Joan Walley
Main Page: Joan Walley (Labour - Stoke-on-Trent North)Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
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Gregory Barker
There are good reasons to think that, whatever the resource may be, shale gas will not develop as dramatically here as it has in the US. Britain is a much more densely populated country, and shale gas is still in its very early days here. Just one well in the UK has been drilled and fracked, so the production prospects are simply unknown at this stage. Whatever they may be, the Government will continue to seek full economic recovery of UK hydrocarbon resources—both conventional and unconventional—when that can be done safely and with environmental integrity.
Joan Walley
I am very grateful to the Minister for giving way; I know that time is of the essence. Regarding the environmental integrity that he has just mentioned, can he tell us what cross-cutting work he is doing, first with the Department for Environment, Food and Rural Affairs in respect of the concerns about the possibility of groundwater contamination, and secondly with the Department of Health in respect of the health concerns about the potential risk of air pollution?
Gregory Barker
I will come to the points about groundwater pollution later in my remarks—if I am able to get to them. In respect of the work with the Department of Health and DEFRA, I fear that I will have to write to the hon. Lady to let her know about that work in more detail.
I turn now to the role of gas and carbon capture and storage in UK energy supply, because changes in the UK energy sector during the next 10 to 20 years will create new sources of gas demand. We will need gas to retain sufficient electricity generation capacity margins in the face of coal-nuclear closures, to manage intermittency from increased use of renewables, and to continue to meet the majority of our heating needs. Equally, we are taking steps to address the possible use of fossil fuels in the low-carbon energy economy of the future.
In the long term, there will be a fundamental shift in the role of gas in electricity supply. By 2050, a major role for gas as a base load source of electricity will only be realistic with large numbers of gas CCS plants. One of our key policy objectives is to enable cost-competitive deployment of CCS by the early 2020s. Last week, we announced the names of the companies who have indicated their interest in the new UK CCS competition, which is a flagship policy for this Government. I am very encouraged by the high level of interest that those companies have demonstrated. It shows that we are on track with CCS, a key technology that is enabling us to make use of fossil fuels while protecting, enhancing and driving forward our climate change objectives.
I now turn to shale gas specifically. It has been said that it is still very early days for shale gas in the UK. However, I am told that the pattern of development of a new shale gas basin in the US has shown roughly three phases: first, initial discovery and the use of appraisal wells to prove the presence of the gas and the size of the resource; secondly, an experimental phase in which the explorers work out the best techniques to obtain production from the particular type of shale; and thirdly, the production phase, in which an efficient pattern of production wells can be drilled to extract the gas on a commercial basis.
Clearly we are right at the beginning of this whole process; only a handful of wells have been drilled and their production potential has yet to be quantified. However, it is encouraging that Cuadrilla believes that there are good quantities of shale gas in the rocks underlying its licence area in Lancashire. Nevertheless, it is still too early to say whether those resources can be extracted economically and safely.
The answer to the question, “What contribution might shale gas make to UK energy supplies?” is even more uncertain. I will not speculate on that issue today. However, if shale gas can be safely and economically exploited here, the Government would obviously welcome any positive contribution it would make to energy supplies, jobs and the economy.
I will now address the specific questions put by my hon. Friend the Member for Morecambe and Lunesdale. First, what steps are being taken to ensure that waste water does not contaminate the environment? That question was echoed by my hon. Friend the Member for Lancaster and Fleetwood (Eric Ollerenshaw). Secondly, how do we prevent fugitive emissions, which is a big problem in the US? Thirdly, what steps are being taken to reduce any seismic activity? Fourthly, there is the overall question of what steps the Government are taking to ensure that our regulatory environment is indeed fit for purpose?
In response to the first question, which was about water waste, I must say that my hon. Friend the Member for Morecambe and Lunesdale made a very important point, which was echoed by my hon. Friend the Member for Lancaster and Fleetwood. It is essential that any waste water or flow-back fluids that come from fracking operations are handled carefully and treated properly. Disposal of waste water falls within the regulatory responsibilities of the Environment Agency, which has a range of regulatory powers to ensure that such operations are carried out without causing harm to the environment. The agency will consider all proposed operations and will only permit them if it is satisfied that the intended disposal route will not harm the environment. The waste water could either go to a waste treatment plant that is already permitted, or specific disposal arrangements would need to be agreed with the agency. With regard to Cuadrilla’s current operation, the return fluids are currently being retained on-site by the company and stored in double-skinned tanks. A permit for correct disposal of them is required, and Cuadrilla is in discussions with the Environment Agency.
