Fracking
Debate between Baroness Verma and Lord Lawson of Blaby(9 years, 8 months ago)
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Baroness Verma
My Lords, we have been fracturing for many years. It is nothing new. We are making sure, through legislation recently enacted, that there will be protection for national parks and areas of outstanding natural beauty, but we need to explore potential so that we do not rely on overseas energy that spikes up in price and whose supply can be dictated by geopolitical events. I think that this Government have approached it very responsibly.
Lord Lawson of Blaby
My Lords, given the agreement on all sides of this House, and indeed more widely, on the desirability of boosting the development of the economy of the north of England, and given that American experience suggests strongly that the greatest single contributor to that could be the successful development of the Bowland shale in the north-west, is it not deplorable that Labour-led Lancashire County Council is doing its best to prevent this happening by turning down every single application for exploratory drilling?
Baroness Verma
My Lords, while my noble friend of course makes a very helpful intervention, we need to be mindful that development needs to take account of local communities. Therefore, it is absolutely right that the processes in place are followed properly so that community benefits reach out to those people. We should ensure that the case for fracking is made properly and that businesses, suppliers and operators are all engaged with local communities.
Electricity Generation
Debate between Baroness Verma and Lord Lawson of Blaby
Baroness Verma
My Lords, the right reverend Prelate raises an important issue about making sure that we have supply available all the time. The investment framework we have introduced means that we are getting on board two new interconnectors. They will make their final investment decisions this March. We realise that we need to do much more and that is why we have looked at the interconnectors as part of a programme that enables energy supply when it is needed most.
Lord Lawson of Blaby (Con)
My Lords, so far as indigenous energy resources are concerned, can my noble friend the Minister confirm that it is the Government’s policy to encourage the most rapid, practicable exploration of our UK shale gas resources? In that context, will she join me in deploring the unreasonable delays currently imposed by Lancashire County Council?
Baroness Verma
My Lords, my noble friend is of course a great advocate of shale gas, which offers huge potential for adding to the UK’s energy source but we need a diverse mix of energy supply. As a Government, we have tried to remove many barriers that get in the way of exploration but we have to work very closely with local communities to ensure that they come on board.
Green Climate Fund
Debate between Baroness Verma and Lord Lawson of Blaby
Baroness Verma
The noble Baroness is right. The fifth assessment report has concluded that, and many around your Lordships’ House recognise that. It is not just about Back-Benchers on my side; it is about ensuring that we deliver an informed debate, and perhaps thus far that debate has not really taken place.
Lord Lawson of Blaby (Con)
My Lords, I echo my noble friend Lord Teverson in welcoming the agreement reached within Europe the other day because it was clearly non-binding, as the noted energy expert Nick Butler has pointed out in an excellent article in today’s Financial Times. It is non-binding in two ways: it applies to the European Union and not to any of the member states, where decisions are in fact taken; and it is explicitly open to review in the light of the forthcoming global conference on these matters.
Baroness Verma
My noble friend is absolutely right: that it is not a binding target. However, in the UK we have not been under binding targets before but have managed to ensure that our uptake of renewables has increased. We have almost doubled our renewable energy sources since coming into government in 2010. It does mean that we have an agreement now from 28 members, all agreeing that the targets, being non-binding, enable each member state to be free and flexible in how it reaches those targets.
Energy: Winter Supplies
Debate between Baroness Verma and Lord Lawson of Blaby
Baroness Verma
My noble friend is right to highlight the outages. However, as I stated in my initial Answer, the grid already has existing options for companies to receive payment to reduce the amount of electricity they are taking from the grid at a time of peak demand during winter months. They are finalising new agreements with additional power stations to provide reserve services following the recent loss to which my noble friend referred. The national grid has around three gigawatts of additional tools to boost supply when margins are very tight and is in the process of extending our mutual assistance arrangements with both France and the Netherlands.
Lord Lawson of Blaby (Con)
My Lords, the noble Lord, Lord Ezra, has rightly drawn the attention of the House to a truly alarming state of affairs, which is the direct result of subordinating over a number of years energy policy to the damaging, fundamentally immoral and futile demands of the Climate Change Act. Has my noble friend had time to study the outstanding GWPF lecture given by our right honourable friend Owen Paterson MP on this very subject only last week? If she has not, will she now do so?
