Infrastructure Bill [HL]

Lord Wigley Excerpts

Monday 10th November 2014 Lords Chamber

[Baroness Young of Old Scone (Non-Afl)]

My Lords, I rise to support Amendment 113G. I declare a past interest, having been chief executive of the Environment Agency for eight years. This is a technology that is deeply distrusted by the public. Certainly, my experience of regulation in the environmental field is that if a degree of certainty can be given to both sides—the industry and the public—that is hugely beneficial in removing tension, distrust and suspicion. Industry used to tell me time and again that it would prefer to see clear, unequivocal regulation, which it could then fit its business around and make sure that it was compliant with, so that there was no doubt about the requirements that would be laid upon it. This was the most successful way of developing a degree of trust on hotly contested issues that could have an environmental impact.

Therefore, I urge the Minister to think seriously about placing in the Bill an environmental impact assessment and some of the other associated requirements here. Some of these exist elsewhere in legislation, but there is no harm in making the point that whether they are implemented is not the decision of the Environment Agency but a requirement because this technology is so distrusted by the public. I think it should cover exploration as well as extraction. It should also be associated, if I may say so slightly in advance, with the two amendments—or at least one of them—that I have put down, which we will be debating later. Certainly in the initial stages of this hotly contested area, we need belt and braces, not just belt.

[Lord Wigley (PC)]

My Lords, I am content to support Amendment 113G as far as it goes but, to my mind, it does not go anything like far enough. I regret that I will be introducing rather a disconsonant note to the debate. I will outline my opposition to hydraulic fracking, lock, stock and two poisoned barrels, in the debate on a later amendment in my name—here’s to knocking these diabolical fracking provisions out of the Bill. These amendments give a modicum of increased environmental protection, and I welcome the reference to the levels of methane in underground water, to which I shall certainly be returning in a later bank of amendments. I seek some clarification from the mover of the amendment on whether either the Scottish Parliament or the National Assembly for Wales has any role in the consideration of these draft instruments.

[Lord Teverson (LD)]

My Lords, when one reads the amendment, one is clearly very favourable to it because it tries to do certain things and convey a message, which the noble Baroness is quite right about, in terms of public confidence in the fracking industry. However, sometimes in this debate we forget the amount of regulation and control that is already there. For a start, we must have the permission of the surface land owner. We need planning permission from local authorities. We need a licence from DECC from a series of auctions or allocations of those licences and areas for that. We need the Environment Agency to approve and we need health and safety to give the go-ahead as well. That is quite substantial. When I look through the amendment a little more, I certainly agree with independent inspections and disclosure of chemicals. I am far from sure about a 12-month period for a previous record of monitoring. From discussions on this in Committee, this is not particularly seasonal and 12 months is a long time—certainly, in terms of fugitive gases, methane in particular, that is extremely important.

However, I am not sure that the Bill is the right place to ask the Committee on Climate Change to do something. In fact, I am sure the Minister could speak to the chairman of the Committee on Climate Change quite easily—maybe even after the debate—and come to an agreement on whether that was needed. I agree that maybe a report is required. It could, of course, really look only at foreign experience, while perhaps UK experience becomes far more important. We clearly cannot do that until after at least some of the exploration stage, and maybe some of the production stage, has happened. However, I agree that we need the regulation of this technology to be comprehensive, and we have a good track record in general in this area. Perhaps we need that regulation to be in one place comprehensively so that not only the industry but we as parliamentarians can understand it and, more importantly, the public can see how this all works.

So while I do not really support this amendment in its current form, I hope that the Government are working on this anyway and will bring forward, perhaps later in the Bill or in secondary legislation, a comprehensive summary and description of exactly how all these levels of regulation will work within the industry.

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[Lord Young of Norwood Green (Lab)]

My Lords, in taking part in the debate, my only interest is that we should make a judgment based on supported evidence, rather than on allegations. If nothing else, the amendment is important because there is a battle of ideas on fracking that we need to win. Noble Lords have said that we are not currently doing so well on public opinion. Unfortunately, the scare stories are believed. There has been an important event since we debated this in Committee: the publication of The Economic Impact on UK Energy Policy of Shale Gas and Oil. It is a very important report. No one has questioned its integrity or the evidence it contains. I stress that point again and again.

