Shale Gas Profits

Debate between Mark Menzies and Eric Ollerenshaw

Wednesday 19th December 2012 Westminster Hall

[Eric Ollerenshaw (Lancaster and Fleetwood) (Con)]

It is a pleasure to serve under your chairmanship again, Mr Bayley. Before I go into the argument for community compensation, I will set the background for the impact of fracking in terms of the present energy demands on the county of Lancashire. At the moment, we face energy projects across the country. My own constituency has a third planning application for onshore wind farms in the Lune valley. We have offshore wind farms, the Walney field off Barrow and proposals for new offshore wind farms run by Centrica off the Isle of Man. Now, the need to transport power from those wind farms will mean extra pylons on land through the middle of my constituency and the middle of Lancashire.

At the south end of my constituency, there is a fourth planning application by a company called Halite for the excavation of salt mines and the storage of liquefied gas, a proposal that I oppose, as do my constituency neighbours and hon. Friends the Members for Blackpool North and Cleveleys (Paul Maynard) and for Wyre and Preston North (Mr Wallace). There are also a number of proposals for smaller hydroelectric schemes in the hills. It is already a massive issue for Lancashire, and there is even the possibility of an extra nuclear power station at Heysham, in the north of the county. All those proposals are the background. Into that mix comes the issue of fracking.

I want to put on the record my position on the wider shale gas issue. I have never been against using shale gas in our energy mix in principle. However, I want my constituents’ genuinely held concerns to be addressed before I support an expansion of fracking. I have raised those concerns with Ministers before, including three times in previous debates in Westminster Hall, but they are worth recapping.

First, my rural constituents have understandable concerns because many of them draw their water directly from boreholes rather than the mains. They are worried about contamination of their water supply, and equally worried about the impact on their water supply of the vast amounts of water that will be drawn from the water table to carry on full industrial fracking. Secondly, the small earth tremors that happened last year were proved subsequently to have been caused by the fracking process. Thirdly, my constituents have serious concerns that the regulatory regime, even if more stringent than in the US, will not be extensive enough to keep track of all the activity that could take place if the fracking moved to an industrial scale. I underline the point that, in a sense, we are in a hypothetical position. All that the Minister has reallowed is one testing at Preesall in the constituency of my hon. Friend the Member for Fylde (Mark Menzies), and we may be some way along in the process.

I welcomed the pause in fracking operations to allow an investigation into the earth tremors. I was pleased that the Royal Academy of Engineering and the Royal Society produced reports into the processes and equipment involved, and that they were studied further by an independent panel. Such investigation and review was much needed.

As a result of those investigations, the Energy Secretary announced last week that fracking and the tests at Preesall by Quadrilla could resume, but, as his recent statement made clear, with new safeguards in place. I welcome some of the measures in the Energy Secretary’s statement, including monitoring of seismic activity and enhanced wellhead integrity, which are fundamental to ensuring safety of the water table and water supply. I also welcome his commitment to continuing to record and analyse data on the effect on the environment of exploratory fracking. It is an important step, along with the appointment of an independent inspector who will be on site at all times. However, I still want greater efforts to boost the safety of the water supply and put in place a proper and effective regulatory system.

Although exploratory fracking has been resumed, we are still some way from industrial-scale operations, although anyone who reads the national press would think that the bonanza was going to happen next week. We in Lancashire are realistic in seeing that it will be a long-term process, but this debate is meant to get in at the beginning and ask what the impact might be if it happens.

[Mark Menzies (Fylde) (Con)]

I thank my hon. Friend for securing this debate on a subject that is hugely important and of great concern to my constituents. I urge the Minister to take on board the point that my constituents, like those of my hon. Friend, are incredibly worried that fracking could be done on an industrial scale. It is important that the company be clear from the outset that until safety measures and regulations are in place, it will be done on an incredibly limited scale, with detailed on-the-ground monitoring at every stage.

[Eric Ollerenshaw]

I thank my hon. Friend and neighbouring MP. To underline the point to the Minister, there has been speculation in the papers that if industrial fracking happens, there could be some 800 wellheads across Lancashire, against the background of onshore and offshore wind farms and the possibility of new nuclear. One can see why it is generating concern.

