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Kevin Hollinrake (Thirsk and Malton) (Con)
I beg to move,
That this House has considered shale gas.
It is a pleasure to serve under your chairmanship, Mr Howarth.
Is shale gas exploration right for the UK, right now, and right for the constituency I represent? The benefits of shale gas exploration are clear. Greater energy independence and security at a time of significant international uncertainty is a compelling proposition, as is the prospect of a prosperous new industry that can provide new jobs, business opportunities and direct financial benefit to local communities. The economy is important, but no economic benefit, vested interest or party political pressure could ever lead me to support something that I believed would have a detrimental effect on our countryside or the health of local residents. Over the last 10 months, I have met parties on either side of the fracking debate in an attempt to get a clearer understanding of the issues.
Shale gas exploitation will produce harmful greenhouses gases. The natural gas produced is a fossil fuel, and many object to its production because when burned it produces carbon dioxide, a greenhouse gas. Some say we should instead focus on renewables, such as wind farms, solar and producing energy from household waste, but most reasonable observers would accept that we are a long way from green energy being able to met all our needs. Natural gas produces 50% less greenhouse gas emissions than coal and can help us to meet our climate change targets more quickly and cheaply. Although renewable energy production is increasing, in 2014 it delivered only 7% of our total energy needs. We need a mixed, and ideally domestic, solution to our energy requirements.
On Saturday morning, I visited the village of Kirby Misperton in my constituency, where an application to drill for shale gas has recently been submitted. Of about 50 people in attendance, 44 were against fracking and six had an open mind; none was in favour. These people are not professional campaigners: they are decent local people, desperately worried that fracking will change their lives forever, and not for the better. Their concerns mainly centre on safety—the potential for contamination of water supplies and air pollution—during production and after the producer has made their money and left; the spoiling of countryside by drilling rigs, noise and light pollution and lorry movements; and, at the end of the day, who cleans up and who pays up if things go wrong.
First, on safety, the fact that other Administrations—France, Germany, New York state and so on—have banned fracking is a major worry to many. So too is the “Shale Gas: Rural Economy Impacts” report from the Department for Environment, Food and Rural Affairs, which had 63 redactions within 13 pages, including of a whole section on the impact on house prices. The Government’s position that
“There is a strong public interest in withholding the information”
did little to ease anxieties. It leads many members of the public to feel that they are being deceived, patronised or treated with contempt. We have only one chance: we need to get it right an to be seen to get it right.
The Environment Agency, Department of Energy and Climate Change, the mineral protections authority and the Health and Safety Executive regulate operations. Having met the Environment Agency, I am confident that our regulations are strong. Fracking will be allowed only outside groundwater source protection areas. According to one representative of the agency, chances of contamination are entering the “realms of fantasy”, but I would like to see a clearer, more robust and independent monitoring regime for the regulations. The Environment Agency is already stretched and cannot be reasonably expected to carry out truly independent checks on the producers’ operations and any consequential effects on the environment.
A 2012 International Energy Agency report on unconventional gas exploration includes in its golden rules:
“Recognise the case for independent evaluation and verification of environmental performance”.
Our current regulations require the producer to instruct a chartered independent contractor to take baseline checks before drilling and to monitor water and air quality before, during and after production. Concerned local residents do not feel that those checks would be truly independent, as there is a clear commercial relationship between the producer and the contractor. Would it not make sense for the Environment Agency to instruct the relevant chartered environmental engineers, with the bill reimbursed by the producer?
The Royal Society’s 2012 report states:
“The operator commissions and pays for the services of the well examiner… This might be someone employed by the well operator’s organisation. It is important that those carrying out examination work have appropriate levels of impartiality and independence from pressures, especially of a financial nature. Promotion, pay and reward systems should not compromise professional judgement…. The independence of the scheme must not be compromised.”
Evidence provided to the House of Lords Economic Affairs Committee in 2013-14 states:
"the weakest point of the regulatory process concerns the Environment Agency”,
which appears to have
“insufficient in-house expertise.”
The Committee stated that the agency
“should make it much clearer to the industry and the public exactly how and when they would inspect well sites.”
Many are also concerned about the amount of water required and whether it can be safely decontaminated and recycled, and whether contaminates can be disposed of, particularly on the scale proposed.
The spoiling of countryside is another major concern. I would be first in a long line of local residents who would fight tooth and nail to prevent any attempt to produce shale gas in my area in a way that industrialises the landscape. Traditionally, the fracking process involves a high number of lorry movements and unsightly infrastructure that could be a real blot on the landscape. Just one of the companies, Third Energy, has stated that it might drill 950 wells in less than a third of my constituency, which would require hundreds of thousands of lorry movements, all in one of the country’s most beautiful counties, with an economy heavily dependent on agriculture and tourism. North Yorkshire County Council, which would handle any application, has to take into account the impact on other parts of the economy, particularly tourism, and the suitability of our roads to handle additional traffic. The beauty of our countryside is North Yorkshire’s main asset and we must protect this at all costs.
A 2012 “World Energy Outlook” report on unconventional gas stated that production is
“an intensive industrial process”,
which
“can have major implications for local communities, land use and water resources… Improperly addressed, these concerns threaten to curb, if not halt, the development of unconventional resources.”
I propose clear planning guidance that there must be buffer zones, with a minimum distance between sites of, say, six miles. We do not want the images of a fracked industrial landscape from North Dakota to become a reality here. The 2012 Royal Society report recommends recycling and reuse of waste water and that water disposal options should be planned from the outset, thereby reducing traffic and the impact on local communities.
Who cleans up and who pays up if things go wrong? We need to make sure that our green fields are not turned into brown fields. Appropriate regulation and supervision may reduce the chances of things going wrong, but we also need to understand and provide for a situation where it does. Although groundwater source protection zones are excluded from fracking activities, what protections are in place for boreholes and artesian wells? According to United Kingdom Onshore Oil and Gas, the body that represents the industry,
“if a company causes damage, harm or pollution to the environment, they can be required under these regimes to remediate the effects and prevent further damage or pollution…. Environmental regulators and planning authorities have the power to require upfront financial bonds to address these risks. The industry does not wish to leave this to the taxpayer or the landowner. As a less expensive alternative to upfront bonds, UKOOG is working with Government on the development of an industry scheme that will step in and pay for liabilities.”
The Royal Society report states:
“Arrangements for monitoring abandoned wells need to be developed. Funding of this monitoring and any remediation work needs further consideration.”
What if the producer has gone bust? Who compensates those who have lost out?
As far as the jewels in the crown are concerned—namely, areas of outstanding natural beauty, national parks, ancient woodlands and sites of special scientific interest—we need to state unequivocally that production will not take place in such areas. We must ensure that people do not feel that the Government agenda is being directed by big business. Many members of the general public do not trust business and also feel, perhaps unfairly, that too often politicians will support business at their expense. We need to take it one step at a time and ensure that people see that the process and facts are being properly monitored, assessed and reviewed.
