Energy Supplies

Lord Callanan Excerpts

Wednesday 12th October 2022 Lords Chamber

[Baroness Jones of Moulsecoomb]

To ask His Majesty’s Government what assessment they have made of the impact of (1) increased fracking and oil and gas extraction on energy costs for consumers, and (2) the time frame required for such supplies to come on stream in comparison with renewable energy capacity.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)]

My Lords, measuring the impact of any specific gas project or energy costs for consumers is inherently complex. The UK is not isolated from international markets. Shale gas can also support energy security. Renewable energy sources have a wide range of development timeframes. The process of extracting onshore shale gas can be relatively rapid and scalable but will always depend on specific development factors.

[Baroness Jones of Moulsecoomb (GP)]

I thank the Minister for his reply; I will not call it an Answer. I am sure that he is extremely embarrassed by his Government’s ditching of one of their election promises not to frack any more. I would like a yes or no answer to a question. If local people—and perhaps even the local council—are against fracking in their area, as for example is the Tory-led council in East Riding, will the Government accept that and allow no fracking in their area?

[Lord Callanan (Con)]

The Prime Minister and the Secretary of State have said that local support for fracking projects is very important. It is one of the factors that we will take into account.

[Lord Lilley (Con)]

My Lords, more than a million shale wells have been drilled in North America and elsewhere. There is no record of a single building having been shaken down by the occasional microtremors, nor of a single person being poisoned by allegedly contaminated aquifers. Is not the scaremongering of the anti-frackers as bad as that of the anti-vaxxers? Should it not be treated similarly?

[Lord Callanan (Con)]

The noble Lord makes an important point. A number of scare stories have been circulating, although I would gently point out that many parts of America are much less densely populated than many parts of the UK.

[Lord Teverson (LD)]

My Lords, it is well understood that fracking will take some time to develop, and it is more expensive than many renewables. As an alternative, solar is renewable, a lot cheaper and can be implemented much more quickly. Can the Government guarantee that they will not restrict further the rollout of solar in the country during the next couple of years?

[Lord Callanan (Con)]

Not only can I guarantee that but we will be expanding renewables production. We need to do both. We need to roll out renewables, which have a good track record. They are relatively cheap, but they are intermittent—it is no good telling people that they can keep their lights on for only 60% of the time. The real watchword is that we need diversity of supply. We need more renewables; we need gas; we need nuclear; we need biomass production—we need all of them.

[Baroness Hayman (CB)]

My Lords, I declare my interests. I welcome the Government’s movement on the planning regime for onshore wind. I also endorse the need to change the illogical charging regime for electricity generation which was announced today. How will the Government ensure that funding for research and investment in renewables is maintained, given the effective windfall tax on renewables that is being introduced, when the detrimental effect on investment in research on oil and gas was the reason for not having a windfall tax on those industries?

[Lord Callanan (Con)]

I agree with the first part of the question from the noble Baroness, but we do have a windfall tax on oil and gas producers: the energy price profits levy was announced earlier in the year. We do not propose a windfall tax on renewables. I welcome her support for increased supplies of wind energy.

[Lord Watts (Lab)]

My Lords, does the Minister’s previous answer mean that the suggestion that the local people will have a say is meaningless, because the Government will overrule them?

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[Lord Callanan (Con)]

No, that is not what I said—if the noble Lord would care to consult Hansard. I said that local support is extremely important. It is one of the factors that we will be looking to see demonstrated before any hydraulic fracturing licences are issued.

[Baroness Foster of Oxton (Con)]

My Lords, as a former Member of the European Parliament for North West England, and for many months in this House, even before the invasion of Ukraine, I have been a vocal supporter of the reintroduction of shale gas extraction in the Bowland fields in Lancashire. The protesters at the time generally were not those who lived there, but people who came from outside. We are also now aware of the fearmongering propaganda against fracking across Europe and the UK, which emanated from Russia. Can my noble friend the Minister reassure this House that the process will go ahead?

