Shale Gas

Lord Polak Excerpts

Tuesday 7th March 2017 Lords Chamber

[Lord Polak (Con)]

My Lords, I too thank the noble Lord, Lord Truscott, for securing this debate. I am not sure that he expected the consensus around the House when he put it down. UK energy policy should provide secure, affordable and climate-friendly energy with an emphasis on homegrown energy, primary fuels and innovation for the future. UK Onshore Oil and Gas is a representative body for the industry and has suggested that, to achieve the aims of secure, affordable and climate-friendly energy, the UK will need a balance of: natural gas, to provide heat, electricity and essential chemical feedstocks and to improve air quality; renewables and nuclear to generate electricity; and oil to power transportation and to provide essential chemical feedstocks. So gas is a vital source of energy for the UK and we have so much of it in our own country.

The IoD says that shale gas could cut our gas imports by half. The National Grid believes that British shale gas could heat every home in the UK, and shale gas, as we have heard, could create 60,000 jobs. How ironic that in September 2016 the first shipment of shale gas arrived in the United Kingdom from the US, at Grangemouth refinery in Scotland. How ridiculous that shale gas produced in the US arrives in Scotland when the Scottish Parliament has banned fracking. As Francis Egan of Cuadrilla so rightly said at the time:

“They are taking ethane, turning it into a liquid, transporting it across the sea in a container, turning it back into a gas and then pumping it into Grangemouth. Just beneath Grangemouth are deposits of shale gas the Scottish Government is saying you can’t touch”.


Today in the United States around 50% of oil production and two-thirds of gas production is from so-called non-conventional wells. Well over 300,000 such wells have been drilled. The fact that the oil and gas industry pumps chemicals into the ground in this process causes opposition from environmental groups. However, despite Hollywood dramatizing the dangers, there is no significant evidence of any environmental damage from fracking. I agree with the noble Lord, Lord Young, that it has been suggested that test fracking in the north of England caused a minor earthquake, but I understand that the magnitude of the so-called tremor was no more likely to cause damage to property than the vibrations of a heavy truck passing a building. In reality, the opposition to fracking in the UK has more to do with the perceived blight on the surface environment and the volume of heavy industrial traffic than with the theoretical poisoning of aquifers, which some say is impossible as shale operations take place at a much deeper level than the water table which is cased from the well bore, as was explained by the noble Lord, Lord Mair. We have sensible regulations in this country which will help us to maintain the environment while being able to produce the gas that we need.

In the energy industry, three key issues are often cited: energy security now that our traditional fossil fuels are running out, the long-term affordability and financial security of energy, and climate change, environmental concerns and decarbonisation targets. Our North Sea oil and gas reserves are running low. Production, as we know, has fallen two-thirds in the last 15 years. But gas represents 35% of fuel consumption in the UK and we currently import more than half our gas from Norway, the rest of Europe—and, maybe, Russia—and Qatar. By 2035 we may well have to import 90% of our gas. From a security point of view that is alarming.

The British Geological Survey estimates that there is 1,300 trillion cubic feet of shale gas in the north of England. Even recovering just one-10th of those reserves will be enough to supply us for at least 40 years as we currently use just under 3 trillion cubic feet per annum. If it is accepted that we need gas and that it is more secure, better for domestic employment and for the development of a manufacturing industry—which is part of our industrial strategy—and that it would produce a potential bonanza in tax receipts, then the clear answer is to exploit these shale beds. Let us not turn our backs on a lower-carbon energy source, on maintaining our own energy security, and on growing a manufacturing industry with jobs and careers for a whole new generation. As the North Sea reserves run out let us be positive and create a shale revolution.