All energy sources have impacts. As Members of Parliament, we have constituents who might be against onshore wind, solar farms, nuclear power or energy from waste. Twenty years ago in my constituency, many had similar fears when proposals were announced to carry out conventional gas exploration. Protests took place, views were heard and compromises were reached. Gas has been produced in the area ever since, with many residents unaware of its existence. Many members of the public have an open mind on fracking; others have genuine safety concerns. Whatever their viewpoint, it is critical that we keep the public informed and that local communities are consulted on the case for fracking, the potential benefits, the environmental risks and the proposed safeguards. We need to reassure the public that we are prepared to stop if fracking is significantly affecting lives and livelihoods, just as we did in 2011 when it caused earthquakes at Preese Hall in Blackpool.
In summary, we need: truly independent monitoring and publicly available analysis; a defined minimum radius between production sites; a clear solution on water recycling and disposal to reduce traffic; additional blight compensation for any person or community directly impacted; the release of an unredacted version of the DEFRA report; a clear willingness to stop if lives and livelihoods are affected to unacceptable levels; and, a clear answer to the question of who cleans up and who pays if the worst happens. We need to take the public with us, consult, provide expert scientific information and ensure that people do not feel they are being pushed or manipulated.
Cat Smith (Lancaster and Fleetwood) (Lab)
I congratulate the hon. Gentleman on securing the debate, and I thank him for his reference to Preesall in my constituency. Is he aware that yesterday, Lancashire councillors overwhelmingly voted to reject fracking in the county? The result was very clear: nine voted against and three voted in favour, which broadly reflects opposition to fracking across Lancashire—two thirds of people are in opposition, and the figure might be similar for his constituents over in Yorkshire. We had 300 local businesses write to the council, urging it to reject fracking. Those businesses included farmers, bed and breakfasts, media companies, the retail sector and many others. Does he agree that opposition to fracking runs across many different parts of our communities?
Mr George Howarth (in the Chair)
Order. It might be of assistance to remind those hoping to take part in the debate that interventions should be short and to a single point. I think the hon. Lady made a mini-speech there, and I will not tolerate that in any future contributions.
Kevin Hollinrake
I absolutely accept that many local residents have real concerns, and we need to take those concerns into account before taking the next steps.
Mark Menzies (Fylde) (Con)
As a point of correction, the hon. Member for Lancaster and Fleetwood (Cat Smith) mentioned Preesall in her constituency. For the record, my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) was actually referring to Preese Hall, which is a fracking well in my constituency.
Kevin Hollinrake
I am grateful for the lesson in geography. It is not a part of the world I am all that familiar with, but I am very familiar with the geography of the beautiful parts of North Yorkshire, and I am strongly keen to ensure that they remain that way.
As the IEA report recommends, we need to:
“Integrate engagement with local communities, residents and other stakeholders into each phase of a development starting prior to exploration; provide sufficient opportunity for comment on plans, operations and performance; listen to concerns and respond appropriately and promptly.”
The public deserves precise answers to those questions.
Julian Knight (Solihull) (Con)
I congratulate my hon. Friend on securing this debate. Does he acknowledge that although the United States and Canada initially saw a transformative economic effect from shale gas, there has been a slowdown since 2014? Some gas fields are running at a loss. Does that not show that we need to ensure that there is an economically viable case in all instances of exploration?
Kevin Hollinrake
There is clearly an opportunity here. The volatility of oil and gas prices is not within my remit, but there is commercial pressure to exploit shale gas for future domestic security. I understand that; it is why we need to get it right.
The public deserve precise answers to their questions via every means possible, including a comprehensive series of community meetings conducted by real experts with real answers. It would be all too easy to join the chorus of political voices who oppose fracking in North Yorkshire, but I do not believe that politics should be about doing what is convenient or being swayed by a vocal minority; it is about doing what is right. At this stage, we need to look at the issues and solutions more closely and find those solutions that reassure the public that we have their interests at heart and that allow us to realise the benefits of low-carbon, low-cost energy independence.
Dr Alan Whitehead (Southampton, Test) (Lab)
I congratulate the hon. Member for Thirsk and Malton (Kevin Hollinrake) on obtaining this debate. It is important because it goes to the heart of the distinction between what it is to drill an exploratory well and what it is to have a fracking industry in any particular part of the country. He clearly set out the safeguards that are needed as an absolute baseline for any fracking at all to take place, as well as the cumulative effects of fracking and the extraction of shale gas on particular areas and what impact that has on the community in the longer term, as well as the impact on the consequential things needed to keep that industry in place—whether that is the disposal of wastewater, consideration of the intensity of various fracking pads, or a range of other issues.
I shall concentrate for a moment on thinking about what fracking as an industry might look like in this country, as opposed to what an occasional exploratory well might look like. The proposition in front of us is not for occasional bits of exploration; it is “Go for it. Let’s have a substantial fracking industry. Let’s change the nature of how we obtain our gas supplies.” The argument in favour of fracking is that it is a substantial addition to our national security. Some of the further reaches of the argument relate to bringing prices down, but that is quite wrong and misunderstands the nature of gas trading in Europe. There would not actually be any great difference in gas prices unless the whole of Europe decided that it would frack everywhere in Europe.
The argument that a substantial fracking industry might be good for national security is the main argument put forward for it.
David Mowat (Warrington South) (Con)
It is true that there is no reason to believe that prices in Europe will come down by a factor of four, as they have in the United States, but it is also true that if we have more of something, the price is likely to come down. Increasingly, our strategy is to buy gas from Russia and liquefied natural gas from Qatar. That is not a viable way forward.
Dr Whitehead
The hon. Gentleman is right to say that we buy some LNG from Qatar, but only about 0.5% of the UK supply comes directly from Russia. Buying gas from Russia is really not an issue for this country, although it is for some other parts of Europe. My point was that the international trading arrangements for gas have three nodes across the world—the far east node, the north American node and the European node—and gas is traded and pipelined within those nodes. The product of shale gas in this country would simply go into one of those nodes and be traded across them, and the price would even out. That is my point about whether a shale gas industry would mean a substantial reduction in price.
I want to concentrate on what a shale gas industry in this country would look like. We have only one serious document sponsored by the Department of Energy and Climate Change that looks at the consequences of a serious industry. My concern is that that document, a strategic assessment produced by AMEC a little while ago, estimates the output from shale gas wells to be 3.2 billion cubic feet per well over 20 years. As an average output for wells in the UK, that would equate to the best level ever obtained in any well in north America. Conditions for shale gas in the UK are very different from those in the United States, and the likelihood is that the output per well would be far lower than the very best output in the US. On top of that, the current average US well output is about 0.8 billion cubic feet—far lower than the best ever output—and, more to the point, there is a rapid rate of depletion per well.