[Lord Callanan (Con)]

I know that my noble friend has been a long-standing supporter of fracking. There are a lot of steps to go through. There could be potential for large amounts of shale gas. We do not yet know. Local planning will still need to happen, the licences will need to be issued, the Secretary of State will want to be reassured that it is still safe in operation et cetera, but it is certainly a potential that we are looking at.

[Lord Wigley (PC)]

My Lords, I am sure that the Minister is aware that the Government of Wales have banned fracking, not just on the question of environmental impact in the conventional sense but because of the uncertainty of the underground workings in many of the coalfields and other mineral areas of Wales. In those circumstances, in the context of the possibility of fracking in west Cheshire and the Wirral, and the uncertainty about many of the underground tunnels in the industrial area of Flintshire, can he ensure that there is close co-operation and discussion with the Government of Wales before any consent is given on the eastern side of the border?

[Lord Callanan (Con)]

The Welsh Government are of course responsible for policies, planning et cetera in Wales, and the British Government are responsible for that in England.

[Baroness Liddell of Coatdyke (Lab)]

My Lords, many of the issues that we are discussing today could be covered in the Energy Bill. What has happened to it?

[Lord Callanan (Con)]

Well, we have had some extensive debates, as the noble Baroness knows. We had an excellent Second Reading and two days in Committee. I am sure that we will want to look at when that returns to the House.

[Lord Walney (CB)]

My Lords, do the Government accept that public and community support for fracking projects and others such as onshore wind could be greatly increased if it was made easier—perhaps even mandated—for companies to share the revenue directly with local consumers in the environment of the projects where they are either fracked or where the wind turbines go up?

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[Lord Callanan (Con)]

The noble Lord speaks a great deal of sense. They are eminently sensible suggestions and of course local communities will want to feel the benefit of any procedures that they consent to in their areas.

[Baroness McIntosh of Pickering (Con)]

My Lords, following up that point, does my noble friend agree that energy from waste is very much the way forward, and will he ensure that any benefits go to the local community from electricity generated from waste?

[Lord Callanan (Con)]

I am happy to agree with my noble friend that energy from waste is an excellent production technique. There are many successful energy-from-waste projects; it is another technology that will make a contribution to our energy supply.

[Baroness Sheehan (LD)]

My Lords, a short while ago in the Commons, the Prime Minister stated that fracking would go ahead only where there was community support, and the Minister has just corroborated that. Can he categorically state that community support will be gauged neither by the fracking companies themselves, of which there is a rumour, nor by Jacob Rees-Mogg’s department, given the debacle of his consultation on imperial measurements, in which “no” was not an option?

[Lord Callanan (Con)]

I am happy to hear from the noble Baroness the great news that the Prime Minister agrees with me and has said the same thing, which is always good for a Minister to hear. However, the reality is that the issuing of hydraulic fracturing consents is a matter for BEIS and the Secretary of State for BEIS.

[Lord McNicol of West Kilbride (Lab)]

My Lords, as many speakers have alluded to, there is little evidence to suggest that fracking is the answer to the current energy crisis. However, reducing our collective energy demand would improve energy security and lower prices. Why was the Government-led campaign to encourage household energy savings scrapped?

[Lord Callanan (Con)]

If I can just correct the noble Lord: fracking is not the only answer; it is one of the potential answers to energy security. As I said earlier, we need a diverse range of supply. I remind the House that while we have our own domestic supplies of gas, we still import a considerable amount of very carbon-intensive LNG. If fracking gas—shale gas—can replace some of that, then that is a net carbon saving.

With regard to information, the Government will continue to promote all our energy efficiency schemes. We will continue to provide information to consumers on ways that energy can be saved and, more importantly, on how they can reduce their bills. There is one pre-eminent technology that everybody should do, which is to turn down the flow temperature of your condensing boiler: you will end up with the same temperature, the boiler will run much more efficiently, and you will save 8% to 10% on your gas bills.