Energy: Shale Gas

Baroness Verma Excerpts

Wednesday 17th October 2012 Lords Chamber

[Lord Naseby]

To ask Her Majesty’s Government what is their policy on shale gas extraction in the United Kingdom.

[The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Baroness Verma)]

My Lords, my department’s key objectives are to ensure that the UK has safe and secure energy supplies for the future. It is also committed to reducing carbon emissions. That is why we are encouraging a diverse and sustainable energy mix and therefore support industry’s endeavours in pursuing new energy sources in the UK such as shale gas.

[Lord Naseby]

I congratulate the Government on the recent announcement encouraging the extraction of gas by fracking. When your Lordships’ House realises that nearly 40% of the United States is now supplied by natural gas, does this not offer a huge opportunity for the United Kingdom to develop cheap and reliable domestic sources of energy, to create jobs, in particular in the greater Blackpool area, to reduce imports of gas and, finally, to improve the environment? At the same time, your Lordships’ House will remember that when North Sea oil was developed, it was a success because of the combination of government working with the industry. This must happen with shale gas as well.

[Baroness Verma]

My noble friend is of course right that the Government are very alert to the possibilities for boosting growth and employment in Lancashire and across the country. If shale gas does prove to be commercially viable, there is every reason to suppose that it will be positive for the economy and employment. However, the industry is at a very early stage of development and we need to make sure that all our commitments to ensuring that it is safe and secure to extract are formally looked at.

[Lord May of Oxford]

The Government are currently on course to fulfil their legally binding commitments under the Climate Change Act—only, however, by virtue of the recession. A second “dash for gas” rather than a speeding up of our decarbonising of electricity generation is flatly inconsistent with the commitments to 2030. Am I correct in assuming that the only way to square this is to maintain the recession, and that that explains some of this?

[Baroness Verma]

No, my Lords. I think the noble Lord knows from his question that that is not the case. We need to look at a wide range of energy sources and make sure that in the long term we fulfil our commitment to the 2030 target, but also that we utilise new renewable sources .

[Lord Howell of Guildford]

Further to my noble friend Lord Naseby’s Question, has my noble friend noticed that in the United States domestic gas prices are up to one-third lower than they are here, that its CO₂ greenhouse gas emissions are falling and are the lowest for 20 years, and that it is attracting a great deal of new industry and manufacturing back into America and creating new jobs? Is this not the sort of balanced model we should be considering?

[Baroness Verma]

My noble friend is absolutely right. However, the conditions in the United States are different from those in the United Kingdom. We first need to make sure that we thoroughly explore the ability to develop shale gas safely and securely. However, it is something that we are looking at very constructively.

[Lord Taylor of Blackburn]

My Lords, can the Minister tell us whether the Government have any idea when shale gas will be viable or not?

[Baroness Verma]

My Lords, I have tried to make it quite clear that we are still exploring all the possibilities for extracting shale gas. As soon as we have the go-ahead, we will report to your Lordships’ House and make a general statement.

[Baroness Parminter]

My Lords, fracking to extract shale gas uses enormous quantities of water, three-quarters of which remains down the wells. Given that the overabstraction from our rivers is already causing huge problems, what can the Minister tell us about the consideration that is being given to water resources in determining our future energy policy?

[Baroness Verma]

My Lords, my noble friend is right to raise her concern, and I hope that I can reassure her that any abstraction of water for industrial purposes is subject to control by the Environment Agency or by corresponding bodies in Scotland and Northern Ireland. The agencies will not permit additional abstraction in any area if they consider that it is not sustainable.

[Baroness Worthington]

My Lords, whether gas comes from fracking or more conventional sources, it is still a source of carbon dioxide and greenhouse gases. Therefore, will the Minister reassure us that in the horse trading that we believe is going on around the Energy Bill at the moment, there will be no concession to reduce our investment in carbon capture and storage in favour of decarbonisation? We must do both, and we must have carbon capture and storage on gas if it is to play a role in the future.

[Baroness Verma]

I absolutely agree with the noble Baroness. It is an exciting technology that can decarbonise coal and gas-fired power stations and large industrial emitters. The Government are absolutely committed to CCS. We have one of the best offers anywhere in the world, including £1 billion in capital funding for our new competition, contracts for difference for low-carbon generation through our electricity market reforms, and £125 million to support research and development.