In fact, a shale gas industry in the UK would see relatively low gas output per well, with a fairly rapid depletion rate and the necessity for re-fracking, probably once every seven or eight years, were the well to be retained in production over 20 years. It is not a question of a well pad being drilled and then the equivalent of “nodding donkeys”, such as we have at Wytch Farm, nodding away quietly in the countryside. The process of trucks, waste water and re-fracking would have to be repeated every few years on that well pad in order to keep it going. Even then, the depletion rate is more rapid after the second re-fracking, after which the well goes out of business.
George Kerevan (East Lothian) (SNP)
Given the multiplicity of wells that would have to be drilled, does the hon. Gentleman agree that the UK would require a massive pipeline system and investment in a massive gas storage system? That would affect a large number of constituencies, not just where the drilling originally was.
Dr Whitehead
The hon. Gentleman is absolutely right: the location of various wells would require either that the gas was stored in tanks near the well and then transported or that new pipelines be constructed to take it away. A pipeline could not be organised in the same way as for the North sea.
On the basis of the scenario I have outlined for what a shale gas industry would look like in this country, the estimates are that, in order to divert, let us say, 10% of our gas supply from conventional gas into shale gas and remove part of the need to have gas from Qatar or Russia—10% is a modest diversion—we would need to drill somewhere between 10,000 and 18,000 wells, and they would have to be re-drilled over a period. Of course, those wells would not be evenly distributed throughout the country—Members would not have around two wells per constituency; wells would be concentrated in the two areas of the UK where there are reasonable shale plays. Those shale plays are geologically faulted and difficult to get at; nevertheless, they are the main areas: Bowland shale in the north-east of England and across the weald in the south.
We are looking at 10,000 to 18,000 wells concentrated in two parts of the country. As the hon. Member for Thirsk and Malton said, that would probably result in the very intensive geographical concentration of fracking in those areas, with a substantial geographical concentration of take-off facilities and of the need to remove waste water, 7 million gallons of which per well will have to be removed and disposed of fairly safely as hazardous waste. We do not currently have the ability to do that in this country. We can do it for the occasional well, but we would not be able to do it very easily without substantial new facilities for such a concentration of hazardous waste, which would be repeated as the wells were re-fracked.
We need to ask whether all that is a realistic prospect compared with the gain that might come from extracting the additional gas. It seems to me that, if that is what we want for our energy strategy, there will be a very high price to pay throughout the country for a marginal gain. Are we really, seriously committing ourselves to that? Recent events in Lancashire demonstrate that it is rather difficult to get two wells into the ground, let alone 18,000 over a longer period. I am worried that we are setting ourselves up by assuming that some of our future energy supplies are going to be pencilled in for this particular route, when either there are unacceptable costs to reaching that goal or, to make the industry work, we will have to build a whole lot of infrastructure on the back of what we already have.
Having considered at how a UK shale gas industry might look, it might be interesting to look briefly at an alternative industry: green gas, which is the production of gas by anaerobic digestion plants and associated methods. It has been projected that, by using most of the available feedstock that could go into anaerobic digestion plants, we could probably divert between 5% and 10% of our domestic gas supply requirements. When I say “divert”, I mean literally divert, because green gas AD plants can now inject gas directly into the mains.
There are eight green gas plants currently operating in the UK. I recently visited one in Poundbury, which, at certain times of the year, injects gas into the mains grid. People living between, roughly speaking, Lyndhurst and Weymouth will receive green gas from the Poundbury anaerobic digestion plant at various times of the year. There is direct substitution of the existing gas going into the mains. An AD plant would probably produce some 6 million cubic metres over 20 years. A well could produce rather more at some 20 million cubic metres, but it would have to be re-fracked several times. After that, the well would be capped and the operators would walk away. Because plants and animals continue to produce feedstock, AD green gas plants would simply continue. If we are considering changing from gas imports to domestic production for national security purposes, it might be a better idea to build a large number of AD plants and have one at the end of every lane.
David Mowat
I support green gas and anaerobic digestion. The hon. Gentleman said that the gas could be injected directly into the mains gas system. Is he implying that the characteristics of shale gas or other unconventional gas mean that they cannot be put directly into the grid? I do not follow.
Dr Whitehead
I am sorry if I unintentionally misled the hon. Gentleman. Shale gas can of course be injected directly into the grid. AD-produced gas has a slightly different calorific value, but with minimal treatment it can actually go directly into the grid in the same way as shale gas, so there is a direct comparison in production and in end use between the two processes. I suggest that if we want an industry that diverts substantial amounts of gas from import, building up AD plants and injecting green gas into the system might be a more environmentally sound and less intrusive way of doing so which might be more acceptable to the communities affected by any potential intensive fracking.
I appreciate that a farm AD plant at the end of a lane is not exactly the prettiest sight in the world, but it produces gas at a near zero overall net carbon cost, because it simply recycles what has captured carbon in the first place, and produces a different pattern of use. In the long term, it is potentially—
Mr George Howarth (in the Chair)
Order. I am sorry to interrupt the hon. Gentleman, but 11 further speakers are hoping to catch my eye. I shall have to impose a time limit, but the extent of that limit is in the hon. Gentleman’s hands.
Dr Whitehead
This hon. Gentleman was actually just about to finish.
Considering the industry as a whole, I suggest that AD is a rather sounder route in the long term than imposing 18,000 wells across the country with all the consequences that the hon. Member for Thirsk and Malton outlined. I heartily concur with his concerns, but there is an alternative and it should be seriously considered.
Seema Kennedy (South Ribble) (Con)
I thank my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) for securing this debate. I will keep my remarks short.
The decisions taken at county hall in Preston yesterday and last Thursday directly affect my constituency. Lancashire County Council’s planning committee has rejected Cuadrilla’s applications to frack at Roseacre Wood and Little Plumpton, both of which are in the constituency of my hon. Friend the Member for Fylde (Mark Menzies). Those two sites are on the north side of the River Ribble, just a few miles away from a site at Hesketh Bank in South Ribble, where Cuadrilla was given a licence to frack in 2008. That licence was suspended, along with all others, in 2011.
Most of my constituents accept that we need to explore this new form of energy as it will help national self-sufficiency in energy. Too often, however, those with legitimate concerns about fracking are dismissed as luddites or nimbys, but many of my constituents’ worries have not yet been adequately addressed by Government or the energy companies. The main worries are about safety, specifically water contamination, the lack of adequate infrastructure to support a new industry and the details of the compensation framework.
South Ribble is the floodplain of the River Ribble and is known as the salad bowl of England. Grade 1 agricultural land makes up 32% of my constituency, which puts it in the top 10 of such constituencies in the country, and 41% of my constituency is grade 1 or grade 2 agricultural land. The neighbouring constituency of West Lancashire has the highest proportion of grade 1 agricultural land in the country, and many of the farmers and growers in my constituency have fields that cross constituency boundaries. The industry employs many thousands of people and contributes to our nation’s food security.
