Energy: Shale Gas

Baroness Verma Excerpts

Tuesday 19th November 2013 Lords Chamber

[Lord Renton of Mount Harry]

To ask Her Majesty’s Government whether they expect shale gas to be widely used in the United Kingdom; and whether there are circumstances under which they consider fracking for gas is likely to be dangerous.

[The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Baroness Verma) (Con)]

My Lords, wherever shale gas operations are conducted they must be done in a safe and environmentally sound way. There are regulations in place to ensure on-site safety, prevent water contamination and mitigate against seismic activity and air pollution. As part of this rigorous process, my department, the Environment Agency and the Health and Safety Executive must all approve an application. Local communities will be consulted before any operations and the industry has committed to provide a package of benefits from shale gas production.

[Lord Renton of Mount Harry (Con)]

My Lords, I thank my noble friend very much for that opening, but I want very quickly to say a few words about the position of shale gas in the UK. On one side, shale gas is considered as having no real future importance and as not being worthwhile; but on the other side, the position is quite different. The Financial Secretary to the Treasury recently wrote that shale gas has the potential to support thousands of jobs, generate substantial tax revenue and keep energy bills low for millions of people. If that is true then our shale gas is very important. Which way would the Minister vote on this?

[Baroness Verma]

My Lords, my noble friend is aware, of course, that the Treasury and the Government are very keen to explore all sources of energy. Shale gas will provide the UK with greater energy security, economic growth and jobs, and the Government are encouraging exploration to determine this potential.

[Lord Barnett (Lab)]

My Lords, I suppose that we have all been nimbys at one time or another but it is important now that the public interest should be the main issue. Unfortunately, it looks as if the companies that are investing in fracking are being stopped or delayed, and that is clearly not in the public interest. As I am sure the Minister knows, all the evidence shows that there is only a low public health risk, and even that could be reduced considerably by proper regulation. In those circumstances we need the full support of both sides of the House. I hope that my own party will strongly support the Government on this, although there may be some critical points. What can the Minister tell us about what they are doing strongly to support the companies that are bringing in the private investment which is desperately needed in this vital matter?

[Baroness Verma]

My Lords, the noble Lord is absolutely right that this is an important source for us, and as with all things, we are making sure that the environmental protections are in place. We have a very strong regulatory process in this country, as he said. We are doing whatever we can to ensure that the process is followed through smoothly and as quickly as possible so that this industry which is investing in our country is not hindered by unnecessary regulations and red tape.

[Lord Hylton (CB)]

My Lords, do the Government consider that there are risks from shale gas exploration for such national assets as, for example, the hot mineral water at Bath and the water flowing through the caves at Cheddar? Are there methods for assessing such risks, and are there ways of preventing harm?

[Baroness Verma]

My Lords, I hope that I am making it clear that we take seriously any environmental risk whether it is water contamination or anything else. It is therefore right that the Environment Agency, the Health and Safety Executive and my department work very closely together to ensure that the proper processes are followed through and that all the regulations which need to be in place are in place in order for companies to do their work carefully, safely and properly, and for the country to benefit from the potential.

[Lord Borwick (Con)]

My Lords, is my noble friend aware that just 25 acres of shale gas well pads in Pennsylvania produce as much energy each year as the entire British wind industry, and that they produce energy rather more reliably, too?

[Baroness Verma]

My Lords, I am extremely grateful for my noble friend’s intervention because it allows me to agree with him that shale gas is a very important component of the mix that we want for our country.

[Viscount Brookeborough (CB)]

My Lords, does the Minister agree that there is a big difference between this country and America in that people there own the mineral rights under their farms whereas in this country it is very important to get public opinion behind it? The businesses involved may provide community benefit but that will not replace such a thing as financial benefit. I am not sure that they will get the public behind shale gas without that.

[Baroness Verma]

My Lords, the noble Viscount raises an interesting point. Companies have pledged through their own charter that they will at exploration stage give £100,000 in community benefits, but also that 1% of the revenues generated from each well will go to local communities.

[Lord Teverson (LD)]

My Lords, in the United States the shale gas industry is fragmented and there are good and not-so-good operators in terms of environmental risks. What specific lessons have been learnt from the United States? It is estimated that some 10% of the total UK water supply could be demanded by shale gas if, as many of us hope, it were to be successful. What discussions are the Government having with the water industry to make sure that that area will be catered for if shale gas development takes place?

[Baroness Verma]

My noble friend again raises an important point. Water UK, which represents water companies, is working closely with the United Kingdom Onshore Operators Group—the representative body for onshore oil and gas—to make sure that any potential extra demand for water will be managed sensibly. However, water companies are already obligated to produce and update every five years a proper water plan. Water companies will therefore assess well in advance the amount of water that will be available to the operator before it is used.

[Baroness Worthington (Lab)]

My Lords, I wanted to let the Minister know that I have just returned from Poland, and fracking was a topic of great conversation there. What if anything has she done to reach out to Poland to discuss how it will pursue fracking? It could make a huge difference to Europe’s carbon emissions.

[Baroness Verma]

My Lords, I know that the noble Baroness was in Poland and was aware that she returned today. As she will be aware, the UK is always in close conversation with all its member-state partners, and of course these conversations are ongoing.