Michael Fallon
Main Page: Michael Fallon (Conservative - Sevenoaks)
Andrew Stephenson (Pendle) (Con)
2. What steps he is taking to encourage shale gas exploration in Lancashire.
The Minister of State, Department of Energy and Climate Change (Michael Fallon)
The Government are creating the right framework to accelerate shale gas development in a responsible way, ensuring regulation is robust as well as streamlined and that communities share in the benefits which are created. Cuadrilla announced its updated exploration programme in Lancashire last week.
Andrew Stephenson
The British Geological Survey study of shale gas resources in Lancashire has doubled previous estimates of reserves and extended the potential drilling area right across to the east of the county. Although shale gas exploration and extraction has huge potential benefits to the UK economy, the people who live above need to see a real community benefit. Will my right hon. Friend update the House on his plans to ensure that that happens?
Michael Fallon
We are accelerating the search for shale, streamlining and simplifying the technical guidance for exploration permits, publishing clearer planning rules and consulting next week on fiscal incentives to encourage exploration and production. Later this year the developers charter will commit developers to earlier engagement with local communities and ensure that local areas that host shale benefit financially, directly and significantly.
Mark Menzies (Fylde) (Con)
3. What steps he is taking to meet future energy demand.
Mr Nicholas Brown (Newcastle upon Tyne East) (Lab)
4. What estimate he has made of the number of jobs created in the UK as a consequence of his policies on offshore wind power generation.
The Minister of State, Department for Business, Innovation and Skills (Michael Fallon)
The trade association RenewableUK last year estimated that the wind industry as a whole currently employs around 12,200 people in Britain. As we announced in May this year, since 2010 more than £29 billion of investment has been announced in renewable energy, with the potential to support around 30,000 jobs. Of that, nearly £18 billion and more than 9,000 jobs relate to offshore wind.
Mr Brown
I welcome the Minister’s recent visit to the north banks of the Tyne where he saw the employment potential of that exciting new industry. The fabrication work that could be generated, were contracts placed domestically in the United Kingdom, would represent an exciting opportunity for former shipbuilding communities such as the one I represent, which has the skills and energy to do the work, if it could get the contracts. What more can the Minister do to ensure that at least some of that work comes to the United Kingdom?
Michael Fallon
I have provided at least two regional growth fund grants to yards on the Tyne, and I have visited two of them myself. Tyneside already contributes to future energy infrastructure development. It is becoming a leader in sub-sea technology. I want to ensure that it also benefits from the new generation of offshore wind that is now coming on stream.
Mr Charles Kennedy (Ross, Skye and Lochaber) (LD)
This is my first opportunity to welcome the Minister to his portfolio—and a very welcome presence he is too—so may I tempt him with some highland hospitality? The Secretary of State will confirm that it can be very good. I invite the Minister to pay a visit to Kishorn Port Ltd in my constituency, which began with the concept of manufacturing offshore wind turbines and has submitted—and now had approved—a master plan with Highland council, the diaspora of which could see 2,500 jobs being created on that site. That would be a massive boost to the economy of the highlands, Scotland and the United Kingdom. Would he care to pay a visit, perhaps during the recess?
Michael Fallon
I will certainly see whether that is possible. I am already aware of—how can I put it—the power of Skye hospitality, and I would certainly like to see for myself exactly the potential for Skye to contribute to the offshore wind power that we need.
Mr Iain McKenzie (Inverclyde) (Lab)
I, too, represent a former shipbuilding community. I believe that Inverclyde has the skills and the infrastructure to play a full part in offshore wind generation. In that context, I have a meeting next Tuesday with RenewableUK. I extend an invitation to the Minister or the Secretary of State to attend that meeting with me and help to promote Inverclyde in playing a full part in that wind power generation.
Michael Fallon
Our diaries are filling up. I want our shipyards to reap the full benefit of the work that is now becoming available in offshore wind. I saw for myself recently on a visit to Cammell Laird on Merseyside just how much of that yard’s work now contributes to the Gwynt y Môr field in the Irish sea, and I am sure that there are opportunities for the Clyde as well.
Ian Austin (Dudley North) (Lab)
5. What steps he is taking to help households with their energy bills.
Mr Tim Yeo (South Suffolk) (Con)
8. What assessment he has made of Ofgem’s electricity capacity assessment report 2013.
The Minister of State, Department for Business, Innovation and Skills (Michael Fallon)
The Government welcome Ofgem’s electricity capacity assessment as an authoritative investigation into security of supply over the next five winters. We will be working closely with Ofgem and National Grid to take decisive steps to ensure that security of supply is maintained in the short, medium and long term.
