Draft Onshore Hydraulic Fracturing (Protected Areas) Regulations 2015

Andrea Leadsom Excerpts

Tuesday 27th October 2015 General Committees

[The Minister of State, Department of Energy and Climate Change (Andrea Leadsom)]

I beg to move,

That the Committee has considered the draft Onshore Hydraulic Fracturing (Protected Areas) Regulations 2015.

It is a pleasure to serve under your chairmanship, Mr Hanson. Before outlining what the draft regulations seek to do, I would like to take this opportunity to restate the Government’s commitment to a low-carbon and affordable future for energy. Gas, the cleanest fossil fuel, still meets a third of our energy demand and we will need it for many years to come. It is vital that we seize the opportunity to explore the UK’s shale gas potential, while maintaining the very highest safety and environmental standards.

We have established those standards as world leaders in extracting oil and gas over many decades. Shale can and will be developed safely. The UK has more than 50 years’ experience of safely regulating oil and gas exploration. We have world-class independent regulators, who will not allow operations that are dangerous to local communities or to the environment to go ahead. Safety is and always will be absolutely paramount.

Members of the public are understandably worried about a process which has not been used in the UK before, and my job is to provide reassurance and a clear explanation of why this potential new industry is very much in our interests and will be safely carried out. We have a strong regulatory regime for exploratory activities, and we will continuously review it as the industry develops. We insist on the highest safety standards, and all of that is backed up by independent checks from the regulators.

There is no denying the fact that 80% of us use gas for heating and cooking, and industry uses gas in many everyday products. At the moment, we import about 40% of our gas needs and by 2030 we could be importing three quarters of the gas we use.

[Michael Fabricant (Lichfield) (Con)]

On a point of order, Mr Hanson. Someone is taking a photograph in the Committee Room. Surely that is out of order?

[The Chair]

Thank you, Mr Fabricant. Whoever is taking a photograph, would they please desist? That is not allowed in the Committee.

[Andrea Leadsom]

As I said, at the moment, we import 40% of our gas needs, and by 2030 that could increase to around three quarters of the gas we use, so shale is vital, not just to reduce our reliance on imports but because it can create an energy bridge while we further develop renewable energy, improve energy efficiency and build new nuclear generating capacity.

[Christian Matheson (City of Chester) (Lab)]

On that point, will the Minister give way?

[Andrea Leadsom]

I will not give way at the moment. I would like to make some progress in making my case and then I will take some interventions.

Importantly, studies show that the carbon footprint of electricity from UK shale gas is likely to be significantly lower than that of unabated coal and imported liquefied natural gas. Shale offers a valuable decarbonisation route from where we are today to where we want to be with a cleaner energy future.

Exploring for shale will also help create jobs and grow local economies. Investment in shale could reach £33 billion and support as many as 65,000 jobs in the oil, gas, construction, engineering and chemicals sectors. Locally, that could mean not just highly skilled jobs, but cementing contracts, new facilities and work for local businesses such as lorry drivers and income for local restaurants and bed and breakfasts.

The draft regulations serve to strengthen further the protections already in place for protected areas. It is right that we are debating them at the earliest opportunity, as we agreed to do during debate on the Infrastructure Act 2015. The powers to make the regulations are found in section 4B of the Petroleum Act 1998, as inserted by section 50 of the Infrastructure Act, which, following scrutiny in this House and the other place, received Royal Assent in February 2015.

The Infrastructure Act requires the Government to specify protected areas within which hydraulic fracturing cannot take place. As hydraulic fracturing occurs far below the surface, the regulations can relate only to subsurface activities, so they will not contain an answer to all the questions Members may wish to raise about hydraulic fracturing at surface level; however, I will address those questions in a moment.

I remind hon. Members that sections 4A and 4B of the Petroleum Act set out further safeguards for onshore hydraulic fracturing in England and Wales to provide the public with confidence that the shale industry is being developed in a safe, balanced and measured way. The Act lays down a number of conditions that must be satisfied before a hydraulic fracturing consent is issued by the Secretary of State. It includes two conditions specifying that associated hydraulic fracturing cannot take place within “protected groundwater source areas” or “other protected areas”.

[Michael Fabricant]

Will my hon. Friend give way?

[Andrea Leadsom]

If my hon. Friend will bear with me, I will certainly give way in a moment.

Those two terms are not defined in the Act. Instead, the Act contains a requirement for the Government to produce draft regulations with the proposed definitions and to lay them in both Houses by the end of July this year. To honour that commitment, we laid the instrument in draft form on 16 July.

