK was the largest
installer of offshore wind in Europe installing 733 MW worth (Hope, 2014), positioning the country
as a mature international climate leader in an otherwise paralysed global environmental governance
setting, a recognition that will be squandered in its pursuit for shale gas. An international slowdown
in the response to climate change is now being viewed from the lens of environmental justice where
it is clear that the World’s poorest nations, which also happen to be predominantly agrarian and
! ! Page 17 of 29

based in the Global South, will suffer the greatest impacts of climate change with low lying areas
becoming inundated with flood water and water stressed areas suffering extreme drought (IPCC,
2014). Climate change is a systemic issue where emissions from one geography do impact the
global climate system. Climate models used to inform the IPCC report indicate that those impacts
will not be universal and the U.K. is forecasted to agriculturally benefit from a warming climate
(IPCC, 2014). Water availability on the other hand is a cumulative issue, where increasing U.K.
GhG emissions will affect water availability elsewhere. Hence, pursuing a shale gas strategy can be
perceived as a grave global environmental injustice imparted on the global south. This coupled with
disrupting domestic hydro-social relationships by reducing local government spending followed by
offering perverse cash incentives to accept fracking makes a strong case for weaving deep
environmental ethics and justice into energy policy discussions (De Mello Martin et al, 2014). !
5.3 Conclusion: Precaution, De-federalisation Integrated Resource
Planning
!
The key observation emanating from this study is that none of the water companies surveyed were
consulted by the DECC before the drafting of shale gas policy and issuance of exploration licenses,
despite the DECC being the lead agency for shale gas policy development. The lack of interaction
between the DECC and the water sector therefore falls in line with the historic trend of energy
policy not taking into account concerns from the water sector, strengthening an observation made
earlier by Byers et al (2014). As highlighted earlier, the water-energy nexus gains prevalence not
only in the context of drilling for shale gas using the hydraulic fracturing process but also the use of
water for the cooling of existing coal, gas and nuclear power stations. To reiterate another point
made earlier, the energy sector is currently the largest consumer of water in the U.K., hence its
efficient usage and the management of resulting wastewater to ensure public health and ecosystem
vitality must be made mandatory and reverent in energy policy development. DEFRA’s surprisingly
minimal engagement with the surveyed water companies deepens the ecological concerns of the
author where the need for DEFRA to proactively scale up engagements with the water sector on this
matter could not be more urgent, given that this is a part of its existing mandate. The science
regarding the environmental impacts of fracking on water, the atmosphere and the ecology is still
out and hotly contested where data quality in general needs tremendous improvement in order to
inform policy guided by environmental economics (Glassman et al, 2011). Therefore, since the
science is still debatable and motivated by political and economic ideologies, a sense of precaution
must prevail. !
Energy security has been and will continue to be a national security issue but safeguarding it from
wider consultations and factoring in broader natural capital risks and thereby going beyond the ‘low
carbon’ rhetoric is critically required given the broad range of economic implications for not doing
so. Whilst the focus of this dissertation has been on the lack of engagement by shale gas policy
makers with the water sector, a sector directly affected by fracking and whose destabilisation could
lead to significant natural capital economic risks going forward, the need for engaging with a
disgruntled and affected public must also feature prominently considering recent community
protests and civil society activism. So whilst public consultations in relation to shale gas policy
making should indeed take place, this dissertation has made the case for how the DECC and
DEFRA should at least begin with consulting the water sector as key stakeholders in a bid to avoid
future economic disruptions caused by the destabilisation of water security in order to achieve
weakly sustainable energy security. This approach still adheres to a neoliberal ideology that dictates
! ! Page 18 of 29

energy policy formation in the U.K., creating conducive and sustainable environments for all
business sectors to operate efficiently and thereby provide critical public goods at affordable prices
to the public. In this endeavour, energy policy setting must be de-federalised and become more
geographically focused so as to include local environmental concerns and impacts on affiliated
strategic resources, like water (Powers, 2012). !
Therefore, the fourth energy paradigm underscores the importance of including water security in
energy security debates using an integrated strategic resource planning framework suggested by
Siddiqui et al (2013), which is socially and ecologically inclusive at the local and community levels
in the hope of substantially mitigating natural and social capital risks to the economy, a thought
echoed by Rahm et al (2012). This would require substantial institutional restructuring (Holahan et
al, 2013) where DEFRA’s agencies along with the Department of Communities and Local
Government start playing instrumental roles in energy policy development and mobilising public
participation in energy policy decision making, in line with the Aarhus Convention (1998) which
was signed by the U.K.. Scott et al (2011) echo a similar sentiment in a bid to make environmental
regulators more proactive in energy policy, instead of being passive recipients of instructions from
ecologically disconnected policy makers. Greater inclusivity and incorporating broader ecological
objectives into energy policy formation in the U.K. are key to following a strong sustainability
pathway and delivering local and global environmental justice, starting by taking water availability
and quality seriously and thereby broadening the trilemma to a ‘quadrilemma'. !
Acknowledgement
!
The author would like to thank Luke De Vial, of Wessex Water in helping to reach out other
environment managers in the U.K.’s 23 water supply and sanitation companies. This greatly helped
in expanding the reach of the survey. !
Word Count: 9502
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! ! Page 25 of 29