Baroness Verma
As ever, I am grateful for my noble friend’s interventions because they enable me to highlight that, of course, we do have to look at the costs of any policy. However, we also need to look at the commitments we have made to reducing carbon emissions both in our global targets and in our national targets. I remind noble Lords that having a lower-carbon energy sector has brought in more than £45 billion worth of investment in electricity generation. That is a clear signal that we need a diverse range of energy supplies. I have not looked at my right honourable friend’s lecture notes but I will do so.
Climate Change
Debate between Baroness Verma and Lord Lawson of Blaby
Baroness Verma
The noble Lord is of course right that we need to have ambitious but cost-effective targets. We need the European Commission’s 2030 framework to be urgently agreed, which will adopt the 40% that the noble Lord mentioned. However, we have a more ambitious target to work towards—50%—in the context of an ambitious global agreement. That is what the United Kingdom is working hard to get.
Lord Lawson of Blaby (Con)
My Lords, is it not high time that the Government recognise that there is no point in damaging British industry and hurting the poor by setting an example which most of the rest of the world has not the slightest intention of emulating?
Baroness Verma
My Lords, I am always grateful for my noble friend’s interventions. They are helpful because they allow me to raise a couple of serious issues. One of those is that unless all countries globally sign up to reducing carbon emissions, we will leave a bad place for future generations. Therefore, while I disagree with my noble friend’s premise about the intervention, it also challenges us to be able to respond in ways that allow competitiveness to grow while dealing with climate change issues.
Russian Gas
Debate between Baroness Verma and Lord Lawson of Blaby
Baroness Verma
The noble Baroness is right. We need to look at all aspects of usage of our energy supplies. But this feeds into a much wider question which will take a little longer to debate. The bigger point is that we need to ensure that we have a diverse mix of energy. That is what this Government pledge to do.
Lord Lawson of Blaby (Con)
My Lords, I welcome my noble friend Lord Jenkin’s point about the important report by this House’s Economic Affairs Committee published today on shale gas and our indigenous resources. This is a massive opportunity for this country. Does the Minister agree with the committee that unless the Government streamline the regulatory system and unless they get their act together, this massive opportunity will not be realised?
Baroness Verma
My Lords, my noble friend is right to raise the benefits of shale, but he will also be aware that we are looking at streamlining. We have streamlined the process. We are also reducing the tax on the proportion of a company's production from 62% to 30% at current rates. The Government are doing a lot to be able to ensure that those hurdles that may hinder the exploration of shale gas are removed, but we need to follow proper procedures and ensure that we also look at all the environmental impacts of shale exploration.
Climate Change: Extreme Weather
Debate between Baroness Verma and Lord Lawson of Blaby
Baroness Verma
I am extremely grateful for my noble friend’s intervention and I agree with every word that he has said.
Lord Lawson of Blaby (Con)
My Lords, is it not clear that my noble friend the Minister is completely mistaken in saying that it is not a question of mitigation or adaptation but both? There are competing claims on resources, and we have to decide which is our priority. Is it to decide single-handedly to decarbonise the world and thus, to no useful purpose, push up British energy prices, make fuel more expensive for British homes and litter the countryside with wind farms and solar panels? Is it not better instead to devote our resources to increasing our resilience to extreme weather events, whether or not the frequency of such events is marginally increased by global warming?
Climate Change
Debate between Baroness Verma and Lord Lawson of Blaby
Baroness Verma
My Lords, that would be unfair, given that the coalition Government have signed up to ensuring that we have made the largest investment in the green sector during our tenure.
Lord Lawson of Blaby (Con)
My Lords, en passant I express my gratitude to my noble friend Lord Ridley. If I may say so, the Minister is quite mistaken in suggesting that the alternatives are either decarbonisation or doing nothing. The IPCC report says very clearly, first, that climate change is far less serious than other changes affecting the world at present and, secondly, that the most sensible response is adaptation, something that, as my noble friend said, I have been advocating for the past six years.
Baroness Verma
My Lords, if my noble friend had listened to my original Answer, he would have heard that it was about adaptation and mitigation. They both work hand in hand, rather than either/or.
Ukraine: Gas Supplies
Debate between Baroness Verma and Lord Lawson of Blaby
Baroness Verma
My Lords, my noble friend is absolutely right to raise this very important issue, and it is right that the Government are encouraging investment in domestic gas production to help to reduce our reliance on imports. We are also taking steps to support UK shale gas exploration by accepting the recommendations of Sir Ian Wood’s report following his recent review of how to maximise recovery of oil and gas in the UK continental shelf. However, the real answer must be to ensure diversity of supply so that we can ensure affordable and cleaner energy.
