Vitol, Central Scottish Councils and 'fracking'.

A wee bird has told me that Iain Taylor's (of 'dirty money' imfamy) company Vitol have a possible share of a 16% holding (along with a venture capital company through a private company vehicle called GEL/GPEL) in 'Dart Energy' (through Vitol's Bob Finch and Christoper Bake) who are seeking planning permission from Stirling and Falkirk Councils to extend their current methane coal extraction operations onto the old central belt coal and shale fields in their Authority areas.

Dart Energy purchased Greenpark's UK licenses in a cash and share deal to be paid in two main tranches. Greenpark Energy was owned by Gel/Gpel Ltd which is owned half by Grace Greenpark Ltd, registered in the British Virgin Islands, a known tax haven, and half by Electra Private Equity Partners 2001-2006 Scottish L.P., a subsidiary of Electra Equity via its subsidiary Kingsway Equity Partners LP. It is not hard to surmise Vitol were part owners of Greenpark Energy Ltd through a British Virgin Islands PLC, Grace Greenpark Ltd, as it is the only track that comes to a dead end and loses traceability courtesy of the British Virgin Islands fiscal regime.

The problem with tying Vitol down is it is technically owned by its 330 employees and it is purely surmise that  Bob Finch, its head of trading, and Christopher Bake, managing director of Vitol, Dubai, holdings in “unconventional gas extraction” assets are actually part of the Vitol Portfolio. Though it is clear from Company House records both Bob Finch and Christopher Bake of Vitol are also directors of GEL/GPEL Ltd.

As both these councils are under Labour / Conservative coalitions the donation clearly has no implications concerning  Mr Taylor's sudden interest in subbing £500,000 to 'Better Together' nor I suspect will it have any effect on the planning permission currently under review by both councils. Though the Observer was less than sanguine about Mr Taylor's £500,000 donation to the Conservatives on the same basis.

Clearly the councils will not have to take into account the problems the multinational Dart Energy are already having with a small trial at Cannonbie in Dumfries and Galloway:

"Scotland’s environment agency is investing reports that drilling at operations by coal bed methane specialist Dart Energy is leading to an escape of gas. SEPA, the Scottish Environment Protection Agency, will look into reports that methane is “bubbling up” from wells drilled in coal seams near Canonbie in Dumfries and Galloway. SEPA said that it would consider whether follow-up work in line with its enforcement policy would be needed once its investigations were completed."

quote: Natural Gas Europe

While this sort of thing may well go unnoticed in the big uninhabited areas of the US or Australia it is quickly noticed in Scotland where folk live and see what is going on and are very sensitive to the condition of local burns and rivers. Environmentalists have been warning people about the actual impact of fracking on the local water table and, in this instance, we already have a clear example of the problems, enough to trigger a SEPA investigation. The next stage of environmental danger is localised geological instability caused as the water allows local compression areas in the rock to release by lubricating them, causing mini earthquakes; just as already has happened around Morecambe Bay. SEPA are only responsible for water quality and have responsibility to ensure the local environment:

"This can present several risks to the water environment including:

• cross contamination of aquifers due to poor borehole construction;
• pollution from an unexpected release of gas or fracturing fluid into other parts of the water environment;
• pollution from an uncontrolled disposal of liquid or solid waste containing potentially polluting substances;
• abstraction of uncontrolled quantities of water for fracturing operations leading to an unacceptable impact of the water environment;
• leaks of gas to the atmosphere (also known as fugitive emissions);
• spills from fluids that come to the surface from storage tanks or lagoons."

Water Environment (Controlled Activities) Regulations 2011

SEPA have the power to close down operations until the problems identified are put right including any preventive actions they request but the control of the Fracking License and its removal lies with the National Coal Authority, a Westminster Quango, which has taken over the issuing of coal methane licenses from the DECC.

You do not have to be much of a genius to understand why Mr Taylor would be interested in backing the 'Better Together' camp as the SNP view is there is no need for 'Fracking' in Scotland as we are more than self reliant in terms of natural gas, from the North Sea, in the first instance and power from re-usable sources in the second. Fracking, like nuclear power has no place in an independent Scotland.

No Union, no National Coal Authority License, no fracking, no fracking profit for Vitol's Bob Finch and Christopher Bake in Scotland ... as they say, you just need to follow the money.

Sources:
"An Observer investigation has established that energy trading giant Vitol, whose boss has given more than £500,000 to the Conservatives, has emerged as a major shareholder in a company bringing "hydraulic fracturing", commonly known as fracking, and a related technology, coal bed methane (CBM) extraction, to the UK." - Greenwise

"Vitol and two venture capital firms acquired a 16 per cent stake in a company called Dart Energy after selling it a company called Greenpark that has a licence to conduct exploratory fracking at a site on the Anglo-Scottish border." - Greenwise

Vitol's previously unpublicised interests in what are referred to as "unconventional gas extraction" assets suggests the company believes they could be a major source of energy.

The previously unpublicised interests of two Vitol executives, Bob Finch, its head of trading, and Christopher Bake, managing director of Vitol, Dubai, in “unconventional gas extraction” assets suggests they believe it could be a major source of energy.

Jeff Archer exploration CEO at Greenpark now on Dart Energy Board.

Greenpark acquisition Dart Energy 2012 Annual Report:

In December 2011, the Group agreed to acquire the unconventional gas business of Greenpark Energy Ltd, comprising certain onshore licences in the UK for a consideration of US$42 million. The consideration was payable in two tranches and made up of a mixture of cash and shares in Dart Energy and potentially in the intended, to be listed, DEI. The first tranche comprising US$6 million cash and US$10 million in newly issued Dart Energy shares was paid in May 2012. In aggregate, 31,354,118 shares were issued which, post-issue represented 4.1% of the enlarged shares in issue of the Company at that time. A further US$5 million was placed in a retention account and will be released in 2 tranches, 18 October 2012 and 18 February 2013, subject to there being no claims. Deferred consideration for the 2nd tranche of US$21
million is payable by 30 September 2012 in the form of cash and shares or fully in shares.

Dart Energy Quarterly Report Dec 2012:

Consequently, shares were issued such that Greenpark vendor (GEL/GPEL Limited) now hold a total of 145 million shares or approximately 16% of the total issued share capital of the Company.