Appendix - Survey Format
!
Title of the survey: Assessing the risk perception of the UK water supply and sanitation sector towards
the exploration and extraction of shale gas !
Context of the survey: !
Dear Respondent, !
I am a MSc. Environment and Development student at the London School of Economics and Political
Science currently conducting research for my dissertation. The objective of my dissertation is to the assess
the primary preparedness of water supply and sanitation companies in the UK towards the exploration and
extraction of shale gas using the hydraulic fracturing process. This dissertation also aims to assess whether
government agencies involved in developing energy and water policy in the UK have appropriately
consulted water supply and sanitation companies whilst developing UK shale gas energy policy. ! The American shale gas boom has encouraged the UK government to explore the potential of extracting
shale gas which naturally occurs in blocks spread across the country’s onshore geography. The preferred
technique currently used to extract shale gas, based on experience in the USA, is a very water intensive
process known as ‘hydraulic fracturing’. The procedure involves blasting freshwater mixed with a cocktail of
chemicals at high pressure into shale rock formations to release trapped natural gas. The process results in
‘flowback' or ‘produced water’ which has to be treated and disposed off appropriately since it is deemed
unsafe to re-enter the drinking water system. Since water management is an integral part of the shale gas
extraction process, ensuring that water supply and sanitation companies are operationally prepared and
included in the policy development process is of critical importance from the perspectives of public and
ecological health. ! Therefore, your company’s response is significantly important for this study to appropriately inform policy
makers and further academic inquiry into the rapidly evolving shale gas energy and water nexus. Your
responses will be treated with utmost confidentiality where neither your identity nor your company’s name
will be disclosed in the final draft of this study. !
kind regards, !
Nitin Sukh ! Please sign this disclaimer before proceeding: I hereby confirm that I am authorized by my company to
respond to this survey. !S
urvey Questions: !
1) Please state which company you represent (This information will be kept confidential) !!
2) Please select the number of services your company provides
Water catchment area management
Water treatment
Water supply
Sewerage and Sanitation
Wastewater treatment
Other (Please state) !
3) Please select the from the following water sources your company abstracts water from
River
Stream
Reservoir
Aquifer
Other (Please state)
! ! Page 26 of 29

!
4) Does your company operate in a ‘water stressed’ area?
Yes
No
Can’t say !
5) Please select the from the following shale gas blocks fall in your water network coverage area that you are
aware of:
Weald Basin
Kimmeridge and Apthill Clay
Kellaways, Oxford Clay and Osgodby Formation
Lias
Marros Group
Bowland and Craven Groups
Upper Cambrian Shales
Not sure of the name, but we do operate on top of a shale gas block
Unsure if we do operate on top of a shale gas block
Our company does not operate on top of a shale gas block !
If your company ‘does not operate on top of a shale gas block’, please skip to question 15 !
6) Have any shale gas exploration licenses been granted to energy companies operating in your network
area?
Yes
No
Don’t know !
If you have selected ‘no’ or ‘don’t know’, please go to question 8 !
7) If yes, how many?
1
2
3
4
4
Don’t know !
8) Was your company consulted by the Department of Energy and Climate Change (DECC) and its related
agencies before the shale gas exploration licenses were granted?
Yes
No !
9) Was your company consulted by the Department of Environment, Food and Rural Affairs (DEFRA) and
its related agencies, i.e. the Environment Agency (EA), the Drinking Water Inspectorate (DWI) before the
shale gas exploration licenses were granted?
Yes
No !
10) Since the exploration licenses were granted, have the grantee shale gas operators held consultation
meetings with your company to discuss water abstraction, supply and wastewater treatment?
Yes
No ! 11) On the following scale, please identify how your company perceives the impact shale gas hydraulic
fracturing operations will pose on its business model? (scale from 1-5)
Negative (high risk)
Mildly negative (low risk)
No impact (no risk)
Mildly positive (low business opportunity)
Positive (high business opportunity)
! ! Page 27 of 29

!
12) If your company considers shale gas hydraulic fracturing a risk, how has it voiced its concerns to the
DECC, DEFRA and other concerned government departments and agencies?
Direct engagement
Through an industry group, i.e. Water UK, Society of British Water and Wastewater Industries, The
Chartered Institution of Water and Environmental Management etc.
Media campaigning !
13) Does your company currently have the operational capability to supply water to and/or process waste
water and flow back water from shale gas operators?
Yes
No !
14) If your answer to the previous question was ‘Yes’, please select all the services your company can
provide to shale gas operators:
Water supply
Removal of produced water from shale gas operations
Storage of fluids used for shale gas hydraulic fracturing
Treatment of ‘produced’ water, i.e. ‘frack’ water’
Disposal of ‘produced’ water in underground wells
All of the above
None of the above (Please state) !
15) Have your household, industrial and/or agricultural customers expressed concerns about future water
quality supply from your company vis a vis shale gas exploration and possible extraction?
Yes
No !
16) On a scale of 1-5, please state how concerned is your company of the potentially harmful effects of shale
gas hydraulic fracturing to water quality in your catchment area:
Not concerned
Mildly concerned
Neutral
Concerned
Very Concerned !
17) In your view, are the Environment Agency (EA) and Drinking Water Inspectorate (DWI) capable of
enforcing strict water regulation on shale gas operators?
Yes
No
No Comment !
18) Would your company prefer the DECC, DEFRA and other concerned government agencies to have a
deeper consultation process with water companies prior to developing shale gas energy policy and granting
licenses?
Yes
No
The company is satisfied with the current consultation processes !
19) Please select the range of activities your company undertakes to ensure water quality optimisation at the
source:
Direct or Indirect biodiversity conservation
Payment for watershed services/Payment for ecosystem services
Capital investments in water treatment facilities !
20) Do you mind being contacted to discuss these responses in more detail?
Yes
No ! Thank you for taking the time to complete this survey.
! ! Page 28 of 29

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