Several shale gas wells in production would be seen as success by the government, according to recently released notes of a round-table meeting between the energy minister and the industry.
Once the first well was in production, the notes said, the government believed “we will be in a better position”.
And according to the notes, ministers intended to streamline regulation for shale gas and create a “UK model” for shale extraction that can be exported around the world.
The meeting, called by Claire Perry, was at lunchtime on 21 May 2018. Later that day, the minister gave evidence to a committee of MPs on proposed changes to the planning rules for shale gas developments. Four days earlier, these changes had been announced in Written Ministerial Statements. They proposed treating non-fracking shale gas proposals as permitted development, avoiding the need for planning applications, and classifying major shale gas production schemes as nationally-significant infrastructure projects (NSIP), to be decided by a Secretary of State.
DrillOrDrop reported in August that most of the notes of the meeting released under a Freedom of Information request had been redacted by a government department “in the public interest” or because they contained confidential information. The list of attendees was also not released.
But following an internal review of that decision, we now know more about what was discussed and which companies and organisations attended the meeting. Some material remains redacted, partly because it referred to policy “that is intended for later publication”. This is likely to refer to the proposed planning changes, which at this point were not being formally consulted on. Less redacted notes of Claire Perry meeting with shale industry
The FOI request was made by Richard Bales, who lives in Ryedale, where Third Energy had been planning to frack at Kirby Misperton.
He said the latest version of the notes “reveal an appalling lack of preparedness on the part of Government” and based on the contents he predicted “a chaotic roll-out of an industry that will mimic the very worst of the US experience”. He said “the industry vultures around that table must have been quietly licking their lips.” (See more detail in section headed “Appalling lack of preparedness”)
Who was there?
The internal review said the guest list does not exist for the meeting but the Department of Business, Energy and Industrial Strategy said it has reconstructed one from the organisations and companies that attended.
The oil and gas companies present were: Aurora, BP, Cuadrilla, IGas, Ineos, Third Energy and the industry representative body UK Onshore Oil and Gas.
Service companies: Ground Gas Solutions, Marriott Drilling, Onshore Energy Service Group, and the Zetland Group.
Investors and fund managers: Riverstone (a major partner in Cuadrilla), Kerogen (investor in IGas), Global Natural Resource Investments (formerly part of Barclays which invested in Third Energy), KKR, JP Morgan.
Other industries and organisations: Chemical Industries Association and the chemical company SABIC, Coalfield Regeneration Trust, Engineering Employers’ Federation, GMB.
The previous release of the meeting notes redacted, in the public interest, this section of notes from Claire Perry’s presentation:
“Hoping that we can be successful and create a ‘UK model’ for Shale extraction which can be exported around the world”.
It also redacted the following question and answer:
Question: “What does the Minister see as ‘success’?
Answer: “Several wells in production; adequate support from government, industry and regulators resulting in confirmation that the system is working; working in partnership to make the case for Shale Gas and have line of sight to commerciality”.
According to the notes, the attendees welcomed the WMS. But an unnamed attendee wanted to ensure that:
“the regulation is appropriate as the industry is a difficult one from a commercial perspective”.
The response from either the minister or senior officials was:
“Be clear that the intention is to streamline regulation and ensure that there is a lead person available to help navigate the regulation. We will consult on the case for a standalone regulator. Also, we need to make a virtue of our good regulators as this can help us export expertise abroad.”
In her presentation, the minister also noted “that the current arrangement with a ‘virtual regulator’ is working well.”
An attendee stressed that:
“planning is the problem and we need to work out how the system has been used by those blocking progress and understand why it takes so long. Also, need to educate people that we need more than just renewable energy at the moment”.
The response from the Minister or officials hinted that decisions could be taken out of local authority control:
“Believes the MHCLG [Ministry of Housing, Communities and Local Government] are doing a good job and used the example of the speed with which Hinkley Point C was passed through planning under NSIP as an example of how things can be accelerated. Stressed that diversity of our own UK energy sources is a virtue as move towards a lower carbon economy.”
A fully-redacted question may have referred to the proposals for permitted development or the NSIP regime. The minister or officials were said to have responded:
“The challenge is recognised and there is no single solution. [sentence redacted because it refers to material in course of completion] Facilitation via the Shale Brokerage, supported by robust decision making and up-to-date guidance will help. View that once first well is in production and the case can be made based on live examples, we will be in a better position.”
The issue of UK jobs was raised several times during the meeting. But there were no detailed ideas from on the government or industry on how to ensure jobs stayed in the UK or that a skills gap was filled. Ms Perry or her officials said in response to one question on jobs to UK companies:
“lt is not only that a growth in the industry can create jobs, but also the location of those jobs which is important.”
On a call for more money to build skills ahead of the industry’s arrival in former coal producing areas, the minister or officials responded:
“Take offline to understand what more can be done. Also, demonstrates that there needs to be support across industry and other bodies for the growth of the industry to help re-generate areas where it can replace older, diminished industries.”
According to the notes, Campbell Keir, from the Department of International Trade, spoke about:
“the requirement to try and show that Shale Gas is a robust and sustainable industry – used the example of UK wind to demonstrate the power of foreign direct investment and the ability for the UK to become an export of skills”.
According to the notes, the attendees welcomed the “renewed focus of the government and the Minister on this topic”. But the minister was told:
“communication and engagement has not been explicit enough to date, What will change?”
The minister and officials were said to have responded:
“Sequence is important and now that official Whitehall statements have been made we can start the process of working together to better communicate the benefits of carefully and safely growing the industry. lndeed, the case for Gas in general will be key to this.”
In another question, the minister was told that “facts about the debate have been missing”.
The minister or officials responded:
“It will not be appropriate if we allow UK energy policy to be made on the basis of those groups which shout the loudest and that evidence must be the basis.”
“Appalling lack of preparedness”
Richard Bales, who made the initial FOI request and asked for the internal review, told DrillOrDrop today:
“Whichever BEIS official that redacted the original version must have done so out of shame of association, as these documents now reveal an appalling lack of preparedness on the part of Government and an astonishing naivete at senior level. The industry vultures around that table must have been quietly licking their lips.
“The notes show that even the industry doesn’t know where UK jobs will come from, that we have a Minister who is prepared to discuss regulatory control and commerciality in the same breath, and that PD and NSIP proposals are being presented to the operators as a foregone conclusion. In combination, these factors would lead towards a chaotic roll-out of an industry that will mimic the very worst of the US experience.
“A few points of discussion remain redacted as they are claimed to reference policy that is intended for later publication’ and cannot be released piecemeal. The fact that the Minister was quite prepared to release this privileged information to a small group with clear vested interests raises some interesting questions that should perhaps be pursued further.”