Energy Security: Gas Production

Lord Henley Excerpts

Tuesday 17th April 2018 Lords Chamber

[Baroness Featherstone]

To ask Her Majesty’s Government what is their assessment of the extent to which indigenous gas production is needed for energy security.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)]

My Lords, indigenous gas production plays an important role in meeting the United Kingdom’s energy needs, meeting 46% of the country’s gas demands in 2016. We also benefit from a diverse and flexible system of gas sources, including from Norway and continental Europe, and LNG terminals that can source gas from around the world.

[Baroness Featherstone (LD)]

I thank the Minister for his Answer, but I have three recommendations for him.

[Baroness Featherstone]

Well, I will see at the end if he agrees with my recommendations. First, does he agree that it would be good to end the ugly and unnecessary distraction of fracking? Secondly, stepping up support for renewable gases, given the trouble the Government are in on decarbonising heat, might be a very good idea. Thirdly, making energy efficiency a national infrastructure priority would contribute to indigenous energy security. Does the Minister agree?

[Lord Henley]

Up to a point, my Lords. Renewable gas is all well and good, but it is never going to meet all our demands. As far as energy efficiency is concerned, yes, that is wonderful and it does make a considerable difference to what we are doing. As regards production of domestic shale gas, I think we should do everything we can to tap into this potential resource. I am very sorry that the Liberal party is opposed to it. Particularly at the moment, with problems with Europe’s dependency on gas from Russia and other places, there is a lot to be said for making us less reliant on imports, looking at domestic shale gas and at the opportunities that are available there.

[Lord Lawson of Blaby (Con)]

My Lords, is my noble friend aware that the strongest opponents of fracking, both in this country and in mainland Europe, are the Russians, whose economy is wholly or very largely dependent on exports of gas? Is it not much more sensible for us to develop our own resources, be free from this threat of dependence on Russia, have cheaper gas—because gas transport is expensive—and provide a real boost to the north-west of England, where the richest shale seams exist?

[Lord Henley]

My Lords, my noble friend makes the very point I would have made if I had been able to develop even further my Answer to the three recommendations from the noble Baroness on the Liberal Benches. He is quite right: other countries are overdependent on imports from Russia, and it is not surprising that Russia opposes our attempts to look at the opportunities available through domestic shale gas.

[Lord Rooker (Lab)]

Can the Minister therefore explain why the Government reduced our storage capacity by closing storage in the North Sea? There was three weeks’ capacity of storage there. Given the vagaries of gas supply, notwithstanding the interconnectors, to lose that much storage and reduce us to, I think, less than a week’s capacity for storage is, frankly, irresponsible.

[Lord Henley]

My Lords, I do not accept that. Levels of gas storage in the United Kingdom are often compared unfavourably with those on the continent. Direct comparison between countries does not reflect the amount of our indigenous gas production or the other storage that we have available. If all that is taken into account, our storage is broadly in line with that of the rest of Europe.

[Baroness McIntosh of Pickering (Con)]

My Lords, if the Government proceed to frack, will they undertake the commitment, given at the time that the energy Act was passed in the House of Commons, that there will be no fracking in or near an area of outstanding natural beauty or a national park?

[Lord Henley]

My Lords, I am not going to comment on any individual application that might or might not come forward for the exploration of domestic gas. But I repeat that there are considerable opportunities for this country in production and exploration, and I think we should look at those opportunities.

[Lord Cunningham of Felling (Lab)]

My Lords, is not the lesson of previous Governments, both Conservative and Labour, that energy security comes from being as self-sufficient as possible in energy production? In the present circumstances, given climate change and air pollution problems, that means that we should rely on gas, nuclear power and energy conservation as the bedrock of our policy.

[Lord Henley]

I am in total agreement with the noble Lord and I am glad that he is in agreement with me and my noble friend Lord Lawson.

[Lord Polak (Con)]

My Lords, the Institute of Directors says that shale gas could cut gas imports by half. National Grid says that shale gas could heat every home in the UK—notwithstanding that there could be 60,000 jobs with that. What are the Government doing to help the shale gas industry?

[Lord Henley]

My Lords, I hope that we are giving every possible encouragement to the shale gas industry. We think that the economic impact of shale, both locally and nationally, could be very large indeed. There will be opportunities for jobs and energy security, and in a great many other areas, through supporting that industry.

[Lord Lea of Crondall (Lab)]

My Lords—

--- Later in debate ---

[Lord Stephen]

My Lords, I first declare my interest in renewable energy, as declared in the register of interests. Can I return to the issue of gas storage and storage in general? Given in particular the current international uncertainties and the severe—some would say critical—shortages of gas that have occurred over recent years, should the Government not be doing more to review the situation in relation not only to gas storage but to battery and hydro storage? These are crucial issues that require the Government’s greater attention.

[Lord Henley]

My Lords, I will stick to gas at the moment, but I believe that we are doing everything necessary on this front. In October 2017, we published Gas Security of Supply: Strategic Assessment and Review. That work looked closely at our gas security over the next 20 years and concluded that the United Kingdom’s system was robust.