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Debate on shale gas and fracking in the House of Lords

7th June 2014

With help from Theyworkforyou.com, we’ve included extracts from the House of Lords debate on 5th June about proposals in the Queen’s Speech to change the trespass laws to make it easier for oil and gas companies to drill on private land without permission.

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Latest Fracking Week in Westminster

Extract from the Queen’s Speech and 1st day’s debate – House of Commons  (4/6/14)

Ministerial Statement by Michael Fallon, Energy Minister (5/6/14)

Debate on the Finance Bill (5/6/14)

Lord Deighton (Conservative)
Shale gas has significant potential for boosting economic growth and competitiveness, and the Government are creating the most competitive tax regime in Europe to encourage its development, but more still needs to be done. The Government want to put in place the right regulatory framework to support a shale gas industry while ensuring that we protect the environment.

Lord Adonis (Labour)
Legislation on fracking is proposed in the Queen’s Speech which, the Government say, would put shale gas production in line with the coal industry, water and sewerage, all of which have access to underground land. We welcome that in principle, provided that communities are reassured about impacts on the environment, including contamination of the water table.

Lord MacGregor of Pulham Market (Conservative)
I particularly welcome the proposal in the Queen’s Speech to, “introduce a Bill to bolster investment in infrastructure and reform planning law to improve economic competitiveness”. In particular, the Bill will, “enhance the United Kingdom’s energy independence and security by opening up access to shale and geothermal sites and maximising North Sea resources”.

This measure was one of the proposals that the Economic Affairs Committee of this House recommended in its recent report, The Economic Impact on UK Energy Policy of Shale Gas and Oil. I believe that this is one of the most important reports the Economic Affairs Committee has published during my chairmanship of it. I ask the Minister to urge his colleagues to produce the government response in good time and well before the Summer Recess so that we can have a full debate on this issue as today I can outline only briefly some of the issues.

The committee was immensely impressed by the US experience over recent years in relation to shale gas and oil, which has transformed the American economy, lowered energy prices, produced substantial employment, caused a lot of the energy-intensive industries to consider going back to the United States and led it to export a great deal of coal to Europe, which is not the most environmentally beneficial form of energy. That American experience, which will not be repeated in full here, has been dramatic. Shale gas and oil could provide a huge opportunity for the UK, with lower energy prices, although not on the scale experienced in the United States, and greater energy security, which is particularly important in the context of what is happening in Ukraine. The development of shale gas and oil could retain energy-intensive industries in the UK and help to mitigate climate change as it is an effective carbon dioxide reduction measure. However, the problem is that progress is painfully slow. We are only just beginning to see applications to do exploratory drilling and we simply have no idea how much shale gas and oil can be produced in this country until we go ahead with exploratory drilling. We have not really started on the process. As the noble Lord, Lord Adonis, correctly pointed out, there are real risks of energy shortages and rising energy prices occurring in this country towards the end of this decade because of the reduction in coal-fired plants and the slowness of getting nuclear proposals through. Therefore, we urgently need to take full advantage now of the potential offered by shale gas and oil.

We identified the planning process as one of the main obstacles. We did not recommend that the regulatory environment should be weakened but we believe that the delays which arise in dealing with a multiplicity of agencies greatly inhibit companies that wish to exploit shale gas and oil. Therefore, streamlining is essential in that area. We examined a huge amount of scientific evidence, looked with great care at all the environmental and other objections, and concluded that all could be met, given our rigorous regulatory regimes. In short, shale gas and oil exploration is potentially a major opportunity for this country but we need to get on with it.

Lord McNally (Liberal Democrat)
I heard what the Minister said about the shale gas industry and the comments and observations from my noble friend Lord MacGregor. What I say now is only a personal observation, but I believe that if there is a region where fracking could be done safely and successfully it is west Lancashire, with its long association with the chemical industry, with British Nuclear Fuels and with offshore gas and wind. There is an industrial tradition on the west coast which could very quickly be revived. I was delighted to learn that the site of the old ICI works at Burn Naze, where my father worked for 47 years, is again a growth point for the manufacture of polymers and chemicals.