Like many others, I looked at Amendment 113G. I was pleased to hear my noble friend Lady Worthington say that she was not opposed to fracking. I suppose the amendment is a bit like the curate’s egg: it is good in parts. It is probably better than the average curate’s egg because most of the parts are good. I support an environmental impact assessment—I agree with the noble Lord, Lord Teverson, that that is something that needs to be done. I support independent inspections of the integrity of wells used; I am pretty sure the fracking companies would as well. They are also prepared publicly to disclose the chemicals used for the extraction process. Again, read the report: they are in there. For the most part they are used in tiny amounts, and for the most part there is no problem with them whatever.

It is true that some practices that went on in the States were not helpful to the process of fracking. That is not to say that everything that happened in the States was bad, because it was not—there are plenty of good examples from there. We should not forget that fracking substantially reduced emissions in the States. It did and has created jobs and it has brought industry back to the States. We should not forget that important aspect.

[Lord Wigley]

The noble Lord quotes the economic impact report, which I have with me. Paragraph 269 says that the Government,

“must also explicitly address the safety issues”.

The committee that produced that report was clearly not entirely happy on that count.

[Lord Young of Norwood Green]

Of course, we have to address the safety issues. I am not seriously saying that anybody in the Chamber is recommending that we embark on a process of mining or whatever activity without addressing safety issues. I listened carefully both to the noble Lord, Lord Wigley, and to his companion sitting next to him, the noble Baroness, Lady Jones. They both expressed a deep-rooted opposition to fracking, which frankly puzzles me. If we do not have fracking we will still be dependent on LNG, on which I think about 27% of our energy is based. I do not understand the basis of their opposition. I sometimes do not understand the green analysis of a number of issues because it is not always evidence-based. I could say the same about GM foods, but that is another issue.

To return to this important subject, I, too, want to hear what the Minister has to say. I heard it once in Committee, but it is worthy of repetition. I listened to and understand the concerns of my noble friend Lady Farrington, but I direct her to the report. It said that when people talk about earthquakes, it might be better if we talk about tremors. There was one in Wigan in Greater Manchester, which was of a 1.5 magnitude. It was about the same as a heavy lorry passing.

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[Lord Jenkin of Roding]

My Lords, neither the noble Baroness who has moved this amendment nor the noble Lord, Lord Judd, appears to have recognised that what we are talking about in Clause 32 is developing land 300 metres below the surface. Looking at the list of the various sites in the noble Baroness’s amendment, I cannot of think of one of them which could remotely be affected by horizontal drilling 300 metres below the surface. I am surprised that neither the noble Baroness nor the noble Lord seems to have acknowledged this. We are not talking about actually drilling down in a special area of conservation or a site of special scientific interest which implies development on the surface. We are talking here about horizontal drilling 300 metres below the surface and I just cannot understand how either the noble Baroness or the noble Lord can think that this could affect these important sites. Perhaps I have missed something.

[Lord Wigley]

My Lords, first, I thank the noble Baroness, Lady Young of Old Scone, for introducing these important amendments. Perhaps I could immediately pick up the points made by the noble Lord, Lord Jenkin, a moment ago. Yes, there will be drilling across—of course there will be—but somewhere they have got to drill down. If he is saying there shall be no drilling down at all in these areas, just drilling across into them, then at least I would understand what he was saying, but he appears to say that there should not be any rules whatsoever appertaining to these special areas because the drilling can only come from the side. Well, it cannot only come from the side, and I would have thought that that is something that perhaps could be addressed later if this amendment was accepted.

I wholly welcome this amendment—

[Lord Jenkin of Roding]

The noble Baroness had an amendment in Grand Committee which addressed the question of whether there should be downward drilling and whether pads for developing shale gas could be located in any of these places. Although we did not vote in Grand Committee, the argument was perfectly clear that it would depend on the site. You have got planning permission and you have got a whole range of other things. I must confess I have not reread the noble Baroness’s debate on that occasion, but what we were talking about here is 300 metres below.

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[Lord Wigley]

As I was saying before such diverse interventions, I welcome these amendments. They exclude important parts of these islands from the impact of fracking.

I come back to the experience of the United States—I will be talking more about that in the next group of amendments. The experience of the United States has been scorned in our previous debates, but it teaches us to be extremely careful before allowing such developments in our more sensitive rural areas. I accept that perhaps the rules will be different in the United Kingdom compared to the United States. That is one of the reasons why we need to have rules in the United Kingdom to look after these areas. Most certainly in the United States, to my knowledge, there are areas that have suffered not just from the effects underground but also very badly on the surface.

