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Agenda
1. A SocialLicencetoOperate?
2. TheUKShaleGasDebate
3. LearningfromLancashire
4. Conclusions
http://www.m4shalegas.eu
1.ASOCIALLICENCETOOPERATE?
DefiningtheSocialLicence?• ‘Asociallicenceisanunwritten socialcontractbetweenacompany
andcommunitythatisfundamentallyintangible,baseduponthepremisethatacommunityorsocietyisabletograntorwithholdsupportforanindustrytooperateinagivenarea.’(Luke2016)
• Not alegallicence.(Nelsen2006)• Cannotbegrantedbyformalcivil,political,orlegalauthorities.
(Parsonsetal.2014)• Continuousprocessoverthelifeofaproject.(Parsonsetal.2014)• AninstitutionwhereSLO‘rules’arenegotiatedbetween[mining]
companiesandlocalcommunitiesthroughoutthe[mining]lifecycle.(Prno andSlocombe 2012)
• Awayofconceptualisingcompanies’relationshipwithsocietyand/orlocalcommunities.(ParsonsandMoffat 2014)
WhyseekaSLO?• Tominimisethe(social)riskthat isgrowingwithashift
towardssustainabledevelopmentandtowardsgreaterinvolvementofnon-stateactorsingovernance.
• ToReduce‘communityresistance.’(ControlRisks2012)• Toenhanceacompanies’andindustries’reputation/trust• Tominimiseconflict• To‘Reducetheundesirablekindofpoliticalinstability’
(Boutilier 2014)
TheSLOPyramidModel
AsproposedbyThomsonandBoutilier (2011).
PrerequisitesforaSLO1. Provideeconomiclegitimacy(goodforme?): the
project/companyoffersabenefittotheperceiver.2. Scalebenefitsdependingonthecontext(whobenefits?):
individualcommunitiesorwidersociety?4. Gaintrustandsocio-politicallegitimacy(companygives
back):theperceptionthatthecompanycontributestothewell-beingoftheregion.Gaininteractionaltrust(communication):theperceptionthatthecompanyanditsmanagementlistens,responds,keepspromises,engagesinmutualdialogue,andexhibitsreciprocityininteractions
5. Gaininstitutionaltrust(companycares):theperceptionthatrelationsbetweenthestakeholders’institutionsandtheproject/companyarebasedonanenduringregardforeachother’sinterests
CriticalreflectionsontheSLO• IstheSLOspecifictoaparticularcommunityorcompany?• Whoisthecommunityandwhospeaksonitsbehalf?• CantheSLOempowerlocalcommunities?• Or,isitjustanotherCSR/PR‘tool’forgainingsocial
acceptance?• Isgranting/withholdingaSLOassimpleasavote?• OrdoesaSLOexistonlyintheabsenceof(substantial)
protest?• IsEnvironmental(Energy)Justiceamoreeffective
alternativeorcomplimentaryframingwithitsemphasison:distributivejusticeANDproceduraljustice?
2.THEUKSHALEGASDEBATE
Dec-13
Mar-14 Jun-14 Sep-14
Dec-14
Mar-15 Jun-15 Sep-15
Dec-15
Mar-16 Jun-16 Sep-16
Dec-16
TOTALSUPPORT 27 29 24 26 24 24 21 23 23 19 21 17 18
TOTALOPPOSE 21 22 24 27 23 26 28 30 29 31 31 33 31
Neithersupportnoroppose 48 44 47 45 49 44 46 43 44 46 46 48 49
10
15
20
25
30
35
40
45
50
55
Percentage
Residual‘Don’tknow’
NationalAttitudestowardsshalegasdevelopment(BEISWaveSurvey)
ArgumentsinFavourofShaleGas ArgumentsAgainstShaleGas
ItwillimprovetheUK’senergysecuritybyreducingthelevel ofgasimportdependence.
Shale gas(methane)asahydrocarboncontributestoclimatechange.
Itwillgenerate taxrevenueandimprovetheUK’sbalanceofpayments.
Theproblemoffugitiveemissionsreducesitsdecarbonisingbenefit.