The quality of the products grown relies on their growing in pristine soil that must be free from water-borne contaminants, which is the growers’ No. 1 concern. Fracking involves injecting water, sand and chemicals into the ground, but what is the composition of those chemicals? We are told that drilling takes place well under the water table, but my constituents are looking for further reassurance from Government and the energy companies that there will be no seepage into the water table and that the pipes will not develop fissures. They also have certain concerns about residual flowback fluid.
The site at Hesketh Bank is down a long country lane. The villages of Tarleton and Hesketh Bank are already clogged up with wagons transporting salad and vegetables to market. I am already working with local campaigners to put pressure on the council to build the “Green Lane Link” because the road system is not even adequate for our primary industry of agriculture. Were a new industry to be introduced, local people would expect the energy companies to contribute towards new infrastructure. They would not want it all to come out of their council tax.
Finally, let me turn to the compensation framework. Research from the US is conflicting on whether house prices are affected by having wells nearby. There needs to be robust compensation for those whose homes and livelihoods are affected. We need statute to set down the framework, which should include obligations to provide infrastructure such as roads and schools, rather than leaving it to local council planning authorities. Furthermore, the news on jobs is unclear. Are they the sort of high-skilled, long-term jobs that we want in Lancashire? DEFRA’s report from March 2014, “Shale Gas: Rural Economy Impacts”, states that jobs will be available for locals
“on the availability of skills and experience in the local labour market.”
My constituents want more reassurance that energy companies will train local apprentices and employ local people for the long term.
Kit Malthouse (North West Hampshire) (Con)
My hon. Friend rightly highlights the local impact of the industry, which generates significant concern in my constituency. Given the Government’s statement last week that local communities should have the final say on wind energy, does she agree that there should be special rules for fracking—I see in the paper today that the industry is calling for a change in the legislation—requiring applications to go through the normal planning process, like in every other industry? Local communities would therefore get a say about what the industry looks like in their area—if it appears at all.
Seema Kennedy
We have all accepted that local communities need to have total buy-in, and I am talking about what the energy companies do as well. National Government need to lay down such obligations. The companies need to be seen to be engaging fully with young people, providing apprenticeships and local jobs.
My constituents are not nimbys, but they want reassurance that fracking will not affect the quality of their land. They want concrete reassurances that their communities will be adequately compensated for any risks that they might face.
Mr George Howarth (in the Chair)
Before I call Graham Stringer, I will have to impose a five-minute limit on speeches. It is unfortunate that I have to do so, but it is the only way that I can contemplate getting everyone in.
Graham Stringer (Blackley and Broughton) (Lab)
I congratulate the hon. Member for Thirsk and Malton (Kevin Hollinrake) on an extremely well balanced speech. All discussion about the energy industry is fraught, because it tends to deal not only with the detail, but with people’s particular ideological positions.
In the time available, I will make two major points. The first is that this country is at a particularly critical moment in its economic history. The energy policy that we have had for the past seven or eight years—putting up the price of energy by moving to intermittent renewable sources, which has increased people’s bills—has had two unfortunate consequences: not only the price going up, but the deindustrialisation of the country, as industry has moved elsewhere in the world. As a result, although the policy objective is to reduce carbon dioxide emissions, the overall carbon footprint of the country has increased. The policy has been a mistake. We now have a big decision to make on runway capacity in the south-east—which I will not talk about, Mr Howarth—as well as on fracking. All those decisions are critical for our country’s future wealth.
On fracking, there are two intellectually coherent arguments. I understand people from the green lobby who say—this often invades the discussion without being explicitly stated—that we should leave all fossil fuels in the ground forever, because we have already taken enough out. I do not agree, but it is intellectually coherent for people to say that. The argument that I support is that we need to look at every possible energy source for this country’s energy future. I agree with my hon. Friend the Member for Southampton, Test (Dr Whitehead) that we should look at green gas, and we should also put more money into research, because at the moment renewables cannot compete with the energy-intensity available from fossil fuels.
In the meantime, we also need to be developing shale gas. There is a case against and a case for, but there is not a case for pretending that we do not know or for simply kicking the can down the road and saying, “Oh, we’ll have a moratorium,” as some of the candidates in the competition for the leadership of the Labour party are doing. We have to make a decision about such things, and I think we should go for shale gas. More than 1 million wells have been drilled in north America. All those wells that have complied with the safety regulations—which are not as tough as the regulations that this country will have—have been drilled without any problems. The scare films are often about areas where the issues might not be to do with fracking, as it turns out, or where, if fracking is involved, the rules have not been followed. We have to go for it.
We have heard from two Conservative Members about the normal planning concerns that one gets—about the amount of road usage and what will happen to an area. Those are obviously genuine local concerns, but as a country we have to decide on the balance between those people with genuine local concerns and what is part of the national infrastructure plan. There is nothing unusual about that: when the country was cabled, the amount of local cabling decisions that could be taken were reduced. Shale gas is of such importance that we should have a national infrastructure plan.
I will finish with the final point made by the hon. Member for Thirsk and Malton. Rumours are sometimes put about wilfully by those who are ideologically opposed to fracking, so the worst thing that any Government can do, whether a Conservative or Labour one, or a coalition, is to hide information. We need to get as much information out there as possible, because fracking is safe and water will not travel through half a mile of rock. People need to be reassured about that and, by reassuring them, we are much more likely to get the economic benefits of a real shale gas industry.
Jeremy Quin (Horsham) (Con)
I congratulate my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) on securing this debate.
The benefits of unconventional drilling have been well flagged. While bridging to a low-carbon future, it might provide the UK with a secure source of energy. However, the Government have only one opportunity to get things right, as my hon. Friend said. We are routinely told about the economic value associated with extraction, so in that context it is critical that people, especially those living near extraction sites, have cast-iron confidence that proper and sufficient investment is being made to ensure their safety during and after the drilling period. My constituency has seen exploratory drilling conducted near Balcombe under a licence granted in 2013 to Cuadrilla. The concerns of many residents were far from being assuaged and, if the resource is to be exploited, public acceptance and support are critical. The Government must ensure that the public have complete confidence that their overriding concern remains the safety of their citizens around the sites.
There are advantages to a country in being a second mover. The hon. Member for Blackley and Broughton (Graham Stringer) referred to the US experience, which is clearly useful to learn from. I am sure that the Minister will place on the record her Department’s continuing monitoring of the US experience. We have much to learn from it and, given the far higher concentration of population in the UK, it is essential that we do so. However, I have constituents who are concerned that the Minister’s Department, having in large measure set out a safety regime, will cease to focus as much on the US experience. I would like a reassurance that that is not the case, not only in the Minister’s response today, but, more critically, in how the Department responds to the stories that emerge from the US in the coming months and years.
