Shale Gas

Energy and Climate Change – in the House of Commons at 9:30 am on 19 June 2014.

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Photo of Priti Patel Priti Patel Conservative, Witham 9:30, 19 June 2014

What recent estimate he has made of the value to the UK economy of the shale gas sector.

Photo of Michael Fallon Michael Fallon The Minister of State, Department for Business, Innovation and Skills , Minister of State, Department of Energy and Climate Change, Minister of State for Portsmouth

The Government are promoting responsible shale development for greater energy security, to deliver jobs and growth and to support investment. The recent EY report estimates that there could be £33 billion-worth of spend on shale gas exploration creating about 64,000 jobs, including over £20 billion on hydraulic fracturing and £8 billion on drilling and completion of the wells. That is why we are supporting exploration to understand just how much of this potential can be realised.

Photo of Priti Patel Priti Patel Conservative, Witham

I thank the Minister for his response. Given the enormous projected value of the shale gas sector and the opportunity shale provides for energy independence, do the Government have plans to support more investment in shale gas infrastructure?

Photo of Michael Fallon Michael Fallon The Minister of State, Department for Business, Innovation and Skills , Minister of State, Department of Energy and Climate Change, Minister of State for Portsmouth

Yes, we have set out the new fiscal regime that will apply to shale exploration. We have a system of robust regulation in place. There are some dozen companies now exploring, and I shall shortly be inviting applications for new onshore licences under the 14th licensing round, which will afford more opportunities for new companies to enter this market, and I know colleagues across the House will want to champion applications for licences in their area.

Photo of Tom Greatrex Tom Greatrex Shadow Minister (Energy)

The Minister in his reply referred to robust regulation, and he is right that robust regulation is important, as is comprehensive monitoring of those regulations to meet the higher public acceptability test for this technology. Given that groundwater can contain methane naturally, will the Minister explain why it is that, more than two and half years after the issue being raised with his predecessors, it is still the case that the regulations do not include the baseline monitoring of methane in groundwater, especially as there are concerns about such contamination in the US and elsewhere? Surely it is important that we have that as part of the regulation to ensure confidence in the regulatory regime for shale gas.

Photo of Michael Fallon Michael Fallon The Minister of State, Department for Business, Innovation and Skills , Minister of State, Department of Energy and Climate Change, Minister of State for Portsmouth

There are no examples from the United States of hydraulic fracturing contaminating groundwater because, as the hon. Gentleman will appreciate, the fracturing takes place very much deeper than any groundwater levels. I am happy to look at the specific point that he mentions about baseline monitoring.