UK Shale Gas

Lord Lilley Excerpts

Thursday 18th July 2013 Westminster Hall

[Caroline Lucas (Brighton, Pavilion) (Green)]

It is a pleasure to serve under your chairmanship, Mr Bone. I thank the Backbench Business Committee for allowing this debate and colleagues from across the House for supporting it. It gives us an opportunity to examine some of the measures that the Government are putting in place to promote shale gas, and to explore the implications of fracking for our constituents, our countryside and our climate. I read with interest the Hansard report of Tuesday’s debate, which focused in particular on the details of community benefit packages but also touched on some issues that I am sure we will return to and explore further in this debate.

Before I discuss those questions, in light of recent lobbying scandals and concerns about inappropriate corporate influence on politics and policy making, I will declare my relevant interests. I am a proud, albeit small, shareholder in Brighton Energy Co-operative, which invests in community-owned solar power in Brighton and Hove and whose vision for community-owned renewables at the heart of our energy system I openly support. I have a similar very small interest in the Westmill Wind Farm co-operative in south Oxfordshire. I hope that other Members speaking today will agree that in the interests of transparency and rebuilding trust in the political process, it would be beneficial if all of us declared fully all interests relating to the energy sector or energy companies.

As part of the spending review, the Government set out their commitment to put in place the conditions to allow the shale industry to “reach its full potential”: new planning guidance, community benefits and tax breaks. The planning document was to be published by 18 July, in the depressingly common pattern of waiting until just before the summer recess to publish unpopular policies, but I was told this morning by the Department for Communities and Local Government that it would, after all, be published not today but “very soon”. That is even worse for the House’s ability to examine the details and hold Ministers to account on behalf of our constituents. I am sure that we would all like to hear from the Minister the reasons for the delay. It is hard to avoid concluding that his colleagues in the DCLG are scared of scrutiny.

It is also pretty appalling that the new planning guidelines are set to come into force without public consultation, denying communities that stand to be affected by fracking any say in the new process. It is clear that Ministers and the fracking firms, which are, sadly, increasingly indistinguishable, are keen to press on rapidly, but it is wrong to refuse to consult on new planning guidance aimed at making it easier for developers to cast aside community concerns.

Even from a perspective of due procedure, I cannot see how the decision to deny communities a say in their new planning rules is remotely in line with the Government’s own definition of circumstances in which consultation is unnecessary. The relevant Cabinet Office principle makes it clear that that is appropriate only in the case of

“minor or technical amendments to regulation or existing policy frameworks, where the measure is necessary to deal with a court judgment or where adequate consultation has taken place at an earlier stage”.

Many of my constituents have e-mailed me over the past few weeks to call for a full public consultation, as well as for new planning rules that are strong on tackling climate change and follow the precautionary principle when it comes to issues such as groundwater contamination.

Another spending review measure is the consultation on tax incentives to encourage companies to press on with shale gas exploration. The Treasury is proposing reducing the tax payable on income from 62% to 30%. One of my concerns is that tax breaks for fracking amount to an additional fossil fuel subsidy, which is exactly what the UK and other G20 nations pledged to phase out three years ago. It looks like a backward step. Fossil fuel subsidies, which amounted to $500 billion worldwide in 2011, are effectively an incentive to pollute. Earlier this year, the chief economist of the International Energy Agency, Fatih Birol, called them

“public enemy No. 1 for sustainable energy development”.

[Mr Peter Lilley (Hitchin and Harpenden) (Con)]

Will the hon. Lady make it clear that what she calls a fossil fuel subsidy in the case of the UK is, overwhelmingly, simply a lower rate of VAT on all energy use? Is she calling for a higher rate of VAT on all energy use, or just a higher rate on fossil fuels? To describe it as a subsidy is surely nonsense.

[Caroline Lucas]

I do not think that it is nonsense. The Environmental Audit Committee, of which I am a member, is in the middle of an inquiry into fossil fuel subsidies, and it is clear from some of the evidence that we have received that many people think that the Government’s definition of subsidy, which is narrow and does not include tax breaks, is wrong. I am happy to say that I do not think that fossil fuels should have tax breaks. Whether or not we want to call that a subsidy, I am clear that I think it is, and I am against it.

