Shale Gas and Oil (EAC Report) — Motion to Take Note

Part of the debate – in the House of Lords at 6:24 pm on 4th November 2014.

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Photo of Baroness Blackstone Baroness Blackstone Labour 6:24 pm, 4th November 2014

My Lords, I will speak briefly to support the noble Lord, Lord MacGregor, who so ably chaired the Economic Affairs Committee during its consideration of the report.

The evidence we heard convinced us that the Government should create opportunities for shale development and persuade the public of its desirability. We were convinced for five main reasons. A thriving shale gas industry will contribute to our commitment to reduce our carbon imprint and to mitigating the effects of climate change. The environmental impact of fracking will not be damaging in the way it has sometimes been portrayed—most of my speech will be on that. Moving towards greater self-sufficiency and less dependence on importing our energy supply will have advantages for energy security, and for our balance of payments and tax revenues. New jobs will be created, a substantial proportion of them outside London and the south-east. The longer-term benefits of developing and retaining energy-intensive industries was also something that we thought important.

I will expand on the first of those reasons, the impact on climate change. I endorse what was said by my noble friend Lord Hollick. While the case for renewables is strong, they are expensive and they are a long-term solution. However, the exploration and exploitation of the extensive reserves of shale gas in the UK should be seen not as an alternative to renewables but as an additional source of energy that is much superior to burning coal. The carbon footprint of shale gas extraction is about half that of coal. That is a huge benefit that it would be irresponsible to ignore.

I will now focus on the environment, mainly because that is the issue about which there has been some public disquiet, as well as quite a lot of misinformation. As the noble Lord, Lord Shipley, said, in considering the issues we can learn from the experience of the US, although it is important to recognise that there are differences, not least in the location of US shale in the wide-open spaces of relatively remote rural areas.

The committee took this issue very seriously and received extensive scientific evidence from a variety of government and independent sources, as has been said. We were convinced that the potential long-term benefits of shale gas outweigh any potential environmental damage in a well regulated system. It was therefore somewhat disappointing to read the strident reaction to the report from a couple of the green environmental groups, which seem unwilling to adapt their views in the light of the evidence.

On the claim that ground-water will be polluted by the chemicals used in fracking fluid by operators, we were convinced that there is no reason why that should happen in the UK. The regulators here do not allow the use of hazardous chemicals. The companies concerned have clearly set out their intentions to avoid their use. As long as the regulators insist on enforcing the prohibition, there is no risk to ground-water from fracking fluid.

On the escape of methane into ground-water, leading to flames coming out of taps when they are turned on, we accepted evidence from the Royal Society and the Royal Academy of Engineering. The risk of methane migrating up natural faults in aquifers is hard to imagine. However, it is important that wells are properly constructed and well sealed. The Environment Agency is well aware of the need to ensure this. Nor did the committee accept the claims of the Frack Free Balcombe

Residents Association that wastewater treatment from fracking would not be safe. We were convinced that the low percentage of wastewater from fracking—estimated to be about 3%—could be handled by the tough regulatory system already in place for mining.

The claim that water shortages would arise as a result of shale gas development has also been greatly exaggerated. The demand for water from the operators will be similar to that from other industrial users. Moreover, technological advances will allow the use of saline water and recycling of flow-back water, reducing the need for fresh water. It is inconceivable that the regulators would allow levels of water consumption that would threaten supply to households.

Perhaps the most serious misinformation is about the threat of earthquakes from fracking. The scientific evidence is clear that the likelihood of tremors from fracking is negligible and that their magnitude is likely to be so small as to be—I repeat the quotation cited by the noble Lord, Lord Lawson—

“no worse than a heavy lorry driving past the house”,

in the words of one of the scientists who gave evidence to the committee.

It is, however, important that any risk of seismic activity should be mitigated by strong regulatory controls. All the evidence that we heard about the stringent measures that are in place was compelling. We took evidence from the Health and Safety Executive and others about air pollution, which might have an effect on public health. Again, the conclusion of a review by Public Health England of all the evidence on the risk to public health of both air emissions and radon levels in people’s homes was convincing. Once again, with proper regulation the effects would be very small.

This brings me to the last of the possible environmental effects: traffic and noise pollution. Here, the committee accepted that there would be some disruption to local communities from increased traffic, as with any industrial activity. Two things follow from this. First, the planning procedures in local authorities and the environmental permit provided by the environmental regulators must mitigate these effects through requirements on noise levels. Secondly, the operators must work with local communities to provide compensation for the disruption through the industry’s community benefit scheme, to which they are already committed and to which they must be held.

I have argued that the environmental disadvantages of fracking have been exaggerated, leading to unnecessary public disquiet. It is important that the Government tackle these unwarranted fears, and they need to do so along with the regulators and the industry.

I conclude by saying that it is vital that we have a strong regulatory system in place. Everything that I have said about the environment requires this. This may mean that in a few areas the existing environmental regulations and voluntary measures from industry need some strengthening, if only to reassure the public. The Environment Agency will in any case have to take on additional work to regulate the industry. Will the Minister reassure us that it will have adequate resources to do so, and will the principle of full cost recovery from the industry be applied?

As other speakers have said, we also need an efficient and well run system, as well as one which is rigorous and thorough. As the noble Lord, Lord MacGregor, said at the beginning, we were not convinced that the current system is sufficiently clear. There is a lack of transparency and it is overcomplex. I am sure that the Minister will want to respond to these concerns when she replies.