Lord Lawson of Blaby (Con)
My Lords, I am delighted to hear my noble friend say that we need to get ahead with the exploitation of our shale gas resources—their exploration, appraisal and development —which, as the Geological Society pointed out, we have in abundance. However, is it not time to follow up words with deeds, to sort out our immensely cumbersome and unnecessarily complicated regulatory system and to stop the present Secretary of State for Energy dragging his feet, as, I regret to say, he is doing at present?
Baroness Verma
My Lords, I am, as always, grateful for my noble friend’s intervention, because it enables me to lay out exactly what the department is doing. We are trying to streamline the planning processes so that we do not have unnecessary hurdles in the way. The Government have established the Office of Unconventional Gas and Oil to help to develop the shale gas industry in the UK. My noble friend will be aware of the new tax allowance recently announced by the Treasury, which will reduce the tax on a portion of a company’s production income from 62% to 30% at current rates. However, as with all projects, including shale, it must be subject to rigorous scrutiny through the planning system and the regulators and there must be proper engagement with local communities.
Energy: Fracking
Debate between Baroness Verma and Lord Lawson of Blaby(10 years, 8 months ago)
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The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Baroness Verma) (Con)
My Lords, I thank my noble friend Lord Borwick for the measured and informed way in which he introduced the debate. He made a clear and eloquent case for the importance of shale gas development, including on why those who combat man-made climate change should support it.
Gas is a critical part of our energy mix. Our projections, and those of National Grid and others, show that we are likely to use almost as much gas in 2030 as we do today. Half the gas we use is for domestic heating and cooking and a quarter for industrial and commercial uses. These will be difficult to substitute.
I am glad that there was general acceptance, except by the noble Baroness, Lady Jones, that shale gas will play an important part in the contribution of gas to our energy needs. We all recognise that there is a long way to travel in order to be in receipt of those benefits. However, the debate has once again demonstrated that we need to have these debates. We need informed debates and to bust the myths that keep being generating around this issue. It was my noble friend Lord Ridley who said that you bust one myth and another crops up.
We import half of the gas we consume, and by the middle of the next decade, without shale gas production, it could be more than 80% as conventional gas production declines. The UK has invested in facilities to make sure that gas is easy to import, but we cannot be complacent. There is a compelling energy security case for shale gas development. There are economic benefits, as suggested by my noble friend Lord Borwick. The Institute of Directors published a study last year in which it estimated that a UK shale gas industry could support more than 70,000 jobs at peak production, with £3.7 billion of annual investment and significant tax revenues. The institute forecasts that production levels could reach a level of more than a third of the gas we consume today.
We support exploration activity to see what the actual commercial viability of UK shale is, but we are clear that we will allow only activity that is safe, sustainable and properly regulated. The UK has a strong regulatory system that provides a comprehensive and fit-for-purpose regime for exploratory activities, and we need continuously to improve it, as my noble friend Lord Caithness rightly said. The UK has more than 50 years’ experience of regulating the onshore oil and gas industry to draw on. This is supported by an authoritative review of the scientific and engineering evidence on shale gas extraction conducted by the Royal Academy of Engineering and the Royal Society in 2012. This concluded that,
“the health, safety and environmental risks associated with hydraulic fracturing … as a means to extract shale gas can be managed effectively in the UK as long as operational best practices are implemented and enforced through regulation”.
My department’s Office of Unconventional Gas and Oil will work closely with regulators, such as the Environment Agency in England, the Health and Safety Executive and industry to ensure that regulation is robust enough to safeguard public safety and protect the environment while imposing no unnecessary burdens of operators. We have also put in place appropriate measures to manage seismic risk. Of course, we would not proceed with shale development if it conflicted with our climate objectives.
A recent report by my department’s chief scientific adviser, David MacKay, and Dr Timothy Stone concluded that the carbon footprint of UK-produced shale gas would be likely to be significantly less than coal and lower than imported gas. The report made a number of recommendations further to mitigate any emissions from shale gas operations and the Secretary of State will respond positively to that report shortly.
I appreciate that there may be concerns about the impact on local areas, and it would be helpful briefly to explore them. A site will be smaller than a cricket pitch, and although it might produce shale gas for around 20 years, there will be certain periods when most of the activity takes place—for example, during set-up or in preparation for fracture. These operations should have broadly similar impacts on health, local amenities and traffic movements to those from existing onshore gas and oil extraction methods. Each application’s local impact is carefully considered via the local planning system. The industry has made a commitment to work with local communities to minimise the impact of shale gas and oil operations wherever possible and is researching methods and technologies that will reduce traffic movements to and from the site.
