Infrastructure Bill [Lords]

Andrew Miller Excerpts

Monday 8th December 2014 Commons Chamber

[Mr Hayes]

The hon. Lady is, of course, right to defend the interests of her constituents and to say that, when such innovations occur, it is vital that the communities affected understand what is going to happen and are involved in the decision-making process. When as Energy Minister I set up the office for unconventional gas and oil, part of my intention was for it to ensure that good information was provided, that some of the misinformation that prevails be put aside, and that local communities could be as engaged as much as possible in the process. I understand the hon. Lady’s championing of her community and she can be assured that this Government take exactly that kind of open-minded, generous, communitarian approach.

[Andrew Miller (Ellesmere Port and Neston) (Lab)]

The right hon. Gentleman knows that I am on the same side as him when it comes to the potential development of unconventional oil and gas. With that in mind, and given his answer to my hon. Friend the Member for Warrington North (Helen Jones), will he explain why the Government rejected Labour amendments in the other place that the industry are quite relaxed about?

[Mr Hayes]

The hon. Gentleman will have the chance to make that case as the Bill makes its passage through the House. I am not in the other place and it is not really for me to anticipate the amendments that he or other Members might table. Of course, we will listen—this is a Government who listen and learn, as I shall describe in a moment. Given the hon. Gentleman’s record in this House, I know that he would be the last person to turn his back on innovation and stand in the way of progress. Indeed, he has been one of this House’s greatest advocates of innovation and scientific progress.

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[Richard Burden]

I am grateful Madam Deputy Speaker. Let us give it another five months.

It is difficult on Second Reading to go through the specifics of what is needed, but my hon. Friend has mentioned some important issues. There is a whole range of areas where we can tighten regulation. To give the Government some credit, they have so far accepted a number of our proposals—we put forward six—which is good, but there are still areas where they need to sharpen up. She mentioned timing. Our view is that, where there is monitoring, there is no reason why it should not take place over a proper 12-month period.

[Andrew Miller]

The Minister ignored what happened in the other place, although I understood it to be part of the constitutional process. My hon. Friend will know that one of the amendments was about baseline monitoring. It seems to me that we cannot have a proper, scientific assessment of any process without proper baseline monitoring. Will he give a firm commitment that Labour will press that point to the nth degree in Committee if we get that far?

[Richard Burden]

My hon. Friend is absolutely spot on and the answer is yes.

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[Charles Hendry (Wealden) (Con)]

Thank you, Madam Deputy Speaker. In case the House thinks that you have mis-titled me as you did the hon. Member for Birmingham, Northfield (Richard Burden), I should point out—I thank you for drawing attention to it—my professorship at Edinburgh university, which you and I were very pleased to attend; I should make it clear to the House that you were there some decades after I was. I draw attention to my entry in the Register of Members’ Financial Interests in relation to some of these subjects.

This is a very important Bill. As my right hon. Friend the Minister has said, it has a kaleidoscope of measures. It is positive and encouraging to see so many different measures brought together in one Bill; that shows the Government’s determination to make progress on many different fronts. Bringing the measures together in this way is eminently sensible.

I wish to focus primarily on the energy issues in part 5. I welcome the changes being made to improve the extraction rates in the North sea. We should pay tribute to Sir Ian Wood for his report and the work he did in identifying the real challenges in optimising the returns from the North sea basin. I also welcome the proposals on the extension of community ownership. It has always been my view that renewable energy projects will stand a greater prospect of being approved and endorsed by their communities if there is a significant proportion of local community ownership. We all hope that that will be done in a voluntary way, but the back-stop approach proposed by the Government is very sensible indeed.

The meat of much of this Bill relates to shale gas issues, which I want to focus on. Recognition of the continuing role for gas in our energy mix will be of long-term importance in electricity generation. We need to have a flexible source of generation to make up for the peaks and troughs of renewable sources of generation. That is also vital to heating our homes.

It is clear to me, as president of the National Energy Action fuel poverty charity, that the biggest distinction in fuel poverty is between those whose homes are on the gas grid and those whose are off it. If we do not see greater use of gas in heating our homes, there will be more avoidable winter deaths. The Bill’s proposals recognise the contribution that gas can make in terms of both electricity and heat. There is a focus on security of supply and issues of affordability, and, because new gas will replace dirty old coal, it will also help us reduce our carbon emissions.

Security of supply issues will also be determined by the extent to which the gas will come from our own indigenous resources and the extent to which we will need to import it from elsewhere. If there is a significant source of gas under our ground, we need to quantify and measure it and consider the extent to which it is extractable—the two do not necessarily go together—and whether that can be done in an economical way. The extraction must then take place only if it meets the highest standards of environmental protection and safety.

The Labour party, whose amendment was reported in this morning’s Financial Times, is mistaken in its understanding of the core strength of our regulatory approach. The regulation of our oil and gas reserves—which, along with that of Norway’s, is considered to be the best in the world—is successful not because it is frozen in legislation, which can be changed only by another piece of legislation, but because it evolves and changes as new technology is introduced and new challenges emerge. It evolves because the onus is constantly on the producers—the companies involved—to use the best practices available to them to ensure environmental protection and safety.

That is why the European Commission wanted to replicate the British model elsewhere and why, after what happened in the gulf of Mexico, the Americans considered which elements of the British model they could import into the American system. That process of “best in class” has driven this forward and given us the toughest standards of regulation in the world.

[Andrew Miller]

When the hon. Gentleman was Energy Minister, he and I had some interesting conversations about the oil and gas industry. How can we have a regulatory structure that gives confidence to the public about potential methane leaks if there is no baseline monitoring?

[Charles Hendry]

We can certainly get into some of the specifics, and the hon. Gentleman may well have a good point on baseline monitoring. We need to be able to reassure people on such issues, where public confidence will be essential. The shale revolution in America has been possible because there are huge open spaces—for someone with 2,000 acres of North Dakota, it makes sense to explore the reserves of shale—but in a much more tightly compact country such as the United Kingdom, an entirely different debate is needed to reassure the public.

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[Charles Hendry]

My right hon. Friend took the agenda forward on this matter and I hope that he will have a sympathetic ear.

[Andrew Miller]

The hon. Gentleman is being extremely generous in giving way and is making an exceptional speech. Does he agree that the storage issue becomes more vital when one looks at the needs of our heavy energy using industries, some of which use gas as a feedstock? If we are not careful, they will be forced to close down in a bad winter. We have to attack this problem soon.

[Charles Hendry]

The hon. Gentleman is absolutely correct. The head of the British Ceramic Confederation, Laura Cohen, and a group of its members, who employ thousands of people in this country in important industries, wrote to the Prime Minister last year to highlight just that point. They said that there was much greater volatility in prices for industry in the United Kingdom than elsewhere and that that volatility was unacceptably high. They said that the solution was more gas storage and that a public service obligation on gas storage was required.