Draft Onshore Hydraulic Fracturing (Protected Areas) Regulations 2015

Michael Fabricant Excerpts

Tuesday 27th October 2015 General Committees

[The Minister of State, Department of Energy and Climate Change (Andrea Leadsom)]

I beg to move,

That the Committee has considered the draft Onshore Hydraulic Fracturing (Protected Areas) Regulations 2015.

It is a pleasure to serve under your chairmanship, Mr Hanson. Before outlining what the draft regulations seek to do, I would like to take this opportunity to restate the Government’s commitment to a low-carbon and affordable future for energy. Gas, the cleanest fossil fuel, still meets a third of our energy demand and we will need it for many years to come. It is vital that we seize the opportunity to explore the UK’s shale gas potential, while maintaining the very highest safety and environmental standards.

We have established those standards as world leaders in extracting oil and gas over many decades. Shale can and will be developed safely. The UK has more than 50 years’ experience of safely regulating oil and gas exploration. We have world-class independent regulators, who will not allow operations that are dangerous to local communities or to the environment to go ahead. Safety is and always will be absolutely paramount.

Members of the public are understandably worried about a process which has not been used in the UK before, and my job is to provide reassurance and a clear explanation of why this potential new industry is very much in our interests and will be safely carried out. We have a strong regulatory regime for exploratory activities, and we will continuously review it as the industry develops. We insist on the highest safety standards, and all of that is backed up by independent checks from the regulators.

There is no denying the fact that 80% of us use gas for heating and cooking, and industry uses gas in many everyday products. At the moment, we import about 40% of our gas needs and by 2030 we could be importing three quarters of the gas we use.

[Michael Fabricant (Lichfield) (Con)]

On a point of order, Mr Hanson. Someone is taking a photograph in the Committee Room. Surely that is out of order?

[The Chair]

Thank you, Mr Fabricant. Whoever is taking a photograph, would they please desist? That is not allowed in the Committee.

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[Andrea Leadsom]

I will not give way at the moment. I would like to make some progress in making my case and then I will take some interventions.

Importantly, studies show that the carbon footprint of electricity from UK shale gas is likely to be significantly lower than that of unabated coal and imported liquefied natural gas. Shale offers a valuable decarbonisation route from where we are today to where we want to be with a cleaner energy future.

Exploring for shale will also help create jobs and grow local economies. Investment in shale could reach £33 billion and support as many as 65,000 jobs in the oil, gas, construction, engineering and chemicals sectors. Locally, that could mean not just highly skilled jobs, but cementing contracts, new facilities and work for local businesses such as lorry drivers and income for local restaurants and bed and breakfasts.

The draft regulations serve to strengthen further the protections already in place for protected areas. It is right that we are debating them at the earliest opportunity, as we agreed to do during debate on the Infrastructure Act 2015. The powers to make the regulations are found in section 4B of the Petroleum Act 1998, as inserted by section 50 of the Infrastructure Act, which, following scrutiny in this House and the other place, received Royal Assent in February 2015.

The Infrastructure Act requires the Government to specify protected areas within which hydraulic fracturing cannot take place. As hydraulic fracturing occurs far below the surface, the regulations can relate only to subsurface activities, so they will not contain an answer to all the questions Members may wish to raise about hydraulic fracturing at surface level; however, I will address those questions in a moment.

I remind hon. Members that sections 4A and 4B of the Petroleum Act set out further safeguards for onshore hydraulic fracturing in England and Wales to provide the public with confidence that the shale industry is being developed in a safe, balanced and measured way. The Act lays down a number of conditions that must be satisfied before a hydraulic fracturing consent is issued by the Secretary of State. It includes two conditions specifying that associated hydraulic fracturing cannot take place within “protected groundwater source areas” or “other protected areas”.

[Michael Fabricant]

Will my hon. Friend give way?

[Andrea Leadsom]

If my hon. Friend will bear with me, I will certainly give way in a moment.

Those two terms are not defined in the Act. Instead, the Act contains a requirement for the Government to produce draft regulations with the proposed definitions and to lay them in both Houses by the end of July this year. To honour that commitment, we laid the instrument in draft form on 16 July.

Let me be clear: despite accusations to the contrary by Opposition Members, there has been no attempt to sneak the regulations past Parliament. The instrument has been in the public domain for three months, during which time the Opposition have not requested a debate on the Floor of the House, so to affect outrage that there will not be a House debate at such a late stage—hours before this Committee met—is pure political point scoring. On that point, I will give way to the hon. Member for City of Chester.

