Infrastructure Bill [HL]

Baroness Verma Excerpts

Monday 9th February 2015 Lords Chamber

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

My Lords, I beg to move that this House agrees with the House of Commons in its Amendment 20, as well as with Amendments 32 and 38. I shall also speak to the subsequent Amendments 20B and 20C, which the Government have tabled in this group. I restate this Government’s commitment to reducing carbon emissions by 80% by 2050. To meet our challenging climate targets we will need significant quantities of renewables, nuclear and gas in our energy mix, and we are committed to listening to the experts and their advice on how to reach those targets. The Committee on Climate Change said that for flexible power supply, the UK will,

“continue to use considerable, albeit declining, amounts of gas well into the 2030s”,

which will leave,

“a considerable gap between production of North Sea gas and our total demand”.

The committee argues that this demand,

“can either be met through imports or UK production of shale gas”,

and concludes that,

“if anything using well-regulated UK shale gas to fill this gap could lead to lower overall lifecycle greenhouse gas emissions than continuing to import LNG. It would also increase the proportion of energy produced within the UK, improving our energy sovereignty”.

Notwithstanding this, concerns have been raised in both this House and the other place about how the UK’s shale industry will affect our carbon budgets. We therefore tabled amendments in the other place that will place a duty on the Secretary of State to seek advice from the Committee on Climate Change as to the impact of petroleum produced onshore in England and Wales on our ability to meet the UK’s overall climate change objectives over time. The Secretary of State must consider the advice of the Committee on Climate Change and report on his conclusions at least every five years.

The Government now seek to further strengthen this commitment by specifying that if the Committee on Climate Change advises that shale gas may adversely impact climate change objectives, the Secretary of State must either make regulations providing that the right of use for petroleum and deep geothermal exploitation will no longer be available for future projects or report to Parliament on the reasons for not doing so. Amendment 20B and the consequential Amendment 20C seek to address this commitment. By introducing these amendments we are making it absolutely clear that shale development will remain compatible with our goal to cut greenhouse gas emissions.

[Lord Teverson]

My Lords, I welcome these amendments and very much welcome what my noble friend just said. I do not point at my noble friend in saying this, but I am always disappointed, given the truism about gas being the future, that we have not made more effort to make sure that, in the short term, gas is substituted for coal and that we have a far more rigorous gas industry than we have at the moment. That was the route forward, but we have been unable to put it to bed during the passage of the Energy Bill and now of the Infrastructure Bill. I hope that it is something that can at least be given greater attention after the election. However, I welcome these new clauses.

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[Baroness Verma]

I am grateful to all noble Lords for their support for these amendments. I think that all noble Lords will agree that it makes great sense to ensure that we have the informed advice of the climate change committee.

Motion agreed.

Motion on Amendments 21, 21B, 21C and 21D

Moved by

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21D: In the Title, line 13, leave out from “provision” to “geothermal” in line 14 and insert “about onshore petroleum and”

[Baroness Verma]

My Lords, I shall speak also to the other amendments in this group.

There is a clear and pressing need to ensure that this legislation is absolutely right. Shale gas is an exciting new energy resource for the UK, with the potential to provide greater energy security, growth and jobs, alongside playing an important role in the transition to a low-carbon economy. Unlocking the shale industry is too big an opportunity to pass up. We all agree that it must be done safely and sustainably, but we cannot throw away the opportunity to create thousands of jobs and economic growth for communities across Britain.

The Government’s position comes from careful consultation of relevant experts and draws on many authoritative reports from the US. More specifically, it is based on reports by the Royal Society and the Royal Academy of Engineering, and Public Health England, which have considered a wide range of evidence and looked at the UK regulatory system. Their advice has outlined the risks and concluded:

“The health, safety and environmental risks associated with hydraulic fracturing … as a means to extract shale gas can be managed effectively in the UK as long as operational best practices are implemented and enforced”.

Following exhaustive discussions in this House and the other place, we have been considering the implementation and enforcement of operational best practices in the UK, which is why we accepted Amendment 21 during Report stage in the other place. We did so in order to show our acceptance of the intent of the 13 policy elements it sets out, but noble Lords—in particular, those with a legal background—will appreciate that, as currently drafted, the amendment cannot be included in the Bill. Although the courts would attempt to interpret the provisions, Amendment 21 is not viable as law and simply would not work in practice. Amendment 21 as currently drafted would have been wrong to accept, so we have been working hard to ensure that its spirit is maintained.

The government amendments in lieu are designed to ensure that the regulations we seek to introduce deliver the intended outcomes and support the growth of the shale industry while reassuring local communities that this will be done in a safe and responsible manner. They also ensure clarity for all interested parties by proposing clauses that are capable of being interpreted and enforceable.

Regarding the scope of our amendments, they will apply to hydraulic fracturing, which will be defined in UK law. Geothermal operations will be excluded, as the amendments are being taken forward through the petroleum licence, for which there is no geothermal equivalent. Conventional oil and gas well stimulation techniques will also be excluded—something that noble Lords will agree makes perfect sense, as these have been used for decades onshore.

The territorial extent of the amendments will be limited to England and Wales. In other words, Scotland will be excluded from the requirements of the new commitments. Noble Lords will be aware that, as a result of the Smith commission’s recommendations and the Command Paper published, it is planned that in the next Parliament responsibility for mineral access rights for underground onshore extraction of oil and gas will be devolved to the Scottish Parliament.

