Petroleum Licensing (Exploration and Production) (Landward Areas) (Amendment) (England and Wales) Regulations 2016

Maria Eagle Excerpts

Wednesday 1st March 2017 General Committees

[Dr Alan Whitehead (Southampton, Test) (Lab)]

I beg to move,

That the Committee has considered the Petroleum Licensing (Exploration and Production) (Landward Areas) (Amendment) (England and Wales) Regulations 2016 (S.I. 2016, No. 1029).

It is a pleasure to serve under your chairmanship, Mr Gray. We have before us a statutory instrument purporting finally to put in place protection against surface drilling for hydraulic fracturing in national parks, sites of special scientific interest, areas of outstanding natural beauty and similar areas. It might be worth casting our minds back and considering how we got to a position in which this SI is being presented to us today. During the passage of the Infrastructure Act 2015, the then Secretary of State for Energy and Climate Change, the right hon. Member for Hastings and Rye (Amber Rudd), assured us that

“we have agreed an outright ban on fracking in national parks, sites of special scientific interest and areas of outstanding natural beauty.”—[Official Report, 26 January 2015; Vol. 591, c. 586.]

That was assumed to be the outcome of the Infrastructure Bill discussions, but it turned out, at the end of consideration of that Bill, that a separate SI needed to be introduced to give effect to the outright ban. That secondary legislation was laid before us in autumn 2015, but it turned out that it was not an outright ban on fracking in national parks, sites of special scientific interest and so on, because it separated hydraulic fracking underground from drilling on the surface in national parks. Although it indicated that hydraulic fracking would be restricted as far as sub-surface activity was concerned, it appeared to many of us at the time that that was something of an absurdity, inasmuch as a common-sense interpretation of fracking is that it does involve drilling a hole in the ground, and then fracking that hole, so separating the two in the way the SI did might be regarded as somewhat Jesuitical.

When that SI was laid before Parliament, the then Minister of State, Department of Energy and Climate Change, the right hon. Member for South Northamptonshire (Andrea Leadsom), reassured those who had made that point that

“the Government have separately committed to ensure that hydraulic fracturing cannot be conducted from wells that are drilled at the surface of national parks and other protected areas. Members can be reassured that that remains the Government’s position.”—[Official Report, Second Delegated Legislation Committee, 27 October 2015; c. 7-8.]

That is why we have this statutory instrument today; it is a third go. It deals at last with surface drilling in national parks and sites of special scientific interest.

One would therefore expect these regulations finally to lay that trail to rest, so that we could say that yes, there is to be an outright ban on fracking in national parks and sites of special scientific interest, which I believe all hon. Members present would want. Elementary research—I will not go into names or places—shows that a number of Members present have those areas in their constituency. What the Minister says about a ban today may give them some succour in discussions in their constituency with people who are concerned about fracking in their area. Hon. Members might have welcomed the regulations as finally indicating that their wishes had come true, and that there actually was to be a ban, and might have thought that we could leave the room this morning safe in thinking that that was what we had voted for. Unfortunately, it appears unlikely that that is what will happen if we vote for the regulations.

In the 2015 Act, there is a definition not just of fracking—surface drilling—but of “associated hydraulic fracturing”, which is fracking that involves

“more than 1,000 cubic metres of fluid at each stage, or expected stage, of the hydraulic fracturing, or…more than 10,000 cubic metres of fluid in total.”

That fluid is the water associated with the fracking process. It is injected into a well, comes back up again, and then has to be dealt with as waste once the fracking has been completed. If a well produces less fluid than that, it is not deemed associated hydraulic fracturing under the Act, although common sense would suggest that it is fracking.

Proposed new clause 22A(2)(c) slightly redefines “associated hydraulic fracturing” as “Relevant Hydraulic Fracturing”, although that has exactly the same definition as “associated hydraulic fracturing” does in the 2015 Act. The regulations define relevant hydraulic fracturing as

“hydraulic fracturing of shale or strata encased in shale which is carried out in connection with the use of a Well to search or bore for or get petroleum, and involves, or is expected to involve, the injection of—

more than 1,000 cubic metres of fluid at any stage, or expected stage, of the hydraulic fracturing, or

more than 10,000 cubic metres of fluid in total.”

Proposed new clause 22A(1) states:

“The Licensee shall not carry out Relevant Hydraulic Fracturing from a Well if the well pad is in a Protected Area in England or Wales.”

There is a clear link between the definition of relevant hydraulic fracturing and whether a licensee can carry out that fracking in a protected area. That is a problem, because if, in legislation to protect such areas, we place a limit below which fracking is not fracking, then evidently, straightforwardly and logically there is a point below which that area is not protected. It is not protected if someone is fracking in it but not producing 10,000 cubic metres of fluid. That is what appears in the explanatory memorandum that accompanies these regulations:

“The purpose of this instrument is to amend the model clauses for onshore petroleum exploration and development licences in order to ensure that licensees do not carry out high volume hydraulic fracturing from a well if the well pad is located in a protected area”.

