Britain Must Frack For Gas Or Be The Country With No Beer


The link between the necessity for Britain to get on with fracking for natural gas underneath Liverpool and the risk of our becoming the country with no beer might indeed go through a few steps but it is still watertight and sound. For there really is a link between the two things. This having a greater importance than the risk of trashing Liverpool – no risk for who cares – or of running out of beer – a calamity that should not befall our fair land.

But there is indeed that link:

The CO2 shortage that forced supermarkets to ration fizzy drink sales and threatened World Cup beer supplies could become a “longer-term” problem as “fragile” supply arrangements struggle to cope in outages.

A dearth of investment in the European sector could leave the UK exposed to future shortages, warned City analysts Liberum.

The temporary closure of UK and European factories producing the gas used widely in the food and drinks industry has created a shortage that has forced suppliers to curb production.

So, the problem stems from the source of that food grade CO2. Yes, we are all aware of the amusement here, apparently industrial society produces too much CO2, enough to broil Flipper, but not enough for beer. It’s a byproduct of making ammonia, that itself then used largely in making fertiliser. So, summer, not much fertiliser being used, close the plants for maintenance, shortage of CO2. CO2 is cheap and bulky (when in those tanks at least) so it tends not to be traded internationally very much. You need local production of it.

So, that puts the kibosh on the idea of organic agriculture then, doesn’t it? For if we don’t use fertiliser we’ll not be making ammonia and thus won’t have CO2 for beer. Obviously, industrial agriculture it is then.

But we can and should go further. Because of that not much trade in CO2. But there is significant trade in fertiliser. Because the major cost input is the price of natural gas. Something very much lower in places which frack, higher in places which don’t. All of which means little to no investment in ammonia factories in Europe:

“The competitiveness of that industry in global terms is not great due to relatively high natural gas input costs.”

So, yes, there we have it, we must frack for gas in order to ensure that we’re not the country that runs out of beer. For as Hogarth pointed out:

Beer, happy Produce of our Isle
Can sinewy Strength impart,
And wearied with Fatigue and Toil
Can cheer each manly Heart.

Labour and Art upheld by Thee
Successfully advance,
We quaff Thy balmy Juice with Glee
And Water leave to France.

So, there we have it.

Except that’s not the point at all. Right, now start planning an economy. No, really. Collect all the really bright people, give them dachas and fancy apartments, all the computers they need and let the very finest of them date the ballerinas. Now wade through how difficult it is to work out how to plan an entire economy. You’re not going to use a new technology to drill for cheap natural gas and this means the Coca Cola runs out in Wimbledon week. You’ve thought this through have you? Worked out how damn complicated a modern economy is?

Ah, no, you haven’t, have you? Meaning that Hayek was right, the only calculating machine we have capable of planning the economy is that economy itself with its pricing mechanism.