Fracking

Debate between Eric Ollerenshaw and Julian Sturdy

Tuesday 25th November 2014 Westminster Hall

[Eric Ollerenshaw (Lancaster and Fleetwood) (Con)]

It is great to follow the hon. Member for Brighton, Pavilion (Caroline Lucas) and my hon. Friend the Member for Warrington South (David Mowat), because my view sits somewhere between Brighton and Warrington in this great war of experts, which has not helped our discussions.

If I have only got a few minutes, I will focus specifically on the situation in my constituency, where 23% of the land is open to licensing to test and explore fracking sites for shale gas. My hon. Friend made a cohesive speech and talked about there being no bonanza. Unfortunately, to many people in my constituency, it sounds as though people in London are saying that there is a bonanza. There has been talk about £366 billion of recovery gas under the Bowland shale, which crosses my constituency. As he said, there has been talk of us having the revolution that has happened in America, but when we enter into the argument and say, “Can we possibly have a share of that bonanza?”, we hear, “The costs of developing this are quite high and you don’t understand.” What is it to be? Are there vast profits to be made from this or not?

The sheer fact that has taken a great deal of time to land is that England is not the USA. Whether someone thinks that that is a good or bad thing is entirely up to them. I think that its development might be a good thing, because I have faith in our regulatory systems and their accountability. Those systems are a measure far above the USA and can provide security to people. The biggest area is that local landowners and residents do not receive any return from any possible development of shale. In fact, the Government’s Infrastructure Bill removes the age-old right for someone to have a say on who drills under their land and their house. That is a heavy-handed manoeuvre, which reinforces the view in my part of the world that the Government are bowing down too easily to international oil and gas companies and their financial interests.

There are international companies and American examples, experts are legion, and fundamental rights are being taken away. Is it any wonder that conspiracy theorists are having a field day across the north-west? The only response is that fracking is in the national interest in terms of energy needs and that the areas to be fracked will get a financial return after all. A Government press release states:

“Companies have pledged…to provide community benefits in areas where shale is commercially extracted.”

The north-west has seen company pledges for community benefits from offshore wind farms, but we are yet to see any money, because the companies decide who they give it to and what they will give it for.

We are told that £100,000 and 1% of revenues for every production site—estimated at between £1 million to £7 million a year—will apparently be given to communities near wells, but a number of issues then arise. Who is the community? Is it those on top of fracking sites or the local government ward or parish where fracking takes place? How will the money be distributed? Will that be done by household or through the local council? Can it be spent on anything or will the companies decide? Who guarantees that companies will pay up following takeovers and so on? Nothing in this is statutory. The Government have also promised that, on top of the 1% of revenues, local councils will now get 100% of business rates, which is a late addition to the financial promises.

All that is welcome, but it is confusing and last-minute when for months we in Lancashire have attempted to argue on a cross-party basis that such promises miss the point. There is no definition of “community”. There is no statutory guarantee. There is no guarantee that a future Secretary of State for Communities and Local Government will not take the financial rewards into account when deciding on central grants, so that nothing extra will be gained from fracking.

[Julian Sturdy]

My hon. Friend makes a powerful point. The potential benefits of fracking may prove transformative, but they will only ever be achieved with local community support and the necessary safeguards. Community benefits play a key role in that. Communities need to know exactly what their rights are, but they do not at the moment.

[Eric Ollerenshaw]

For once, I agree with a Member from Yorkshire. My hon. Friend makes a real point. I pay tribute to my hon. Friends the Members for Wyre and Preston North (Mr Wallace) and for Fylde (Mark Menzies), with whom I have been working to argue for some form of sovereign wealth fund for Lancashire, into which the funds will be paid. It would have representatives from local authorities, so it would not be part of the local authority grant system and would represent something extra in return for fracking. As the hon. Member for Edinburgh North and Leith (Mark Lazarowicz) said, the reserves will not last for ever, but the fund would represent something that we can say we got in return. It is great to hear the Chancellor and the Minister recently make positive noises about such a wealth fund and INEOS talk about a 4% share of revenues, rather than just 1%. In addition, basing the new national college for onshore oil and gas in Blackpool is a positive move that demonstrates the possibility of long-term jobs to benefit the most-affected areas.

In conclusion, we need to know the scale of investment into the fund—if it happens—the area covered by the fund and the statutory underpinning that will accompany the fund. Only then can we hope to get back the majority political consensus across Lancashire that we had a few years ago.