I stress that we are talking about a hypothetical situation involving industrial fracking some time in the future. The point that I am here to make is that if shale gas operations commence on that scale and scores of wells are drilled, Lancashire should share in the rewards. At the moment, that is not likely to happen, at least not beyond any small-scale voluntary schemes that energy companies might decide to pursue themselves. To be fair to Quadrilla, I understand that it has given a number of grants to various local parishes. The only other way is through section 106 agreements, which do not derive a vast amount of money for the local infrastructure.

The clear point is that the United Kingdom, and Lancashire in particular, is not Texas, where local landowners can strike it rich if oil or minerals are discovered on their land. The mineral rights in our area belong to the Crown, but mainly to the Duchy of Lancaster. Any farmer for whom fracking is proposed on their land will gain precious little, except perhaps a small amount of rent, and the local authorities will get a small amount of business rate. The company will get its profits, the Duchy will get its share from the mineral rights, and of course and as ever—unless Starbucks starts drilling operations—the Treasury will get its share of the proceeds from taxation. Local residents, who will have to deal with increased industrial activity, traffic movements, the movement of chemicals and so on, will not see a direct reward.

Onshore Gas

Debate between Mark Menzies and Eric Ollerenshaw

Wednesday 24th October 2012 Commons Chamber

[Mark Menzies]

My hon. Friend makes a valid point, which was touched upon in the debate that my hon. Friend the Member for Lancaster and Fleetwood secured in Westminster Hall. I know that the Minister heard that point and is well aware of it.

Many of the people who have been involved in the process are experts in their field, but despite that, I do not believe that the regulatory system is robust or transparent enough to instil public confidence should permission be granted to the industry. That is why I am calling for an independent panel of experts to be set up without delay. Many questions and concerns still surround the shale gas process, and it is vital that we have a panel for three purposes: to look at each issue in detail; to fully appraise the risk; and to ensure that specific regulations are in place to deal with that. If part of the process cannot be dealt with safely through regulation, an alternative method should be found. If, however, an alternative way of carrying out that process is not possible, it must not be done.

[Eric Ollerenshaw (Lancaster and Fleetwood) (Con)]

I congratulate my hon. Friend the Member for Fylde (Mark Menzies) on securing this important debate. Does he agree that one key issue of regulation and safety, particularly in my constituency, is the impact on the water table? It is not yet clearly understood by all that many of my constituents draw water from their own boreholes directly from the water table, and do not receive mains water.

Energy Resources (Lancashire)

Debate between Mark Menzies and Eric Ollerenshaw

Tuesday 18th September 2012 Westminster Hall

[Eric Ollerenshaw (Lancaster and Fleetwood) (Con)]

Given how many times I have previously raised this subject, I thought that I might bore the Energy Minister if I did so again. However, there has been a reshuffle and there is a new Minister, so I now have a new audience. I take this opportunity to thank the previous Minister, my hon. Friend the Member for Wealden (Charles Hendry), who always dealt with the matters I raised seriously and with his usual good humour. I am sure that the same will be true with the new Minister, my hon. Friend the Member for South Holland and The Deepings (Mr Hayes), whom I congratulate on his new position.

Put simply, my constituents and I are concerned that a huge amount of energy exploration and production is going on across Lancashire and a lot more is planned. Energy production of almost every variety is being planned across the county, much of it in or around my constituency. We have wind turbines in abundance, both onshore and offshore. We have nuclear power in Heysham and the possibility of a new reactor there. We had the discovery of shale gas just outside my constituency—the fracking process, which was being undertaken by Cuadrilla, is currently on hold—and Halite Energy Group has applied to store natural gas in salt caverns in Preesall. We have small-scale hydro and solar schemes across the county, and we even have a serious proposal for a tidal barrage across the mouth of the River Wyre in Fleetwood, which has been on hold since 1991; we are still waiting for a national statement on tidal power.

If any or all of those schemes go ahead, we face the additional pylons and substations needed to transfer the power from Lancashire to the national grid. To underline the problem, I add that before any of those new schemes have happened, the existing wind turbines in the Irish sea have led National Grid to consult on brand new pylons that would cross the Lake district. The power would come over land or under the sea to Heysham, which is just outside my constituency, and arrive at the village of Quernmore, where a new substation is proposed; then, to connect the power from the existing turbines in the Irish sea to the national grid, large new pylons would be erected down the core of my constituency and others to reach Pendle in Lancashire. That proposal takes no account of any of the other plans that I mentioned a moment ago.