Mr Yeo
It is the excitement of your Speakership, Mr Speaker.
Does my right hon. Friend agree that the quickest, cheapest and most environmentally friendly way to ensure that the lights stay on at a time when capacity margins are a bit tight is through demand-side measures? Will he explore how Smart technology could be used more effectively to extend time-of-use pricing, which would cut some of the peaks in demand and thereby reduce the need for some of the expensive new capacity that is being considered?
Michael Fallon
Of course demand-side measures have a role to play, but Ofgem will also be looking at better balancing the system as a whole, using some of the measures it has been using for more than 20 years. We will also be looking at whether some of the previously mothballed plant, or mothballed units at some plant, can be brought back into operation if needed.
Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)
The Minister is obviously well aware that even on a sunny and slightly blustery day in different parts of the country, significant amounts of capacity and generation still comes from coal. We have talked about carbon capture and storage a number of times in relation to the long term, but I want to press him on a point that his predecessor, the right hon. Member for South Holland and The Deepings (Mr Hayes), made in, I think, his final appearance at the Dispatch Box before moving to the Cabinet Office. He undertook then, in response to a question I asked him, to prepare a short-term strategy for coal. Does that commitment stand, or did it disappear off to the Cabinet Office with the previous Minister?
Michael Fallon
Our focus on coal over the past three months has been almost wholly on ensuring the survival of the Thoresby and Kellingley collieries, which are two of the four remaining deep-mine collieries in this country. I am pleased to say that UK Coal Operations Ltd entered its restructuring earlier this week, meaning that some 2,000 jobs have now been saved. That has been the focus for my Department, for officials from a whole number of Government agencies and for the management of that company.
Mr Peter Lilley (Hitchin and Harpenden) (Con)
10. What steps he is taking to encourage shale gas exploration in the UK.
Dr Phillip Lee (Bracknell) (Con)
16. What steps he is taking to encourage shale gas exploration in the UK.
The Minister of State, Department for Business, Innovation and Skills (Michael Fallon)
Further to my earlier answer to my hon. Friend the Member for Pendle (Andrew Stephenson), the Government have commissioned the British Geological Survey to carry out a study of possible shale gas resources in the Weald basin in the south-east of England. This will be published in the early part of next year. We are also carrying out a strategic environmental assessment with a view to launching a further onshore licensing round for oil and gas in 2014.
Mr Lilley
Given that 2 million fracking wells have been drilled in the United States without harm to life or property, will my right hon. Friend act vigorously to thwart the vexatious use of environmental laws by Friends of the Earth and others to keep shale gas in the ground? In particular, will he introduce early legislation to clarify UK red-line planning laws and to restrict them to surface installations? Will he also tell us what he plans to do to prevent the mining waste directive and the groundwater directives from being used expansively to delay and prevent the exploitation of shale gas in this country?
Michael Fallon
The Environment Agency has already announced its actions to streamline and simplify the system of permits required, which will be in the interest of everyone, including developers and local communities. My colleagues in the Department for Communities and Local Government will next week announce a simplified system of planning guidance so that the industry can be clear about the necessary planning permissions. As I have said, the Treasury will also announce next week the fiscal incentives that are necessary if we are to see this industry develop on anything like the scale that we have seen on the other side of the Atlantic.
Christopher Pincher
Further to the question from my right hon. Friend the Member for Hitchin and Harpenden (Mr Lilley), what action can the Government take to help to bust the myths about shale gas and hydraulic fracturing, so that local authorities—which are often a stumbling block—will be more inclined to grant planning applications? In that way, the Treasury, communities and energy users will be able to benefit from this vital national resource.
Michael Fallon
I am grateful to my hon. Friend. We all have a responsibility to ensure that the debate over shale and fracking is conducted on the basis of evidence rather than myths. I want to ensure that the developers of potential shale resources and those who want to dig exploration wells engage early with local communities. I also want to ensure that those communities that want to host shale are fully aware of the procedures involved and of the significant financial benefits that could accrue.
Dr Lee
Given the likely significant increase in Government revenue from shale gas exploration in the north-west, would the Minister consider using a proportion of that revenue to transform the plutonium stockpile in Cumbria from a liability into an electricity-generating asset for the nation and, in the process, secure jobs for the north-west region?
Michael Fallon
We have a separate plutonium management strategy. I think that that will answer my hon. Friend’s inquiry on that matter. It is worth saying that local communities that are prepared to host shale will receive significant benefits, including some £100,000 for an exploration well and, potentially, between £5 million and £10 million over the lifetime of any production well. Those are significant amounts, and they would rightly recompense local communities for any of the disruption involved.
