Shale Gas

John Pugh Excerpts

Thursday 3rd November 2011 Westminster Hall

[John Pugh (Southport) (LD)]

My constituency is right on the edge of the latest find. I have to declare a sort of interest, because when I originally bought my house, under a 999-year lease, I found the local feudal landlords had mineral rights over my front garden. When I bought the freehold, I obviously took over those rights. My house suffers from tremors, but that is only because eight trains an hour from the Northern line go past my front door. None the less, there is a genuine concern in the area about the exploitation and extraction of shale gas. I will be visiting Cuadrilla tomorrow, coincidentally, to put to it some of the questions that will no doubt come up in this debate.

When I read the report, I was delighted by its excellence and balance. It may surprise you to hear this, Mr Gale, but I do not know much about geology and oil exploration. I was extraordinarily well educated by the report. What I understand, however, is politics, which I have been in for a long time. The two motives that move people in politics are greed and fear, and both greed and fear are in play in this particular issue.

On one side, pictures are sketched of a shale bonanza. The Lancashire find is put at 200 trillion cubic feet. I am reliably informed—well, informed—by a Cabinet Minister that that is almost equivalent to half the entire reserves in the USA. One ponders, I guess, why that has not dramatically affected the share value of Cuadrilla in the way that one might expect, but, none the less, it is by all acknowledgment an appreciable find. That offers the possibilities of making the UK energy-secure, of lowering energy prices and of generating wealth, although there could be an argument about how that wealth will be spread and who will benefit the most. There is no doubt that with energy comes wealth. The people buying up our premier league football teams, by and large, tend to be energy barons. That is one side of the equation.

On the other side, there is not the hype, but the fear. There is the fear of environmental destruction, the fear of wells being aborted over a period of time or rather more rapidly and there is the fear of poisoned water supplies. [Interruption.] I am sure that hon. Members have seen the flaming house taps in the USA, although I wonder what the American water authorities are doing in allowing gas to contaminate—

[Mr Roger Gale (in the Chair)]

Order. I am sorry to interrupt the hon. Gentleman, but someone’s mobile phone is switched on. Can everyone check their phone, including those sitting in the Public Gallery?

[John Pugh]

I suspect that it was my phone, unfortunately. I am interrupting myself.

There are also arguments about water depletion, tremors, geological instability and so on. Given the degree of hype on one side and of panic on the other, the report is most timely and helpful. I genuinely think it is a good report, which enables us to form a judgment about how and whether to extract. There is, however, one view that the report perhaps does not deal with sufficiently. It is at one extreme of the debate and it goes something like this: even if extraction is safe and profitable, it should not be done, either because it produces a carbon fuel, and we should not get more carbon fuels out of the ground, or because it augments and influences the use of carbon fuels and the carbon fuel market elsewhere. Organisations such as the Tyndall Centre have put that argument very seriously and would still oppose the extraction of shale gas in the UK for the same reasons, even if they found out tomorrow that it was perfectly safe.

People who argue like that believe a range of different things. They might believe that renewables can plug the UK energy gap quickly, that the British public will dramatically and quickly reduce their energy consumption through energy conservation or energy efficiency or that nuclear energy can easily plug the gap and step up to the plate. When we go through those alternative assumptions and the general argument for doing nothing about shale gas, however, it becomes clear that none of them has general support from informed opinion, and I share none of them myself. I do not think renewables will plug the energy gap as quickly as we would like, that the British public will dramatically or rapidly alter their behaviour in the next decade or that nuclear energy can easily fill the gap.

Given that most people believe and accept that gas is part of the mix, the debate can then centre on whether we should have UK gas or imported gas. People can be against natural gas extraction full stop or shale gas extraction full stop, or they can simply be against shale gas extraction in the UK. As I understand it, most people’s anxieties are not about shale gas per se, but about particular propositions in the UK and about whether the process followed here might emulate bad practice elsewhere in the world. Most people are concerned about safety, either because they are not convinced that shale gas extraction is safe or because they are not convinced that all companies can be trusted to make it safe—even where it has the potential to be safe, they think one should be suspicious of oil companies.

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

On safety, does the hon. Gentleman think that it was perhaps a mistake for the report on the seismic activity to have been commissioned by Cuadrilla, given that many residents in the area already have questions about the report’s true independence? There have been press reports today that although the report refers to a few seismic activities, Cuadrilla has now admitted to there having been 50 in just eight months, which undermines the confidence of people in the area.