Charles Perry said in evidence to the Committee:

“The media in this country…would like us all to believe that we are paying a lot more for renewable energy as consumers, but if you compare what we are paying for renewable energy versus fossil fuels, it is six times more for fossil fuels as a taxpayer than it is for renewables.”

That sums up what I am saying.

--- Later in debate ---

[Mr Peter Bone (in the Chair)]

I should like to tell right hon. and hon. Members that I will call the first Front Bencher no later than 10 minutes past 4. The Chairman of Ways and Means has given the Chairman of this debate permission to impose a time limit. I will not do that at the moment. Nine Back Benchers want to speak, so Members can do the arithmetic.

[Mr Lilley]

For Members who cannot do the arithmetic, can you tell us how long we have to speak, Mr Bone?

[Mr Peter Bone (in the Chair)]

No, you are quite capable of doing that, Mr Lilley.

--- Later in debate ---

[Barbara Keeley]

My hon. Friend is entitled to that view, but I do not agree with him.

There are serious concerns about the impact of fracking on communities. I want to quote from the International Energy Agency’s “Golden Rules for a Golden Age of Gas: World Energy Outlook Special Report on Unconventional Gas”:

“Producing unconventional gas is an intensive industrial process, generally imposing a larger environmental footprint than conventional gas development. More wells are often needed…The scale of development can have major implications for local communities, land use and water resources. Serious hazards, including the potential for air pollution and for contamination of surface and groundwater, must be successfully addressed.”

Those are the issues and concerns that are starting to bear down on my constituents, and the notion that anyone living in an area where such things were being contemplated would see house price increases is just not realistic.

I want also to quote from a report by the Tyndall Centre for Climate Change Research produced by local academics at the university of Manchester:

“The depth of shale gas extraction gives rise to major challenges in identifying categorically pathways of contamination of groundwater by chemicals used in the extraction process. An analysis of these substances suggests that many have toxic, carcinogenic or other hazardous properties. There is considerable anecdotal evidence from the US that contamination of both ground and surface water has occurred in a range of cases.”

The report also states that

“there are a number of documented examples of pollution events owing to poor construction and operator error. There are reports of incidents involving contamination of ground and surface waters with contaminants such as brine, unidentified chemicals, natural gas, sulphates, and hydrocarbons”.

Government Members appear to be saying “Nonsense.” I think I heard the Minister say it too, so I hope he can give me information that I can pass on to my constituents that will help to settle their minds.

[Mr Lilley]

There have been some 2 million wells fracked in the United States and not a single person has suffered from water contamination as a result.

--- Later in debate ---

[Dan Byles]

Of course it is.

[Mr Lilley]

Show some leadership.

[Mr Peter Bone (in the Chair)]

Order.

[Barbara Keeley]

I do not know about the particular developer we will have or the particular process that it will undertake. To be perfectly frank, in the current environment I do not know whether I have the resources to get into that anyway, so it would be helpful if the information could be provided.

[Mr Lilley]

Will the hon. Lady give way?

[Barbara Keeley]

No, I want to make some progress.

I want to touch further on the potential environmental impacts of shale gas developments. Constituents of mine have brought reports to meetings and have raised their concerns. I have already mentioned the issues they see as being more likely to cause problems for the local environment and for human health, including water contamination and air pollution, and I want to go a little further into the latter.

In certain places in the States—Wyoming and Texas have been mentioned—there have been cases of photochemical smog, which increases susceptibility to asthma. A hospital system in Texas, which serves six counties, has reported asthma rates of three times the national average. In my constituency, we already have significant problems with air pollution, due to the volumes of traffic and traffic congestion on the three motorways. My constituency is surrounded by the M60, the M62, the M602 and the local road network. Recent roadworks near a junction of the M60 caused tailbacks of up to two hours, with traffic nearly at a standstill, and that was in the same area as the drilling site.

The current mortality figure for Salford attributable to air pollution is as high as 6%, which is higher than the average for England of 5.6% and much higher than the figures for other parts of the country, such as Devon and Cornwall. We have evidence from the United States of some hazardous pollutants being prevalent around shale gas wells. In my constituency, the Barton Moss site is close to two local housing estates—the real difference is that the hon. Member for Lancaster and Fleetwood was talking about a rural area, while I am talking about a heavily populated urban one—so any drilling for shale gas would only add to the harmful air pollutants already breathed in by my constituents. Has the Department done any work to examine the outcomes and the potential risk of exploiting shale gas in such urban areas? I do not know whether there is information about that, because there is concern about air quality now that the monitoring duty has been taken away from local authorities.

