Shale Gas

Tom Greatrex Excerpts

Thursday 3rd November 2011 Westminster Hall

[Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship, Mr Gale, and to take part in this important debate after some excellent contributions from members of the Select Committee and other Members with a local or professional interest. I commend the introduction to the debate by the Chair of the Committee, the hon. Member for South Suffolk (Mr Yeo). From the few short months at the start of this Parliament when I was a member of his Committee, I know that he is an excellent Chair and does very good work.

As Members have said, the debate is important and timely, given the shale gas issues that are high profile following the publication yesterday of the Cuadrilla report. In the three weeks since I was appointed shadow Energy Minister, I have heard Lord Lawson describe shale gas as the biggest energy bonanza since the discovery of North sea oil, the hon. Member for Brighton, Pavilion (Caroline Lucas)—I am surprised that she is not here today—say, “So what?” to the estimate of 200 trillion cubic feet of reserves under the Lancashire coast, and others say that we are in danger of encountering an environmental disaster. We are, therefore, not short of opinions on the matter, but there are some fundamental issues raised in the report and the Government’s response that I want briefly to address.

The Chair of the Committee has set out that the report is generally favourable towards onshore shale gas exploration and does not accept the case for a moratorium. Since the publication of the Committee’s report, the report on the unusual seismic activity in the early summer has been published, and I wonder whether the tone of the Committee’s report might have been more cautious had it been published subsequent to that. The conclusion of the Cuadrilla report, that it was highly probably that the tremors were triggered by fracking but that somehow that is unlikely to be repeated with further exploration, was interesting. Those two statements appear, on first examination, to be incompatible at the very least, and it is important that the Government look carefully at that when they take that report and the work by the British Geological Survey into account. During the past 24 hours, I have heard from geologists who take a different view. It is important that we look into it. However, I also accept that, due to their scale, the tremors were not significant and had no structural impact.

[Mr Dai Havard in the Chair]

I know that additional work will be undertaken and reported to the Minister. I broadly support that approach. As the Select Committee report highlights, public confidence is needed in the safety regime attached to the exploration of shale and other unconventional gases. Public confidence is important. Given the scale of the concerns expressed by groups, individuals and people who live in that part of Lancashire, it is important that the Government’s response takes account of those anxieties.

The other, equally valid side of the issue is that the public rightly expect that new developments, technologies and techniques should be used if they can help balance our energy mix, increase a potential indigenous energy source, reduce carbon emissions and address security of supply. The public also have an interest in getting a better energy mix, as it could affect the rate of increase in the prices that they pay.

Many claims have been made that shale gas can make a huge difference to all those issues, although some seem to be the result of a crude extrapolation of the American experience to the UK, which I do not think is valid. My hon. Friend the Member for Southampton, Test (Dr Whitehead) alluded to that in his remarks. The Chair of the Select Committee repeated today something that I have heard him say before: shale is a game changer whose significance has yet to be fully understood. He might be right, but estimates differ as to the amount of shale gas available on and offshore. That requires significant investigation.

As technology develops and techniques become more practised, the economics might also become more attractive. There are plenty of examples of North sea oilfields that have exceeded their claimed lifetime by several years. One particular field has almost doubled its lifetime and is still going strong due to the dual impact of technological and drilling advances and the fact that complex extraction is more economically viable than it was 20 or 25 years ago.

Shale gas involves many unknowns, which is why robust and effective environmental protection and monitoring are important, as the Select Committee report makes clear. I would like reassurance after reading the Minister’s oral evidence in the report. I hesitate to use the word “complacent”, but I am not sure that he demonstrated enough of the urgency required about providing public confidence and ensuring that we can exploit the technology more fully as we learn more about it.

The Select Committee report makes the point that many aspects of protection and monitoring need clarifying. The offshore regime for the North sea is widely accepted as world-leading. That is due at least in part to Piper Alpha. Many improvements in offshore health and safety and environmental protection were introduced as direct results of that tragedy or, indirectly, through inspections and monitoring by the Health and Safety Executive, the Environment Agency and, in Scottish waters, by the Scottish Environment Protection Agency.