Itwillresultinlowerenergybills. Investment inshalegasmayreduceinvestmentinrenewablesandshouldnotreceivetaxbreaks.
Itwillattract newinvestmentandcreatenewjobs. Itwillnotenergyreduceenergybillsorimproveenergysecurity.
Itwillpromotelocal (communitypayments)andregionaleconomicdevelopment(NorthernPowerhouse).
Thereisariskofinducedseismicity.
Itwillmake apositivecontributiontodecarbonisationandtheUK’sclimatechangepolicy.
Thereisariskofground waterpollutionanditwillplaceadditionalstressonwaterresourcesandwatertreatment.
Theregulatoryregimeisfitforpurposeandwillminimise theriskstotheenvironmentandhealthandsafety.
Therearesignificantnegativelocalimpacts inrelationtoair,noiseandlightpollutionandtrafficcongestions.
Itwillhaveanegativeimpactonthelocaleconomy.
Communitypaymentsamountto bribeandcreateofconflictofinterestforCountyCouncils.
Theregulatoryregime isinadequateandthereisinsufficientregulatorycapacity.
ContoursoftheUKShaleGasDebate
3.LEARNINGFROMLANCASHIRE
ASocialLicence toFrack?• ActuarialLicence:the
regulatorystructurethatcompaniesmustadheretoforlawfuloperationandthereforeformalandenforceable.
• PoliticalLicence:national,regional,localgovernmentsupportforindustry.
• SocialLicence:socialacceptanceandapprovalofcompanies,industriesandtheiroperations(afterMoffat andZhang2014).
TheSAPModel—reproducedfromBice,Brueckner andPfoor,(Forthcoming)
Central
Local
Central
Central
Local
ActuarialLicence:ShaleGasRegulationintheEngland
Central
PoliticalLicence:Goingalloutforshale!
"Akeypartofourlong-termeconomicplantosecureBritain'sfutureistobackbusinesseswithbetterinfrastructure.That'swhywe'regoingalloutforshale.Itwillmeanmorejobsandopportunitiesforpeople,andeconomicsecurityforourcountry.”
PrimeMinisterDavidCameron,13January2013
IntheNationalInterest!My Rt Hon Friend Greg Clark (Secretary of State for Communitiesand Local Government) and I wish to set out the Government’sview that there is a national need to explore and develop ourshale gas and oil resources in a safe, and sustainable and timelyway, and the steps it is taking to support this. In laying thisstatement before Parliament, it formally replaces the Shale Gasand Oil Policy Statement issued by DECC and DCLG on 13 August2015. This statement to Parliament should be taken intoaccount in planning decisions and plan-making.
AmberRudd,SecretaryofStateforEnergyandClimateChange16September2015
ShaleGasandEnergySecurity?“I look at shale gas through the lens of energy security.”
“It is primarily an energy security issue for me. We import alot of gas. If we have the capacity to generate our own gas inthis country and we can do it while reassuring people aboutthe impact on the environment, personally, I think it would beirresponsible to future generations not to answer thequestion can we do it.”
NickHurd,MinisterofStateforClimateChangeandIndustry,10January2017
APoliticalLicenceinLancashire?
"A local council, made up of councillors democratically elected by localpeople, and charged with serving their interests, is exactly the rightbody to make decisions on local matters. It is clear that thegovernment supports the development of a shale gas industry, but Iwould ask them to do more to address the concerns of localcommunities and the councillors who represent them by supportingthe best environmental controls.”
LancashireCountyCouncil,StatementinresponsetoSecretaryofState'sdecisiononplanningappealsregardingshalegasexploration,6October2016.
ASocialLicence toFrack?
TheIndustry’sCommunityCharter
• £100,000 per site will be paid tothe local community situated nearto each exploratory (hydraulicallyfractured) well site. This will bepaid by the operator, regardless ofwhether or not recoverabledeposits are found;
• 1% of production revenues will bepaid to communities during theproduction stage, before theoperator has accounted for theircosts.