Let me be clear: despite accusations to the contrary by Opposition Members, there has been no attempt to sneak the regulations past Parliament. The instrument has been in the public domain for three months, during which time the Opposition have not requested a debate on the Floor of the House, so to affect outrage that there will not be a House debate at such a late stage—hours before this Committee met—is pure political point scoring. On that point, I will give way to the hon. Member for City of Chester.

[Christian Matheson]

It is okay. Time is moving on.

[Andrea Leadsom]

In that case, I give way to my hon. Friend.

[Michael Fabricant]

While I have concerns to raise if I catch your eye later, Mr Hanson, I want to ask my hon. Friend a question following on from a visit I paid to the Environment Agency last Friday. Does she agree that, although there were major incidents of pollution in the early stages of fracking in the United States, there have not been such incidents since the US implemented strict regimes; and can she assure me that there will be robust regulations in the United Kingdom?

[Andrea Leadsom]

I assure my hon. Friend that the Government, in conjunction with the regulators, have taken every step possible to ensure that we can safely exploit shale. Let us be clear: at the moment no hydraulic fracturing is going on in the UK. This industry is at the very early stages and we have used every bit of our more than 50 years of regulatory experience to make the process the safest possible.

[Huw Irranca-Davies (Ogmore) (Lab)]

The Minister has been at pains to give assurances on environmental protection, but does she accept that one of the assurances that even those who are adamantly opposed to onshore hydraulic fracking as part of unconventional gas set great store by was that it would not take place in protected areas such as sites of special scientific interest or anywhere near any groundwater source zones? There is a fear that, with these regulations, that assurance is being undone.

[Andrea Leadsom]

The regulations tighten the protections on hydraulic fracturing; that is precisely what they are for. As I have made clear, they deal with the subsurface implications of hydraulic fracturing, a process that occurs far below ground level, and they will tighten the protections. Far from loosening them or turning back on whatever the hon. Gentleman seems to think, they will improve the protections.

[Christian Matheson]

I accept what the Minister is saying: the regulations deal with what is happening far below ground level. But for that to happen far below ground level, something has to happen at the surface. Frankly, I cannot see why the Minister is making that rather false distinction.

[Andrea Leadsom]

I am grateful to the hon. Gentleman because he gives me the chance to repeat what I said, which is that the Infrastructure Act required the Government to lay regulations to deal with the hydraulic fracturing process, which happens far below the ground. We will, as soon as possible, make a statement regarding the areas on ground level—the surface drill level—in which activity will be banned. We are looking very carefully at how to define and protect our most valuable areas. We will be making announcements shortly, but that is not for today. These regulations are the consequence of a requirement in the Infrastructure Act to deal with the subsurface implications, so I will move on.

The draft regulations set out definitions for the protected groundwater source areas and other protected areas in which hydraulic fracturing will be prohibited, and will afford greater protection to some of our most precious areas in a manner that still meets the Government’s broader policy objective of supporting the long-term development of the UK’s shale gas industry.

Regulation 2 defines protected groundwater source areas. The definition is equivalent to the existing definition of source protection zones 1, which applies to those areas close to drinking water sources where there is the greatest risk associated with groundwater contamination. The draft regulations ensure that the process of hydraulic fracturing cannot take place in such areas at depths above 1,200 metres. The vast majority of drinking water supplies are located at depths above 400 metres. The limit therefore provides at least 800 metres between the depth of most drinking water sources and the highest possible level at which hydraulic fracturing can take place.

As required by the Infrastructure Act, we consulted the Environment Agency and Natural Resources Wales on the definition of protected groundwater source areas. They confirmed that they are content with the definition being aligned with source protection zones 1, as that reinforces their approach to controlling risks from other groundwater activities. Indeed, it is already the case that neither agency permits onshore drilling for oil or gas, which does currently happen in the UK—to be clear, hydraulic fracturing does not—in source protection zones 1. They have successfully influenced operators not to apply for sites in those zones and have ensured that pipelines do not run through such areas. Furthermore, if either agency assesses that more stringent controls are needed to protect groundwater, those will be applied as conditions in the environmental permits required for all developers. The proposed definition would not affect the environmental regulator’s current powers to refuse permit applications within source protection zones 1, 2, 3 or wider on a case-by-case basis, if it considers that an activity poses an unacceptable risk to the environment.

Regulation 3 defines “other protected areas” as national parks, the broads, areas of outstanding natural beauty and world heritage sites. The draft regulations ensure that the process of hydraulic fracturing cannot take place above 1,200 metres below ground in such areas. In defining protected areas there is a need to strike the right balance, affording them additional protection without stifling the nascent shale industry. The Government firmly believe that the depth limit chosen—1,200 metres—strikes that balance.