There is a concern that many of the data currently used to promote shale gas extraction are limited or at best incomplete. Hon. Members have given examples and pointed out certain websites. The Tyndall Centre for Climate Change Research has argued that, although there are increasing volumes of data on the subject—such as lists on websites—many of the data are built on provisional sources and there is a paucity of reliable data. Will the Minister tell us what measures he is taking to develop the information used to underpin Government policy, so that people have certainty? It is important to have certainty about the data on fracking that are being relied on and the potential effect on the environment.

Another concern is that any gains from shale gas will not be as substantial as claimed. A fear that I have heard from my constituents is that gains will go straight to the Treasury and bypass the local community, as we have heard today. It is right to question to what extent shale gas may cut energy bills. Although there has been a boom in the United States, experts say that costs in Europe will be up to 50% higher than in the US because of such factors as the less promising geology and the higher population density. Bloomberg New Energy Finance has said that hopes that shale gas will cut energy prices are “wishful thinking”, and the former Energy and Climate Change Minister, the hon. Member for Wealden (Charles Hendry) has written that

“betting the farm on shale brings serious risks of future price rises.”

Like the hon. Member for Lancaster and Fleetwood, I am concerned about the real bonus, if there is one, to the local community in Barton and Irlam, because they will experience all the disbenefits. It is said that exploiting shale gas will lead to cheaper fuel bills, but we have heard from other sources that it may not.

I return to the planning issue and whether local communities can have a proper say on any decisions about shale gas that affect them. I have to say to the Minister that the changes to the planning and permit process advertised over recent months have served only to make my constituents more anxious. We know that the Growth and Infrastructure Act 2013 will allow developers to bypass local authorities in some cases, which is a real concern in my constituency. The Act creates an opportunity for developers to fast-track major projects instead of going to the local authority, and I have many times been asked, “Is that going to happen to us?” The Act allows developments for large onshore gas extraction over a certain size to be fast-tracked to the Secretary of State, so it would be helpful if the Minister said whether he thinks shale gas extraction will be fast-tracked.

The hon. Member for Brighton, Pavilion has already referred to the fact that on 27 June the Government published their document on infrastructure investment, which stated that they intended this month to publish measures

“to kick start the shale gas industry in the UK.”

The measures were to include guidelines that, as she said, are not currently available. I am concerned about that, so can the Minister shed any light on why they have not been published? Most alarmingly, the 27 June document stated that the Environment Agency would

“significantly reduce the time it takes to obtain environmental permits for exploration.”

A process seems to have been built in for fast-tracking or streamlining permits in a standard period of 13 weeks from August, but in as little as six weeks in some cases. Alarmingly, by February 2014 permits will be issued within one to two weeks, based on standard rules. Will the Minister tell us what we can expect with the new planning and permit regime, so that I can pass that on?

I want to quote some policy lines that relate to the debate. The shadow Chancellor, my right hon. Friend the Member for Morley and Outwood (Ed Balls), has said that

“the green economy and low carbon energy will be central to Labour’s plans in government”,

and that work for Labour

“on industrial strategy will also have energy and environmental policy at its heart. So will…Armitt’s review into the way in which we make our infrastructure decisions. Without a low carbon infrastructure plan and economic strategy, in the modern economy you simply don’t have an economic plan. Our vision is for a race to the top—to secure a world-leading position for British businesses in helping the world meet the low carbon challenge—and in doing so create prosperity and jobs for people in this country.”

The point about jobs has already been raised.

My hon. Friend the Member for Rutherglen and Hamilton West (Tom Greatrex) has set out the questions that need to be answered to ensure that exploration and extraction are properly regulated and monitored, and he may say more about that later. He has quoted President Obama as saying that plentiful shale gas does not make climate change and its associated emissions go away; it makes the need for carbon capture and storage all the more essential and the need to drive renewable technologies more urgent. Legitimate environmental concerns should be addressed and, I would add, consultation with communities should be meaningful. Energy policy needs responsible leadership, and I hope that this debate helps point the way to that and, more importantly, helps to get answers that I can pass on to my constituents.

