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Report (3rd Day)

Part of Infrastructure Bill [HL] – in the House of Lords at 5:15 pm on 10th November 2014.

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Photo of Lord Hollick Lord Hollick Chair, Economic Affairs Committee 5:15 pm, 10th November 2014

My Lords, I was chair of the Economic Affairs Committee of your Lordships’ House during the inquiry into shale gas and oil. The committee wanted to be fully satisfied that the regulatory regime was equal to the task of protecting people and the environment. We took extensive evidence from regulators, academics, local communities, NGOs and exploration companies. We concluded that the regulations and the mandatory industry guidelines gave the regulators all the powers needed to ensure that the environment and the health and welfare of local communities could be effectively protected. The report in 2012 by the Royal Society and the Royal Academy of Engineering, already referred to by the noble Lord, Lord Jenkin, came to exactly the same conclusion.

We heard from many witnesses that the current regulation of offshore and onshore gas and oil drilling in the UK is widely regarded as best in class. Four of the proposals in Amendment 113G are already covered by existing regulations or industry guidelines, and there is no need to gold-plate them and include them in the Bill. We on the committee endorsed the recommendation in Professor MacKay’s report that fugitive methane should be measured when shale gas extraction begins. The industry agreed to this. To impose a requirement to monitor over the previous 12-month period is quite unnecessary, and only extends an already far too long 16-month timetable to get permission to drill.

We also recommended in our report, as my noble friend has mentioned, that wellhead inspections should be carried out by independent inspectors. The Environment Agency and the Health and Safety Executive will indeed conduct job inspections but the well examiners will be employed by the companies. This was raised in the debate by the Minister last week, and she pointed out that the companies would provide these. One of the important things about regulation is that not only must it be independent but it must be seen to be independent. So why not ask the companies to foot the bill—if resources are a concern, and I suppose they are—for one of the agencies to carry out these independent inspections?

Our report identified that the tortuous and bureaucratic process to approve exploratory drilling is the major impediment to finding out whether or not the UK’s shale deposits are economically exploitable. It is regrettable that amendments were not tabled to address this serious problem, which has the merit of being supported by the facts and which would have commanded cross-party support. If passed, these amendments would add further complexity to an already devilishly complex and bureaucratic approval process, and will potentially extend the timetable by a further 12 months. Having lost the argument on the facts of the case, delay is now the main weapon of choice for those who oppose fracking. To add further delay to the exploration of shale gas would be a misstep.

Shale gas and shale oil could be a major boost to our economy; create jobs and preserve them; boost public and local finances; and halve emissions by replacing coal, which currently generates 40% of our electricity. For these reasons, I will not be supporting this amendment.