My question in a nutshell is: with all those proposals, where is the overarching plan? Who assesses the effect of the multiple types of energy? How will all those energy developments impact on one another? Can the fact that other schemes are planned be considered as part of the planning process by the relevant planning authorities? I am also concerned because applicants resubmit applications that are almost entirely the same in nature, for the same sites, time after time, in a sort of salami-slicing process designed to wear down opposition. The Minister has a lot of questions to deal with, so to give him time, I shall highlight just one or two major proposals in my constituency.

We are near the end of the planning process for proposals to store gas in excavated salt caverns under the River Wyre in Preesall. This is the third application: two previous applications from a company called Canatxx were refused; and the third application to store the gas is from a new company, Halite. Residents are concerned about safety—we had the collapse of an old salt cavern in Preesall—and about the impact on the unique geology of the River Wyre. Alongside the Protect Wyre Group, I and my fellow MPs will again oppose that third proposal. I pay tribute to the Protect Wyre Group, which is a residents’ association that has fought year-in, year-out against the proposals, with no extra money. It has none of the resources of energy companies, but it is defending its bit of my constituency. What concerns the group is the repeated applications, which it tries to deal with by fighting planning battles. The uncertainty in the meantime reduces property values because of worries about safety and the possibility of compulsory purchase orders in the area.

I even question the need for the development, and this is where the Ministry comes in. We understand that there have been more than enough applications for natural gas storage to meet national needs for years, yet we in Wyre and Preesall are faced with yet another application. Where is the overall national concern about how many applications will be allowed in the process? The joined-up nature of the plans is what I question.

The application to store gas in Preesall is also relevant because it highlights how one scheme might impact on other. Gas storage on its own may be deemed safe, but what if fracking were given the go-ahead on a larger scale just across the River Wyre in the constituency of my hon. Friend the Member for Fylde (Mark Menzies)? Because of minor earthquakes, the Department of Energy and Climate Change has suspended the operations there, which were being conducted by a company called Cuadrilla, but how do those operations affect the proposal for the storage of natural gas in salt caverns on the other side of the River Wyre? My understanding is that the planning inspector is looking at the link as part of the Halite application, but I am unsure how much weight a hypothetical development elsewhere carries when reaching a conclusion on the application that is in front of the planning inspectorate.

I turn to the shale gas development. As I have stated in previous debates, I am not against the development of shale gas, and many of my residents also see the national need for gas. However, local people—particularly people living in Bleasdale—are concerned because they get their water not from the mains, but from bore holes. One can see why they are concerned about the protection of watercourses if the process is pursued. They will need reassurance about tight regulations and controls where underground watercourses may be affected.

As I have mentioned in other debates, Lancashire is in danger of becoming like a British Texas, given all the energy exploration, but the key thing about Texas is that, despite the obvious blight, the wealth then goes to local people. What I find difficult to explain to people is that we are part of the Duchy of Lancaster, and it is the duchy that controls and owns the mineral rights. Any farmer who grants permission for fracking to go ahead and gets the drills going will not get much return, and nor will the county or the district. If the process is to be pursued and supported nationally, local people must see a benefit, and from what I understand, the employment benefits are not large.

Fracking also has an impact on the scenery. If, in addition to the pylons and wind turbines, storage wells are to be built all over that part of Lancashire, the natural scenery will be destroyed. I am also concerned about the new substations and pylons needed for the transportation of the gas.

[Mark Menzies (Fylde) (Con)]

As my hon. Friend knows, many people in Fylde are concerned about fracking. I call on the Minister to recognise that what I am pushing for is tight, robust regulation that is fit for purpose. We also have to take into account population densities, because as my hon. Friend mentioned, our area is not like Wyoming or South Dakota. Lancashire is a densely populated place, which must be a major factor.

[Eric Ollerenshaw]

As usual, my hon. Friend hits the nail on the head. It is not so much that the people of Lancashire are opposed to the development; they see opportunities in it both for them and for the country, but they are concerned about who will regulate it and who will provide assurances about safety. At the moment, the only people in Lancashire doing the running on this issue are those who are against any kind of development, and a lot of my residents are left wondering who is telling the right story.