Baroness Noakes (Conservative)
Our energy policy is still a mess. We have the self-inflicted wounds of environmental policies that load costs onto British businesses and onto vulnerable consumers. We need some common sense on how much this country is prepared to pay for green luxuries. I endorse everything that my noble friend Lord MacGregor of Pulham Market said about the potential for shale to transform our economy, but dealing with underground access to shale resources in the Infrastructure Bill is but a small part of what the Government need to do to get this moving. Like my noble friend, I look forward to the government response to the report of the House of Lords Economic Affairs Committee on this.

There is also much work still to do on reducing regulatory burdens. There is only so much that we can do in the UK, so we will have to take the fight to Europe—and the sooner we get into serious negotiations over our membership of the EU and its terms the better.

Lord Jenkin of Roding (Conservative)
The gracious Speech foreshadowed the Infrastructure Bill, which had its First Reading this morning. As my noble friend Lord MacGregor made clear, it includes measures to ease the path for the development of shale gas and oil and geothermal energy. It is interesting that the consultation paper that has been issued covers both almost in parallel because they raise exactly the same issue of deep drilling. Shale gas involves horizontal drilling, which is part of the technology. A lot is known about this because of the consultation paper that has been issued. There has been quite a lot of consultation with stakeholders in recent months. I agree with my noble friend Lord MacGregor that this implements the recommendation that came from his Economic Affairs Committee. Like him, I hope we shall have a response to that very soon so that we can debate in the House that hugely important report. Suffice it to say that the report sets out in detail the very great economic benefit that will accrue to this country from the successful exploitation of this energy source. Of course it must be safe, and of course the environment must be protected, but the evidence that was given to that committee shows that, in fact, that is all entirely possible.

Why do we need this new provision? When I was reading law at university more years ago than I care to remember, I was taught that the common law of England provided that the ownership of land—I shall eschew the Latin, because I know it is out of order—roughly translated, carries ownership of the space up to the heavens and down to Hades. Of course, the minerals below that have long since been nationalised and therefore do not belong to the landowner, unlike in America where they still do. The right to use the space is still that of the owners. Below 300 metres—the figure in the consultation paper—it really can be of absolutely no practical use to the landowner at all. Yet some of the opponents of fracking have threatened to buy strips of land all around so that they can stop the exploitation of shale gas simply by saying, “Sorry, you cannot go through our land”. The Government have made it clear that this is of huge importance to the economy of this country and in helping Europe as a whole to become less dependent on imported sources of gas. I will warmly support the proposal in this Bill.

However, there seems to be a question of timing. The consultation was launched last month and is not due to end until August, in the long recess. Are we really going to debate this Bill and the clauses in it without knowing whether it will in fact be approved by the Government and without having seen the Government’s response to the report? I find this quite difficult. It would be helpful if something could be said about that when the Minister winds up.

The Bishop of St Albans
I recognise the importance of energy security, which will certainly be threatened in the coming years. However, the discussion about changing the law to allow companies to exploit gas reserves under privately owned land in return for only minimal compensation to landowners, even if the latter object, may not be the best way to achieve this end, especially if it is clear that profits are being taken out of that area and going somewhere else. Is this not another area where we need to think about introducing local agendas whereby communities can see that they will get tangible benefits from opening up the land and from the gas that is taken from it?

I am fully aware of the vital importance of energy security but have reservations about the wisdom of Her Majesty’s Government’s continuing overreliance on fossil fuels. We cannot afford to wait until we run out of fossil fuels before turning to alternative sources of energy. Indeed, we have more than enough fossil fuels remaining to do almost irreparable damage to our world. Rather, we must continue with serious sustained investment in research into and development of renewable energies to go along with the legislation on shale gas.

If the United Kingdom is to meet its commitment set out in the Climate Change Act of an 80% reduction in emissions from 1990 levels by 2050, growth in the renewable energy sector will be needed way beyond the current 15% share of the national electricity supply. I applaud the Government’s push for an EU energy and climate change package that would mean at least a 40% reduction in greenhouse gas emissions by 2030. To this end, the Government’s investment in renewable energy sources must match the growth in private sector investment, which has created more than 37,000 green jobs across the UK in the past five years.

Lord Northbrook (Conservative)
[I] was impressed by the Minister’s remarks on infrastructure projects with regard to planning, roads and shale gas.