I am sure noble Lords will agree that it is important that local communities benefit from hosting shale gas developments. That is why we welcomed the package of benefits industry has announced. At exploration stage, £100,000 in community benefits will be provided per well site where fracking takes place, and 1% of revenues at production stage will be paid out to communities. Industry estimates that that could be worth between £2.5 million and £10 million for a typical producing pad. Each year, operators will have to publish evidence of how they have met their commitments. The benefits will be reviewed as the industry develops, and operators will consult further with communities. This is a new sector developing. My department is working hard to help people to understand the facts about shale gas, particularly with local communities.
A few questions were raised so I will quickly address them in the time I have left. My noble friend Lord Lawson said that we need to reduce regulation on shale. The Environment Agency has—
Lord Lawson of Blaby
I never said anything of the sort, as my noble friend should recall. I said we need rigorous regulation, but it must be clear and as speedy as the rigour allows.
Baroness Verma
I apologise for misrepresenting what my noble friend said—absolutely. The Environment Agency is developing a single application form for permits. In 2014, the Environment Agency will aim to reduce the time for low-risk activity from 13 weeks to approximately two weeks. I hope that that addresses the point raised by my noble friend. Of course, it is not about reducing regulation; we do not want to see regulation reduced, but we also do not want to see barriers where they do not need to be in place.
My noble friend Lord Teverson mentioned CCS projects. As my noble friend is aware, we were able to go forward with two of them at Peterhead and White Rose—the Drax project. The Government have committed £1 billion to CCS—a commitment from this Government to make sure that we are not lacking in ambition for CCS. My noble friend also mentioned dependency on Russian gas. I reassure him that only a small percentage of our gas comes from Russia. By and large we are better connected, with 50% being our own gas and a larger proportion of what is left coming from Norway.
Energy: Gas Storage
Debate between Baroness Verma and Lord Lawson of Blaby(10 years, 11 months ago)
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Baroness Verma
My Lords, as always, the Government constantly review what they are doing to ensure that energy is secure and that the lights stay on. Of course, these reviews take place regularly. However, we are working with Ofgem and National Grid, and are in constant conversation over those matters.
Lord Lawson of Blaby (Con)
My Lords, I congratulate the Government on increasing the amount of gas storage by 20%. I recall that when the party opposite was in government, I called for increased gas storage month in, month out, but it did nothing at all about it. However, 20% is not enough. Will the Minister place in the Library of the House the curious calculation that DECC has come up with, which says that any further increase in gas storage would be economically damaging, because it is highly implausible?
Baroness Verma
My Lords, my noble friend has asked me to place information in the Library, as have other noble Lords, and I will be very happy to do so. However, I reassure noble Lords that beyond what we are doing, further projects in the pipeline will be coming on line, so there is plenty going on. However, unfortunately, I am not able to provide dates at this moment in time.
Energy: Winter Supply
Debate between Baroness Verma and Lord Lawson of Blaby
Baroness Verma
My Lords, I remind the noble Viscount that under this Government, since 2010, £35 billion-worth of investment in the energy sector has come forward and there has been a 56% increase in the renewables sector. It is a fallacy to say that there is a hiatus when we are a very open and welcome country for investment. However, if we were to go by the plans that the noble Viscount’s party is trying to project, that investment would be driven away.
Lord Lawson of Blaby (Con)
My Lords, I welcome the noble Lord, Lord Ezra, to his place. I recall well his being the chairman of the Coal Board when I was Energy Secretary. My noble friend the Minister referred to the Energy Bill but it has nothing to do with his Question. The Bill will do its damage in the future when it implements the targets of the Miliband Climate Change Act but there is a crisis in this coming winter, which is a result of the large combustion plant directive. That European directive requires us to close prematurely coal-fired power stations. Will she give an assurance that if it is a question of either implementing the directive straight away and the lights going out or saving the lights from going out, the Government will choose the latter course and not implement the directive?
Baroness Verma
My Lords, I am always grateful for my noble friend’s very helpful questions and I reassure him that the Energy Bill is relevant to the Question because it brings forward all the measures we need for long-term security in energy at a competitive price. I think that I have already answered the Question: we have enough energy there and we have the measures in place to be able to respond to any short-term fluctuations, so I hope my noble friend will be reassured that his lights and our lights will stay on.
