Shale Gas

Lord Smith of Finsbury Excerpts

Tuesday 7th March 2017 Lords Chamber

[Lord Smith of Finsbury (Non-Afl)]

My Lords, in 2014 and 2015 I chaired the Task Force on Shale Gas; we concluded our work at the end of 2015. I should also mention that I was chairman of the Environment Agency until September 2014.

The task force looked very carefully at the economic and environmental implications of the development of a shale gas industry in the UK, and five especially important points arose from its work. First, we will need gas as part of our energy mix in this country for several decades to come. Yes, of course we must develop renewables and yes, we must build a new generation of nuclear power stations—though not necessarily on the model that the Government appear determined to take forward. But these cannot be deployed in a hurry. They will take time and we will need gas as an interim fuel to take us towards a lower-carbon future. Let us also not forget that this is not just about electricity generation: 80% of our households depend on gas for cooking and heating. That is not going to change overnight.

Secondly, gas is better than coal. The industrial emissions and greenhouse gas effects of burning it are something like half of those of burning unabated coal. In this country we are rightly running down our coal-burning capacity to generate electricity at the moment—and I trust that this will be one of the developments that does not fall foul of Brexit. Gas has to be part of the solution—along, I add, with carbon capture and storage, which will become increasingly important, especially for gas. I am dismayed at the Government’s decision to abandon the fund that had been specifically earmarked for the development of large-scale pilot projects of CCS. It was very short-sighted of them to do so and it denies us both an early environmental benefit and a first-mover economic advantage with carbon capture.

Thirdly, local environmental protection at a shale gas site is imperative. There are four things that are crucial for this. Rigorous regulation, monitoring and inspection are largely in place at the moment—but the noble Lord, Lord Mair, is absolutely right to point to the issue of ensuring that necessary resources are available if a shale gas industry develops at scale. There should be local community participation in this monitoring and inspecting process, as that will ultimately be the way to secure their agreement and acceptance. As the noble Lord said, the absolute integrity of wells, independently overseen, is crucial—it was failures of well integrity that caused problems in the early buccaneering days in the United States, which are long since over. Mandatory green completion to ensure that all gases, especially methane, are captured when they rise to the surface must be put in place. With these clear conditions in place, shale gas extraction can be done safely. Regulatory corners, however, cannot and must not be cut in the process.

Fourthly, it makes economic and environmental sense to produce gas domestically rather than ship it half way across the world. Taking gas out of the ground in Qatar, liquefying it, shipping it to the UK, de-liquefying it and then delivering it to power stations and households has a far higher carbon and climate change footprint than sourcing it here in the UK. The climate change impact of not having a domestic gas resource will be worse than that of having one.

Fifthly, the development of a shale gas industry in the UK, however, must not be allowed to have a chilling effect on the development of renewables and our preparation for a low-carbon future. Shale gas can and should be only an interim energy response. It is not a long-term answer. To ensure this, I propose that all government revenues coming specifically from a developed shale gas industry should be earmarked for investment in research and development and innovation in renewables, carbon capture and storage, and low-carbon energy generation, storage and distribution. In that way we will have an energy policy fit for the longer-term future.