Shale Gas (Lancashire) — [Mr Joe Benton in the Chair]

Part of the debate – in Westminster Hall at 3:26 pm on 16th July 2013.

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Photo of Tom Greatrex Tom Greatrex Shadow Minister (Energy) 3:26 pm, 16th July 2013

It is a pleasure to serve under your chairmanship this afternoon, Mr Benton. I congratulate Mark Menzies on obtaining the debate. It is not really a surprise to many of us that following the announcements that formed part of the spending review—or rather announcements of announcements, as I anticipate more detail soon—there is heightened interest in the broad subject of shale gas and fracking, with two debates this week.

Some hon. Members who will take part in Thursday’s debate are not here today, and I hope that they will read this debate before then. What has been good about it so far is the degree of thought and rationality that has been applied to wider issues of community benefit, and not just the specifics. Those thoughts have come, not surprisingly, from Members of Parliament from all parties in the affected area; they have the right and responsibility to speak up for their constituents. As many have intimated, even if they have not said so explicitly, we do not yet really know what we are dealing with. We can know only after some exploration, when we find out what is being extracted and what will be got out of the ground. We can then make further judgments; but we can get to that stage only if there is public confidence and acceptance.

Dan Byles referred to a social contract—I am pleased to hear he is not a socialist; that gave me some comfort. However, the idea of a social contract is vital. The technology is not new, but an existing technology is being given a new or different application, and it is not surprising that there is anxiety and concern about the impact. That is not least because people have seen reports and films about the experience in other parts of the world, notably the USA. It is right for Government and the appropriate authorities to take those things seriously; because confidence is necessary. That is why the hon. Member for Fylde was right to begin his remarks by talking about regulation. I hope that he does not mind my saying that he was right to point out that the issue is not just the robustness of the regulation; it is also the comprehensiveness of monitoring. Having all the right regulations does not necessarily guarantee that what should happen does happen. That is not to cast aspersions on any individuals or companies that may be involved in the future: it is a question of public confidence.

The reality is that for a number of months, following the cease in activity after the earthquake, or earth tremors, that my hon. Friend Mr Marsden referred to, many of us were waiting for the Government response to those issues. Despite the comments of some hon. Members—who are not here today but who have an interest in the area—who thought that that it was a dereliction of duty for the Government to have that pause on activity, I think it was exactly the right thing to do in order to assess properly what was happening. I take the geological survey published a couple of weeks ago as an aspect of that evidence base that needs to be assessed, but it only tells us what the theoretical resource is and not what is recoverable.

We had a debate in Westminster Hall on the Energy and Climate Change Committee’s initial report into shale gas, which the hon. Member for Fylde was not able to take part in at that time, as he was a Parliamentary Private Secretary to the then energy Minister, Charles Hendry. However, I seem to recall that John Pugh and Eric Ollerenshaw, who have spoken today, were present and took part. Since then, a lot has happened and things have moved on, but in March last year, we set out a number of conditions, from the Opposition perspective, that we thought needed to be in place in relation to regulation. I am sure that we will delve into these matters much more on Thursday, but I want to highlight what we suggested those conditions should be, because they speak to the wider point about the way in which the whole issue continues to develop.

We said that the chemicals used must be restricted to those that are proven to be non-hazardous with mandated public disclosure of all the chemicals to be used, including their toxicity levels. The integrity of each well must be assured to prevent water contamination, with independent assessment of the well design, the cement bond between the casing and well bore, in addition to the composition of the casing to determine its ability to resist corrosion. Seismic monitoring should be put in place with a traffic-light system, to which the hon. Member for Fylde referred earlier, as has been the case in the Netherlands and Germany. The level of methane in groundwater should also be assessed prior to any drilling, because a criticism that has been made a number of times relates to potential contamination. Sometimes it goes further, and some people claim contamination of groundwater from methane, when, as we are all aware, methane can occur naturally in groundwater. Unless there is initial monitoring of it as a baseline study, we cannot tell whether anything untoward has happened. We said—the hon. Member for Fylde also made this point—that all potential shale exploration should be subject to an environmental impact assessment, given that previously, smaller applications did not necessarily need to be. We also said that we believe the monitoring should take place over a 12-month period to allow sufficient time to gather the evidence required to make an informed decision to proceed with exploration.