--- Later in debate ---

[Mr Peter Lilley (Hitchin and Harpenden) (Con)]

It is a pleasure to be at this debate under your chairmanship, Mr Bone, and I am delighted that you are a chairman of so many things. I congratulate the hon.—and old Malvernian—Member for Brighton, Pavilion (Caroline Lucas) on obtaining the debate. I mention her school since she seems to be obsessed with other people’s schools. It is important to have the opportunity to debate the issues.

The hon. Lady asked Members to draw attention to their interests. I invite everyone to look at my interests, as declared in the Register of Members’ Financial Interests. They will find that I have no interest in fracking or in any oil and gas companies in this country. Over my lifetime, I have been—indeed, I still am—involved in an oil company in central Asia and I was involved in analysing oil companies and predicting energy prices for 20 years, when I had a proper job before coming to this place, so she may try to insinuate that that somehow makes me too well disposed to the oil and gas industry. She may therefore be surprised that, as the hon. Member for Southampton, Test (Dr Whitehead) will confirm, I was the only member of the Energy and Climate Change Committee who criticised, as she does, the suggested special tax breaks for fracking. On the basis of my knowledge of the oil and gas industry, I think that they are probably unnecessary, and we should not give away unnecessary tax breaks; although if they are necessary, that would be fair enough.

I want to draw Members, attention to one interest that is not declared in the Register of Members’ Financial Interests. I probably share this interest with all other Members, although too many ignore it. It is my interest in my 70,000 constituents who want their heating bills kept as low as possible, my interest in the people in this country getting jobs and my interest in reviving the manufacturing industry in this country and providing it with fuel that is as plentiful and cheap as possible.

I have great respect for the hon. Lady and those who, like her, simply want to keep fossil fuels in the ground, although if that was my objective, I would start by keeping coal in the ground rather than gas, which produces only half or less of the carbon dioxide emissions of coal. I do not support such a policy because, probably like her, I take as given the Intergovernmental Panel on Climate Change summary of the science, I also, unlike her, accept its summary of the economics of taking action to prevent global warming. It has concluded that, in relation to the level of CO₂ in the atmosphere, it could not identify

“an emissions pathway or stabilisation level where benefits exceed costs.”

Unless and until we can find a pathway or a stabilisation level for CO₂ that will produce greater benefits than its costs, we should not set about impoverishing this generation in the vague hope that we may make some generation in the future richer.

[Caroline Lucas]

I think I said that the driver for increasing fuel bills for most people today is rising prices of gas rather than renewables or anything else. Those interests that the right hon. Gentleman declared at the beginning of his contribution around jobs and keeping fuel bills low are better met through green energy sources than through gas, the prices of which are pushing up bills right now.

[Mr Lilley]

The current cost of electricity produced from gas or coal is £50 per megawatt-hour. The current cost of producing it from windmills is £100 per megawatt-hour. For offshore windmills, it is £150 per megawatt-hour and for solar it is off the scale. If we think that we will get cheaper, lower energy bills by going to energy sources that are two, three or four times as expensive, we are living in la-la land.

[Caroline Lucas]

Far from my being in la-la land, the right hon. Gentleman has very effectively not answered my question. I said that if we were to look at a fuel bill to try to ascertain which elements made it high, we would find that it was gas rather than renewables. Yes, renewables have a greater degree of subsidy now, but that is because they are new. They have a rate that will enable them to come to grid parity very soon. Gas, by contrast, is an old technology and hardly needs those kinds of subsidies.

[Mr Lilley]

Even that is not true. The most recent generation of gas turbines are so much more efficient than the previous ones that the savings from replacing all our gas turbines with the most recent generation would probably be greater than the savings in CO_2, emissions from using wind. I will, if I may, make some progress.

Until we find a way of controlling CO₂ levels in the atmosphere that will not cost more than the benefits of doing so, we should not impoverish this generation. My respect for the hon. Lady and her colleague, the hon. Member for Worsley and Eccles South (Barbara Keeley), begins to evaporate when they abandon their real belief, which is that we should not burn any fossil fuels, and start to concoct fabricated fears and spurious arguments against fracking. Their first argument is that there will not be much there—that was what they originally said. Now the British Geological Survey says that there is probably an awful lot there, but that we will not know until we have drilled it.