I also support my hon. Friend the Member for Thirsk and Malton in calling for the monitoring of fracking activities not only to be independent, but in every respect to be seen to be independent. It would be damaging for the industry if a perception were to emerge that those being paid to monitor activities had a vested interest in those activities being ongoing.
Antoinette Sandbach (Eddisbury) (Con)
Does my hon. Friend agree that environmental impact assessments are key, in providing information to local communities before planning applications and looking at possible consequences, so that they may be taken into account and dealt with early in the planning processes?
Jeremy Quin
I agree with my hon. Friend in every respect. Other hon. Members have referred to the importance of getting information out there to reassure the public, and that is one example of us doing exactly that.
Water contamination is one example where reassurance might be required, as was referred to earlier. The construction of wells is key to this, with sufficient casing and cementing being essential to prevent groundwater contamination and manage the flowback fluid. As we have seen in Pennsylvania, there is inevitably a failure rate in certain new wells. Will the Minister provide a reassurance that the regulatory regime on well construction is sufficient to prevent substances from leaking? Monitoring of groundwater for contaminants is essential, not on the basis of an investigation every three years, but as a regular, routine undertaking during and after drilling. I appreciate that the Infrastructure Act 2015 specified that
“hydraulic fracturing will not take place within protected groundwater source areas”.
A lot may hang on the exact definition of what “groundwater source areas” comprise, so I look forward to that being clarified.
Lastly, under the Environment Agency’s recent consultation, flow testing could be covered by a standard permit granted to the explorer. The Minister will appreciate that, at this early stage of unconventional drilling in the UK, particularly in the context of early flow testing, anything that suggests a standard approach without particular consideration and monitoring will cause concern. We look forward to that being clarified in due course.
I have no doubt that the Minister will act with her usual boldness and determination in pushing this agenda forward. I simply ask that, in doing so, she uses the same determination—I have every conviction that she will—to ensure that the safety regime is not only highly effective, but capable of assuaging the concerns of people living close to drilling operations.
John Mc Nally (Falkirk) (SNP)
I thank the hon. Member for Thirsk and Malton (Kevin Hollinrake) for securing this debate on a subject that is close to most people’s hearts, of that I am quite sure.
I will be brief, but first let me say, by way of background, that I am speaking today because Falkirk, the area I represent, is at the heart of fracking operations, with test bore drills already in place. INEOS has planning permission to build shale gas tanks, and it has to be said that that is a hugely significant investment.
On 19 May last year, I attended a fracking conference at the Mermaid theatre in London on behalf of Falkirk Council, of which I was a member at the time. I assume that many Members present have attended similar conferences. After about an hour, I was thinking to myself, “Why do we keep being told that our regulations are the best and safest in the world?” It reminded me of an anecdote about Sir Alex Ferguson, who when looking at a player he was interested in was told that there was no truth in the rumour that the player had injury problems; the first thing he thought was that he needed to look at the player in a great deal more detail. I took that methodology back to my constituency: more analysis is required.
Martyn Day (Linlithgow and East Falkirk) (SNP)
Does my hon. Friend agree that perception is reality, and that even if fracking were technically proven to be safe, the public concerns surrounding it would also need to be addressed, or else it could still be damaging to our economy in terms of our water production, the reputation of our food and drink industry, and house prices?
John Mc Nally
I agree totally with my hon. Friend. Perception is everything. The hon. Member for South Ribble (Seema Kennedy) referred to the salad bowl. If Mr Birdseye thinks that water contamination is going to affect his product in any way, he will withdraw and people will not buy the product. I am convinced of that; there is no second-guessing there.
The delegates at the conference I attended went on to listen to various utopian and dystopian presentations. That ignited for me the other reason we are here today. Last Thursday I asked the Secretary of State to produce a detailed health and environmental impact assessment for the conference in Paris this year. She answered that safety would always be a priority and that this country has a safe environmental working record. I eagerly await the presentation of the findings on the health and environmental impacts.
Medact, a registered public health charity with over 1,000 public health clinicians and the like as members, has produced a report on fracking. The report concludes that fracking poses significant public health risks and calls for an immediate moratorium, to allow for the completion of a full and comprehensive health impact assessment. I agree totally with that position.
In Scotland, there is what we call the WOW factor—wind, oil and water. There is currently a moratorium, as the Scottish Government have listened to concerned communities not just in Falkirk but across Scotland. We have a worldwide reputation for the purity of our water; our vast food and drink industries require that that reputation is not tarnished in any way, shape or form. Under the Smith commission’s proposals, licensing of fracking will be devolved to Scotland, which makes absolute and total sense. We need to tread warily on this huge issue, which affects all our communities.
I intend to write to the Secretary of State to ask her to share with the Scottish Government the report she will present on fracking to this House and to the Paris conference. I cannot help but note that the Prime Minister’s comment about going “all out” for shale gas in the UK was a little premature. It could involve huge financial costs for companies that have invested in fracking, such as INEOS, as I sincerely hope that fracking does not take place in this country.
Neil Parish (Tiverton and Honiton) (Con)
It is a pleasure to serve under your chairmanship, Mr Howarth. I thank my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) for securing this debate and for the balanced way in which he presented his case, as others have noted.
If I put my national hat on—and given that I am a Member of Parliament for Tiverton and Honiton down in Devon, where at the moment there is no notion that there will be fracking—it is easy for me to say that it is good for the country to have a great gas supply, so we must make sure that we get on with fracking. From the national perspective, that is absolutely right, but as a Government, we are keen on taking local people with us, and—dare I say it—at the moment we do not seem to be doing terribly well on that. All the locals are turning fracking down. We are going to have to rethink our approach to all this. We have to make sure that we do not simply talk about a sovereign fund that might help local people. We must be much more up front. How does an industry like fracking help local people? They have to see something tangible before they buy into it.
If I put on the hat of Chair of the Environment, Food and Rural Affairs Committee, we of course are concerned about our land, food production and groundwater. In the previous Parliament, the Committee was assured that when fracking takes place the water used is well beneath groundwater sources and the area from which we extract water to purify for drinking water—but is that the case? I agree with my hon. Friend the Member for Horsham (Jeremy Quin) that we cannot simply have a blanket licence from the Environment Agency; each case has to be looked at individually.
Putting my Conservative hat on, I want to make sure that we are competitive and have an efficient industry. In this case, we must have an industry that extracts the gas—that is absolutely right. We still use an awful lot of gas and will still do so in future; if we do not use Russian gas, someone else will, so the gas we can extract for home consumption has to be good, but that gas should not be brought out of the ground at any price. If we need to put in more pipelines, reduce lorry movements and improve roads in villages and other areas where there are proposals for help with infrastructure, we have to do so. I was a Member of the European Parliament for 10 years, so everything in Europe is my fault—I just put that on the record. I look at the French: now, I do not always agree with the French, but I acknowledge that when it comes to exploiting resources, they put in all the infrastructure necessary for local people’s lives to be enhanced.