Secondly, how do we prevent fugitive emissions? That is a very important issue; indeed, I was also asked about the control of fugitive emissions. Most aspects of shale gas operations—for example, the construction of the well, the well-head equipment and any pipeline—use exactly the same technology as conventional gas production. Provided that that technology is competently constructed, there is no reason to think that unintended emissions from shale gas will be different from conventional gas emissions or will pose new problems. At present, methane emissions from gas production are estimated to comprise less than 1% of our total greenhouse gas emissions, so fugitive emissions from current gas production activities are not a major contributor to greenhouse gas emissions.
At the exploration stage, however, it is normally necessary to dispose of any produced gas by venting or flaring, as there will not be any export facilities in place. Nevertheless, my Department imposes controls to ensure that venting—the release of methane—is minimised, so far as it is technically possible, and to ensure that any gas that is released is flared, which reduces the greenhouse warming potential of the gas by a factor of at least 20.
However, there is one aspect of shale gas production that is different from conventional gas production: with shale gas production, the rock is, of course, fracked by injecting water under pressure. Much of that water flows back and is collected at the surface. That flow-back water will then contain methane, which could add significantly to emissions if it was simply allowed to escape. Having said that, there is technology available—described as green completions—that can capture that methane. If the well is purely for exploration, the gas can be flared; as I have said, that reduces its greenhouse warming potential. In production, the gas will be exported and sold. As we have no proposals for production as yet, it is too soon to say precisely how that aspect of production operations will be controlled, but my Department will continue to control flaring and venting, and the Environment Agency is also considering how its powers might apply if there is production.
What we can safely say at this stage is that both my Department and the Environment Agency will expect all shale gas projects to demonstrate best practice, including green completions, and they will apply suitable controls to the operations in question, with exploration or production to ensure effective control of emissions.
Thirdly, what steps are being taken to reduce any seismic activity? If any future shale gas operations are allowed to commence, it is vital that they do not result in further seismic activity at the level that was experienced near Blackpool last year. That is why detailed analysis has been undertaken to determine the linkage between the seismic activity and the fracking, and to consider the best way to mitigate the risk that such events will occur again.
An expert study was commissioned by my Department, which found a link between the fracking and the seismic tremors near Blackpool, and it recommends a number of measures to mitigate the risks in any future operations. They include micro-seismic monitoring on the site and a traffic light system that would shut down operations if early signals suggest that seismic events are being generated. However, the Government have not yet decided whether to allow fracking to recommence. We will not be finalising a view on that issue until we have considered all the additional comments that have come in as part of the consultation process, which finishes this week.
Finally, what overall steps are the Government taking to ensure that our regulatory environment is fit for purpose? Although we do not have a robust regulatory regime for the onshore industry—[Laughter.] Sorry, we do have a robust regulatory regime for the onshore industry. I apologise; my contact lenses are a bit blurry. However, it is important that we consider how that regime sits for any longer-term development of shale gas. Consequently, we are proactive in relation to the regulatory position.
My Department, the Health and Safety Executive and the environmental agencies work closely together to share relevant information on shale gas activities, to ensure that there are no material gaps and to ensure that all material concerns are addressed. We consider that the regime and the co-ordination of the work of the regulators are adequate, at least for the current exploratory phase of shale gas activity. However, with a view to ensuring the continued adequacy of the regime if shale gas proves to be commercial and moves into the development phase, the Environment Agency is currently undertaking a detailed environmental assessment of shale gas extraction, so that it has all the information it needs to ensure that regulation is appropriate to protect the environment. Other regulators, including my Department, will contribute to that review. Furthermore, the Royal Academy of Engineering, along with the Royal Society, is currently conducting a review of the risks posed by shale gas extraction. That review is expected to report in the summer.
The Minister of State, Department of Energy and Climate Change, my hon. Friend the Member for Wealden (Charles Hendry), or I will be delighted to meet my hon. Friend the Member for Morecambe and Lunesdale to address any further concerns he has that have not been addressed in this debate.