I hope that my noble friend will encourage him to read my comments.
Moving on to more substantive issues, we had actually very little discussion of shale gas. My noble friend Lord Teverson spoke about geothermal extraction. I think that is rather positive. There is clearly an appetite in this House to ensure that this is a successful project. I know that many people are waiting for the detail, and that is exactly right. I would encourage anyone with an interest in this area to look at the consultation that is under way until 15 August because they may wish to participate in it as well as use it to inform themselves of what may happen, since the Government will not be making their final decisions until that consultation is complete and its implications are understood. We do not want to prejudge.
My noble friend Lord Teverson asked for more information on geothermal. I suspect that he knows this area far better than I do, but I remind him that geothermal power projects are eligible for support through the renewables obligation, and that under the contracts for difference the department has set a final strike price for geothermal power of £145 per megawatt hour until 2016-17 and £140 per megawatt hour thereafter. Indeed, there are a lot of measures to exploit geothermal, of which I think everyone recognises the potential.
In the same vein, my noble friend Lord Purvis mentioned the Wood review. We recognise that the oil and gas industry in the UK is of national importance and will be a vital part of the energy mix. While investment levels in the UK continental shelf are rising and near-term prospects are strong, there are new challenges for exploration and production. The environment is, frankly, very different from the circumstances when production peaked approximately 15 years ago. We will be responding very shortly to the Wood review. Details of how this will be carried
forward will be available in Committee—I think my noble friend might have thought it would be later but it will be in Committee.
On zero-carbon homes, my noble friend Lord Teverson constantly reminds us that as well as talking about the supply side for energy we must focus on the demand side. This part of the Bill is absolutely critical in this area, and we will see those clauses before the Summer Recess. We recognise, as I suspect all noble Lords did in their speeches, that making all homes zero-carbon “on site” is sometimes not physically feasible or cost-effective for housebuilders. There are technical limits. Of course, we will be exploring the whole issue of allowable solutions. My noble friend Lord Teverson said he was concerned that we were focusing on potential exemptions for small sites, but we must recognise that small housebuilders face a very different economic framework from that faced by the big housebuilders, lacking economies of scale. But it is an important industry throughout the UK and we rely on it heavily for housebuilding in this country, and we must always keep in mind that the industry needs to be successful.
On roads reform, there was a very wide range of questions. A number of noble Lords, including the noble Lords, Lord Whitty and Lord Adonis, and my noble friend Lord Bradshaw—and there may have been others—talked about the importance of ensuring that reforms to the Highways Agency were seen within the context of spending on local authority roads, particularly the maintenance of those roads. It is obviously a very important point. Your Lordships will know that the Government are investing more than £6 billion in this Parliament—£12 billion in the next—on highways maintenance for strategic and local roads, enough to resurface 80% of the national road network and fill 19 million potholes a year on local roads. I also want to make it clear that there are benefits from that integration between the strategic highways network and local roads that come from our proposals for changes to the Highways Agency. The licence agreement for the reformed Highways Agency will include a duty to co-operate that will foster and improve partnership working with local authorities.
The new company will be a traffic authority and have the same legal responsibilities to ensure that traffic runs smoothly on its own network and the local network. These changes will strengthen the interplay between local authorities and the Highways Agency.