[John Pugh]

If one were extraordinarily suspicious, one would expect Cuadrilla simply to produce a whitewash report, because there is no advantage to the company, in the current circumstances, in admitting liability for the tremor—it has not helped Cuadrilla and, in terms of its public relations operation, it has been a disaster. I guess that that leads one to believe that Cuadrilla is prepared, in certain contexts, to admit to some of the flaws that might arise during drilling.

The great thing about the Committee’s report—this is a considerable reassurance—is that it indicates that the process is not, as in America, taking place in the wild west. A series of robust arrangements are in place, and the report refers to

“a suite of environmental legislation”.

There are controls at various stages, and they seem—at first blush, at any rate—to be relatively robust. There is licensing, which is subject to conditions in the first place, and there is drilling permission, which is subject to planning regulations. There are also environmental effects, which are subject to impact assessments and monitoring by the Environment Agency. Similarly, the site is covered by health and safety legislation. Finally, people in the UK—unlike the people with methane in their taps in the USA—presumably have the advantage of water companies that test their water before sending it through the system.

The might, and should, offer a degree of reassurance, although there is an argument about how much reassurance it offers. However, there is a point at which reassurance runs out, because none of these things can totally get rid of the known unknowns, to use Donald Rumsfeld’s splendid expression. I did not realise this before, but there is talk about the effect of extraction or any sort of mining on the mobility of other sorts of gases and minerals that are not directly investigated or extracted from the strata affected. People cannot always say what will happen to those, but, then, they cannot say what putting Crossrail under London will do. Similarly, I have spoken to people in my constituency, and some of them have said, “That reassurance is all very well, but there might be things wrong with the process that we don’t currently know about. There might be some dangers out there we can’t identify.” This is where we get on to Donald Rumsfeld’s unknown unknowns.

There is a rational view of all these things, which goes something like this: if we are to have any conventional extraction, unconventional extraction or even large-scale development, we should do everything reasonable and necessary to ensure that it is as risk free as it can be, but we cannot eliminate risks that we cannot anticipate. There is, therefore, a strong case—particularly where there is genuine public concern—for taking a proactive approach towards monitoring any shale gas extraction process. Such an approach would mean having an open, transparent process, with frequent monitoring, genuinely hard and enforceable regulations and a body that is resourced to enforce those regulations. The Committee’s report makes it clear that the Environment Agency will have more work to do if shale gas takes off in the UK, and it will need to be resourced appropriately, subject to current Government restraints.

Importantly, we also need to be assured that whoever promotes large-scale developments has the public indemnity to act if something goes wrong, and that includes dealing with the unknown unknowns. They should also be in a position to clear up. As the hon. Member for Southampton, Test (Dr Whitehead) has said, wells are simply abandoned in the USA, and people leave their detritus behind them. That simply cannot take place in the UK, where it would be wholly unacceptable.

There is a lot of good advice along those lines in the Committee’s report. Recommendation 14 states:

“We recommend that the Government consider the future funding for the Environment Agency”.

Recommendation 15 states:

“We recommend that the Health and Safety Executive test the integrity of wells before allowing the licensing of drilling activity.”

Recommendation 16 states that

“the Environment Agency should insist that all companies involved in hydraulic fracturing should declare the type, concentration and volume of all chemicals they are using.”

And recommendation 17 states that:

“before the Environment Agency permits any chemicals to be used in hydraulic fracturing fluid, they must ensure that they have the capabilities to monitor for, and potentially detect, these chemicals in local water supplies.”

In other words, the Committee is making a plea for a robust regime to govern what is a new process for many people in the UK. In many of its technological aspects, fracking or shale gas exploitation is not that new, but it is certainly a new concern for many people in my part of the world.

My concern about the Committee’s report relates not to the report itself, but to the fact that the Government’s responses to some of our clear-cut recommendations allow a little more wriggle room than I am comfortable with. There are too many “mays” and “cans”, too many expectations and too many statements to the effect that things might be done, could be done or, optimally, would be done, but there is no assurance that they always will be done. If we are to get any benefit from shale gas in the UK, we must be able to guarantee safety at every stage. Therefore we must have appropriate and effective monitoring and enforcement. Without those things, there will not be public support for shale gas, and there will be much anxiety about it, and we will have to accept that we have an asset perhaps to bequeath but not necessarily to use. The ball is in the Government’s court. If they and the agencies that want to exploit shale gas can show to all and sundry that they will hold the various companies concerned to the fire until they agree to what is appropriate, safe and satisfactory and that it passes all reasonable scientific tests, there may be an answer in shale gas for British energy supplies. If not, the issue will be coupled to an unnecessary degree of anxiety.