Oct 8, 2015

The problems with fracking (part 4)

2 min
Originally published as a main feature story in Energy Digital's monthly magazine, this piece takes a head-on approach to the top arguments again...

Originally published as a main feature story in Energy Digital's monthly magazine, this piece takes a head-on approach to the top arguments against hydraulic fracturing, or fracking, in an effort to separate fact from fiction. Click here to read the entire article. 

In the first post of this 4-part web series, we explored Argument No. 1: Fracking will worsen climate change.  In the second post, we explored Argument No. 2: Renewable energy is replacing fossil fuels and non-renewable energy. In the third and most recent post, we combined Argument No. 3: Fracking contaminates ground and surface water with Argument No. 4: Fracking uses a tremendous amount of water.

In this fourth and final post, we explore Argument No. 5: Fracking causes earthquakes.   

There has been a lot of talk lately that fracking causes earthquakes: This argument has escalated from claiming it causes small earthquakes (around magnitude 2.0) to claiming it causes Hollywood movie-style cataclysmic earthquake events.

The problem with this argument is that it does contain some truth; however, fracking won’t likely be the cause of “the big one.”

RELATED TOPIC: Fracking the way to energy independence

According to the USGS, fracking can cause “extremely small earthquakes, but they are almost always too small to be a safety concern.”

Specifically, the salt water and fracking fluids that are returned to the earth’s surface after drilling are often disposed of by being injected into very deep wells. When this material is injected into the Earth’s subsurface, it “can cause earthquakes that are large enough to be felt and may cause damage.”

It is interesting to note here, though, that hydro-power – the sustainable energy that is regarded as “eco-friendly” – has actually been the documented cause of earthquakes; in fact, the hydroelectric Koyna Dam in India caused a magnitude 6.3 earthquake that killed 180 people and left thousands homeless in 1967.

RELATED TOPIC: Top 10 largest hydroelectric dams

Similarly, in 2008, the 7.9 magnitude earthquake that destroyed the Sichuan province in China is believed to have been caused by the hydroelectric Zipingpu Dam. Geothermal energy and carbon sequestration are also often cited as culprits.

And remember this story? Ohio well operations shut down for causing earthquakes

No matter what type of energy we use, there will always be someone protesting it: People have their own opinions, and issues like this tend to be very emotionally charged, which can result in the lines of truth becoming blurred.

The bottom line here is that while fracking may not be perfect, it is not the villain that anti-fracking advocates portray it to be. Just like any other form of energy, there are benefits and there are potential harms. 

Let's connect!   

Click here to read the October 2015 edition of Energy Digital magazine! 

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Jul 26, 2021

Ofwat allows retailers to raise prices from April

Dominic Ellis
3 min
Ofwat confirms levels of bad debt costs across the business retail market are exceeding 2% of non-household revenue

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:   

  1. 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. 
  2. 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. 
  3. 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.

Anita Dougall, CEO and Founding Partner at Sagacity, said Ofwat’s decision comes hot on the heels of Ofgem’s price cap rise in April.

"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 VenturesWave 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.

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