Here's one reason for slow growth: regulation
Perhaps we do want to drill for oil in the heartland of the Home Counties, perhaps we don't. That's rather a political question and probably one best solved by politics. Instead, we want to draw attention to one of the reasons why the richer countries tend to have lower growth rates:
It is understood that although UKOG, which is chaired by Mr Lenigas, and its partners have local planning permission and a licence for the site in Surrey they would still require formal approval from the newly established OGA before any flow testing operations- vital to the project’s commercial future - could begin.
UKOG, whose shares are traded on the London Stock Exchange’s junior Aim market, said in a statement to the stock exchange that planning permission to proceed at Horse Hill was in place and that it had “already submitted the applications to the authorities for their consent” to conduct a flow test of the well.
However, The Telegraph understands that no such application had been received by the Oil and Gas Authority as at the close of business today, Aoril 28.
A spokesman for Mr Lenigas – who is playing an active role in driving the scheme forward – said that the company stands by its original statement “which is entirely accurate”.
According to guidelines, a well test would require planning permission from the Mineral Planning Authority, environmental permits from the Environment Agency (EA), a review of well plans by the Health and Safety Executive and finally regulatory consent from the OGA.
This process could take months, which if so would potentially put the company’s plans to flow test Horse Hill this year under pressure.
Leave aside, entirely, the interesting financial background to this. Consider instead this regulatory thicket.
It's entirely possible that this is environmentally sound. That it really should take many months for the authorities to decide whether someone should be allowed to carry out a flow test. We find that hard to believe, given that well tests are a normal, routine, and well understood part of the process. But let that stand: there's still, obviously, a restriction of the growth rate of the economy when people trying to do new things meet such regulatory thickets.
If there must be regulation then it needs to be simple, obvious and above all fast. The current regime doesn't meet those tests: and this is a part of the explanation as to why growth rates are slow. We've allowed the necessity of a certain amount of bureaucratic licence gaining to become the equivalent of a barnacle encrusted hull on a ship. This reduces the speed through the water: time to haul the system out for a good careening.