Community Engagement Charter
Oil and Gas from Unconventional Reservoirs
The UK Onshore Oil and Gas industry has been in existence for over a hundred and fifty years and has drilled over 2,000 wells, currently producing over 20,000 barrels of oil equivalent per day at 120 sites. Our industry is set for potentially major expansion with the onset of exploration for oil and gas from previously undeveloped sources and with that we must make sure that the communities we work within understand what we are doing, how we are doing it and the steps we will take to mitigate concerns around safety, noise, dust, truck movements and other environmental issues. The economic benefits of our industry will be energy security, economic growth and revenue to the Exchequer potentially for decades to come. Nationally, our footprint on the ground will be small in comparison to the likely contribution we will make to Britain’s economic wellbeing; however we must recognise that our social licence to operate is linked to ensuring that we engage properly with the local communities that host our operations on behalf of the nation. Openness and transparency has to be at the heart of everything we do. This document sets out the industry’s charter for community engagement. All operators displaying our logo will adopt these as minimum standards and will be measured against them on a regular basis. Each operator will report annually to UKOOG on their performance and UKOOG will produce and publish an annual industry report which it will publish on its website. Any failure to comply will result in a loss of use of the UKOOG logo and ultimately of membership. Ken Cronin, Chief Executive
Our Guiding Principles
Aim To ensure open and transparent communications between industry, stakeholder groups and the communities in which we operate.
Objectives Identify and proactively address local issues and concerns. Facilitate the sustainable development of extractive resources. Achieve an appropriate balance between the safe production of energy and the community’s needs. Outcomes Greater understanding and involvement by communities in unlocking the UK’s energy potential.
To create jobs and economic
growth
To provide a UK based
solution to our energy needs
To engage openly with
local communities
To act safely and with
environmental sensitivity
“Opennessandtransparencyhastobeattheheartofeverythingthatwedo.”
CompanySchemes
COMMUNITYAND THE INEOS PROMISE
“INEOShaspromisedtoshare6%ofrevenues.Fourpercentofthiswouldgotohomeownersandlandownersintheimmediatevicinityofawell,andafurther2%tothewidercommunity.”
UKGovernmentResponse:AShaleGasWealthFund
The government has announced that it willcreate the Shale Wealth Fund. This fund willinitially consist of up to 10% of tax revenuesarising from shale gas production to be usedfor the benefit of communities which hostshale sites. It will ensure that the developmentof the shale industry leaves a positive legacy inthe local communities and regions where it isbased and that residents can share thebenefits of shale development and get a sayon how the money is spent. The Shale WealthFund could provide up to £1 billion of fundingin total, a proportion of which could be paidout to each community over 25 years.
Shale Wealth Fund:consultation
August 2016
CommunityactivismFRACKING AT KM8 - NO SOCIAL LICENCE
IN NYCC CONSULTATION 99.2% SAID NO . . . AND ONLY 0.8% SAID YES ( 3,907 responses against fracking, 32 in favour )
“The social licence to operate is the proposition that, even if fully compliantwith laws and regulations, activities that are particularly intrusive or perceivedto carry significant risk can be vetoed by a hostile public through campaigns,legal actions, demonstrations or other democratic pressures. Such industriesmust negotiate a ‘Social Licence’ with their community to conduct theirbusiness.”TheEuropeanAcademiesScienceAdvisoryCouncil(2014)ShaleGasExtraction:IssueofParticularRelevancetotheEuropeanUnion.
OneWayForward?• Communitiesandotherstakeholdershaveaninformed
understanding ofthetechnologiesofshalegasproductionandtheassociatedrisks,impactsandpotentialbenefits;theyarealsoinformedaboutthemanagementandregulatoryprocessesthatareusedtomanagetheserisks.
• Proponentsandregulatorsofthesetechnologieshaveaninformedunderstandingof,anddemonstraterespectfor,theconcernsandperspectivesofvariousstakeholders.
• Differentpartiesareabletoengageinconstructivedialoguewitheachotherandworktowardsagreedoutcomes,oratleastanaccommodationofdifferences.
CouncilofCanadianAcademies(2014)Harnessingscienceandtechnologytounderstandtheenvironmentalimpactsofshalegasextraction.
Conclusions:ASocialLicence toFrack?
http://www.m4shalegas.eu/reportsp4.html
