Energy Resources (Lancashire)

John Hayes Excerpts

Tuesday 18th September 2012 Westminster Hall

[The Minister of State, Department of Energy and Climate Change (Mr John Hayes)]

It is always a delight to serve under your benevolent and sagacious chairmanship, Mr Hollobone. I congratulate my hon. Friend the Member for Lancaster and Fleetwood (Eric Ollerenshaw) on securing the debate. Disraeli said,

“Man is only truly great when he acts from the passions”

and my hon. Friend has shown that passion admirably today on behalf of his constituents and the area that he represents. I hope that I can equal that passion in my determination to do right by his constituents; of course, we must do right by the national interest simultaneously.

My hon. Friend is right to focus on the circumstances in Lancashire with regard to energy infrastructure—gas storage, shale gas, nuclear and wind. He covered all those matters in his remarks. He knows that securing sufficient energy is vital for the UK’s future—for national well-being but also for economic growth—but it is also vital that communities play their part in making key decisions about the character of that investment. It is right that they feel a sense of ownership of those decisions and that they are fully involved and consulted before any such decisions are taken. After all, those issues, as he said, will impact on them now but also for years to come. They are matters of considerable concern for those who look to their children’s and their grandchildren’s future, as well as to the immediate prospects that he has described.

I think that the Government can be proud of the approach that we are taking to these concerns, not least through the sustainability appraisal process for the national policy statements at a strategic level, but also at the project level for nationally significant infrastructure, where interactions between developments are considered independently and objectively. The debate is an excellent opportunity to highlight the Government’s overarching strategy for energy and infrastructure and to provide reassurance to my hon. Friend and other Members. I see my hon. Friend the Member for Fylde (Mark Menzies), who has been a worthy champion, in his place and I would not ignore my hon. Friend the Member for Wyre and Preston North (Mr Wallace). My hon. Friend the Member for Lancaster and Fleetwood made a powerful case on behalf of his constituents in defence of what he identified as the strategic changes and cumulative effects of energy matters. My hon. Friend the Member for Fylde has been notable for his keen interest in the development of shale gas particularly. I will say a little about it today, but more in due course.

We should be in no doubt about the massive scale of investment required to ensure our energy security over the coming decades and to make the transition to a lower-carbon economy. Our electricity plant is old and needs replacing. About a fifth of our existing capacity is due to close over the next decade and will be replaced by energy sources that are increasingly intermittent, such as wind, or inflexible, such as nuclear. As my hon. Friend the Member for Lancaster and Fleetwood knows, almost all our existing nuclear plant is due to close by about 2023. Despite being aware of the time scales, in recent years, as he described, we simply did not see the necessary levels of investment.

For the first time in a generation, we faced the prospect that at the end of the decade there would simply not be enough electricity to meet demand. That is clearly not merely unpalatable, but wholly unacceptable for our economy and wider society. Our priority therefore is to rebuild our power sector to guarantee our energy security, and to do so in a genuinely low-carbon way at the lowest possible cost to consumers. Those are the balancing elements in the task that I have been set in my job: to ensure energy security at the lowest possible cost, to attract investment, and of course to do so in a way that is sensitive to local communities and delivers the sense of ownership to which I referred a few moments ago.

To put it in crystal clear terms, we need twice as much investment in every year of this decade, as in the last decade. To put it in numbers, we need £110 billion invested in our energy infrastructure in this decade alone. I learned that fact on the first day I came to this job, and I came to appreciate, perhaps as never before, the scale of the task. Every part of the country has a role to play, and all stand to benefit from secure energy supplies, the jobs created—as my hon. Friends the Members for Lancaster and Fleetwood and for Fylde mentioned—and the stimulus to the UK economy. We need to proceed in a way that is appropriate in terms of not only the energy mix that we deliver, but the environmental impact of the investment. My hon. Friend the Member for Lancaster and Fleetwood made that point repeatedly and powerfully here and previously.

The energy national policy statements designated in July last year set out the need for new energy infrastructure to deliver power to the low-carbon economy. They help to ensure that the UK is a truly attractive market for investors in energy infrastructure, by ensuring that the planning system is rapid, predictable and accountable. The overarching national policy statement EN-1 sets out an overview of the Government’s strategy, and the policy that will lead to an 80% reduction in greenhouse gas emissions by 2050, while maintaining security of supply and ensuring affordability for customers.