I emphasise “high volume”, because that is the reality of what is in front of us today. We are talking not about fracking, but about high-volume fracking, and those are two very different things.

I mention this problem because we have expert testimony on what happened with hydraulic fracking in the United States; I am sorry to call on the wisdom of experts, because I know there is some dispute about whether we should listen to experts. In the United States, the amount of water used for fracking in any well is notified to the Environmental Protection Agency. There is still an EPA in the United States, which is good; it monitors how much water is used in each well and publishes the numbers once the fracking is completed. Work by Professor Stuart Haszeldine at the University of Edinburgh looking at more than 17,000 wells fracked in the United States between 2000 and 2010 shows that 43% of wells fracked through gas fracking, hydraulic fracking, and machinery and surface drilling—the whole lot—would not be defined as fracking under UK rules simply because the amount of water they used did not reach the American equivalent of that 10,000 cubic metres overall definition.

In case we do not agree with experts, I—a non-expert—have looked at the EPA’s more recent data from 2011 to 2013 on wells that have been fracked, and not only do they show a very similar picture, but in the majority of states in which wells have been fracked, all the wells are below the 10,000 cubic metre water level. That suggests that to some extent this is an issue of variability in geology, the difficulty of fracking a particular well and so on. In some states in the United States, most of the wells use more than 10,000 cubic metres of water in the fracking process, and in other states, most do not.

Of course, we simply do not know whether the UK is likely to be an Arkansas, a New Mexico or even a Texas as far as fracking is concerned because we have the evidence of only two wells. It may be that all the wells across the UK will have to use more than 10,000 cubic metres of water, or it may turn out that none or not many will. The problem with the statutory instrument is that the outcome is pre-empted and predicted by it stating that protection from fracking in protected areas will be based on a prescribed definition of what it is to frack a well, and what amount of water is involved.

[Maria Eagle (Garston and Halewood) (Lab)]

As everyone on the Committee knows, many people campaign against fracking, particularly in places where it is to take place. How does my hon. Friend think people who campaign because they fear the damage from fracking will react to politicians who have told them that protected areas will not be fracked, if they see wells in those areas because the fracking will involve less than the specified volume of water?

[Dr Whitehead]

I cannot imagine anything other than that those people will feel betrayed, let down and effectively duped when they find that what they thought was the protection of those areas turns out to be nothing of the sort.

Perhaps the Minister can assist me; under the SI, what will be the process for deciding to frack in a particular area? What process will have to be carried out in relation to the 10,000 cubic metre outcome? The SI is pretty silent on that. Taking the provisions at face value, I can imagine that a company wanting to frack in a national park—and, indeed, surface-drill, so that things will be worse than under previous statutory instruments—will merely have to say, “We are confident that this well will not produce 10,000 cubic metres of water, so it is not relevant hydraulic fracking—so we can go ahead, can’t we?”.

It may be suggested that there are other means by which that outcome could be prevented, such as through planning arrangements or ministerial intervention. Ministerial intervention has already overturned a planning decision, in an early fracking case, in Preston, but that is not the real point. The point is that the SI was supposed to be the definitive measure finally establishing protection—on the surface and under the surface—in national parks: protection for national parks with no ifs, no buts and no quibbles. I suggest that the SI simply does not do that. Furthermore, as my hon. Friend the Member for Garston and Halewood mentioned, it opens the door to a possible series of national confusions; what people thought was the case may turn out not to be, and we, collectively, will find that we are responsible for that.

There are two possible explanations for the SI taking the form it does. Either the Government consider that all wells drilled in this country will use more than 10,000 cubic metres of water, in which case it would be a good idea to have some evidence on the table to demonstrate that. Alternatively, they do not want proper protection for national parks, despite previous statements, and have produced the SI in accordance with that. I cannot believe that such mendaciousness is involved, however; I prefer to think that either the Government erroneously believe that all wells will have 10,000 cubic metres of water associated with them, or they believe that other mechanisms can protect the national parks, despite what the SI says. If that is the case, I hope that the Minister will be able to explain.

In the absence of all those explanations, I suggest that the right thing for hon. Members to do—this is not a party issue; it is a matter of doing what we collectively said we would do on fracking—is, as we say in our conferences, refer this back. We should not vote for the motion, but should ask the Government to go away and come back with a statutory instrument that produces the result that we all want.

