Draft Onshore Hydraulic Fracturing (Protected Areas) Regulations 2015

Graham P Jones Excerpts

Tuesday 27th October 2015 General Committees

[Dr Whitehead]

I was in the process of saying that there is no clarity in the statutory instrument—although the Minister suggested that at some stage a definition might be brought forward—with respect to the rest of the fracking process, the drilling itself, vehicle movements, the pads, the treatment of waste water and so on, on the site.

From the definition in the statutory instrument—which, I agree, also has to be read in conjunction with the requirements on local authorities to certify that fracking is not taking place within any of the stated protected areas in their planning area—the Secretary of State could lawfully give permission for fracking wells to be established on the surface of all the areas in question, provided only that the 1,200 metre condition was met when it came to the actual fracking proceedings. The statutory instrument therefore completely overthrows the assurances and written definitions in the Infrastructure Act 2015.

[Graham Jones (Hyndburn) (Lab)]

My hon. Friend makes a powerful case for our serious concerns about today’s proposals. He says that he struggles to find a reason for the manner in which the Government are bringing the measure forward; but on pages 10 and 11 of the impact assessment we see nothing but spreadsheets about the value—presumably to the Treasury as well as to the economy—and about numbers and financial benefits. Is not that one reason for the introduction of the measure?

[Dr Whitehead]

My hon. Friend may well be right. He has drawn attention to the impact assessment accompanying the statutory instrument, which dwells at length on the relative utility for the public—or private—purse of fracking at 1,000 metres or 1,200 metres. Even assuming—this is what the hon. Member for Newbury and I were puzzling about a little while ago—that there could conceivably be a proposition that one could drill diagonally from outside the areas in question below 1,200 metres, and that that would not give rise to a great deal more danger or problems for the whole process than drilling vertically down, a 200 metre “additional protection zone” seems an odd creation.

Either the 1,000 metre limit below which fracking may take place nationally is deemed not to be safe, but under these particular areas 1,200 metres is safe—in which case why is there a 1,000 metre prohibition for the rest of the country, and additional protection under areas of outstanding natural beauty and national parks—or there is no difference as to protection. In that case, the statutory instrument is a completely vacant measure, which should not have been put before the Committee in its present form, as it makes no difference to the reality of what goes on under the surface.

There is another strange locution in the statutory instrument, about the question of what a national park is. The regulation refers to

“land at a depth of less than 1,200 metres beneath…a National Park”

as if a national park were merely what is on the surface. In planning terms, it is not possible to be granted planning permission in a national park if what is under the national park is not taken into account. The definition of a national park is not just the surface of the national park; in planning terms, it is the surface and what is under the national park. Therefore, we cannot decide to introduce even secondary legislation that treats a national park as if what is under it is nothing to do with it and as if the national park is merely a millimetre deep linear feature on the surface of the earth.

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[Callum McCaig]

I thank the hon. Lady for that. To dwell for a second on the terminology here, we are talking about protected groundwater source areas. Why are we talking about that? The agencies have suggested that the areas are in need of protection. Someone drilling a well is going through the aquifers to pump chemicals down into the ground to cause a chemical reaction that causes mini-fractures. That is the process. If people think that what happens 1,200 metres below the ground has no relevance to what happens at the surface, they are deluding themselves. Even were it not for the large hole that is required to get the chemicals down there in the first place, there is the chance of seepage to the surface and the aquifers, causing damage.

I understand that the Government have a different approach to fracking than my party’s Government in Holyrood, and I am entirely thankful that the matter is devolved to the Scottish Parliament. I have great sympathy for Members whose constituencies may be adversely affected by the regulations. If the Government are to proceed with fracking, would it not be sensible to demonstrate its safety before they consider allowing it in protected groundwater source areas? To me, that seems a logical way of dealing with the race for gas.

[Graham Jones]

The hon. Gentleman tempts me to ask two quick questions. First, has there not been some form of fracking under the North sea, in and around Scottish shores, for a long period? What experience and knowledge does he have of that?

[Callum McCaig]

First, the majority of fracking in the North sea uses water, so there is not the use of chemicals that is required for onshore gas fracking. Secondly and frankly, the North sea is considerably further away, so I do not think that the implications for our drinking water are the same: I do not think that it is possible to drink sea water.

