Shale Gas

Lord Young of Norwood Green Excerpts

Tuesday 7th March 2017 Lords Chamber

[Lord Young of Norwood Green (Lab)]

My Lords, I think that I would have congratulated my noble friend Lord Truscott on introducing this debate if I had not had to listen to the way he introduced it, which was another example of all the scare stories that we have heard about fracking in the past. I am disappointed to hear them reiterated, because they have all been roundly disproved. The earthquake stories have been recycled again, but even if there was a slight worry about earthquakes, if monitoring of fracking in this country should show anything like 0.5 on the Richter scale I do not think that the earth would be moving, even for my noble friend. We have the toughest fracking safety regulations anywhere in the world.

I do not understand the idea that, apparently, anybody else can do fracking—it does not matter where else it is done—but it cannot be done here. We do not care if it is done in Qatar, or what the conditions are. We do not care about the fact that if it is liquefied and then de-liquefied that in itself causes emissions. Apparently that is okay with my noble friend.

The plain fact of the matter is that gas will continue to be used in this country, for 20, 30 and even more years. It is the largest source of electricity, accounting for around 45% of electricity generation, which has allowed the share of coal-fired generation to fall to record lows. Gas-fired power stations can run continuously or as flexible back-up for intermittent wind and solar energy.

I shall partly repeat what the noble Lord, Lord MacGregor, said, because it was nice to hear a voice telling us about the real benefits that we can expect from fracking, assuming that we actually get round to doing it. At the moment we are significantly dependent on imports, not only of liquid natural gas but also of pipe gas. Whether or not we worry about energy security, surely we should be worried about price volatility, because we do not control the import prices. That exposes the UK to international currency fluctuations, with imported LNG, for example, priced in dollars.

This also harms the UK’s balance of trade, which apparently does not really matter to my noble friend. In 2015 the UK spent over £14 billion on net primary fuel and energy imports—crude oil, oil products, natural gas, coal and electricity. It is estimated that by 2030 imports of gas alone could cost the UK economy £10 billion a year. We could be producing that ourselves.

Among the benefits would be energy security and employment. What do we know about shale gas? We know that potentially there are billions if not trillions of cubic feet of gas here. We do not know for sure, but even taking the most conservative estimates—taking only 10%, say—that would give years and years of gas supplies. Employment does not seem to matter any longer either, but there are potential skilled jobs there. We have set up training colleges to train people, but apparently that does not matter either.

I listened carefully to my noble friend’s arguments, but I direct him to the report by the American Environmental Protection Agency, which looked at 38,000 wells. I did not notice it issuing an instruction that fracking had to stop immediately. If it were such a serious environmental danger, listening to my noble friend one would think that the whole of the US water supply was poisoned. That is just not the case.

The UK has the industry experience to make a success of shale gas production. More than 2,000 wells have been drilled onshore, with around 200 having been hydraulically fractured at lower volumes to enhance recovery. The Wytch Farm oilfield is located in an area of outstanding natural beauty on a world heritage coastline whose property prices are among the highest in the country and it produced 100,000 barrels of oil a day at peak production, yet I never noticed the whole of Dorset being contaminated as a result. Today the industry has 230 operating oil and gas wells onshore on 120 sites, producing about 8 million barrels of oil equivalent per year.

We have very large potential shale gas resources and what we are doing about them beggars belief—including, unfortunately, the decision taken by my own party to endorse a ban on fracking—when we could be using them to reduce the cost of fuel. If we cared about fuel poverty, I would have thought that that would be uppermost in our minds.

Unfortunately, in the green movement there are many scare stories. My noble friend talked about leaving it to local people to decide. I would be happy if it really were local people who decided, but we know that, as soon as there is any local activity in relation to fracking, the usual opponents flood the area, spreading scare stories about earthquakes and poisonous substances. The fact that 99.5% of the substances consists of sand and water did not stop Friends of the Earth claiming that the silicon used caused cancer. On that basis, I presume that none of our children will be playing on beaches any longer, because to my knowledge—although I do not claim to be an expert chemist—that is what sand consists of. These are irresponsible scare stories. Why people persist in spreading them is beyond me.