I want to underline to the Minister the mineral rights issue. That is a key issue in Lancashire. Who is to get the benefits if the developments go ahead? I know that the Minister’s brief does not include planning, but knowing him as I do, I am sure that he has a wide interest in energy impacts and in the planning process. I have mentioned before that repeated planning applications unsettle local residents, especially when it comes to wind farm developments. In another example, in Claughton moor, at the other end of my constituency, the original application submitted by the developer was for 20 wind turbines between 110 and 126 metres high in an area of outstanding natural beauty. It was rejected unanimously by the planning authority, but the applicant then came back with another application, this time for 13 turbines. That was rejected and then rejected again on appeal, but we are now faced with a third application, this time for 12 turbines. Hon. Members can see what is worrying residents. If the third application is thrown out, will there be a new application for 11 turbines? When does the process cease?

It is all right for the developer and, presumably, the energy company behind it—they are willing to speculate over a long period with a great deal of money—but what about the local residents? Here, I pay tribute to the Friends of Eden, Lakeland and Lunesdale Scenery, the FELLS group. They are volunteers, who have steadfastly fought and fought and fought the applications, but they are beginning to ask: when does the process come to an end? Residents in Preesall are in exactly the same position. They are fighting the third application from Halite. Will that be the final application? Will that be the end? I believe that the Government must step in and say, “Enough is enough.”

We in Lancashire recognise that there is an important national need in relation to gas, electricity and, indeed, any other kind of energy. Lancashire is clearly prepared to play its part. As I am sure the Minister knows, it was, historically, the centre or part of the centre of the industrial revolution. In the energy revolution, however, we face so many applications and the possibility of all sorts of things—pylons in particular—scarring the countryside, that we are asking: who will take a balanced view on this? Will I and my fellow Members of Parliament for Lancashire face a succession of repeated applications, with residents worn down trying to deal with those applications?

I would like to get a plug in for the proposed tidal barrage on the River Wyre. There is another oddity in the energy balance in this country. It has always seemed to me odd that even though this is an island with seas and the power of the waves, we are right at the bottom of the table when it comes to using that energy. I know that the Government have brought through new proposals, but I repeat that what some of us want is a national statement on tidal power. The proposal for the River Wyre has existed since 1991. In 1991, the county council went through a whole planning process in relation to that tidal barrage, but now, all these years later, we are still sitting here with the price of electricity rising.

People can argue for or against a tidal barrage. Many people would argue that it would have far less impact in the form of scarring of the natural scenery in my part of Lancashire than other proposals and that it would have huge potential for regenerating the town of Fleetwood and in terms of flood protection. The proposal is being handled by a small group of people who are determined to try to get it on the agenda, but there is no possibility, it seems to me, of solid financial support to see whether it is a runner in 2012. I say to the Minister that if it was a possible runner in 1991, it must be even more of a possible runner in 2012, particularly given that the revived proposals for the Severn barrage are on such a massive scale. What some of us have proposed in Wyre is the Wyre tidal barrage, because it would be on a much smaller scale, being seen as a pilot to test the engineering necessary for a scheme as huge as that on the Severn.

We all strike a different balance between the different parts of the energy process. Some of us prefer this, some of us think that that might be better, and some of us like the other. What I am trying to underline in the debate is that the pressure on Lancashire, particularly my part of the county, is such that residents are questioning where national, joined-up government is in the approach taken to these matters. In the next few months, as I mentioned, we will have the proposal from National Grid for new pylons in relation to existing wind power from the Irish sea. That proposal and others will ratchet up the debate. There will be the final hearings in relation to Halite and there is the possibility of a new nuclear station at Heysham. Interestingly, the support for a new nuclear station at Heysham is pretty widespread because people can see the strength of the proposal and the job opportunities that it would provide. Given the safety record of the present Heysham power stations, which is second to none, there are very few quibbles from the majority of the population in my area about the proposal. Again, however, although the proposal has been made, I am not sure exactly where it lies in the national strategy.

What we want in Lancashire is a share of the cake. I underline the duchy and mineral rights issue, which is real. What we want in Lancashire is, obviously, jobs. What we want in Lancashire is support to make up for the disastrous lack of planning by the previous Government over 13 years. People understand that, but no one has got to grips with it. We want some security. We want to know that the Government are taking a balanced view and that Lancashire will not just become a Texas where there is no money, where the scenery is scarred by the different attempts by different energy companies to get their proposals through, and where residents have finally given up the fight because they have to carry on with their normal lives and their own jobs or work. We need some reassurance from the Department that people are considering these issues and considering them sympathetically. Lancashire can deliver so much—so much—but we need that security for our residents. They need to know that they will not be ignored, that they will not be trodden over by energy companies and that the scenery that they have will be protected.