[Graham Jones]

I am grateful for that answer. The hon. Gentleman said that scientific evidence is needed. So I presume that he is in favour of some limited testing of fracking: he is not absolutely opposed to fracking if he wants some scientific base for it.

[Callum McCaig]

The science can be done in a number of ways and there are many lessons that can be learned from fracking elsewhere in the world: we would benefit from pausing and learning the lessons of elsewhere. I am very pleased that the Government north of the border have proceeded with a moratorium to allow a proper evidence-based approach to this issue.

[Graham Jones]

So the hon. Gentleman is saying that fracking is okay in other countries, to find out the scientific evidence base, but there is a moratorium in Scotland. Is that not a duplicitous position for the SNP to take?

[Callum McCaig]

I have no jurisdiction over what happens in the United States of America, for example. [Interruption.] Excuse me?

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[Graham Jones]

It is a great pleasure to serve under your chairmanship, Mr Hanson. I do not know if this is your first Committee, but it is certainly the first on which I have served under your chairmanship.

I want to make a few brief comments on the regulations, the purpose of which is to clarify and hurry on the industrial-scale fracking in the UK. I question the Government’s reasons for fast-tracking this. The report I alluded to earlier, the “Summary: Intervention and Options” impact assessment, makes interesting reading and talks about being committed to developing oil and gas as soon as possible, a new tax regime—I want to touch on that—and streamlining the regulatory regime. I presume that phrase means trying to do away with some of the genuine objections and issues that might be raised about unconventional gas extraction. I am deeply concerned about that. That report talks about mitigating the risk. I think we should be sure about what we are doing, rather than simply mitigating a risk.

I am not opposed to fracking in principle; I support fair policies based on evidence. As I mentioned to the hon. Member for Aberdeen South, I do not think we should be duplicitous on this. If it can plug a demand gap before a transition to new technologies, which are not reliant on fossil fuels, and in the meantime provide jobs and local revenue, we ought to consider fracking.

It would be wrong to oppose fracking without evidence and without exception. I do not see how someone can be totally opposed to fracking and opposed to the gathering of scientific evidence through tests, unless they say they will end all gas consumption in the UK. That is an illogical position and does not stack up.

That said, fracking is clearly a different form of extraction involving a different process, and it is being carried out onshore, which is one of the critical points that ought to be raised as a concern. There are good reasons why many of our constituents are worried. I believe we should be ultra-cautious and strike a balance when considering the roll-out of fracking if it is to be proved safe. Clearly, if it has not been proven safe, there should be a moratorium, which would be a logical position.

Turning to the report, I am concerned that as early as page 4 the topic is growth and jobs. It is all about finances, not about safety. Sporadically, over the next couple of pages, the economic rather than the environmental case is mentioned. I would have thought that the environmental case should come before the economic one. On page 6 at the bottom, we are straight into Treasury figures about fracking. That causes me deep concern. We should be considering the environmental, not the financial argument. By the time we get to page 8, we are talking about production levels, and page 9 addresses development costs and gas prices, which is a long way from environmental considerations, and I am deeply concerned about that. By the time we get to pages 10 and 11, as my hon. Friend the Member for City of Chester mentioned, we have tables of costings on who will benefit from this measure: private companies and the Treasury. I will return to the benefit to the Treasury, which is mentioned at the beginning of the impact assessment. I am deeply concerned that the emphasis is completely the wrong way round. We should look to protect the environment. If there is a case for unconventional gas, it should address those environmental concerns.

I am regularly contacted by my constituents on this issue. I am a Lancashire MP, and I see quite a few Lancashire MPs here today. Of course, Lancashire is probably the epicentre at the moment, with supposed considerable shale gas reserves in the Bowland basin. We have seen the test wells and the test pads out on the west coast in the constituency of the hon. Member for Blackpool North and Cleveleys.

[Paul Maynard (Blackpool North and Cleveleys) (Con)]

indicated dissent.

[Graham Jones]

You don’t have them? There are test wells and test pads very nearby on the Fylde coast. Licences have just been issued for that area, and Lancashire MPs are deeply concerned.