I say to the Minister, who is a very good Minister, that we must make sure that local people buy into fracking much more than they are doing at the moment. If we are going to stick to our principle that local people decide—I think we should—we are going to have to reassure them a great deal more about environmental safety, especially on water, and make sure that fracking is properly monitored. In evidence to our Committee, the Environment Agency said it had the capability to do that, but people need to be reassured that that is the case and that the agency will not be overstretched.
Another problem is that, while all of us can be experts beforehand on whether the gas will or will not come out, we cannot know until we have a number of wells in place whether the ground will actually give up the gas. We know the gas is there, but we are not certain that it can be got out. We may not, in the end, be able to produce the gas we expect, although we may be able to produce a lot more, which is very exciting.
There must be a balance: as we move forward, we must take local people with us, reassure them about the environmental position and reduce the number of lorry movements by piping more gas, however expensive that may be. In that way, the local population will, in the end, be able to buy into these projects, and our green and pleasant countryside will remain green and pleasant. We have a large population, and we want to keep our green spaces and our food production.
Rachael Maskell (York Central) (Lab/Co-op)
Is not the problem that we are taking a piecemeal approach to licensing exploration, as opposed to a strategic approach that looks at the real impact the industry will have across our land?
Neil Parish
The hon. Lady makes a good point, which I am sure the Minister will address.
I will leave my comments there, because others want to speak, and it is right that everybody has a chance to debate this issue. Again, I thank my hon. Friend the Member for Thirsk and Malton.
Tom Elliott (Fermanagh and South Tyrone) (UUP)
I too thank the hon. Member for Thirsk and Malton (Kevin Hollinrake), and I congratulate him on securing a debate on this important national issue. I was interested to hear the hon. Member for Tiverton and Honiton (Neil Parish) take all the blame for what has gone wrong in Europe. I am pleased, at long last, somebody has done that.
My position on this issue is clear, definite and unambiguous: I will not be in favour of hydraulic fracturing, or fracking, while there is any reasonable suspicion that it has a negative impact on the environment and public health. There is still a lot of work to be carried out on that. The Government have progressed the matter too quickly.
It is easy to say that fracking in the bigger states of America is positive and produces a massive supply of energy. We need to compare those states with some of the areas we have heard about today and with my constituency, where there is cross-border exploration between Northern Ireland—in other words, the United Kingdom—and the Republic of Ireland. It is clear that we cannot compare a small, densely populated area such as mine with the vast, sparsely populated areas in America that are carrying out fracking. There is no comparison at all, but the Government have not taken that on board.
In Fermanagh and South Tyrone, we set up a group to investigate fracking. Anyone who wants a report that is positive about fracking can find one, while anyone who wants a report that is directly opposed to it can find one too, so we set up our own group to look at the issue. The group, which contained someone from the medical profession, solicitors, business people and farmers, came up with three recommendations, which I fully support.
The first is that we cannot progress with fracking unless there is a full, independent—I stress “independent” —environmental impact assessment that demonstrates that there will be no negative environmental impact. Secondly, there must be a full, independent public health impact assessment. Members have talked about public health, but it is not always given the importance it should have, and it is sometimes overlooked. We must therefore have confirmation that there will be no negative public health impact. Thirdly, there needs to be an economic appraisal of how good fracking is not only for the UK, but for local people. What will they get out of it economically? Will their land simply be taken off them and vested in someone else? Will trucks drive through their areas? Will they have monstrous structures on their back doorsteps? Will they get a reduction in their rates or council tax? Will there be a direct economic benefit for them, or will the big companies come in and take all the benefits? That is something people will not comprehend.
The hon. Member for Tiverton and Honiton indicated that we have not been good at taking people with us. That will not happen unless the three points I mentioned are dealt with and it is shown that fracking is not harmful to the environment or public health and that it provides an economic benefit to local people. That is the position of the Ulster Unionist party. I should make it clear again that the Government have moved on too quickly.
Mr George Howarth (in the Chair)
Order. I am afraid I have to allow time for the two Front-Bench speakers, and the spokesman for the Scottish National party also has to take part. I will have to restrict the remaining Back-Bench speech to three minutes. I call David Mowat.
David Mowat (Warrington South) (Con)
In my three minutes, I shall make just a couple of quick points.
Although I support fracking, I agree with the three points made by the hon. Member for Fermanagh and South Tyrone (Tom Elliott): there can be no issue with public health, we should have done more to bring local benefits to the fore, and the environment cannot, of course, be damaged. In the end, those things will have to be assessed by people who are independent and have the confidence of the local community. As my hon. Friend the Member for Tiverton and Honiton (Neil Parish) said, it is clear that, whatever else we take from the debate, we must accept that we have not brought local people with us on fracking. However, every form of energy has issues, whether it is solar, wind or nuclear, which is still by far and away the dominant form of decarbonised energy in the world. Fracking also has issues, and we have to work through that to decide whether fracking is worth it. Members have said that fracking may not be cost-effective, and if it is not, it will not be done, so that problem goes away.
I want to talk a little about the three elements of UK energy policy: low-cost energy, sustainable energy and energy security. Gas has a major role to play in all those, but the fact is that our own gas is running out. Output from the North sea is 70% of what it was 10 years ago. Some 85% of the energy used in this country still comes from fossil fuels, with coal and oil making up by far and away the majority. If we could replace all the coal being used in the world with gas, that would reduce global carbon emissions by the same amount as a fivefold increase in renewables. That is something we should be going after, and parties that believe in a low-carbon future should embrace it. There are, therefore, environmental advantages to fracking.
We have talked about cost, and it has been said that fracking in the UK may not transform the economy, as it has in America. In the United States, there is massively lower fuel poverty—I have not heard those words today. We may well not succeed in reducing our gas bills by a factor of four, with the same transformative impact that has been seen in American manufacturing. Manufacturing is relocating from parts of the UK.
Peter Grant (Glenrothes) (SNP)
Does the hon. Gentleman not accept that the reduction in gas prices in the United States of America simply will not happen in the United Kingdom, so it is not appropriate to talk about fracking being a game changer in terms of reducing fuel poverty?
David Mowat
In an intervention I said I thought it unlikely that gas prices would be reduced by a factor of four. I also think it unlikely that if we have more gas in Europe there will not be a reduction in gas prices, with a knock-on impact on fuel poverty and on the competitiveness of our chemicals industry, what is left of our steel industry, and our aluminium industry. Those industries have to a large extent left our country, not only for south-east Asia but for other parts of Europe with lower energy prices than ours where coal continues to be burned.