[Andrea Leadsom]

In that case, I give way to my hon. Friend.

[Michael Fabricant]

While I have concerns to raise if I catch your eye later, Mr Hanson, I want to ask my hon. Friend a question following on from a visit I paid to the Environment Agency last Friday. Does she agree that, although there were major incidents of pollution in the early stages of fracking in the United States, there have not been such incidents since the US implemented strict regimes; and can she assure me that there will be robust regulations in the United Kingdom?

[Andrea Leadsom]

I assure my hon. Friend that the Government, in conjunction with the regulators, have taken every step possible to ensure that we can safely exploit shale. Let us be clear: at the moment no hydraulic fracturing is going on in the UK. This industry is at the very early stages and we have used every bit of our more than 50 years of regulatory experience to make the process the safest possible.

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

It is a pleasure to serve under your chairmanship, Mr Hanson.

This simply is not good enough. It defies belief that arrangements set out in the Infrastructure Act can be separated out in the way that the Minister has described, talking about fracking underground as if it had no relation whatever to the pipe that leads up from the underground fracking, that leads to the drill head at the top of the pipe, that leads to the water coming out of the pipe and being held in containment ponds on the surface, that leads to the vehicles bringing the water to go down the pipe for fracking. It is preposterous to suggest that associated hydraulic fracking is nothing to do with the rest of the process of fracking that inevitably has to take place on the surface and down through the ground to the point at which the drill bit turns left or right and goes into the horizontal seam and then begins the fracking.

We can see why that suggestion is preposterous in the Infrastructure Act. As the Minister has indicated, this SI does indeed arise from section 50 of the Act, which is headed “Onshore hydraulic fracturing: safeguards”. Section 4B(4) of the Petroleum Act 1998, which is inserted by section 50, requires the Secretary of State by regulation to specify descriptions of areas that are protected in the section. That is essentially what the Minister has told us this afternoon: it is something she is thinking about at the moment and she may come back at a later date with a definition. However, the definition is already required by section 4B. The protected areas are numbers 5 and 6 of the table in section 4A, which state that

“The associated hydraulic fracturing will not take place within protected groundwater source areas”,

and

“The associated hydraulic fracturing will not take place within other protected areas.”

One might think that that is clear. The regulation defines the areas—what is in, what is out and what is the extent of the areas.

It is clear also because those two items in the table directly arose from an amendment to the Infrastructure Bill accepted by the Government at the time, which specified that,

“Any hydraulic fracking can not take place...in land which is located within the boundary of a groundwater source protection zone…within or under protected areas”

or

“in deep-level land at depths of less than 1,000 metres”.

The amendment was modified to some extent during the passage of the Bill through another place, but by and large it remained intact as a list of prohibitions on or conditions attached to the fracking process that is a hydraulic fracturing consent issued by the Secretary of State. So clear was it that upon acceptance of the amendments even before the Bill went to another place, the Secretary of State declared:

“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.]

So that was that: no fracking pads, no trucks, no water retaining ponds, no drill heads, no drilling rigs in those areas. All that was left to do would be to winnow out the precise designation of what those areas were, and that is what was required in the regulation that is in the legislation. There might have been an issue, for example, about the exact extent of groundwater source protection zones, but the regulation would sort that out.

One might ask: what could possibly go wrong? Well, quite a lot has gone wrong. Yes, the instrument before us defines what is in groundwater source protection zones; it defines other protected areas, including national parks, the broads, areas of outstanding natural beauty and world heritage sites; as has been pointed out, it defines out all but zone 1 groundwater source protection zones; and it defines completely out sites of special scientific interest—but then, as in the fracking process, it veers away at 90 degrees. It uses a very curious definition of what constitutes associated hydraulic fracking within those defined zones. It merely adds an additional protection zone of 200 metres to the 1,000 metres nationally above which the process of fracking can take place. If the Government really intended to undertake as a separate exercise the process of deciding in which areas fracking would be banned completely—and these would be identical to the areas defined in this statutory instrument—why would they introduce a zone below which fracking can take place? Why does regulation 3, at that point, state that associated hydraulic fracking can take place at depths below 1,200 metres, rather than 1,000 metres, as is the case nationally, if indeed there was to be no fracking at all in those particular areas? It simply makes no sense.

Reading the definitions in the statutory instrument, along with the provisions of the Act, we can see that only the associated hydraulic fracking that might otherwise take place within that chunk of defined land—it is all underground, from 0 metres to 1,200 metres—cannot happen. That is the protected lump of rock in this particular statutory instrument.