Finally, on my constituents’ concern and on the policy being the wrong way round, the beginning of the impact assessment mentions a new tax regime. I am delighted to oppose the Government’s plans for fracking in Lancashire so long as they are accompanied by an insulting 1% retention rate for local authorities while the Treasury collects 60% should gas flow from the wells. The Treasury is taking a huge amount of money that my constituents, and constituents across Lancashire, think is just going to be spent on Crossrail 2 or some other London or south-east project. It is outrageous that the Bowland basin should be so used. The Minister talks about a new tax regime, but that new tax regime is an insult to the people of Lancashire.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

The hon. Gentleman may be confusing two different figures. The 1% figure is based on revenue, but the 60% figure is taxation on profits.

[Graham Jones]

The hon. Gentleman has a point, but he will find that, when the gas finally flows, it will be nearly all profit because the capital investment will be at the beginning and there will be minimal capital investment as we go along. Year on year, the balance sheet will essentially show profits. He is not wrong, but if he looks at how it will play out, there is huge disparity and there will not be much closing of the gap between the 1% that Lancashire gets and the 60% that will be given to the Chancellor.

[Michael Fabricant]

I think the hon. Gentleman is genuinely confused. The revenue is the actual total sales. He is comparing capital with revenue. The revenue is the sales, and the profit is the profit. As he will know, profit on the pump at petrol stations is a tiny proportion of total sales. His assumption is therefore wrong.

[Graham Jones]

That is not what the Treasury has set out. It is following the broad financial framework for the oil and gas industry in Scotland. I know that other Members want to speak, but it is not fair that the constituents of Lancashire will be ripped off again. There are environmental concerns, but I am happy to oppose the regulations because the offer in the impact assessment is simply not good enough.

[Several hon. Members rose—]

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[Caroline Lucas]

Thank you, Mr Hanson, for allowing those not on the Committee to make short interventions. To be brief, I simply say that I very much agree with the analysis put forward by the hon. Member for Southampton, Test. The Government have made a spectacular U-turn and are undermining public trust even further by so doing.

Overall, the regulations fall far short of protecting our most precious wildlife sites and also our national parks and water resources. They also run contrary to the recommendations of the Environmental Audit Committee, of which I was a member in the previous Parliament.

The Minister will recall that that Committee carried out an in-depth inquiry into fracking and the unanimous view in that cross-party report was that there should be a moratorium on fracking. If there were not to be a moratorium, at the very least we made recommendations for the regulatory framework, including outright prohibition in protected and nationally important areas such as SSSIs, and in all watersource protection zones. The Minister is now, sadly, running against those recommendations.

I want to pick up on a point the Minister made in her concluding remarks. She said something that frankly beggars belief. She said that going ahead with fracking would help to meet carbon targets. Fracking represents a whole new fossil fuel industry, which will not displace coal because, by the time fracking comes on to our grid, coal will be off the grid. What it will displace are renewables.

There is real lack of understanding that fracking poses a risk to the shift that everybody says they want to a low carbon economy. Even if we had a perfect, generously resourced system of standards, regulation and monitoring—which we do not—fracking is not compatible with securing a safe and habitable climate for current and future generations.

[Graham Jones]

Will the hon. Lady give way?

[Caroline Lucas]

I will not because I have only two minutes. It is clear that globally we already have around five times more fossil fuel reserves than we can safely burn. The bottom line is that building this whole new fossil fuel industry is the very last thing the UK should be doing, especially if we are serious about securing a deal at the Paris climate talks.

The argument that shale gas is lower carbon than coal stacks up only if minimum methane emissions can be guaranteed. Recent studies suggest worrying rates of methane leakage from US shale operations. The inventor of the monitoring device routinely used by the industry warns that a fault in his invention means that historical estimates of leakage are severely underestimated. That means that fracked gas may not be better than coal in greenhouse gas emissions after all.

I can see that you want me to wind up, Mr Hanson, so let me simply repeat what John Ashton, the climate diplomat under the previous Labour Government, said:

“You can be in favour of fixing the climate, or you can be in favour of exploiting shale gas, but you cannot be in favour of both at the same time.”