Noble Lords will be aware of the classic book Rape of the Fair Country by Alexander Cordell. We in Wales know what such extractive industry can do to our beautiful countryside and its effect on all sorts of wildlife. My only reservation with this amendment is merely that it does not go far enough and that many sensitive environments are excluded from being governed by it.

[Lord Borwick]

My Lords, I only wish that I could agree with the noble Lord, Lord Judd, that it is a short-term exercise to get planning permission for this sort of development. The planning permission process will take many months, probably years, and cost a large amount of money. It is not a short-term exercise, and that is why I think this amendment is unnecessary because it will be up to the local council or local planning authority to grant the planning permission, with all the pressures put upon them to make the decision to protect the environment. With these sites listed in this amendment, I do not think they are going to get the planning permission which the noble Baroness fears they will. I really do not think it is going to be possible.

Secondly, I am sorry that—despite trying to listen to it—I am not sure I fully understood the meaning of “functionally linked”. How wide a definition will that actually be in practice? I wonder whether the noble Baroness could help in explaining that?

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Moved by

[Lord Wigley]

114: Clause 32, page 38, line 15, at end insert—
“(6) This section shall not extend to Wales unless an order authorising it has been passed by the National Assembly for Wales.
(7) An order under subsection (6) may contain any conditions which the Assembly deems appropriate.”

[Lord Wigley]

My Lords, I shall speak to Amendments 115B, 115C and 123, which also stand in my name and are grouped with Amendment 114. First of all, could I say a word about the whole issue of fracking? Noble Lords will be aware that when this Bill was given its Second Reading there was no reference to the provision it now makes in relation to fracking. When we first started in Committee, there was no sign of the amendments we knew were being prepared. Ostensibly, we had to wait until the conclusion of the consultation process in August, before amendments were formulated. But since little notice seems to have been taken of the overwhelming opposition to fracking expressed by the general public, this seems to have been little short of a charade. It is not good enough to take an arrogant and disparaging attitude to those who harbour genuine fears.

Now that we have the amendments in the Bill and the provision for fracking is likely to be confirmed as part of it as we move forward from Report, unless we challenge it rigorously tonight, then the fears that people have will be underlined and reinforced. That is why I have tabled my amendments. But before I address the detailed wording, I will make it clear why I unreservedly oppose the application of fracking technology to extract underground gas. I have grave reservations about this technology. I do not express these doubts and concerns on the basis of a nimby approach. There are no identified areas of potential fracking activities in my home county of Gwynedd, nor do I harbour doubts about any form of modern applied technology.

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[Baroness Verma]

My Lords, I note the clause stand part amendments and the amendment proposed by the noble Lord, Lord Wigley, regarding the application of the right to use deep-level land for the purposes of exploiting petroleum or deep geothermal energy in Wales. The Government support the development of shale gas and oil. Natural gas from shale could play a crucial role in supporting UK energy security, as well as an important role as a part of the transition to a low-carbon economy, and that was well debated previously. The carbon footprint of UK-produced shale gas would likely be significantly less than coal and lower than imported liquefied natural gas. Domestic shale gas could also benefit the UK in terms of jobs, tax revenues and growth, mitigating some of the falling revenues from the North Sea.

However, it has become clear that difficulties in obtaining underground access pose a barrier to exploring this new industry. The same problem also applies to the deep geothermal industry, which is likewise at an early stage of development in the UK. New lateral drilling methods that can cover much larger areas underground mean that existing processes for obtaining underground access can be disproportionately costly and time consuming in relation to the potential benefits. Currently, companies must negotiate rights of access with every landowner living above underground drilling. If these negotiations fail, an oil and gas operator can make an application to the Secretary of State, who may refer the matter to the courts. This process gives a single landowner the power to delay a development significantly and, in the case of geothermal, it is likely to stop the project entirely.

The right to use deep-level land would help unlock exploration for shale gas and deep geothermal as we move towards a low-carbon economy. However, let me be clear that we are not proposing any changes to the regime for surface access, and the regulatory system that deals with the potential risks associated with drilling and hydraulic fracturing will remain the same. I can reassure noble Lords that a company looking to develop shale or geothermal would still need to obtain all the necessary permissions, such as planning and environmental permits. The onshore oil and gas industry has committed to engage with communities at the early stage of operations, as well as consulting through the planning application process. Our robust regulation will protect residents while allowing this source of homegrown energy to develop in a way that is fair to communities.