I understand the industry’s reluctance to move towards European regulation of offshore activity, particularly when the need is questionable, but onshore fracking involves factors that must be taken into account, such as water use, recycling, the effect on the water table, the toxicity of the chemical mix, the potential for leaching into drinking water supplies and disruption to the landscape. People have concerns about a range of issues, as the Minister will know. That is why public confidence requires detailed work, as well as investor certainty and environmental standards. Those three aspects can be joined to provide reassurance.

Even if shale gas from onshore sites in the UK does not become more significant in the months and years ahead—my hunch is that it probably will—it is likely to do so in other parts of mainland Europe, most notably Poland. Given those concerns and the present moratorium in France, it would be useful to understand whether the Minister has had discussions with his European counterparts about those issues. Also, what progress has he made in discussions with the HSE, the Environment Agency and his counterparts in the Department for Communities and Local Government, which is responsible for planning policy, to discuss how those agencies can work together to provide the right level of reassurance for those with environmental and community concerns? It would also be useful to hear more about the expected time scale for the Government’s response to the report that they received yesterday and the additional geological survey work that I understand will follow from that.

In addition to regulation, I will mention a couple of issues regarding the potential impact of shale gas on other aspects of energy policy. Other Members have referred to its impact on renewable investment in coal-fired power and on the future of carbon capture and storage. It has been argued that shale gas will precipitate a further dash for gas, and that gas with lower levels of carbon emissions than coal will be at the forefront as a bridging energy, as renewable tidal, wave and other technologies develop. However, there are concerns that that might affect renewable developments and disincentivise the necessary continuing investment.

To risk moving into the subject of our second debate, that would have an impact on the Government’s electricity market reform proposals and some of the assumptions underpinning the various features of that policy. Gas emissions might be lower than those of other fossil fuels, but they will always be higher than those of renewables, and the fracking process is energy intensive. If, as the Select Committee report anticipates, the emergence of shale gas leads to a switch from coal to gas for electricity generation, and to new gas power stations being built close to source, the development of CCS for gas will become increasingly urgent.

However, that should not rule out or relegate the importance of CCS for coal following the Longannet decision a couple of weeks ago. Both are important, and there is a pressing need for urgency in Government progress on alternative demonstration projects in both coal and gas. As BP pulled out from the earlier iteration of a potential CCS project in Peterhead, I hope that the amended project, with SSE leading the consortium, will be considered as a viable option for that technology, given its proximity to deep storage sites in the North sea. What impact do the Government anticipate that the move to shale gas will have on the coal industry and the potential for clean coal? That would be interesting to know.

The hon. Member for Lancaster and Fleetwood (Eric Ollerenshaw) mentioned community benefit. On offshore wind licensing, I note that, particularly in parts of Scotland, moves are being made towards direct community benefit. Perhaps that could go alongside the potential benefits in terms of jobs. As he or an hon. Member intervening on him remarked, sometimes job figures are projected that are not necessarily matched in reality.

Several other countries around the world are more advanced in their experience and understanding of onshore shale gas and the horizontal drilling techniques required to release its energy. They are still learning, as are we. The small tremors in Lancashire in early summer were a signal to the Government and regulators that there are still unknown environmental consequences from fracking, just as there are still potential wider implications for energy policies developed in the past couple of years, which might become redundant or less relevant as a result. It is important for the Government to take on board those concerns, examine the evidence carefully and perhaps press for additional scientific evidence if initial investigations are not conclusive. A cautious approach is right.

The Select Committee report sets out the potential but balances it with the need for effective regulatory oversight to ensure public confidence. I implore the Government to take those wise messages on board and work quickly to put protections in place, so that if the game is to change, to borrow a phrase, the right kit is laid out by the captain in the changing rooms before taking the wicket. Without that confidence, shale gas might become an opportunity missed rather than realised.