The hon. Lady went on to say that the process will be so costly that it will cost more than the price, in which case no one will extract it, so her fears can evaporate. She clearly does not believe her own argument otherwise she would not even bother to attend this debate because it would not be important. She alleges that it will be more difficult geologically to extract shale in this country than in the United States, and that the geology here is less attractive than there, but that is simply not the case.

When the Select Committee interviewed Cuadrilla and BHP Billiton in the States, we asked them how thick the shale beds were in the States that they typically extracted from. They said 300, 400 or 500 feet thick. How thick is the Bowland shale? It is a mile thick; up to 20 times as thick as in America, which means that from one surface pod, we can get up to 20 times as much fracking as they can in the States—perhaps it is only a dozen times.

[Dr Whitehead]

indicated dissent.

[Mr Lilley]

The hon. Gentleman can intervene if he wishes to put me right.

[Dr Whitehead]

The right hon. Gentleman will lose time from me intervening, so I am sorry about that.

[Mr Lilley]

If the hon. Gentleman can be quick.

[Dr Whitehead]

Thickness is not necessarily the final indicator.

[Mr Lilley]

If the hon. Gentleman does not have anything interesting to say, then he should not waste my time.

[Dr Whitehead]

Well, it relates to geological faulting, clay, extractability, tightness—

[Mr Lilley]

Thank you very much. I am grateful to the hon. Gentleman. That was not very helpful to the debate in general.

The second and more plausible argument is that, even if there are large quantities of gas here and we will not know that until we have drilled, it will not succeed in bringing down prices in the UK, because our prices are fundamentally set by marginal suppliers from Europe. That is both plausible and possibly true, but either we will have so much here, and there will be so much elsewhere, that gas prices will come down, or they will not in which case the tax revenues from producing gas in this country will be substantially greater—three times as much per cubic metre extracted as in the States. With those extra tax revenues, we will be able to reduce our other costs on the economy or other tax bills that people face.

Shale is ubiquitous; it is incredibly widespread across the world. For the hon. Lady to suggest that it will be extractable only in the States is really to express the belief that God is an American, that he has created a particularly unique situation in America with shale that is so different from shale elsewhere in the world and with a technology that will only apply there, and that he has maliciously arranged things so that the technology will not apply to the shale in the UK, France, Poland, China or elsewhere in the world. I simply do not believe that that is true. In all probability, we will see a shale gas revolution worldwide that will probably keep gas prices low. It is certainly likely to prevent them going up, and it may even bring them down as it has done in the States.

When pessimism about reserves and prices fails, some people resort to fabricated scares, which are as irresponsible and as unjustified as the MMR scares, which stopped people taking advantage of vaccination. I hope that we will not allow similar scares to stop us taking advantage in this country of the potential resources that exist beneath our soil.

The letter from the people in Balcombe from which the hon. Lady quoted says that fracking is considered to be an uncertain and risky technology. It is far from being uncertain and risky. The first gas well was fracked on 17 March 1949. Since then 2 million wells have been fracked in the United States, and 200,000 in the last year, without anyone being poisoned by contaminated water, or any buildings or people suffering damage from minuscule seismic tremors.

The Royal Society and the Royal Academy of Engineering dismissed fears about water contamination. They concluded that any health, safety and environmental risks associated with hydraulic fracturing can be managed effectively in the UK as long as operational best practices are implemented and enforced.

--- Later in debate ---

[Dr Whitehead]

I am sorry, but I cannot give way any more; I would lose the rest of my time.

What happens with those large numbers of wells in terms of the fracking process? That process involves the use of between 2 million and 7 million gallons of water, and 5,000 gallons of chemicals, per frack; whether we know what is in the chemicals or not, that is the sort of volume of chemicals needed. As has been said, that water cannot be injected into seams deeper than the fracking itself, as is the case in America, but would have to be disposed of by other means. Also, unless the fracking companies brought the water with them, water would have to be taken from the water table within the area where the fracking was taking place, which has implications for the integrity of the water tables in those particular parts of the country. That is an important but largely forgotten point.

The final thing that I want to say, given the short amount of time I have, is about the policy implications of going for a large amount of fracking. If we went for a large amount of fracking, as I have said we could perhaps supply—over a period—10% of overall UK gas supplies. If we went for a large programme of anaerobic digestion, we could provide 10% of the domestic gas supply. A farm-sized anaerobic digestion plant costs about £2 million to build—

[Mr Lilley]

What’s stopping them?

