My Lords, shale could promote the opportunity of a new, domestic source of gas which adds to our energy security. Since 2000, UK gas production has decreased and import dependency has increased. This Government have been clear that shale development must be safe and environmentally sound. As our response to the Committee on Climate Change report states, we believe that each of the three tests for shale gas development will be met.
I am most grateful to the Minister for that Answer. Will she explain to the House how the Government intend to meet those tests and, in particular, satisfy the Committee on Climate Change regarding greenhouse gas emissions, which would increase in intensity with the extraction of such a fossil fuel on a large, significant scale? Also, how do we intend to meet our carbon reporting targets in those circumstances?
We have made it clear that we will take steps to meet our carbon targets, particularly by 2050, and we agreed on the fifth carbon budget before the Summer Recess. In relation to the tests, the first test is met by our regulatory system; tests 2 and 3 will be met by the commitments we will be making in the carbon budgets.
My Lords, does the Minister accept that one of the main considerations with regard to fracking is the geological stability of the land, particularly in those areas where there has been coal mining and the seepage of water can go many miles? Does she accept that, in these circumstances, any decision on fracking should be taken as locally as possible so that local opinions are taken into account?
I agree with the noble Lord that we need to be careful. I also agree that the permission should be dealt with by the relevant local planning authority. However, we are fortunate in having strong regulators. The Environment Agency focuses particularly on water and, of course, the Oil and Gas Authority has operated for many years and has very strong regulations in relation to seismic activity.
My Lords, gas is a fossil fuel wherever it comes from. Given that the Government are going to miss our legally binding targets on reductions in carbon emissions, would it not be better altogether if the Government simply banned fracking and got on with delivering reductions in emissions rather than increases?
My Lords, in the Forest of Dean, to my sorrow, licences have been granted despite the opposition of all members of the community. There is great concern that the complex hydrology, local subsidence and faulting issues, as well as the shallowness of the carboniferous shales and coal-bed which the licence holder intends to explore, will be particularly prone to ground-water contamination through fugitive methane emissions and the chemicals used in the fracking and drilling process. Given that methane is 80 times more significant as a greenhouse gas than carbon dioxide, what level of fugitive emissions —that is to say, leakage—would the Government define as an acceptable level?
My Lords, in fact there is mounting evidence that the methane leaks associated with fracking are far dirtier than those associated with energy derived from coal. Therefore, I do not see how it is possible for us to have clean energy and fulfil all our commitments if we carry on fracking. Is it not time that we followed the devolved countries of Scotland and Wales and abandoned fracking in England?
I think the key thing is to have a proper regulatory system of controls. We have learned from US experience in setting up our system. We are also focused on all the Kyoto basket of gases, which includes methane. I assure the noble Baroness that that is an important part of our thinking. But I return to my first point, which is that we need a mix of energy in the transition to 2050.
I think this is a matter for the experts concerned in the particular circumstances. Our regulatory system is site specific. You go to the particular site and work it out. Clearly, you want to minimise the emissions of all six of the Kyoto basket of gases. I think that would be an agreed objective.
My Lords, is that why the Government do not have a view on what is an acceptable degree of leakage, or are they perhaps consulting the experts? If so, will the Minister share with us what advice has been received on what would be an acceptable level of leakage?
My Lords, I declare an interest as a Lancashire resident. Would the Minister be prepared to inform the House, in writing if necessary, how many of the controls, considerations, regulations and judgments will be made by those external to the industry concerned and how many will be made by those involved in gaining profit, however low they choose to set the safety targets? My recollection is that the Government did not want all the regulation to be external, and that they wanted the industry itself to tackle this. Some of us are concerned about that.
I am the new Energy Minister, but I have been struck by the variety of independent outside agencies that are involved in this site-specific process. There can also be benefit to the community, both through the community benefit package, which involves an industry contribution, as the noble Baroness is suggesting, and from the shale wealth fund, on which we are consulting, which will allow some of the tax revenues to be shared with individual members of the community.