In addition, national parks, the broads and areas of outstanding natural beauty are our finest landscapes and are afforded the highest status of landscape and scenic beauty protection within the planning system. Similarly, world heritage site status is the highest international heritage designation. Our world heritage sites are simply irreplaceable, and the Government take their responsibility to conserve and protect them very seriously.

[Mr Mark Williams (Ceredigion) (LD)]

Will the Minister explain the omission from that list of SSSIs, which the hon. Member for Ogmore mentioned, not least in the light of comments made by her ministerial colleague during debate on the then Infrastructure Bill that SSSIs would be protected and part of the list?

[Andrea Leadsom]

The regulation deals with activity underground—1,200 metres below ground. The Infrastructure Act 2015 already deals with the level below ground at which hydraulic fracturing may take place normally. The important balance to strike is between those areas that are protected absolutely and those where the depth of drilling underground can be set safely by the Environment Agency. The key point regarding SSSIs in the planning process is that the Environment Agency may determine the depth, so additional protections were not deemed necessary, because they would transcend the balance between enabling the industry to succeed and protecting our most valuable areas.

[Mr Williams]

rose—

[Andrea Leadsom]

I cannot give way again, because many Members wish to speak.

Turning briefly to surface level protections, our existing regulatory and planning regimes already offer strong protections to sensitive areas. In addition, the Government have separately committed to ensure that hydraulic fracturing cannot be conducted from wells that are drilled at the surface of national parks and other protected areas. Members can be reassured that that remains the Government’s position. We are considering how best to implement that surface restriction, but the draft regulations before us today are not a suitable vehicle, because they flows from the Infrastructure Act’s requirement to specify the protected areas within which subsurface hydraulic fracturing cannot take place. Consideration of surface activity therefore is not within the scope of the regulations.

[Nick Herbert (Arundel and South Downs) (Con)]

The Minister has just said something important that will be reassuring to our constituents. Given that the draft regulations deal with below-the-surface activity and not with surface activity, the assumption has been that drilling at the surface in protected areas would be allowed. Will my hon. Friend make it absolutely clear that it remains the Government’s intention not to allow drilling at the surface in protected areas, including national parks, and that a policy instrument will be put forward to enable that?

[Andrea Leadsom]

Yes, I can give my right hon. Friend that reassurance. The Government’s intention is to announce soon the areas in which it will not be possible for drilling to take place at the surface, and that will include all of our most valuable areas. At the moment we are defining the scope and precisely how the arrangements will work. I hope that totally reassures him and other hon. Members.

The Government recognise that some concerns have been expressed about fracking being carried out from wells drilled at the surface of some of the UK’s most valuable areas; in particular a number of groups have voiced concern about sites of special scientific interest. The national planning policy framework already makes it clear that a development should not normally be permitted if, either individually or in combination with other developments, it is likely to have an adverse effect on special interest features of an SSSI. That applies even if the development itself is outside the boundary of the SSSI.

In addition, under the Wildlife and Countryside Act 1981, as amended, consenting authorities have a duty to conserve and enhance the features of sites of special scientific interest; that duty must be incorporated in their decision making. We have considered carefully how we can protect SSSIs and are confident that the existing planning and regulatory regime already accords them strong protections.

I stress that even when the draft regulations and the surface restrictions are in place, a company looking to develop shale will always need to obtain all the necessary permissions, including planning and environmental permits, before hydraulic fracturing can be carried out.

[Liz Saville Roberts (Dwyfor Meirionnydd) (PC)]

I note what the Minister has said about national parks and areas of outstanding natural beauty, but within the planning regime—certainly within Wales, which is what I am familiar with—there is also a requirement to abide by planning rules in areas where there would be a visual impact on national parks. She mentioned that surface works will not be permitted within national parks, but will the visual impact requirement also be in place, or will there be a rule about how near to national parks and other areas of special interest surface works may be carried out?

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[Andrea Leadsom]

As I said to my right hon. Friend the Member for Arundel and South Downs, we will shortly make announcements about the surface level implications. We are considering how to define exactly in which areas surface drilling will be banned and precisely how that can be enforced. I assure the hon. Lady that there will not be any changes to the ability of local planners to take all those facts into account when determining planning applications.

As part of the licence, permission and permit procedures, the environmental impact and any risks associated with operations are assessed by regulators and through the planning system on a case-by-case basis. All oil and gas sites need permits under the Environmental Permitting (England and Wales) Regulations 2010, as well as planning permission from the relevant planning authority. The national planning policy framework and supporting practice guidance state that, in respect of minerals such as shale oil and gas, any new development should be appropriate for its location. Let me be very clear: if the risks of a proposed shale activity are deemed unacceptable, the environmental regulators will not allow that activity to go ahead, irrespective of the geographic area or the depth of the drilling.