I do not want to exaggerate the impact of shale gas but, according to the British Geological Survey, in the Bowland shale there are something like 1,300 trillion cubic feet of shale gas. If only 10% of that could be extracted, it would be equivalent to 40 to 50 years of UK gas consumption. Surely that is worth doing. I cannot understand the opposition. If we were in the situation where there were not sufficient safety regulations, I would be the first to endorse the concern, but that is not the case. This Government have ensured the tightest set of safety regulations. My view is that there are real economic and energy security benefits, as well as employment benefits, to this country if only we could get on with the production of shale gas.

--- Later in debate ---

[Baroness Featherstone]

As my noble friend Lord Stoneham reminds me, their environmental standards are somewhat lower than ours. I am not saying that everywhere in America is unpopulated, but it is a very different territory from most of the United Kingdom.

There will be people—such as people in Ryedale, for example—who object strongly to what is projected for their local environment. They will use the planning process to object in the way that they are entitled to do. Promises were made that national areas of exceptional beauty would be protected and that local people would hold sway, but that has gone and the promises have been broken.

Putting all that to one side, the most damaging effect of developing the shale industry is one that to an extent was referred to by the noble Lord, Lord Smith. It will set back our ability to reach our legally binding targets by 40 years and undermine the development to scale of renewable heat technology. Renewable heat is vital. Industry will develop the technologies we need for renewable heat if we have the right policy framework and incentives. There would have to be incentives that carry a cast-iron guarantee from the Government that they will not be taken away in a precipitate manner, as happened with the Government undermining investor confidence by the precipitate removal of agreed subsidies on wind and solar. The noble Lord, Lord Smith, raised the breaking of the manifesto pledge on carbon capture and storage.

The Government’s reputation will no longer be adequate to reassure investors; they will need an agreement that is literally written in blood. Additionally, as several noble Lords have said, all we have in the UK so far is licences for exploratory drilling. We are years if not decades away from producing shale gas at any scale, if it happens at all. The Environmental Audit Committee concluded that shale will not contribute to replacing coal because, by the time it comes on stream, coal will no longer be used. I do not believe that fracking is the answer. I do not put my trust in this Government. Everything we have seen since the end of the coalition—when the Liberal Democrats held sway in the Department of Energy and Climate Change, which is also no longer—is pretty indicative of the importance that the Conservative Government attach to climate change. Everything indicates that this Government do not favour a green approach, green understanding or the imperative, for both the planet and the economy, of taking our future energy supply seriously and not introducing something that is a stop-gap and not sustainable. If we had a Government who encouraged cutting-edge technology—renewables, energy efficiency, home energy improvements—

[Lord Young of Norwood Green]

I hesitate to interrupt the noble Baroness, but twice she has referred to fracking being not sustainable. Can she therefore explain why she is in favour of gas being imported for at least the next 30, 40 or 50 years? That is the bit in her argument that I do not understand. I could dispute many things that she says on the environmental impact, for which she has produced no evidence whatever to back it up, but why is she in favour of us importing gas for the next 30 or 40 years rather than using our natural resources?

[Baroness Featherstone]

Other resources are coming on stream, such as green gas, hydrogen and so on. I object to creating a whole new industry, which will be a stop-gap, rather than encouraging our homegrown industries to develop the new technologies that we need to produce renewable heat. I do not see developing the shale industry as the answer to our question. I am not that keen on importing gas, but for the time being, that would be my preference rather than starting a whole new industry with the destruction it brings in its wake.

There is a list of what the Government should be doing in terms of regulation, intervention, sequestration and demand reduction—and then we would actually get somewhere. There seems to be a general prayer that somehow shale will save us. My faith in that not happening is based on the fact that the companies that are taking up the exploratory drilling licences are not huge companies but middle-sized companies, and because of the difference in geology and geography, they will find that it is not profitable. That is the main reason why I am hoping that shale will go away with its drills between its legs.