Shale Gas and Oil (EAC Report)

Lord Smith of Clifton Excerpts

Tuesday 4th November 2014 Lords Chamber

[Lord Smith of Clifton (LD)]

My Lords, I am not sure whether anyone will be sitting here in 50 years’ time.

I, too, should like to thank the noble Lord, Lord MacGregor of Pulham Market, for introducing this debate and join all my colleagues in thanking him for his excellent chairing of the Economic Affairs Select Committee over the past four years. I also want to thank our clerk, Mr Bill Sinton, and wish him well in his retirement, and Professor Nick Butler, our very knowledgeable specialist adviser. As has been said, the noble Lord, Lord MacGregor, successfully contrived to get the committee members to produce unanimous reports during his term. That is a commendable record given the contentiousness of the subjects investigated by the committee. That, of course, includes the question of shale gas and oil, which is the topic of today’s debate.

In the wider context of the UK’s energy supplies, it must be recognised that successive Governments over many years have abysmally failed to produce effective and coherent energy policies. The cumulative result, as my noble friend Lord Shipley said, is that our energy supplies are now at their lowest level in the living memory of most people. Recently, it has been reported that the margin is down to a mere 4%. Long may the recent mild weather continue, to avoid another catastrophic supply failure if a severe cold snap occurs. Some of us recall what happened in 1947, and more will recall the shivering conditions at the turn of the year in 1962-63.

The very feeble response from the Government to our report revealed a lack of urgency bordering on irresponsibility by Ministers that is frankly unacceptable. As the noble Lord, Lord Lawson, pointed out, “energy requires energy”, to coin a phrase. If successive Governments have found it impossible to produce a coherent, credible and robust energy strategy that would endure in the medium term, perhaps the obvious approach is to spread the risks by fostering a diversity of energy resources that would embrace nuclear, solar, wind and tidal power and, now, shale. As has been remarked, all sources have their advantages and drawbacks and all, of course, are subject to the vagaries of both climate change and prices in the international markets. The recent developments that have enabled the exploitation of shale deposits as a source of oil and gas, most noticeably in the USA, have added to the range of supplies of which we should seek to take advantage.

The case for shale, as the committee points out, is not without its problems. The fracking methods involved contain potential environmental dangers, but it is said that fracking may also lead to an excessive demand for water and the possibility of its pollution. Disturbances caused by greater use of lorry traffic and the fumes and noise emitted, together with toxic gas escapes, are all risks that need to be assessed, properly regulated and kept under continuous review by both the industry and government. That is only common sense. However, as many noble Lords have remarked, the risks have to be placed alongside the advantages that are likely to accrue from shale exploitation. Very important among these would be lessening the UK’s dependence on foreign supplies, particularly prudent in the increasingly turbulent times we are currently witnessing. There would be increases in employment and great benefits for our energy-intensive and petrochemical industries. This would help to promote the UK’s manufacturing capacity, which is much needed if we are to reduce our economic reliance on the financial services sector of the economy.

There is now an urgent need to commence shale extraction, not least to ascertain more accurately the extent of our potential reserves. Time is of the essence. The vast majority of people will want to secure our energy supplies overall, including shale exploitation. However, there is likely to be a strong element of nimbyism among the public, which will be played upon by pressure groups who—in principle and never mind the evidence—are totally opposed to shale exploitation whatever the safeguards imposed. The Government and their successors should offer the necessary guarantees to rebut nimbyism and encourage the creation of a fracking industry to exploit the use of shale as a new source of energy.