[Michael Fabricant]

On a point of order, Mr Hanson. I am sorry to interrupt the hon. Gentleman, but I understand that there will be a vote at 3.5 pm, which will be followed by a second vote. Can you define when Committee members have to come back? There will be a suspension during the vote, but if it is a 20-minute vote followed by another, will we have to come back and then go back down to the Chamber?

[The Chair]

We will, as ever, cross that bridge when we come to it, but to help the Committee let me say now that there will be a minimum of 15 minutes for the first Division. If there are two Divisions, I would expect 25 minutes. I will indicate that when the Division bell goes.

[Michael Fabricant]

Further to that point of order, Mr Hanson. If the vote takes 20 minutes before there is a result, are you saying that we need to come back here and wait for the second vote?

[The Chair]

What I am saying, Mr Fabricant, is that there will normally be a 15-minute suspension for a Division and I would expect people to be back here within 15 minutes. If there is a second vote, we will have to cross that bridge when we come to it. We have already used a minute of time now as a result of your point of order.

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[Michael Fabricant]

I rise because I, too, have concerns, and I certainly share some of those expressed by the shadow Minister. He quite rightly pointed out that I have a water source protection zone in my constituency. The SI was laid before the House, it says quite clearly, albeit in tiny print at the very bottom, in July 2015, so there is no excuse for anyone to say that it is a surprise. As a consequence, I went to visit the Environment Agency, which has an area headquarters in my constituency, last Friday, and today I spoke to people at the agency about the legislation. Yes, I have concerns, but I am also aware, as a chartered engineer and someone who is interested in technical matters, that people should not become alarmed unnecessarily—although there is some element to be alarmed about, and I will come on to that shortly.

As I said in my lengthy intervention, for which I apologise, I think the early stages of fracking in the United States, which were not subject to robust regulation, gave it a very bad name indeed. I have had a few emails—only a few—from constituents and from people outside my constituency who have talked about “this dirty practice”. It need not be a dirty practice if it is controlled. As the EA said to me only today, provided that robust regulations are in place—and it fully expects that to be the case—there is nothing to fear from pollution, or the sort of pollution that has occurred in the United States, because the construction of the wells and the horizontal seam is very different.

I listened to the hon. Member for Bolsover with considerable interest before the vote. The conditions that existed in coal mines 30 or 40 years ago are very different from those that will exist with fracking. Indeed, the EA did not even exist 30 or 40 years ago. We must bear that in mind.

With regard to fracking beneath areas of natural beauty, I want to remind people that coal mines have seams below country parks and SSSIs. I do not think that that is the issue. My concern—it has already been expressed by hon and right hon. Members—is the question of the well heads. The drill heads can cause considerable problems, whether they be in SSSIs, country parks, national parks or other areas of outstanding natural beauty. Before I can guarantee that I will vote for this SI, I want assurance from the Minister in her summing up that regulations will be laid before the House to control where the drill heads are placed.

There has been and continues to be a lot of hysteria about fracking, partly because people quite naturally do not know enough about fracking and are ignorant about the actual processes. I should say that I have nothing to declare in regard to fracking: I have no financial interest in it, only an academic interest.

Provided that I can be assured that robust regulations will be in place—that is certainly what the Environment Agency has said to me today—and that the Minister can say that there will be strict controls on where the drill heads will be, I will support the motion. If I do not receive those assurances, I have to tell my hon. Friend the Whip, who is sitting nervously in front of me, that there is a possibility that I may have to vote with the Opposition.

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[Graham Jones]

The hon. Gentleman has a point, but he will find that, when the gas finally flows, it will be nearly all profit because the capital investment will be at the beginning and there will be minimal capital investment as we go along. Year on year, the balance sheet will essentially show profits. He is not wrong, but if he looks at how it will play out, there is huge disparity and there will not be much closing of the gap between the 1% that Lancashire gets and the 60% that will be given to the Chancellor.

[Michael Fabricant]

I think the hon. Gentleman is genuinely confused. The revenue is the actual total sales. He is comparing capital with revenue. The revenue is the sales, and the profit is the profit. As he will know, profit on the pump at petrol stations is a tiny proportion of total sales. His assumption is therefore wrong.

[Graham Jones]

That is not what the Treasury has set out. It is following the broad financial framework for the oil and gas industry in Scotland. I know that other Members want to speak, but it is not fair that the constituents of Lancashire will be ripped off again. There are environmental concerns, but I am happy to oppose the regulations because the offer in the impact assessment is simply not good enough.