It is unfortunate that statutory instruments cannot be amended, because the easiest thing to do would be simply to delete proposed new clause 22A(2)(c) and let the rest of the SI stand. The rest of it—the protections for national parks—is perfectly okay. It is just the introduction of the concept of relevant fracking that fatally overturns the intention behind the regulations. Unless we receive a bolted-on, cast-iron explanation of why the world is not as we see it, I am afraid we will not support these regulations, and we will seek a Division.

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Jesse Norman)]

It is an honour to serve under your chairmanship, Mr Gray. I congratulate hon. Members of all parties on coming along this morning at this early hour to take part in this debate.

I start by restating the Government’s commitment to ensuring that the UK has secure energy supplies that remain reliable, affordable and clean. Shale gas has the potential to be a domestic energy source that can contribute to our security of supply, help to achieve climate change objectives, and create jobs and economic growth.

Gas is the cleanest of the fossil fuels and still meets a third of our energy demand. We will need it for many years to come. Members of the public are understandably worried about a process that has not been used onshore much before now. I want to use this opportunity to reassure them and provide a clear explanation of why this new industry is in the national interest and will be safely carried out.

First, let me assure the hon. Member for Southampton, Test that the Government are clear that shale development must be safe and environmentally sound. The UK has more than 50 years of experience of safely regulated oil and gas exploration, and we have world-class independent regulators who will not allow operations to go ahead if they are dangerous to the environment or to local communities. We are confident that we have a robust regulatory regime in place. To reinforce those regulations, the Infrastructure Act 2015 introduced a range of requirements that must be met before an operator can carry out hydraulic fracturing, and ensure that they do so in a responsible, sustainable and safe way. They include the exclusion of hydraulic fracturing in protected areas.

The Onshore Hydraulic Fracturing (Protected Areas) Regulations 2016 ensure that the process of hydraulic fracturing cannot take place at depths above 1,200 metres in national parks, the broads, areas of outstanding national beauty, world heritage sites and areas that are the most vulnerable to groundwater pollution. When those regulations were passed, we recognised that concerns had been expressed about fracking from wells drilled at the surface of some protected areas. The Government at the time therefore decided that safeguards should also be applied to surface activities in protected areas. As a result, further regulations were laid before Parliament on 31 October last year and delivered through the petroleum licensing regime.

These landward areas regulations, which were prayed against, serve to strengthen further the protections already in place for protected areas. They should, I hope, assure the hon. Member for Southampton, Test that special protection will be accorded to sensitive areas. The surface restrictions in the landward areas regulations apply to the same areas detailed in the protected areas regulations, as well as to sites of special scientific interest.

[Maria Eagle]

It is excellent to hear the Minister read a speech written before he heard the speech of my hon. Friend the Member for Southampton, Test. Will he address some of the specific points made by my hon. Friend about the volume and definition of relevant hydraulic fracturing?

[Jesse Norman]

I am grateful to the hon. Lady for anticipating the point in my speech at which I will address the questions. Let me finish, if I may, the process of not merely introducing the importance of shale gas but touching on the way in which the regulations have been structured and why that is so.

As I said, the regulations serve to strengthen the protections already in place for protected areas and to extend special protection to sensitive areas. The surface restrictions apply to the same areas detailed in the protected areas regulations as well as sites of special scientific interest and Ramsar and Natura 2000 sites. That is further evidence of the Government’s recognition of the importance of protecting key areas around the country. I stress that even outside those areas—the hon. Member for Southampton, Test recognised this point—a company looking to develop shale gas will still need to obtain all the necessary permissions, including planning and environmental permits, before hydraulic fracturing can be carried out. That is in addition to the requirements of the regulations. As part of the licence, permission and permit procedures, the environmental impact of operations and any risks associated with them are assessed by regulators and through the planning system on a case-by-case basis.

All oil and gas sites need permits under the Environmental Permitting (England and Wales) Regulations 2010 as well as planning permission from the relevant planning authority. The national planning policy framework and supporting practice guidance clearly state that, in respect of minerals such as shale oil and gas, new development should be appropriate for its location. If the risks of a proposed shale activity are deemed unacceptable, the environmental regulators will simply not allow that activity to go ahead, irrespective of the area involved.

[Jesse Norman]

The Government’s position remains unchanged that there should be no surface fracturing within those protected areas. That is the question raised at present. Of course it is possible to fracture from outside national parks beneath them, 1,200 metres below the earth, which is 800 metres below the normal lowest levels of any water sites. That is at least 1,200 metres below the surface of the national park. That is the form of the protection.

[Maria Eagle]

I wish to press the Minister on the point made by my hon. Friend the Member for Southampton, Test about the definition of relevant hydraulic fracturing in proposed new section 22A(2)(c). It clearly sets out the minimum number of cubic metres of fluid to be used at any instance or stage, or that a total of 10,000 cubic metres is used. That suggests that if the total is less than 10,000 cubic metres and 1,000 cubic metres of fluid are not used at any stage, that activity will not meet the definition of relevant hydraulic fracturing. Therefore, the regulations do not prevent such activity from taking place in protected areas and even in national parks. Am I correct about that?

