Business Ethics Case Study: Fracking

What is Fracking? • the collection of natural gas by hydraulic fracturing • used controversially in the UK for onshore shale gas • uses a chemical solution to extract natural gas from rock formations

What ethical issues does it create? • Should we be contaminating clean water to extract gas when there are water shortages, in

the UK and globally? • Should we be investing in finite fossil fuel extraction over advancing renewable

technology? • Is it safe for the surrounding environment?

Who are the main stakeholders in fracking? • Private fracking companies e.g. Cuadrilla • Politicians • Gas consumers (the general public) • Residents of fracking communities • The wildlife in the nearby environment

What tensions are created between stakeholders? • The desire for affordable gas vs the health of the local environment and ecology • The promises made by MPs to reduce living costs vs. the viability of fracking • The destruction of acres of beautiful countryside in the ‘desolate North East’ • The debate between the residents of tracking communities and their local MPs vs the

government as a whole who are, in turn, being lobbied by energy companies.

What are the possible solutions? • Choose to frack in select locations, as to minimise impact to the natural environment,

possibly leading to lower gas prices for consumers. • Frack in all possible locations, leading to the destruction of the surrounding area, but

resulting in a short term reduction in gas bills. (If full-scale fracking were to go ahead, there is an estimated 40 year supply for Britain’s gas needs)

• Avoid fracking and invest instead in longer term, renewable ‘green’ energy, creating lower electricity bills and saving the surround wildlife. Big energy corporations may lose out and cabinet ministers might lose some old school friends.

Current situation: Fracking is a very current issue, with no definitive legislature for or against fracking passed in government. Multiple sites have been given permission to drill, with many more being researched. However, public opinion of fracking is poor and the government is constantly facing objections and protests. While Conservatives are overall in favour of fracking, there are many high profile Tory MPs that object, on the grounds of ‘nimbyism’.

As of 2013, there are over 2m fracking sites in the US, constituting 43% of oil production and 67% of natural gas production. The US currently enjoy gas prices one-third that of Eurpean prices, leading to a boom in gas-fired power stations and almost certainly discouraged renewable energy sources.