Finally, in line with the Small Business, Enterprise and Employment Act 2015, regulation 4 of the draft regulations commits us to carry out a review of the regulations in five years, and every five years thereafter, and to publish a report setting out the conclusions of the review.

I recognise that it is for me and the Government to make the case for shale and to reassure the public that shale can be developed safely. Shale gas may have huge potential to add to the UK’s energy sources, to improve energy security, to create jobs and to help to meet our carbon targets. We need more secure home-grown energy supplies, and shale gas has a vital role to play, as a bridge to a cleaner energy future.

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[Callum McCaig (Aberdeen South) (SNP)]

I will be brief to allow others to speak. First, I will touch on what the Minister said about the call for this debate to happen in the Chamber, as opposed to in Committee. At business questions on Thursday, I made that request to the Leader of the House, and it was rejected. That was unfortunate. This debate would benefit from all Members being given the opportunity to engage in it, because the implications of getting this issue wrong are so large.

Ostensibly, this is an England and Wales only matter. The point that my hon. Friend the Member for Edinburgh East made on the changes to Standing Orders raises the issue of why the Scottish National party is here and why we will be voting. There are two clear issues. First, there is the cross-border issue with water contamination. Frankly, poisoned water knows no national boundaries, or sub-national boundaries, if that is what people wish to call them. Beyond that, the SNP made it clear in the run-up to the election that we would engage in progressive politics with folks from elsewhere in the United Kingdom. Frankly, it saddens me that defining whether we should have safe drinking water should count as progressive politics in this day and age. It is beyond the pale.

[Andrea Leadsom]

Does the hon. Gentleman not think it is rather ridiculous, shall we say, that he should stand there as an SNP Energy spokesman suggesting that somehow the Government of the day would deliberately poison people’s drinking water? Does he not think that is a completely outrageous accusation? Did he not listen to my remarks?

[Callum McCaig]

At no stage did I say that there would be deliberate poisoning of water. If the Minister took some more time to listen and reflect, it might be more helpful. What we are dealing with here is the potential for drilled wells—fracked wells—under protected groundwater source areas.

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[Andrea Leadsom]

I am grateful to all Members for their comments. The debate has been interesting and it has certainly given us a lot of food for thought. I will address a few points now and I will write to Members about a few other points later because time is running out. The hon. Member for Southampton, Test asked for the definition of a national park. We have used the same definition as the standard one used by the Environment Agency. He cannot have it both ways. He asked whether there was any point to the regulations. We have taken every possible step to enhance and provide extra protection for the environment and for members of the public. The regulations do that. He seemed to say that the Infrastructure Act achieved adequate safeguards and asked why we need the regulations. I do not understand that. He should welcome this tightening of the protections.

The hon. Member for Bolsover talks about shale wells as if they are similar to coalmining pits. I reassure him that onshore gas wells are enclosed wells and are between six and 22 inches wide. They are enclosed in steel and cement. The Health and Safety Executive scrutinises the well design and monitors its progress, as well as the fracturing process. Nobody goes down these wells; it is a totally different industry. The UK has more than 50 years’ experience of regulating the oil and gas industry. I am sure he did not mean to suggest that anyone would be going down a shale gas well.

I thank my right hon. Friend the Member for Arundel and South Downs, and my hon. Friends the Members for Lichfield and for Newbury for their remarks. I confirm that we will make clear, as soon as possible, the specific policy on banning surface drilling in our most valuable and precious areas, and that will include national parks and areas of outstanding natural beauty. It is complicated to ensure that we have covered every area that we want to and that we have the most robust means of doing so. To clarify, all those rules will apply to hydraulic fracturing. I want to be very clear about that. We have a very successful onshore oil and gas drilling industry. Changes are not proposed to the legislation for that industry, which has a long-standing successful regime.

To the hon. Member for Aberdeen South—I am very disappointed. The statutory instruments were laid on 16 July this year. That was months ago. He has had every opportunity for further debate. I am afraid to say that he is scaremongering to suggest that fracking would be allowed in water sources. That is simply not the case and he should not be saying it. However, I agree with one of his points, which is that we should start with a limited number of wells. I can assure him that it would be great to start with one well. A limited number of wells would be fantastic.

The hon. Member for Hyndburn said that we talk too much about jobs, growth and revenues. I make no apology for that. The country needs energy security, jobs and growth. We need to protect our environment. Communities will gain £100,000 per explored well, and 1% of revenues, which could be worth £5 million to £10 million for the average 10-well site, and there will be a sovereign wealth fund. I assure all Members that we have taken the matter extremely seriously. The regulations seek to improve safety for the environment and for members of the public. I commend them to the Committee.