Andy Sawford (Corby) (Lab/Co-op)
Bloomberg’s new energy analysis of shale gas states that
“the expectation that UK shale gas could lead to gas prices similar to those which have been seen in the US in the last two years can be discounted”.
Does the Minister accept and agree with that analysis?
Michael Fallon
We know from the British Geological Survey, which we published two weeks ago, of the central estimate of 1,300 trillion cubic feet in the Bowland-Hodder basin. What we do not yet know is whether that resource can be recovered as economically or, indeed, technically as it has been recovered in the United States. That is why we need to get on and explore to see whether that resource can be made available in the same way and have the same significant reductions in the cost of energy for our businesses and our households.
Mr Dennis Skinner (Bolsover) (Lab)
But do we not have to be careful about going into those old mining areas where the miners and the miners’ welfares were ethnically cleansed by previous Tory Governments? [Hon. Members: “What?”] Yes, that is exactly what I said. In Calow near Bolsover, Cuadrilla is actually thinking of drilling in an area not a mile away from where methane escaped and nearly killed several hundred people in the village of Arkwright. I warn the new Minister: be careful where these people operate. As for some great nirvana—some great future—from this fracking, it has not been proved at all that there is all that much in it for Britain.
Michael Fallon
Let me utterly reject what the hon. Gentleman said about ethnic cleansing, which I find particularly distasteful in a week when this Government have assisted UK Coal in the safeguarding of 2,000 jobs at Kellingley and Thorseby collieries. We do not yet know the full potential of shale in this country. What is important is that we allow those developers to go down, have a look and see the potential. That is why we are simplifying and streamlining the planning and the environmental system to enable them to do that.
Rushanara Ali (Bethnal Green and Bow) (Lab)
11. What recent discussions he has had with his EU counterparts on reducing European carbon emissions.
Mr Douglas Carswell (Clacton) (Con)
T4. Wind energy subsidies were supposed to deliver a reduction in costs by creating economies of scale and driving technological innovation. After the recent strike price announcements, it is clear that wind turbines work only because they are being given the same level of subsidy as before—subsidy begets subsidy, not sustainability. Does the Minister seriously see a future for wind turbines without subsidy and, if so, when?
The Minister of State, Department of Energy and Climate Change (Michael Fallon)
My hon. Friend will be aware that the draft strike prices that we published a couple of weeks ago show declining support for offshore wind. We need to ensure that offshore wind is cost-effective and to balance that against the need to secure—I have been pressed on this earlier—a reasonable degree of UK content in the fabrication.
Richard Graham (Gloucester) (Con)
T5. The Minister will know that all existing nuclear power stations report operationally to EDF Energy in Barnwood, Gloucester—the home of British nuclear engineering. After my right hon. Friend has agreed the strike price and other details for the next generation of nuclear power stations, will he accept an invitation from me to visit Barnwood and the impressive nuclear academy training ground for so many graduates and apprentices in this vital sector?
Michael Fallon
I will consider that invitation, as I am sure my right hon. Friends will. My hon. Friend will know that I spoke recently in Gloucester at Horizon-Hitachi’s supply chain conference in respect of its proposed nuclear station at Oldbury. I confirm to him that negotiations with NNB GenCo on an investment contract at Hinkley remain ongoing and that agreement will be reached only if a deal is fair and affordable, represents value for money and is consistent with our policy of no public subsidy for new nuclear.
Kerry McCarthy (Bristol East) (Lab)
This morning, six Greenpeace activists are scaling the Shard in what has been dubbed the “ice climb”. Does the Minister think that drilling for oil in the Arctic is an essential part of meeting our future energy needs? Or does he think that, given the huge environmental concerns about drilling there, it is a price that is too high to pay?
Charles Hendry (Wealden) (Con)
Does the Secretary of State agree with me that some people’s concerns about shale gas are based on fact but many are not? Will he ensure that his Department produces and maintains an up-to-date online database so that people can see what claims are evidently false and, where they are based on fact, what the Government are doing to address them?
Michael Fallon
That is an excellent and extremely positive suggestion that I will consider immediately.
Dame Anne Begg (Aberdeen South) (Lab)
The Department for Work and Pensions Minister responsible for health and safety will reply to this afternoon’s debate on the 25-year anniversary of the Piper Alpha disaster. What is the Secretary of State’s Department doing to build on the safety regime that is currently in place to ensure that the men and women who daily risk their lives by working offshore, contributing a huge amount to the UK economy, have the safest working environment possible?