Climate Change
Debate between Baroness Verma and Lord Lawson of Blaby(11 years, 7 months ago)
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Lord Lawson of Blaby
My Lords, the Conservative MEPs are to be warmly commended. The Government have got this completely wrong and it is fortunate for them that the ETS has been killed. Will the Minister reconsider her Answer to the noble Baroness, Lady Worthington? Is she not aware that what the Opposition are calling for in this Question is a futile gesture, the only possible result of which would be higher energy costs, the loss of British business to countries such as the United States where energy costs are much lower, fewer jobs and an increase in fuel poverty? That is what they are advocating.
Baroness Verma
I know that my noble friend has some views on this but I cannot agree with many of them. The market for low-carbon goods and services is a growing one for the UK, so I do not buy into the argument that this is costing British business. We are increasingly able to offer renewable energies as part of a good mix of our energy supply, so that we become less dependent on international global price hikes. I urge my noble friend to look at the benefits of having a good energy mix. Part of that must be a good carbon floor price.
Energy: Electricity Generation
Debate between Baroness Verma and Lord Lawson of Blaby(11 years, 8 months ago)
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Baroness Verma
My Lords, new nuclear is one of the country’s options. As I have said many times at the Dispatch Box, it is part of an energy mix. However, like all things, it goes through the proper procedures, as the noble Lord would expect. We have a lot of interest in investment in the UK from outside; I just mentioned Hitachi’s purchase of Horizon. The noble Lord needs to be reassured that we are going through processes that need to be properly done through planning and all the other necessary requirements of new nuclear. On yesterday’s question, if the noble Lord had been here, he would have heard my noble friend’s response.
Lord Lawson of Blaby
Following the very pertinent Question of the noble Lord, Lord Ezra, will my noble friend assure the House that if the need arises, our coal-fired power stations will be kept open for as long as necessary, regardless of the European large combustion plants directive? Looking further ahead, will she agree that the Government need to give every encouragement they can to the fastest possible development of our indigenous supplies of shale gas, which is clearly the fuel of choice for power stations in the foreseeable future?
Baroness Verma
My Lords, my noble friend raises a number of important and key points. Of course we are looking at ensuring that we do not have a dip in our secure energy supply. We are also making sure that our new energies will take over when the old gas and coal-powered stations come off stream. We cannot meet our carbon emission reduction targets if we have unabated coal continuing to come out of our power stations. However, we are looking at increasing our gas supplies as well as all our other alternative energy supplies.
Energy: Draft Energy Bill
Debate between Baroness Verma and Lord Lawson of Blaby
Baroness Verma
My Lords, I expected the noble Baroness to come back with a serious question and I am disappointed that she did not take this opportunity to further reach out to the work that we are doing. I will not comment on remarks made that I cannot attribute, so I will resist the noble Baroness’s call to comment on my honourable friend.
Lord Lawson of Blaby
My Lords, leaving aside all the green waffle, I welcome the inordinate delay in bringing forward the energy Bill, to which the noble Baroness, Lady Worthington, referred. Does my noble friend think it conceivable that this delay is connected with the fact that all the scrutiny that the draft Bill received—including from the group of which the noble Baroness, Lady Worthington, and I were both members, but more importantly from all the leading energy experts in this country—showed the Bill to be a complete nonsense? Among other things, it would give the Secretary of State arbitrary powers without any parliamentary scrutiny, and it would raise energy costs both for business and consumers. Does my noble friend not agree that the only sensible thing is to go completely back to the drawing board and abandon the present form of the energy Bill?
Baroness Verma
Of course, my noble friend does not expect me to agree with anything that he has just said. We very much took on board the recommendations and comments made by noble Lords in the Committee led by the noble Lord, Lord Oxburgh, and also by the Energy and Climate Change Committee. However, the Bill will arrive. As with all Bills that need proper scrutiny, we will come to the House with a Bill date when it has reached the stages that it needs to reach.
International Aid
Debate between Baroness Verma and Lord Lawson of Blaby(13 years, 11 months ago)
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Baroness Verma
My Lords, in my answer to my noble friend I think I answered what he asked.
Lord Lawson of Blaby
My Lords, does my noble friend recognise that although economic development is well intentioned the preponderance of academic studies have demonstrated that in fact it does more harm than good? Will the Government now reconsider allowing overseas development aid to increase substantially at a time when severe cuts are necessary in all other forms of public expenditure?
Baroness Verma
My Lords, I cannot agree with my noble friend. Development aid helps millions of people and even though we are going through difficult times ourselves, we will not save money on the backs of poor people.