Infrastructure Bill [HL]

Lord Hollick Excerpts

Monday 10th November 2014 Lords Chamber

[Lord Hollick (Lab)]

My Lords, I was chair of the Economic Affairs Committee of your Lordships’ House during the inquiry into shale gas and oil. The committee wanted to be fully satisfied that the regulatory regime was equal to the task of protecting people and the environment. We took extensive evidence from regulators, academics, local communities, NGOs and exploration companies. We concluded that the regulations and the mandatory industry guidelines gave the regulators all the powers needed to ensure that the environment and the health and welfare of local communities could be effectively protected. The report in 2012 by the Royal Society and the Royal Academy of Engineering, already referred to by the noble Lord, Lord Jenkin, came to exactly the same conclusion.

We heard from many witnesses that the current regulation of offshore and onshore gas and oil drilling in the UK is widely regarded as best in class. Four of the proposals in Amendment 113G are already covered by existing regulations or industry guidelines, and there is no need to gold-plate them and include them in the Bill. We on the committee endorsed the recommendation in Professor MacKay’s report that fugitive methane should be measured when shale gas extraction begins. The industry agreed to this. To impose a requirement to monitor over the previous 12-month period is quite unnecessary, and only extends an already far too long 16-month timetable to get permission to drill.

We also recommended in our report, as my noble friend has mentioned, that wellhead inspections should be carried out by independent inspectors. The Environment Agency and the Health and Safety Executive will indeed conduct job inspections but the well examiners will be employed by the companies. This was raised in the debate by the Minister last week, and she pointed out that the companies would provide these. One of the important things about regulation is that not only must it be independent but it must be seen to be independent. So why not ask the companies to foot the bill—if resources are a concern, and I suppose they are—for one of the agencies to carry out these independent inspections?

Our report identified that the tortuous and bureaucratic process to approve exploratory drilling is the major impediment to finding out whether or not the UK’s shale deposits are economically exploitable. It is regrettable that amendments were not tabled to address this serious problem, which has the merit of being supported by the facts and which would have commanded cross-party support. If passed, these amendments would add further complexity to an already devilishly complex and bureaucratic approval process, and will potentially extend the timetable by a further 12 months. Having lost the argument on the facts of the case, delay is now the main weapon of choice for those who oppose fracking. To add further delay to the exploration of shale gas would be a misstep.

Shale gas and shale oil could be a major boost to our economy; create jobs and preserve them; boost public and local finances; and halve emissions by replacing coal, which currently generates 40% of our electricity. For these reasons, I will not be supporting this amendment.

[Lord Deben (Con)]

My Lords, I declare an interest as the chairman of the Committee on Climate Change. It is true that the Minister and I easily could have a conversation, but I wanted to put into context where the Committee on Climate Change stands on the basis of this amendment. Our view is that it would be quite wrong to depart from the science here, when we spend so much time in asking that small group of people who still do not think that climate change is happening, to look at the science there. In other words, we have a responsibility to keep to the science. The science is very clear that there is no fundamental reason why we should not frack and produce gas. Indeed, there is no argument scientifically opposed to it. The royal societies have done us a great deal of good in their work, because we are able to state that as clearly as any fact can be stated. Of course, no scientific fact remains fact for ever; it can always be altered by new information. That is why all scientists are properly referred to as questioning. That is why I believe that we should start with those facts and say that we should go ahead and see whether fracking can give another way of providing the energy we need.

It is very important to say to those who do not want to frack that there is always somebody who does not want to do any of these things—people who think that neither onshore nor offshore wind is acceptable, or people who do not like tidal power. I am fed up with people who have their favourite bits and dislike every other means of generation. The climate change committee has said, rightly, that we want to have a range of means whereby we can meet our future needs. Fracking could, or should, be part of that because we have already said that we will need gas into the 2030s. I thank the Government again for confirming the fourth carbon budget. Following those budgets, we still will need gas. Surely it would be better coming from our own resources than being brought in from somewhere else, particularly given that we do not always have the confidence in many of those places “somewhere else” that we have in our own resources.

That is the background. However, I warn the Government that there is always a chance of snatching defeat from victory. I am afraid that the Government are not always aware of that, so I want to encourage them not to get into that position. I think that the amendment is unnecessary. However, it seems to me that the reason it has been tabled is that there is so much misunderstanding outside. It is terribly important for the Government to underline the very significant difference between the way in which we deal with environmental questions here and the way in which they are dealt with in the United States. First, we deal with them on a national basis, whereas the United States deals with them on a state basis; secondly, there is no doubt that the United States system is lacking very considerably. There are some really disgraceful examples of failure to insist upon basic environmental protections in the United States. I do not want us to have to fight the public, who are misinformed, not about what happens in the United Kingdom but about what has happened in certain states in the United States. Nor do I want the public to take the rather ridiculous view that because it happens in the United States we can do it here, that it is the answer to everything, and there is no need to think about anything else. Both ends of that spectrum are wrong. Those who think that fracking will be the answer to everything and that there will be lower prices are clearly wrong. I say to the noble Lord that to say that it is unacceptable or that it is a sin against the Holy Ghost is also fundamentally wrong and unscientific. We ought not to go back into that same area of the dark ages, which we are invited to do by those who do not believe in climate change. We have to have a sensible, central position, which the Government have.

I would like the Government to oppose this amendment but to say publicly that they will do three things. One is to make it much clearer to everybody in a simple form how the regulations will work and how they will be enforced. The second is to make it absolutely clear that where the Select Committee of this House has recommended that independent checking is necessary, the Government will find a way of insisting that that is done. That is important not just because the House of Lords has suggested it but, frankly, because no one believes any business if it is doing its own checking. It does not matter how good or how bad the business is, we all believe that checking should be done independently—the business can pay for it but it ought to be done independently. We ought to promise that and state it.

The third thing is, I am afraid, even more important—namely, the Government have to give a real undertaking that, when the moment comes, there will be no question of a shortage of funds for any of the institutions that are responsible for protecting the public. The public are very suspicious that it is all too easy to say, “We would have done it but we couldn’t because it was all too long so we did some random checks”. If this measure is to go ahead, we have to know now that there is no question of there being any shortage of funds for the necessary checking, and that it will be done independently. Those of us who believe in the market believe that the cost should fall, as always, on the people who are proposing the fracking.

I end with one simple comment. I am finding it more and more difficult to deal with those who talk about the free market but do not believe in it. They talk about the free market but mean the managed and biased market that we happen to have and which is convenient for them. I do believe in a free market but that means that the costs of the production of this gas should be placed fairly and squarely on the shoulders of the producers and therefore also on the shoulders of the consumers. Given that, I do not think that we need these amendments. The Government are right to proceed on the basis that part of our means of generating for the future will be our home-produced gas.