EU: Energy Infrastructure (EUC Report)

Baroness Parminter Excerpts

Monday 29th July 2013 Grand Committee

[Baroness Parminter]

My Lords, it is always a pleasure to follow the noble Lord, Lord Giddens, and I look forward to discussing in Committee the merits, as I see them, of the precautionary principle, and the benefits that it has brought to the environment both of the UK and, more broadly, of Europe. Like other members of the sub-committee, I thank our chairman, the noble Lord, Lord Carter of Coles, for his excellent chairing and for the debate today. I also thank the Government for their response. They found that there was much with which they could agree, although on the targets for renewable energy we obviously have a strong disagreement.

Given that a number of us are speaking today, I will choose one issue on which to focus. I am sure that colleagues who have been sitting through the Energy Bill will be delighted to hear that I am not going to speak on my particular topic of interconnections because the noble Lord, Lord Cameron, spoke so well about it and because, following the very welcome comments of the Minister last week in Committee, I look forward to returning with an amendment on Report.

Instead, I will turn to the issue of shale gas and the need for a robust regulatory structure for its exploitation in the European Union. Both our report and the Government’s response are cautious about the likely extent of EU-produced shale gas. The Government state that,

“it should not be assumed that it will bring impacts comparable to those seen in the US”.

However, the Government, while not getting too excited by the idea that shale gas can reduce Europe’s energy dependency or solve the problem of high prices, have clearly been persuaded that it can at least stop an increase in dependence. In recent weeks we have seen the Government easing the path for shale gas companies with generous tax breaks and the creation of the Office of Unconventional Gas and Oil to encourage the development of the industry. Beyond that, they have said that they plan to cut environmental permitting processes from the current 13 weeks to less than a fortnight.

What is needed now is a robust regulatory framework that gives certainty for investors and addresses the environmental impacts. However, in their response to our report, which calls for a regulatory structure for the exploitation of shale gas in the EU, the Government argue that they are,

“not convinced that substantial new action at EU level is required”.

It is clear that securing an EU regulatory framework will not be easy. Both France and Bulgaria have banned extraction but José Manuel Barroso, the President of the European Commission, has said that those member states that wish to begin fracking—I use the term unapologetically—should do so. The Commission plans to bring forward a proposal for a framework on shale gas by the end of the year but it is not yet known whether this will be just guidelines or something more robust.

It is disappointing that the Government seem to see the prospect of a revised EU framework as something that could seriously restrict opportunities for exploiting shale gas resources rather than as an opportunity to address the genuine environmental concerns that it brings and, as crucially, to help deliver public confidence in the process. The events of the past two weeks at Balcombe in West Sussex, where Cuadrilla is drilling for oil, could indeed mark the beginning of open guerrilla-style warfare if such concerns are not addressed.

It is worth reminding ourselves that the existing EU regulatory framework is designed for the conventional hydrocarbon sector. Fracking presents a whole series of new challenges. There are real concerns that the chemicals used in hydraulic fracking can seep into water supplies, as Water UK, the industry body that represents all major water suppliers, made clear earlier this month. It was Water UK, not a group such as Friends of the Earth, that went on to highlight that aquifers can be contaminated by fracking, by leaks from wells or by the poor handling of chemicals or wastewater on the surface, and that fracking requires huge amounts of water, which will inevitably put a strain on supplies in areas around extraction sites. All this is in addition to the small earthquake tremors caused by the horizontal drilling necessary to extract the gas.

These issues need addressing and it is not sufficient to be thinking in terms of minor amendments to the existing regulatory framework, as the Government seem to wish to do in order to help grow the industry rather than deliver sustainable shale gas extraction. Given what they say in their response to our report, what is the Government’s approach to the Commission and counterparts in other member states to influence their thinking on the proposal for a framework on shale gas? Do they want minor amendments to a regulatory framework prepared for the conventional hydrocarbon sector or do they accept the need for such a framework to take into account the full environmental impacts of shale gas?

Only by delivering a robust regulatory regime can the legitimate environmental concerns about shale gas be addressed and, just as crucially, public confidence secured. As the shale gas exploiters admit, their attempts to test Britain’s shale gas potential will be hamstrung unless they can win that public support.