Lord Teverson (Liberal Democrat)
In the past week, I think, the final figures for EU emissions for 2012 came out, and there are already provisional ones for 2013. The 2012 figures showed that European emissions had come down by 1.3% and were very close to the Kyoto target for the European Union of 20% from 1990. That target will be met soon, but there were two major exceptions in those figures. One of them was Germany, where emissions had gone up. The other, I regret to say, was the United Kingdom: our carbon emissions had gone up 4.5% and our overall greenhouse gas emissions by 3.5%. They are coming down in 2013 but not by that amount.

Why is that? It is because, despite the fantastic work this Government have done in delivering renewables, we have moved from a primarily gas-based system of electricity generation to one based on coal. Just over 40% of our electricity is now generated by coal. Those coal stations are expected to move out of production over the next decade, but I ask the Government to redouble their efforts. Regrettably, they did not do this completely in the Energy Act, but they should make sure that while the UK promotes shale and alternative gas, at the same time the old dirty technologies of coal generation disappear. That way, our emissions can come down substantially once again.

Baroness Jones of Moulsecoomb (Green)
Global agreements on climate change are wonderful —we really need them—but they come to absolutely nothing if the Governments who are actually setting the policies and spending the money do not understand what climate change means. Specifically, this fracking trespass Bill introduces a new right of corporate trespass for oil and gas companies and threatens home owners across Britain because it will allow companies to run shale gas pipelines under private land without seeking the consent of home owners. I understand that the Prime Minister said today in the other place, in response to a question from Caroline Lucas MP, that it will not be legal to frack against a property owner’s will. Perhaps the Minister could clarify that point and tell me whether the Prime Minister is speaking for the whole party.

The fracking trespass Bill would also decimate our environment and climate infrastructure. It will not only make local conditions very bad because of the pollution that it will cause and the lorry movements and so on, it will mean the development of a whole new fossil fuel industry that will make it impossible for us to keep to our climate change targets.

Lord Horam (Conservative)
I have to say that although I respect the point of view of the noble Baroness, Lady Jones, I fundamentally disagree with her on fracking. It seems to me that it will actually lead to greater energy security for this country, it will help with fuel poverty and it will help by creating a new industry—and we badly need to rebalance the economy. It will also help with climate change. One can argue about that, but I think that the dash for gas did help with climate change in the past and this will help in the future. Looking at the local situation in that rather beautiful part of the country, the Bowland area of Lancashire, it would do no more damage to the immediate aesthetic of the environment than do electric pylons and wind farms, to take two examples.

Therefore, I support my noble friend’s remarks in his opening speech and what the Government are doing on new measures to help fracking. I was glad to hear from the noble Lord, Lord Adonis, in his opening speech, that the Labour Party also supports this. It is profoundly in our national interest that the reserves underneath our feet should be exploited, whichever party is in power, frankly.

Viscount Trenchard (Conservative)
I strongly support the Government’s proposals to stimulate investment in shale gas projects included in the Infrastructure Bill. Shale gas can certainly provide an economic and relatively clean contribution to our energy mix. However, the best and ultimately most economic way to obtain energy security in the nick of time is to accelerate the development of new nuclear power stations. Hinkley Point is a start, but much more progress needs to be made soon with the other proposed projects.

Lord Flight (Conservative)
I also particularly welcomed in the gracious Speech the incentives for shale gas exploitation, the new collective defined contributions pension schemes and the proposals for streamlining planning approvals.

Lord Davies of Oldham (Labour)
The noble Lord, Lord Jenkin, missed no opportunity to emphasise the energy aspects of the debate today. He was following the noble Lord, Lord MacGregor, who had referred to the important report of the House of Lords committee. We agree that it is important that the issue of shale is discussed as fully and as early as possible. There cannot be gains in delay but there are gains in ensuring that we get it right and give reassurances in the legislation to local communities on the potential extraction of shale. However, it would be absurd not to recognise the importance of getting as much information before Parliament as quickly as we can. That is why I support those two noble Lords in their representations on the work of the committee and appreciated the emphasis which they both put on shale.

Baroness Kramer (Liberal Democrat)
There is a consultation at present on the Government’s proposals for underground access. I say to the noble Baroness, Lady Jones, that this concerns access below 300 metres. Many of the people who oppose the headline that they see on this measure have no idea that we are talking about levels below 300 metres. It does not apply to surface access. It is very much to the credit of this country that we have a very tough regime of approval for the kind of exploration that would be necessary for shale oil and gas extraction. They are internationally recognised and there is no attempt to break down those protections, which are essential for the confidence of the community.

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