[Mr Ben Wallace (Wyre and Preston North) (Con)]

At the last two meetings I had with the Minister’s predecessor—at one stage my hon. Friend the Member for Lancaster and Fleetwood also met with him—it was made clear to us that there were more than enough applications for gas storage in the pipeline to cover national need. Will the Minister reaffirm that that is still the case and that this particular application does not necessarily make or break the national strategy?

[Mr Hayes]

I am looking at gas storage closely; indeed, I met with my officials on it in anticipation of the debate. We will shortly publish our gas strategy, and it is inconceivable that consideration of storage will not form part of it. I have personally asked to take a very close look at the matter for the reasons my hon. Friend highlights. It is critical to see it as part of the solution to the challenge I describe, but to do so in the round. I hear what he says and will certainly feed it into the discussions we are having. The policy statements were subject to a rigorous sustainability appraisal process, which looked at the strategic impacts of a range of policy options.

My hon. Friend the Member for Lancaster and Fleetwood mentioned shale gas, which I will speak about at some length. As he knows, the Select Committee on Energy and Climate Change carried out an inquiry into shale gas, which confirmed that, providing good industry practice is followed and careful regulation applied, hydraulic fracturing—fracking—is unlikely to pose a risk to ground water or aquifers. The Royal Society and the Royal Academy of Engineering recently reported on a detailed study into the potential risks of shale gas extraction and how those can be managed.

Let me be absolutely clear: before there is any return to the exploration necessary—long before production, by the way—I will ensure that rigorous measures are in place to minimise risk, to take local community interest into account, and to allow for a rigorous and thorough planning process. It would be absolutely wrong to proceed on any other basis. As a result of the debate, and of course the earlier work that all my hon. Friends here today have done, I am happy to meet them to talk through the issues prior to publication of any further statement from the Government on the subject. We shall make those arrangements through my officials in the normal way.

Clearly, there is a need to navigate a careful path in overseeing this interesting new energy source. The Government have been active in ensuring that regulations and monitoring systems in the UK meet that need, not least in their current consideration of the comments received in response to expert reports on seismic tremors in Blackpool last year, as my hon. Friend the Member for Lancaster and Fleetwood will be aware. The constituency in which much of the activity takes place is often described as Blackpool, but is in fact the constituency of my hon. Friend the Member for Fylde, which is partly why he has been such a champion of the interests of local people. We published the report of a panel of independent experts and are considering the comments received. The Environment Agency has concluded that any further fracking operations in Lancashire will require permits, which will of course be subject to public consultation.

To ensure full co-ordination of the work of the regulators, we have established a strategy group, chaired by the Department of Energy and Climate Change, including the Health and Safety Executive, the Department for Environment, Food and Rural Affairs, the Department for Communities and Local Government and the Environment Agency, to oversee the strategic and regulatory issues of shale gas. It is right to say that shale gas in the UK is still in its earliest days; just one well in the UK has been drilled and fracked, and the production prospects are unknown at this stage. However, it may prove to be an interesting, additional energy source, providing that the regulations are in place and all the necessary precautions are taken. My hon. Friends take a measured, moderate and sensible approach to such things.

As you see, Mr Hollobone, I am rushing through my speech at immense speed. My hon. Friend the Member for Lancaster and Fleetwood also mentioned pylons. Network companies, such as National Grid, are required to make a balanced assessment of the benefits of reducing any environmental impacts against the costs and technical challenges of doing so, following extensive consultation with stakeholders. My Department will assess each application on a case-by-case basis, taking advice from local authorities. We will certainly take into account visual amenity and other impacts, as well as consultations with, and representations from, affected communities.

In addition, I will personally work with the Planning Minister. As a result, once again, of the debate, I have arranged a meeting with him to do just that. It is important to keep such things under regular review to see whether the existing system is fit-for-purpose in delivering the outcomes we all want. After all, are we not in politics to pursue truth and beauty? Is beauty not the expression of truth? We must not see things in entirely utilitarian terms; perhaps that has been the problem with the debate in the past, but now I am here to put that right.

My hon. Friend the Member for Lancaster and Fleetwood also mentioned wind power. It is of course right that we meet our targets for emissions, and he will also know that there is a renewables target. We consider such matters carefully in all respects. I hear what he says about cumulative impact and I know the views of the House on these matters. I will look again, as any new Minister would, with appropriate rigour and vigour.

My hon. Friend made many other remarks, with which I have not been able to deal, but, as is my habit as a Minister, I will write to him picking up in detail all the matters that he raised. My officials are already busy constructing that letter. It has been a pleasure to speak in the debate and a pleasure to hear from him. Let us move forward together, in confidence, delivering energy security sustainably.