EY has estimated a thriving industry could mean 64,500 jobs nationally. Locally, that could mean cementing contracts, new facilities and jobs for local companies. Communities that host shale development could see a share of this, which is why we welcome the developers community benefit package, similar to other technologies such as wind. This will pay communities £100,000 per hydraulically fractured well site at exploratory stage and 1% of revenue if it successfully goes into production. As with wind farms, wider communities will benefit too, as local councils will also be able to retain 100% of the business rates that they collect from productive shale gas. Therefore, there are many potentials of this industry to communities in Wales if shale production takes place.

Petroleum extraction is a non-devolved matter. As such, the proposals for oil and gas will apply across England, Wales and Scotland. The proposals on deep geothermal energy also cover England, Wales and Scotland, where in Scotland deep geothermal energy is exploited for the sole, or main purpose of electricity generation. Schedule 7 to the Government of Wales Act 2006 sets out the conferred subjects over which the Welsh Assembly can exercise legislative competence. Oil and gas are clear exemptions from the conferred list of economic development and, furthermore, the exploitation of deep geothermal resources could not be considered to have been conferred under any of the subjects in Schedule 7.

Although deep geothermal and oil and gas activity may impact upon conferred subjects such as environmental protection, that is not what they properly relate to for the purposes of the legislative competence test in the Government of Wales Act 2006. In addition, the right of use clauses are not removing any existing regulatory requirements. We therefore see no ground on which this measure would be within the legislative competence of the Welsh Assembly. On that basis, there is no rationale for requiring approval by the Welsh Assembly before the section can apply in Wales.

It is also worth noting that, while oil and gas are non-devolved matters, all existing planning authority procedures and powers will remain in place. As such, the different UK planning regimes will continue to regulate shale gas or geothermal developments according to their existing planning procedures. I have reflected on the noble Lord’s amendment and in response to his concerns I have offered him a government perspective. Therefore, I hope that the noble Lord, Lord Wigley, will withdraw his amendment.

[Lord Wigley]

I am very grateful to those who have taken part in the debate and to the Minister for her response. Quite clearly, I would be unlikely to carry the House on the amendment that the clause should not stand part of the Bill. Although my heart would want me to go down that road, I suspect that I would come to a blind alley. Therefore, I will not press it on this occasion because there will be opportunities in another place. I have no doubt that many Members of all parties in the other place will wish to come back to this because there is deep concern outside.

Even if one was in favour of fracking in principle, I would have thought that it would be very wise to pay attention and take the maximum possible notice of the reservations that exist outside, because these are the real fears of real people in real communities, and they need to be addressed. Members in all parts of the House have expressed that in the series of debates we have had tonight.

Turning to the lead amendment in the group, which relates to the powers of the National Assembly for Wales, I think that it is ironic that at a little earlier than this time tomorrow—as the noble Lord, Lord Bourne, on the Government Front Bench, will be well aware—we will consider an amendment that would change the model of devolution for Wales to a reserved-powers model of the sort that exists for Northern Ireland and Scotland. This was a recommendation of the Silk commission, of which the noble Lord, Lord Bourne, was a member, and which appeared to have all-party support in Committee in this House. The Report stage of that Bill takes place tomorrow. That being so, unless there was a specific exemption made for these purposes, it would not be enough to rely on the 2006 Act, which the Minister has relied on in the debate tonight.

However, rather than argue technical, legalistic points arising out of legislation, I put this to the Minister in conclusion. When the National Assembly for Wales has responsibility for the environment, particularly for town and country planning, transport, and economic development within Wales, as well as health proposals, then surely it makes all sense to put the responsibility for this area also into its hands—at the very least to make sure that there is a working together. That surely was the intention of the Government when they responded to the Select Committee on Welsh Affairs report. I will not quote it again, but it underlined the fact that planning policy is a devolved matter and that planning is integrally involved in the decisions we are talking about in regard to fracking.

Therefore, I ask the Minister whether she will take this away between now and the debates in another place and give further thought, particularly in the light of the debate we will have on the Wales Bill tomorrow, as to whether there is a mechanism to make sure that the National Assembly for Wales and the Government of Wales are totally on board in a dialogue on these matters so that, in keeping with the principle of subsidiarity, the decisions affecting communities can be taken as close as possible to those communities—in this context, decisions affecting Wales can be taken by the National Assembly where possible. On that basis, I beg leave to withdraw the amendment.

Amendment 114 withdrawn.