I now turn to the commitments themselves. First, our amendments mean that the Secretary of State will not issue a well consent, something that is required by an onshore licence for England or Wales, unless it prohibits associated hydraulic fracturing from taking place in land at a depth of less than 1,000 metres. The right-of-use provisions will be left unchanged at 300 metres. In land at a depth of 1,000 metres or more, hydraulic fracturing will not take place if the licensee does not have the Secretary of State’s consent for it to take place—something I will henceforth refer to as a hydraulic fracturing consent. For the hydraulic fracturing consent to be issued, an application for it has to be made by, or on behalf of, the licensee. Where an application is made, the Secretary of State will only grant consent if he is satisfied that a number of conditions have been met.

Some of these conditions relate to the planning systems in England and Wales. In particular, the Secretary of State will need to be satisfied that the environmental impact of the development has been taken into account by the relevant planning authority. He will also need to be satisfied that the relevant planning authority has taken into account, where material, the cumulative impact of the development proposed and any other development involving hydraulic fracturing to obtain oil or gas. He must be satisfied that the relevant planning authority has considered whether to impose a restoration condition in relation to the development and that the relevant water companies have been consulted before any planning permission is granted.

Similarly, a well cannot be drilled, and associated hydraulic fracturing cannot take place, within protected areas. The precise definition of protected areas will be decided at a later stage, as our clauses put a duty on the Secretary of State to bring forward secondary legislation to be laid before and approved by a resolution of both this House and the other place no later than the end of July this year. We must be very careful not to put in place restrictions in areas that do not achieve the intended aim of the condition or that go beyond it and needlessly damage the potential development of the shale industry. In order to satisfy himself that the conditions relating to planning have been met, the Secretary of State may rely on notices given by the local planning authority. A notice, which, in practice, means specifically that the process of an environmental impact assessment has to have been carried out, would be sufficient to satisfy the Secretary of State that the environmental impact had been taken into account.

Similarly, notices from the relevant local planning authority confirming that the cumulative effects of permitted developments have been taken into account where material, that it has considered whether to impose a restoration condition, and that local water companies have been consulted before a decision to grant the relevant planning permission is taken, would allow the Secretary of State to be satisfied that the relevant conditions have been met. It would also be sufficient to receive a notice indicating that the area in respect of which the planning permission has been granted does not include any land which is within protected areas, once these have been clearly defined. I note that the absence of these documents does not necessarily prevent the Secretary of State satisfying himself that the conditions have been met. This is to ensure that if, for example, the kind of notice listed is not available, the Secretary of State could grant hydraulic fracturing consent provided he is satisfied that the conditions listed in the clause have been met. I should stress that it is not possible for the Secretary of State to grant hydraulic fracturing consent if these conditions have not been met.

Other conditions that would need to be met concern the environmental permitting regimes in England and Wales. Consent will not be granted unless the level of methane in groundwater has been monitored 12 months before hydraulic fracturing begins. Arrangements have also to be made for monitoring emissions of methane into the air for the period of the environmental permit, and for the monitoring results to be published. The substances used, or expected to be used, in associated hydraulic fracturing have to be approved by the relevant environmental regulator.

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[Lord Berkeley]

My Lords, I follow the comments of the noble Lord, Lord Teverson, about geothermal plants. People may have read an article in the Times last week on 2 February about the Eden project, which is trying to develop the geothermal plant mentioned by the noble Lord, drilling several miles underground. It says in the article—it is quite surprising to me—that the water that will come out will eventually be 180 degrees centigrade, which is well above boiling point. That is wonderful. It would heat 4,000 homes and all the biomes of the Eden project. I hope that this geothermal drilling—which is purely water based, I think; there are no chemicals or anything else—will not be caught by these various amendments. To quote Michael Feliks, chairman of the Renewable Energy Association’s geothermal group:

“It would be a shame if geothermal energy ended up as collateral damage in a debate about shale gas fracking.”

It is a completely different thing. It is drilling, and it should be allowed under the normal planning procedures rather than coming into this Bill at all.

[Baroness Verma]

My Lords, I am extremely grateful to all noble Lords for their contributions, but particularly to noble Lords who have supported the government amendments in lieu of the amendments that were made in another place.

A number of questions were raised. I want to make sure that I respond to all of them, but there will be one or two questions that I cannot commit to answering now and on which I will have to write to noble Lords, such as the question posed by my noble friend Lord Caithness about the number of miles of tunnels going underground. I do not think that information is at hand, unless of course the noble Baroness, Lady Jones, has the answer.

I reassure the noble Baroness, Lady Jones, that our regulatory regime is robust. It will ensure that no hydraulic fracturing will be permitted where groundwater and drinking water supplies can be affected. We had a protracted debate not that long ago in which we made it very clear that this Government take very seriously that operations will take place only if all of the environmental impact assessments are met. I had hoped that I had laid out today very clearly in my detailed speaking notes our response to what the other House came up with on Report. We have bettered the amendments that the other place made, so that they will be able to stand up to legal challenge and to ensure that the safeguards that she and other noble Lords, such as the noble Lord, Lord Truscott, have asked for can actually be delivered.

It would be wrong to return to the detail of a debate that has been well practised in this Chamber. The industry is already voluntarily doing a lot of what was asked in the amendments put by the Opposition. I am pleased with the response from my noble friends about what we have taken on board. It is never about a U-turn for a Government, it is about listening carefully and then making sure legislation works. If the noble Lord, Lord Tunnicliffe, wants to make a political point out of it, that is entirely up to the noble Lord. I would say, however, that it is really important that responsible and sensible Governments look very closely at legislation and then respond. I think that the general consensus in the House has been that we have listened, responded and returned with a much better set of amendments, which answer exactly what noble Lords opposite and their colleagues down the corridor have asked for.