Shale Gas

John McNally Excerpts

Tuesday 30th June 2015 Westminster Hall

[John Mc Nally (Falkirk) (SNP)]

I thank the hon. Member for Thirsk and Malton (Kevin Hollinrake) for securing this debate on a subject that is close to most people’s hearts, of that I am quite sure.

I will be brief, but first let me say, by way of background, that I am speaking today because Falkirk, the area I represent, is at the heart of fracking operations, with test bore drills already in place. INEOS has planning permission to build shale gas tanks, and it has to be said that that is a hugely significant investment.

On 19 May last year, I attended a fracking conference at the Mermaid theatre in London on behalf of Falkirk Council, of which I was a member at the time. I assume that many Members present have attended similar conferences. After about an hour, I was thinking to myself, “Why do we keep being told that our regulations are the best and safest in the world?” It reminded me of an anecdote about Sir Alex Ferguson, who when looking at a player he was interested in was told that there was no truth in the rumour that the player had injury problems; the first thing he thought was that he needed to look at the player in a great deal more detail. I took that methodology back to my constituency: more analysis is required.

[Martyn Day (Linlithgow and East Falkirk) (SNP)]

Does my hon. Friend agree that perception is reality, and that even if fracking were technically proven to be safe, the public concerns surrounding it would also need to be addressed, or else it could still be damaging to our economy in terms of our water production, the reputation of our food and drink industry, and house prices?

[John Mc Nally]

I agree totally with my hon. Friend. Perception is everything. The hon. Member for South Ribble (Seema Kennedy) referred to the salad bowl. If Mr Birdseye thinks that water contamination is going to affect his product in any way, he will withdraw and people will not buy the product. I am convinced of that; there is no second-guessing there.

The delegates at the conference I attended went on to listen to various utopian and dystopian presentations. That ignited for me the other reason we are here today. Last Thursday I asked the Secretary of State to produce a detailed health and environmental impact assessment for the conference in Paris this year. She answered that safety would always be a priority and that this country has a safe environmental working record. I eagerly await the presentation of the findings on the health and environmental impacts.

Medact, a registered public health charity with over 1,000 public health clinicians and the like as members, has produced a report on fracking. The report concludes that fracking poses significant public health risks and calls for an immediate moratorium, to allow for the completion of a full and comprehensive health impact assessment. I agree totally with that position.

In Scotland, there is what we call the WOW factor—wind, oil and water. There is currently a moratorium, as the Scottish Government have listened to concerned communities not just in Falkirk but across Scotland. We have a worldwide reputation for the purity of our water; our vast food and drink industries require that that reputation is not tarnished in any way, shape or form. Under the Smith commission’s proposals, licensing of fracking will be devolved to Scotland, which makes absolute and total sense. We need to tread warily on this huge issue, which affects all our communities.

I intend to write to the Secretary of State to ask her to share with the Scottish Government the report she will present on fracking to this House and to the Paris conference. I cannot help but note that the Prime Minister’s comment about going “all out” for shale gas in the UK was a little premature. It could involve huge financial costs for companies that have invested in fracking, such as INEOS, as I sincerely hope that fracking does not take place in this country.

--- Later in debate ---

[Andrea Leadsom]

I can give my hon. Friend that reassurance. It is certainly intended that there will be regular visits from health and safety and Environment Agency staff, and that there will be unannounced visits.

[John Mc Nally]

Will the Minister give way?

[Andrea Leadsom]

No, I am sorry. We are really short of time—I apologise.

The Environment Agency assesses the hazards presented by fracking fluid chemicals on a case-by-case basis. They will not permit the use of hazardous chemicals where they may enter groundwater and cause pollution. The Health and Safety Executive scrutinises well design and requires week-by-week written updates on drilling progress. DECC has implemented a thorough system of rigorous checks before any drilling or fracking, as well as a live traffic-light system during the actual operations to ensure that earthquakes will not occur.

To reinforce the regulations further, the Infrastructure Act 2015 introduced a range of further requirements if an operator is to carry out hydraulic fracturing. They include a mandatory environmental impact assessment, which is absolutely vital. There was a misunderstanding that fracking would not require an environmental impact assessment, but that is not the case and DECC has tried to remedy that misunderstanding. Any hydraulic fracturing will require separate independent environmental impact assessments. Additionally, unlike in the United States, in this country disclosure of all chemicals used in the fracking process and 12 months of baseline groundwater monitoring will be required. There will be specific community benefits to be paid and the complete exclusion of protected areas. We already require everything that has been recommended by the European Commission.

To summarise on safety, we have among the best and most experienced regulators in the world and a 50-year track record on safe oil and gas exploration. Our regulatory environment for shale is the toughest in the world, but it is also important to discuss the enormous potential benefits of a successful shale gas industry, not just in energy security, as I have said, but in direct benefits to jobs, growth and community investment.

Ernst and Young has estimated that a thriving shale industry could mean 64,500 jobs nationally or over 100 jobs per year at a typical site. The value of the supply chain for the industry has been estimated at £33 billion between 2016 and 2032. This is an incredible opportunity. We are at a pre-beginning phase, but there is a huge amount to play for. British engineering is at the forefront of the world and we have the opportunity to showcase that further by developing for ourselves a safe and environmentally sound shale gas industry. In November, we announced a new national network of colleges for onshore oil and gas to train the next generation of specialists to help the UK seize those opportunities.

The final, very important, point I want to address is the position of local communities. We believe that every community hosting shale should share in the benefits, so we have committed to setting up a sovereign wealth fund to ensure that revenues are shared fairly. We welcome industry’s commitment to putting £100,000 per fractured exploration well to local communities and then a minimum of 1% of any subsequent production revenues. That could be worth as much as £5 million to £10 million over the life cycle of the well. Wider communities will also benefit, as local councils will retain 100% of the business rates that they collect from productive shale gas developments.

I sincerely thank all Members for participating in this debate. It is important that we have the opportunity to discuss such a key issue for our future energy mix. As the UK’s Committee on Climate Change said of shale gas in 2013

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

and

“if anything using well-regulated UK shale gas…could lead to lower overall…greenhouse gas emissions than continuing to import”

gas.

Question put and agreed to.

Resolved,

That this House has considered shale gas.