[Dr Whitehead]

The right hon. Member may well have asked a very valid question. As I was saying, such a plant produces about a third of the gas over a 20-year period that a fracking well would produce over 7.5 years, but anaerobic digestion plants will produce gas continuously because the cows that provide the stuff that produces the gas continue to produce the feedstock, as do we from our own waste and our food. Therefore, anaerobic digestion plants do not deplete. A long-term strategy for gas supply security might concern itself with anaerobic digestion and biogas, rather than going for a gas bonanza. We ought to look at all these factors when looking at the future of gas supply in this country.

--- Later in debate ---

[Kerry McCarthy (Bristol East) (Lab)]

As always, it is a pleasure to serve under your chairmanship, Mr Amess. I want to focus on the area in Somerset that borders my constituency. I note that the hon. Member for Wells (Tessa Munt) intends to speak next, so I hope that I do not steal too much of her material.

So far, four petroleum exploration and development licences have been granted in an area extending from Keynsham, just south of Bristol, down to Pilton and Evercreech—east of Glastonbury—and covering towns such as Marksbury, just south-west of Bath. The area is significantly covered by green belt and includes the Mendip hills—an area of outstanding natural beauty—and there are water catchments for several areas, including Bristol. Bath’s hot springs, which are of course a world heritage site, could be affected. The unique combination of features in the region is said to result from the

“specific geological circumstances of the Mendip Carboniferous strata.”

I understand that UK Methane, which has been granted three of the licences in partnership with Eden Energy, has confirmed that it has been working on plans in the Ston Easton area and around Compton Martin, both within the Chew valley, for its next test drilling sites. UK Methane intends to apply for permission for full production at a site beside the Hicks Gate roundabout on the Bristol ring road in Keynsham towards the end of 2013. Again, that is very close to the border of my constituency. I should say that the areas have been identified for coal bed methane extraction, rather than for fracking, although coal bed methane extraction commonly comes under the same heading and the process can involve fracking.

I thank Louise from Frack Free Somerset for her time this week in setting out the organisation’s concerns. The umbrella organisation brings together many groups, from families to farmers and from the Mendip Campaign to Protect Rural England to Bristol Rising Tide. Residents are particularly concerned about the impact of possible soil, water and air pollution on tourism and agriculture, and there are also concerns about light and noise pollution, especially as some wells could be flaring off gas 24/7. There will be noise from rigs operating 24 hours a day and roads will become blocked with lorries carrying chemicals and waste.

Another key concern is the potential for water contamination, which could also affect people living outside the licence area. The reservoir water supply in the Chew valley needs to be protected, and the impact on the hot springs that supply Bath’s spa water is still unknown. The British Geological Survey’s report to Bath and North East Somerset council concluded that hydraulic fracturing within the carboniferous rocks would

“pose an undefinable risk to the springs.”

The written ministerial statement issued by the Secretary of State for Energy and Climate Change on 13 December 2012 acknowledged instances of water contamination outlined in reports by US regulators and review bodies, which he said confirmed

“the need for the industry to consistently apply good practice, and the need for proper scrutiny and oversight of the industry to ensure that this is in fact done.”—[Official Report, 13 December 2012; Vol. 555, c. 47WS.]

The Environment Agency is of course responsible for providing that scrutiny, but there is real concern that it does not have the staff to monitor wells effectively.

Residents in the area who are opposed to the plans are particularly concerned by evidence emerging from coal bed extraction in south-west Queensland, from gas leaking into local rivers to perceived heath problems such as nosebleeds and skin rashes. The Health Protection Agency does not appear to have published its review of the public health impact of shale gas. I hope that the Minister agrees that potential health risks should be assessed before exploration is allowed to go ahead.

Bristol Greenpeace has raised with me its concern about UK Methane, which was described by a local resident, Laura Corfield, in a recent article in The Guardian by John Harris as

“a company of two guys in a broom cupboard”.

It is difficult to confirm UK Methane’s financial position, but John Harris tracked down its head office to an industrial estate in Bridgend with no listed telephone number. I understand that DECC has set out criteria that need to be met for a company to become a licensee, including a level of financial capacity to show that it is able to meet the actual costs that may be reasonably expected to arise.

