Fracking Near Vineyards in California a Good Idea?
While winemakers along California's Central Coast take advantage of growing their vines on soils rich with decomposing shale, allowing for better drainage and root penetration, oil companies, too, have taken notice of the region's bountiful supplies.
Although drilling operations alongside the Coast's vineyards aren't exactly a new trend, the way in which oilers are planning on extracting the oil is. The only way to extract shale is with hydraulic fracturing (“fracking”), blasting water and chemicals at high pressures into the ground to break up the rocks and force the oil or natural gas out. Despite the immense gains shale brings to the energy industry, environmentalists, farmers and, now, winemakers fear that fracking could pollute nearby water supplies and increase the risk of earthquakes. Is it worth the risk? Many states across the country are vehemently debating the question.
On the other Coast, New York has been undergoing a 4-year environmental and health review to determine if fracking will be permitted at all. Now, in California, mineral rights leases have been sold to 17,000 acres on federal lands near vineyards in Southern Monterey, with more to follow in an auction in May. Experts predict the Monterey shale region hosts over 15 billion gallons of oil.
“Oil companies are buying [mineral rights] up, and if oil companies are buying it, they are obviously planning on doing fracking,” Paul Johnson, President of the Monterey County Vintners and Growers Association, told the Wine Spectator. “We just want assurances that the water supply will be kept safe.”
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Should vineyards experience water contamination, the livelihood of many winemakers in the region will be at stake. Those fears may be premature, however, as the Western States Petroleum Association (WSPA) has said that the amount of water used for fracking is significantly smaller compared to agriculture, taking place thousands of feet below the surface away from groundwater supplies.
Environmentalists remain unconvinced, having witnessed the effects of fracking in areas like Texas, North Dakota and Pennsylvania—now industrial wastelands.
Easing the public's fears, the WSPA welcomes new regulations as activity moves into the Coastal region.
“We don’t think there’s any reason to not be confident in the safety, but it’s important that people outside the industry also understand that,” said Tupper Hill, a spokesman for WSPA.
The jury is still out on whether oilers will even pursue fracking in the area, noting that it is not clear yet if the geology of the region is compatible with the technique. Until more is known, the oil industry continues to peacefully coexist with agriculture industry in California, where barrels of oil have yet to threaten the country's precious bottles of wine.
Ofwat allows retailers to raise prices from April
Retailers can recover a portion of excess bad debt by temporarily increasing prices from April 2022, according to an Ofwat statement.
The regulator confirmed its view that levels of bad debt costs across the business retail market are exceeding 2% of non-household revenue, thereby allowing "a temporary increase" in the maximum prices. Adjustments to price caps will apply for a minimum of two years to reduce the step changes in price that customers might experience.
Measures introduced since March 2020 to contain the spread of Covid-19 could lead to retailers facing higher levels of customer bad debt. Retailers’ abilities to respond to this are expected to be constrained by Ofwat strengthening protections for non-household customers during Covid-19 and the presence of price caps.
In April last year, Ofwat committed to provide additional regulatory protection if bad debt costs across the market exceeded 2% of non-household revenue.
Georgina Mills, Business Retail Market Director at Ofwat said: “These decisions aim to protect the interests of non-household customers in the short and longer term, including from the risk of systemic Retailer failure as the business retail market continues to feel the impacts of COVID-19. By implementing market-wide adjustments to price caps, we aim to minimise any additional costs for customers in the shorter term by promoting efficiency and supporting competition.”
There are also three areas where Ofwat has not reached definitive conclusions and is seeking further evidence and views from stakeholders:
- Pooling excess bad debt costs – Ofwat proposes that the recovery of excess bad debt costs is pooled across all non-household customers, via a uniform uplift to price caps.
- Keeping open the option of not pursuing a true up – For example if outturn bad debt costs are not materially higher than the 2% threshold.
- Undertaking the true up – If a 'true up' is required, Ofwat has set out how it expects this to work in practice.
Further consultation on the proposed adjustments to REC price caps can be expected by December.
"While it’s great that regulators are helping the industry deal with bad debt in the wake of the pandemic, raising prices only treats the symptoms. Instead, water companies should head upstream, using customer data to identify and rectify the causes of bad debt, stop it at source and help prevent it from occurring in the first place," she said.
"While recouping costs is a must, water companies shouldn’t just rely on the regulator. Data can help companies segment customers, identify and assist customers that are struggling financially, avoiding penalising the entire customer in tackling the cause of the issue."
United Utilities picks up pipeline award
A race-against-time plumbing job to connect four huge water pipes into the large Haweswater Aqueduct in Cumbria saw United Utilities awarded Utility Project of the Year by Pipeline Industries Guild.
The Hallbank project, near Kendal, was completed within a tight eight-day deadline, in a storm and during the second COVID lockdown last November – and with three hours to spare. Principal construction manager John Dawson said the project helped boost the resilience of water supplies across the North West.
“I think what made us stand out was the scale, the use of future technology and the fact that we were really just one team, working collaboratively for a common goal," he said.
Camus Energy secures $16m funding
Camus Energy, which provides advanced grid management technology, has secured $16 million in a Series A round, led by Park West Asset Management and joined by Congruent Ventures, Wave Capital and other investors, including an investor-owned utility. Camus will leverage the operating capital to expand its grid management software platform to meet growing demand from utilities across North America.
As local utilities look to save money and increase their use of clean energy by tapping into low-cost and low-carbon local resources, Camus' grid management platform provides connectivity between the utility's operations team, its grid-connected equipment and customer devices.