The United Kingdom’s rights-violating energy policies increasingly hinder energy development in the country, including in a core segment of the country’s manufacturing sector: the $33 billion chemical industry. Businesses in the UK pay two to three times what their competitors in the United States and the Middle East pay for energy, and UK chemical companies spend as much as 60 percent of their budgets on electricity.
UK energy producers could use fracking to produce more energy—if only the government would get out of their way.
The shale underlying the nation is estimated to hold enough natural gas to provide the UK’s energy needs for decades. This gas could be burned to generate electricity and processed into petrochemicals. Recognizing this opportunity, British prime minister David Cameron said:
I think we’d be making a big mistake if we didn’t think hard about how to encourage [natural gas production] right here in the U.K. We’re seeing businesses that have previously gone off to Mexico and elsewhere [return] to the U.S.
It’s good to see that Cameron recognizes some aspect of the problem at hand. Hopefully, he will take action on this knowledge and begin to loosen restrictions on energy producers.
Currently the UK government controls all the oil and gas below the ground, and, due to government restrictions, producers have drilled only an averaged of 19 onshore wells per year over the last century. In stark contrast, because the U.S. government substantially protects the rights of private owners to subsurface oil and gas, energy producers here drill and frack thousands of wells annually.
The productivity of the UK’s chemical industry is being throttled, not because the industry lacks technology, but because UK’s energy producers lack freedom.