How does awarding three licences to UK Methane square with DECC’s guidance? Is it presumed that UK Methane will ultimately be trading its licences to a larger company in the same way as with Eden Energy, with which it was partnered and that has now sold its stake to Shale Energy, a UK firm, for a large amount? That does not appear to be consistent with DECC’s view that licences are not regarded as

“mere tradable assets, and we expect companies to buy licence interests with a view to exploiting them—not merely to sell them on.”

There are specific issues with the area’s geology, including the prevalence of coal mine shafts in Bristol and Somerset, which makes the land more unstable and potentially more prone to both subsidence and tremors. A recent technical report by independent geologists Integrale Ltd concludes:

“Unlike much of North America and Australia where ‘simpler’ rock strata occur, the Carboniferous Coal Measures of the Bristol-Bath Basin form the most tectonically complex area of the UK, ie the rocks are highly fractured, folded, contorted and faulted... So gasfield exploration and exploitation in this district will be commercially and technically ‘high risk’”.

There is a point about whether companies need public liability insurance, given the risks. I understand that, apart from employers’ liability insurance, there is no statutory requirement for insurance.

The hon. Member for South Thanet (Laura Sandys), who is Parliamentary Private Secretary to the Minister of State, Department of Energy and Climate Change, the right hon. Member for Bexhill and Battle (Gregory Barker), said that planning applications for shale gas

“make onshore wind farms look like a walk in the park.”—[Official Report, 6 September 2012; Vol. 549, c. 146WH.]

She was referring to the public opposition that is likely to be encountered.

[Mr Lilley]

Does the hon. Lady ever feel that she has a duty to her constituents not merely to pander to every anti-development pressure group and to give credence to every scare story, but to give some balanced account of what, for example, the royal societies, the Royal Academy of Engineering and the British Geological Survey have said? Two million such wells have been drilled in the States without untoward effect.

--- Later in debate ---

[Tom Greatrex]

I would like us to invest in renewables, because I think that it is important, but I take a slightly different view of the prognosis for how long we will require gas both for heating and for electricity generation. In relation to our indigenous gas supply from the North sea, the hon. Lady will know as well as I do that the extent to which we rely on imports has changed massively in the past 10 years. The trajectory is going one way. If it is possible to extract shale gas safely, and if it is properly regulated and monitored, we may have the benefit of being able to replace some of what we import with indigenous supply. We should not close our minds to that or seek to block it.

I would like to make a slightly different point to the other extreme. I have been listening to the right hon. Member for Hitchin and Harpenden (Mr Lilley) responding to other speeches from a sedentary position. He has said a number of times to Members with constituency interests in the issue that it is about showing leadership. With all due respect, leadership is not about hysterical hectoring; it is about ensuring that the approach is evidence-based and that all the arguments can be properly, systematically and fundamentally dealt with, so that people can see exactly what the level of risk is.

[Mr Lilley]

indicated assent.

[Tom Greatrex]

I see that the right hon. Gentleman agrees with me, so I do not want to chance my arm too much, but it does not help when he shouts across the Chamber to people that they should be showing leadership. They are entirely right to address and represent their constituents’ concerns in this debate, as we are in the early stages of potentially developing a new aspect of our energy supply.

I have a couple of final points to make. It is often considered whether shale is the answer to all our energy problems. This speaks to the point made by the hon. Member for North Warwickshire (Dan Byles) about the tenor of the debate sometimes. I do not think that that is a realistic suggestion. Sometimes, the language around the issue does not help. Suggestions that shale will yield cheap gas, or that an extrapolation of the US experience will apply in precisely the same way in the UK, do not stand up to much scrutiny. My hon. Friend the Member for Southampton, Test (Dr Whitehead) made a point about how gas is traded, which is one aspect, but there are a number of different factors that make it highly unlikely that the impact on costs here would be the same as in the US.

The Prime Minister talks, as he did yesterday, about making it easier for shale to be extracted. That is not particularly helpful or useful either. It should not be about making it easier; it should be about ensuring that it is done sensitively and appropriately. Members have mentioned the precautionary principle. I suppose that I would use the term “proportionate”. It needs to be proportionate. That is important. If it is not proportionate, it will not happen, and then the potential benefits may not be realised. It needs to be done proportionately and properly. We have had a couple of debates this week and I am sure there will be plenty more during the next few months. Some specific points have been raised with the Minister, and I hope that he will respond to them in those terms. If he does not, he may be in danger of stopping something rather than encouraging it.