The issue before us is the fact that we produce roughly 80 GW of electricity in this country, and 24 of them will be turned off by the end of the decade. We already have a 2% capacity margin for 2017. Members in this Chamber—not just those on the Front Benches—must be accountable on the question of the lights going out. Shale gas is not a panacea and I do not argue that it is, but we should explore it responsibly and take into account the environmental issues raised today. However, we should not fail to understand that our country is not infinitely rich. The resources in the North Sea that kept large parts of our country going for a long time are running out. We import more and more of our gas from Qatar and increasingly, potentially, from Russia. Parliamentarians all have a role, and a responsibility for the UK as a whole to take those issues seriously.
Callum McCaig (Aberdeen South) (SNP)
I thank the hon. Member for Thirsk and Malton (Kevin Hollinrake) and congratulate him on obtaining the debate, and on his impeccable timing, given the news on the decision in Lancashire. Time is clearly of the essence, so I shall crack on.
Five themes have been brought out in the debate, and alignment between them is needed if fracking is to be a viable part of the energy mix: safety, public support, climate change, how that fits in with the total energy mix, and economic viability. Dealing with this is to be devolved to Scotland. Scottish Ministers have suggested a moratorium while concerns are explored. That is welcome and it will go a long way towards ensuring that discussions on the food and drink and tourism industries, which my hon. Friend the Member for Falkirk (John Mc Nally) mentioned, are not put in jeopardy by fracking.
There is a question about whether new licences will be issued while the process is going on—it has been suggested that they will not—and there is also a question about licences that have been granted, and how they will be considered when things are devolved. I think there are issues about the economics. If we are to have a truly safe regime it needs to be gold-plated, but that is likely to be more expensive, and I understand that it will be more expensive in the UK than it would be in the United States. Doing things more safely than they are done in the United States, from a more expensive cost base at the start, with gas prices considerably lower than those of a number of years ago, brings the economics into question. I take the point that if shale gas extraction is not economic it will not happen, but we need to consider that when time is spent on exploring.
Perhaps the biggest issue is not economic viability or whether shale gas will change our dependence on fossil fuels, but whether it would be the best use of this country’s resources, from the carbon dioxide point of view, and whether we are going to meet our objectives on reducing carbon emissions. Shale gas will produce more.
Mr George Howarth (in the Chair)
Order. Time will not be added on for this intervention.
Antoinette Sandbach
Does the hon. Gentleman accept that burning coal is more deleterious than shale gas, which has a lower carbon footprint?
Callum McCaig
I certainly do, but it has been pointed out that other technologies could be better. In the context of carbon, when we extract more resources we need to make sure that we get the best ones and the biggest bang for our buck. As I represent Aberdeen, and given the continuing potential of the North sea, I wonder what effect investigating new onshore gas will have on the well established offshore industry, which makes an immense contribution. That needs to be considered along with the entire energy mix that we are considering.
Julie Elliott (Sunderland Central) (Lab)
It is a pleasure to serve under your chairmanship, Mr Howarth. I thank the hon. Member for Thirsk and Malton (Kevin Hollinrake) for securing the debate. That fact that 18 Members from four parties have taken part shows how important and pressing the subject is for many parties. I know the Thirsk and Malton area well and acknowledge its beauty. My train stops there on the way down to London and on the way back, although I have another hour to go then.
This is the first debate I have participated in from the Front Bench on the subject of shale gas. Before the election my former colleague Tom Greatrex, who was the Member for Rutherglen and Hamilton West, looked after this area of policy. His expertise on energy policy was recognised on both sides of the House and I am sure that Parliament will miss his knowledge and good humour.
Our position on shale gas was formally set out in debates on the Infrastructure Act 2015. We made it clear that there should be no shale gas extraction without a framework of robust regulation and comprehensive inspection. Regrettably, the Government have consistently sidelined our legitimate environmental concerns, and those of the public, in a headlong dash for gas. Speeches from different parties today supported that view. With 80% of homes in Britain still reliant on gas for heating, shale gas may have a role to play in displacing some of the gas that we currently import, boosting our energy security; but I want to make it clear that that potential worthwhile benefit must not come at the expense of robust environmental protection, or our climate change commitments.
During the passage of the Infrastructure Act 2015, we were clear about what changes were needed. The Government initially accepted Labour’s amendment to overhaul the regulatory regime for shale gas by introducing 13 vital measures before extraction could occur. That was a huge Government U-turn and a great victory for the protection of Britain’s environment. However, in the House of Lords the Government watered down five of those crucial commitments.
The Government watered down regulations to prevent fracking under drinking water aquifers, ignoring the existing definition of such areas and insisting on the need for a new definition—thus scope was opened up for the weakening of the measure through leaving some areas out. They weakened regulations to prevent fracking under protected areas such as national parks, dropping our proposal to prevent fracking “within or under” protected areas. Instead, they indicated that they would block fracking only “within” them, creating the prospect that protected areas such as areas of outstanding natural beauty and national parks could be ringed by operators fracking underneath them. They dropped requirements for operators to notify all residents individually of potential developments, and to monitor all fugitive emissions—not just methane. Finally, they weakened regulations requiring an environmental impact assessment at all sites.
We tabled an amendment to reverse those changes, but were denied a vote. There should be no shale gas developments in the UK unless those protections are re-introduced. It is right that individual applications should be decided at local level, as has been outlined this week. It is not the place of central Government to become involved and to trump local democracy. That is the Eric Pickles way of doing business. It is not mine, nor that of my right hon. Friend the Member for Don Valley (Caroline Flint). However, the decisions made in Lancashire in the past few days and people’s concerns reflect the fact that the Government have repeatedly ignored genuine and legitimate public concern in a dash for shale gas at all costs.
Does the Minister accept that the continued public concern over shale gas extraction might be caused, at least in part, by the Government’s refusal to address their legitimate concerns? Does she agree with me that the best approach would be to accept, as they have once before, the amendment that Labour tabled to the Infrastructure Act 2015, which would ensure there was a robust regulatory framework? Without that, people will not have the confidence they need and to which they are entitled. I look forward to the Minster’s reply to those concerns and to the crucial questions of many colleagues. There is public concern across the country, as yesterday’s events in Lancashire showed. I hope she will address those things directly, so that the public can be fully informed of the issues in this important debate about how we can safely and most cost-effectively meet our energy needs and our climate change commitments.
The Minister of State, Department of Energy and Climate Change (Andrea Leadsom)
It is a great pleasure to be here today, Mr Howarth. This has been an incredibly valuable and timely debate on the potential of shale gas. My hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) was exactly correct to say that to take advantage of the huge potential offered by shale, we need to get it right, and as the new Minister for energy, I can assure him that making sure we get it right is a key focus for me.
My hon. Friend the Member for South Ribble (Seema Kennedy) mentioned that often, the people who object to shale are called nimbys or luddites, and she is also exactly right. I would never call those with local, very well founded concerns nimbys or luddites. Plenty of people in my constituency have concerns about all manner of things, ranging from HS2 to wind farms, to anaerobic digestion plants. They are not nimbys or luddites, but local communities who need to understand better. My priority will be to reassure them and, yes, to use an element of persuasion. As my hon. Friend the Member for Tiverton and Honiton (Neil Parish) pointed out, we need to take local people with us, so that will be my absolute focus.
