Shale Gas and Oil (EAC Report)

Baroness Worthington Excerpts

Tuesday 4th November 2014 Lords Chamber

[Baroness Worthington (Lab)]

My Lords, I add my congratulations to the noble Lord, Lord MacGregor, on the production of his last report for the committee and thank all noble Lords for their contribution to the debate this evening.

I want to inject a note of optimism. I do not often find myself agreeing with the noble Lord, Lord Lawson, but in this case I agree that we need to have less pessimism. We are moving along quite rapidly towards a new energy system. I may support the Minister when I say that this is not a simple problem. Moving away from the fossil-based economy that we are used to, where the externalities of the use of those fuels is largely borne by society, to a cleaner, more sustainable future is not simple. There is no silver bullet and no one technology that will deliver the answers—and we do not have a crystal ball, so we have to try to move forward in a diverse way that respects our need to keep costs low and to keep the security of supply strong. That is challenging, but we are making progress.

On shale gas, we have the vocal support of the two most senior politicians in the Government. They have made it very clear that they want to pursue it to find out exactly what resource we may be sitting on. Several noble Lords have rightly pointed out that there is great potential but we do not have very much information at the moment about the total recoverable resource and what it will cost.

Either it might be that the two most powerful men in politics just are not very good at their job—we could debate that—or it must be true that this is a complex issue. Not only energy in general but shale is complex. The noble Lord, Lord Tugendhat, pointed out that we have had gas revolutions in the past. We were fortunate enough to discover North Sea gas. In comparison to shale gas it was quite a simple process: not simple in engineering terms but simple politically, because it took place a large distance from the crowded island that we all share, and it was simply a case of drilling and then the gas was relatively easy to extract. I do not want to trivialise the effort, but in engineering terms it was doable, and in political terms very easy.

Shale is not quite that simple. We do see advances, and it is true that in the US they are learning by doing, and getting better at it. But the very nature of shale is that it is largely onshore, more visible, and it has some environmental implications. A number of noble Lords have pointed out that these have, perhaps, been overemphasised. Nevertheless there is often a grain of truth in many of the concerns, and it is true that the UK has a rich heritage of regulatory standards and a regulatory framework that we should be very proud of.

We will probably not be able to do what they have done in the US: we do not have the same geographic conditions of large open spaces with very few people in them; we do not have the same land ownership rules; and we have a world-class environmental regulatory system. That is not to say that fracking and shale gas cannot be developed in that context, but it is going to be different, and it is going to mean that we will be a bit slower to start, but when we do start, hopefully it will be more sustainable.

I do not want to pick up on all the comments that have been made about the various environmental impacts. Noble Lords will know that in the course of debating the Infrastructure Bill, our party has tabled amendments to encourage the Government to look again at whether we have covered all the bases in our environmental regulations. We will probably return to that issue on Report. The key thing for me is that we are relying on a fairly old regulatory framework. Old is perhaps a relative term but regulations were passed in 1996 that cover “Offshore Installations and Wells”. The title slightly gives it away; they were focused on the offshore industry. It might have been sensible for the Government to look again at those regulations and consider whether, in moving forward on fracking, we did not need a comprehensive review of the regulatory framework and to have had government time given to bringing in those regulations.

We have obviously seen some movement on the trespass issue—again, we will discuss that—but we have not seen enough consideration of some of the unique elements of fracking and shale gas. Those will require changes to the way that our regulatory system is currently conducted, not just to try to harmonise it and make it more efficient but to ensure that we have the absolute integrity of the environmental protection completely encapsulated.

One of the issues that we need to think about is fugitive emissions. A number of noble Lords have mentioned this. This is not to say that it will necessarily be a huge issue but, as we move from a fairly centralised system of extraction of energy resources to one which is quite distributed, we will need to have a careful and well resourced environmental regulatory framework to ensure that fugitive emissions are being properly monitored. One of the key recommendations from the report was that we put that monitoring in place. I think it was Professor MacKay who gave that evidence. The report recommended that it was taken on board that we should have a proper monitoring regime for emissions. It would be a shame if the detractors of shale gas were continually able to say, “Oh but it’s going to be worse than coal”, purely because we do not have the information. It would seem sensible to ensure that that monitoring is there, and that it is well resourced and developed in an independent manner.

I support a lot of what the noble Lord, Lord Shipley, said about the need for independence to build the public’s confidence that this is being done fairly, not in a way that compromises integrity because of a lack of independence. Again, that was a clear recommendation from the report. I would be very interested to see the Minister’s response to the recommendation that those inspecting the integrity of wells should be independent of the company that benefits from them.

This has been a fascinating debate. As I say, we can be reasonably optimistic. We in Europe have moved from a system of energy policy that was very focused on renewables and energy efficiency and, in the time that we have been focusing on those two areas, we have seen quite a lot of development. As much as we might want to cast our eyes westwards to America and see the great impact of shale gas over there, we also ought sometimes to look eastwards at some of the things that are happening on the European continent. There we have seen similarly game-changing technologies coming to market. Indeed, we are part of that with our offshore wind industry and other developments in the renewables sector. These show that we have not reached peak electricity—far from it, actually; we have an abundance of mechanisms for generating electrons now. That is a good thing and that diversity will be a huge strength for Europe.

There is no one-size-fits-all solution to the energy trilemma. We need to keep our options open. We were right to press Europe to allow us the flexibility to pursue different technologies; if Germany tries to do it one way and we try another, we will benefit from that diversity. As I say, while we do not have a crystal ball, the last couple of decades have seen big advances in people’s understanding of the different ways in which we can improve our security of supply and reduce carbon at the same time. We must always of course focus on keeping costs manageable and reducing them. This is the energy trilemma and that is what we are undertaking.

I feel amazingly privileged to be involved in this debate, which has been a very rich one. I look forward to hearing the Minister but the debate today is symptomatic of other debates that we need. We need to have a sensible, grown-up discussion that is evidence-based rather than getting too dogmatic about particular technologies.