I am pleased that late last year, the Government broadly accepted, or came up with, a very similar set of conditions. Those conditions are comprehensive, although there are still some gaps in regulation that the Government need to fill, which I will come on to later in the week. But, as others have said, the regulation needs to be robust, and I am sure that that is exactly the intention of both the Minister and the Department. I repeat the point about language, and using language that suggests, even if it is not the intent, that the regulation will be streamlined—which can mean a number of different things to a number of different people—is not necessarily the best choice of language in this regard.

I move on to community benefits, on which some important points have been made so far this afternoon. I take a broadly similar position to the hon. Member for Southport. When making the case, there are people who have legitimate concerns about a number of areas that need to be addressed, while some are against shale exploration and have a principled, ideological position. It is fair enough for people to take that position, but there is a need to separate those ideological objections from legitimate environmental concerns, and that is exactly what the regulation needs to do.

In terms of community benefits, the Government have acted on onshore wind, and, given the ongoing discussions, I am sure that we will get more on community benefits in relation to nuclear in the near future. We have had a broad acceptance that there is a degree of disruption, that there is a need for that to be recognised, and that there should be some community benefit and support. However, it is not as straightforward as it initially sounds. My hon. Friend the Member for Blackpool South made the point about what local impact is, how that is best defined, and where community benefits are. The Minister is well aware of the issue. I read a comment from him that must have been made at the time of the announcement; he was talking about what might impact on a particular community, but if that community uses a swimming pool that needs to be rebuilt in an adjacent town, how can that line best be drawn? We really need to get into the detail of that over the next period, because there are potentially significant financial benefits, quite apart from the impacts that others have discussed in terms of jobs and economic activity.

I want to reiterate a point that has been made. I have, in front of me, documentation from the United Kingdom Onshore Operators Group, when it put out its community engagement charter. The point about whether it is a wellhead or a pad is important—the language used by the UKOOG refers to it being per well site. That language in itself is slightly ambiguous, in terms of it being a well site, as opposed to a wellhead. Will the Minister try to clarify that important point?

On the wider point about community benefits, we know that in relation to the foreshore, the Crown Estate has established a system of community benefits. Not a huge amount is flowing into that fund at the moment, but it will in future in relation to offshore activity. The fund is effectively administered by the national lottery and it is appropriate for a number of community bodies, as well as local authorities, to apply. Will the Minister say more about consideration of that type of model or of that as part of the model, as opposed to something being run by an industry group?

There is a wider point in relation to Shetland, which the hon. Member for Lancaster and Fleetwood referred to. In one of my previous lives, I was a local government officer in Scotland. It always used to gall us that, every year, when the 32 local authorities in Scotland got their audit reports, Shetland got the worst one in terms of sustainability of funding, but it was okay, because it has that huge amount of money there. In fact, with what is happening west of Shetland, it probably has quite a lot to be able to rely on well into the future. However, there is a point about long-term sustainability as well, which I think needs to be reflected in the wider community benefit picture. The Minister is well aware of the issue, and he asked how we stop funds being swallowed up by the local authority social services budget—I think that was what he used as an example of a local authority budget that is always under pressure, where there is the temptation to plug the gap, if there is additional revenue. However, this really needs to be something additional. We do not know the scale yet, as the hon. Members from Lancashire have made clear in their contributions.

I shall finish by reiterating a point that has been made about regulations. Regulations need public confidence and wide acceptance, and the same goes for the community benefits package and arrangements. Communities need confidence in them and they need to know that they will be appropriately and fairly dispersed and applied. They need to see that the benefits are there for them to use in recompense—although not formally in recompense—for the disruption there may be during the activity that may or may not happen in Lancashire or elsewhere in the years ahead.