Julian Sturdy (York Outer) (Con)
The Minister is absolutely right about taking local people with us. The whole debate about fracking is ultimately about trust, as has come out loud and clear in this morning’s debate, but sadly, findings of the Government’s “Shale Gas: Rural Economy Impacts” report were redacted. That does not fill people with trust, so will she encourage the relevant Minister in the Department for Environment, Food and Rural Affairs to publish that report as soon as possible?
Andrea Leadsom
The report is going to be published. The timing is up to DEFRA, but I share my hon. Friend’s concern that it should be made available to the public, so that they can draw their own conclusions.
I want to mention that my hon. Friend the Member for Fylde (Mark Menzies) was keen to speak up for his constituents, but sadly, there was not the time. My hon. Friend the Member for Warrington South (David Mowat) rightly pointed out that keeping the lights on is a key and critical role of Government, and that shale has the potential to contribute to that. We need home-grown energy more than ever before, so we in this Government remain committed to renewables, which now provide 15% of our electricity. We are also committed to energy efficiency and, vitally, to affordability. Shale gas could be a pragmatic, home-grown solution to help meet those needs.
Gas is the cleanest fossil fuel. It still provides a third of our energy demand and we will need it for many years to come. Around 70% of the gas Britain uses is for heating, and many people in businesses will need to keep using gas for heating while we develop and deploy renewable heat sources. We are likely to continue relying on gas to provide much of our heat, as well as to generate electricity into the 2030s, but even with our projected doubling of renewable capacity by 2022 and the planned creation of additional nuclear-fuelled generation in the 2020s, increases in gas-fuelled generation will be needed, as we phase out unabated coal. Flexible electricity generation, such as that fuelled by gas, is also needed to help balance the electricity grid as our policies bring forward relatively inflexible and intermittent low-carbon generation.
We used to be net gas exporters, but that is no longer the case as North sea gas declines. By 2025 we expect to be importing over half the gas we consume. Meanwhile, events around the world show us how volatile energy supplies can be. Developing shale gas could make us less reliant on imports from abroad while providing more jobs and creating a whole new British industry. It is therefore vital that we seize the opportunity to at least explore the UK’s shale gas potential while maintaining the very highest safety and environmental standards, which we have established as world leaders in extracting oil and gas over decades.
I fully appreciate, of course, that many people are worried by the stories they have heard about fracking, so I want to address, as a key point in my remarks, the most important and overriding concern of shale gas exploration, which is safety. Reports by the Royal Society, the Royal Academy of Engineering and Public Health England have considered a wide range of evidence on hydraulic fracturing in a UK context, concluding that risks can be well managed if the industry follows best practice, enforced through regulation. We have one of the world’s most developed oil and gas industries in the North sea basin and some of the world’s most experienced and highly regarded regulators. We have been successfully regulating the gas and oil industry in the UK for over 50 years. Our regulatory system is robust and we are proven world leaders in well regulated, safe and environmentally sound oil and gas developments. We have strict requirements for on-site safety to prevent water contamination and air pollution and to mitigate seismic activity.
The health and safety and environmental regulators are independent, highly specialised and well trained and will enable the development of shale gas in a safe and environmentally sound manner. Regulators simply will not allow unsafe or environmentally unsound operations. They are able to suspend and revoke permits immediately, and if necessary, impose criminal sanctions, including prosecution.
Mark Menzies
As the Member of Parliament for Fylde, I am very reassured to hear what the Minister is saying. However, will she assure me that as well as the planned inspections, some will be unannounced?
Andrea Leadsom
I can give my hon. Friend that reassurance. It is certainly intended that there will be regular visits from health and safety and Environment Agency staff, and that there will be unannounced visits.
Andrea Leadsom
No, I am sorry. We are really short of time—I apologise.
The Environment Agency assesses the hazards presented by fracking fluid chemicals on a case-by-case basis. They will not permit the use of hazardous chemicals where they may enter groundwater and cause pollution. The Health and Safety Executive scrutinises well design and requires week-by-week written updates on drilling progress. DECC has implemented a thorough system of rigorous checks before any drilling or fracking, as well as a live traffic-light system during the actual operations to ensure that earthquakes will not occur.
To reinforce the regulations further, the Infrastructure Act 2015 introduced a range of further requirements if an operator is to carry out hydraulic fracturing. They include a mandatory environmental impact assessment, which is absolutely vital. There was a misunderstanding that fracking would not require an environmental impact assessment, but that is not the case and DECC has tried to remedy that misunderstanding. Any hydraulic fracturing will require separate independent environmental impact assessments. Additionally, unlike in the United States, in this country disclosure of all chemicals used in the fracking process and 12 months of baseline groundwater monitoring will be required. There will be specific community benefits to be paid and the complete exclusion of protected areas. We already require everything that has been recommended by the European Commission.
To summarise on safety, we have among the best and most experienced regulators in the world and a 50-year track record on safe oil and gas exploration. Our regulatory environment for shale is the toughest in the world, but it is also important to discuss the enormous potential benefits of a successful shale gas industry, not just in energy security, as I have said, but in direct benefits to jobs, growth and community investment.
Ernst and Young has estimated that a thriving shale industry could mean 64,500 jobs nationally or over 100 jobs per year at a typical site. The value of the supply chain for the industry has been estimated at £33 billion between 2016 and 2032. This is an incredible opportunity. We are at a pre-beginning phase, but there is a huge amount to play for. British engineering is at the forefront of the world and we have the opportunity to showcase that further by developing for ourselves a safe and environmentally sound shale gas industry. In November, we announced a new national network of colleges for onshore oil and gas to train the next generation of specialists to help the UK seize those opportunities.
The final, very important, point I want to address is the position of local communities. We believe that every community hosting shale should share in the benefits, so we have committed to setting up a sovereign wealth fund to ensure that revenues are shared fairly. We welcome industry’s commitment to putting £100,000 per fractured exploration well to local communities and then a minimum of 1% of any subsequent production revenues. That could be worth as much as £5 million to £10 million over the life cycle of the well. Wider communities will also benefit, as local councils will retain 100% of the business rates that they collect from productive shale gas developments.
I sincerely thank all Members for participating in this debate. It is important that we have the opportunity to discuss such a key issue for our future energy mix. As the UK’s Committee on Climate Change said of shale gas in 2013
“the UK will continue to use considerable, albeit declining, amounts of gas well into the 2030s”,
and
“if anything using well-regulated UK shale gas…could lead to lower overall…greenhouse gas emissions than continuing to import”
gas.
Question put and agreed to.
Resolved,
That this House has considered shale gas.