Infrastructure Bill [HL]

Lord Turnbull Excerpts

Monday 9th February 2015 Lords Chamber

[Baroness Jones of Moulsecoomb]

It is very close at hand if the noble Lord would like to look at it. I can give him any number of sources; I do not have them to hand at the moment but I would be delighted to give them to him afterwards. I am sure that Friends of the Earth and so on would be very pleased to send him a briefing on all this, as they have gone into it extensively.

[Lord Turnbull (CB)]

I remind the noble Baroness of what was said in the Committee on Economic Affairs:

“On the evidence we have heard, there should be no risk that seismic activity caused by hydraulic fracturing would be of sufficient magnitude to constitute any risk to people and property”.

[Baroness Jones of Moulsecoomb]

I thank the noble Lord for that intervention. The noble Lord, Lord Smith, who was then chair of the Environment Agency, reported to that Economic Affairs Committee that,

“groundwater contamination is the biggest environmental risk in the Act”.

The Labour spokesperson in the other place said that it was all or nothing: if the Government did not accept the amendment, including banning fracking near aquifers, the Labour Party would oppose fracking altogether. I look forward to that party reaffirming its opposition today. People might assume that as this is an unelected House, nobody watches what goes on here, but people do watch and they care out there. Fracking is a very controversial issue; people have already voiced their concerns and will continue to do so. A government U-turn on this is unforgiveable.

The second issue is that of trespass. I think there is a later amendment that deals with this, but it does not go far enough.

Groundwater contamination is one of the key environmental public health risks from fracking and is a huge risk to the well-being of the population. In some parts of the UK, more than 70% of public drinking water comes from groundwater. As for the Government promising to redefine groundwater source areas, that is a secondary legislation issue. The original idea from the Labour amendment was, however, that this should be in the Bill; it should be primary legislation, not secondary.

A leaked letter from the Chancellor had instructions to pull out all the stops to make for an easier life for fracking companies. This is probably not surprising when our Prime Minister has said that we are going “all out for shale”. I can accept that that side of the House is very gung-ho on fracking but I hope for something better on this side. The original Amendment 21 would also give us an opportunity to vote against the issue of trespass within this Bill.

Despite assertions that shale gas is a fantastic new source of energy, it is time for us to consider whether and by how much it would have a lower carbon footprint. It probably would not, if CO₂ and methane are included.

Fracking is one of those things that we can go for very hard when we do not know all the risks, but we have to understand that those risks exist. This House has a duty to people outside who know that there are risks. Some 360,000 people voiced their concerns about issues such as trespass. Many people also responded to a consultation on the risks of fracking. There is concern out there that I feel is not well represented in this House and I urge the Government to think again about this amendment.

[The Deputy Speaker (Lord Brougham and Vaux) (Con)]

My Lords, I remind noble Lords that if Amendment 21E is agreed to, I cannot call Amendment 21G by reason of pre-emption.

[Lord Turnbull]

My Lords, I confess that I am somewhat mystified why we are discussing a fracking moratorium. It was not in the Bill as it left the Lords and the Commons declined to insert an amendment. What is there left for the Lords to consider?

There are two approaches for analysing this issue. The first we might call the appeal to reason. That was the title of the book by the noble Lord, Lord Lawson. What is the logic of the moratorium? It seems to me to be completely incoherent. It is argued, first, that we do not know enough to permit this technique to be deployed in the UK, but the moratorium would prevent drilling under careful restraints of the kind that the Minister has pointed out and it would prevent us advancing our knowledge. In my view, it is the logic of the GM-crop tramplers.

The next argument is that we cannot allow our shale reserves to be exploited as this would be inconsistent with the decarbonisation targets of the Climate Change Act. Setting aside the fact that our exploitation of shale is pretty immaterial in a world where China has said that its CO₂ emissions will continue to rise until 2030 and India refuses to set any such objective, this proposal ignores the fact that the largest part of gas usage is for heat in our homes and the feedstock for chemicals. That is not going to change for a long time given the slow turnover in our housing stock for several decades.

This morning, I looked at where the various sources of energy came from. At 11 am on a very cold and still day, we were using 46 gigawatts of energy. Of that, 6% came from wind and 43% from gas. This proposal ignores the fact that we need access to gas to provide the back-up when the wind does not blow in precisely these climatic conditions, which are repeated quite often each winter.

--- Later in debate ---

[Lord Truscott]

No, because that would be a short-term benefit. We should look at the long-term planning. That is the difficult thing with shale at the moment: it is destabilising the market for oil and gas, with the majors cutting back quite dramatically. You can have shale production, but it is short term. If, for example, you invest in a major field, it can take 10 or 20 years to develop—Kashagan in Kazakhstan, for example—it needs billions of dollars of investment, and takes many years to develop, sometimes decades. Companies have to be able to plan ahead, as that gives medium to long-term relative stability to the oil price. If you are talking about shale, you are talking about a two to three-year timescale for the development of a field, which does not provide the sort of stability we are talking about.

Of course, we should also look at increasing investment in renewables as well. Shale is one thing you can look at, but you can also look at investing more in renewables.

[Lord Turnbull]

The noble Lord may be confusing two different things: a well, which may have a short life, and a field. I can see that wells might run out quite quickly, but then other wells will be drilled, so that does not mean that the field runs out in the period as he is explaining.

[Lord Truscott]

What tends to happen is that in the United States, for example, a shale oil rig—a well—may cost $1 million to develop. You then drill in that well for a couple of years, and then you have to invest further in the next well in the same field. A number of shale oil companies in the United States at the moment face not getting the funding to invest in the next well, because it is very cash-flow intense. Therefore if you want energy security, shale oil and gas is not the way to achieve it. It is a very expensive short-term hit, and it adds to the volatility of the price of oil and gas. In a way, the success we are seeing in the United States is already unravelling. I therefore wonder whether it is worth the cost as regards the overall benefit.

We are also seeing the impact on businesses, both large and small, in the hydrocarbon sector. Ask any of the majors at the moment whether they are happy about where they are as regards medium to long-term planning, or go to Saudi Arabia and ask people what they think about the impact of shale oil and gas development in the United States and on the global market. You can say that they are game-playing, but nevertheless, it is destabilising. Is that the way we want to go? Is that a great success story? I am not so sure that when we look back on the development of shale in the United States it will look as successful as we all initially thought it would be. Therefore from that point of view, is what happened in the United States the right way for the United Kingdom to go? I am not so sure.