[Jesse Norman]

Perhaps I can reassure the hon. Lady. The point of the regulations is precisely to ensure that smaller scale operations meet an equivalent range of safeguards to those set out in the Petroleum Act 1998. In some cases there may be local activities that are subject to all of the usual procedures and, if they are not hydraulic fracturing, they are captured by separate rules. However, hydraulic fracturing in national parks has been banned. That is the Government’s position.

I draw the hon. Lady’s attention to the fact that even at the sub-surface level, protections are in place to ensure not merely that hydraulic fracturing using more than 10,000 cubic metres of fluid cannot be done, but that hydraulic fracturing using more than 1,000 cubic metres of fluid at any one stage cannot be done either. That is a comprehensive response to the question.

[Jesse Norman]

No. The position is that “well pad”, as the hon. Gentleman knows, describes the location in which a well is drilled. That term was defined in paragraph 3.33 of the Government’s response to the landwards regulations consultation. Further consideration may be needed of whether a more explicit definition is required elsewhere, but what is in the response is clear. To give him comfort, let me reiterate that a well pad counts as being in a protected area if any part of it is in that area. There should be no ambiguity about that; it is what the response to the consultation says. I take his point, but it has already been addressed.

If I may continue with what I was saying, I should emphasise that the shale gas resources beneath this country have enormous potential, which we as a country should not underrate. We have a very secure regime in place.

[Maria Eagle]

Will the Minister give way?

[Jesse Norman]

I have already taken two interventions from the hon. Lady—perhaps she will allow me to complete what I was saying. We have a thoroughly effective set of permitting permissions and governing legislation in place. This country therefore cannot be compared in any fair way to other countries in which fracking may have taken place under different regimes. We have an excellent track record—one of the best in the world—when it comes to protecting the environment. I am confident that the commitment to restrict surface activities, which is being implemented through landward areas regulations and the policy statement, will complement the protected areas regulations and further strengthen the protections that are afforded to these sensitive areas.

--- Later in debate ---

[Maria Eagle]

It is a pleasure to serve under your chairmanship, Mr Gray. I had not intended to participate; this is not an area in which I am a great expert, and I approach it as somebody who has an ordinary interest in the positives and downsides of the issue. However, I am afraid that in his response to my hon. Friend the Member for Southampton, Test, the Minister was not sufficiently clear, to my satisfaction, about the potential impact of these regulations—if we vote for them—in order to make me happy about voting for them today. I am going to give him one more chance—if I can explain what concerns me, he might be able to satisfy those of us on this side of the Committee sufficiently in his closing remarks so that we do not feel we have to oppose these regulations.

My hon. Friend set out some of the experiences in America. Of course, the USA has had a great deal of fracking. I do not remember the precise percentage that he used but he set out the fact that much of the fracking in the USA is done at below the volumes in the regulations and would not, therefore, count as relevant hydraulic fracturing under them. To my mind he was saying that it is possible in this industry to frack—as most ordinary people would understand the phrase—at volumes that would not meet the threshold the regulations set out. That would, in effect, still be fracking—an ordinary intelligent person looking at what was going on around them would still think of it as fracking—but the regulations would not define it as relevant hydraulic fracturing. That is the point.

As my hon. Friend said, owing to geological issues—there has been only a bit of test drilling; the industry is at a very early stage—we do not yet know what percentage of wells dug will be below the threshold for relevant hydraulic fracturing. It could be anywhere between a few and almost all for all we know, but it is certainly in the realms of possibility that there will be a lot of what an ordinary person would think of as fracking taking place below the threshold for relevant hydraulic fracturing, as defined in the regulations, and therefore below the threshold for the protection that the Minister and the Government seek to implement and the previous Government said they would implement when the original primary legislation went through.

In addition to answering the straightforward question from the right hon. Member for Arundel and South Downs, which ought to have a straightforward answer, will the Minister explain what he will do to reassure people that the definition in the regulations will stop all fracking in sites of special scientific interest and national parks? I can tell the Minister now that if this protection results in wells operating below the defined volume in areas that are supposed to be protected, he will inflame campaigners’ concerns, whether those concerns are scientifically based and accurate or not. He will look shifty. He will look like he has been pretending to provide protections for those areas when in fact he is not.

I am sure that the Minister does not want to look like that, and I am sure that the Government do not want to be seen as cynical and trying to pull the wool over the eyes of people who live in those areas and have legitimate concerns that need to be addressed. The best way for the Minister to address such concerns is to be as open and transparent as possible, and to be clear when setting out what this instrument will and will not achieve. I invite him, when he makes his closing remarks, to be a little clearer than he has been so far.