My Lords, I shall speak also to the other amendments in this group.
There is a clear and pressing need to ensure that this legislation is absolutely right. Shale gas is an exciting new energy resource for the UK, with the potential to provide greater energy security, growth and jobs, alongside playing an important role in the transition to a low-carbon economy. Unlocking the shale industry is too big an opportunity to pass up. We all agree that it must be done safely and sustainably, but we cannot throw away the opportunity to create thousands of jobs and economic growth for communities across Britain.
The Government’s position comes from careful consultation of relevant experts and draws on many authoritative reports from the US. More specifically, it
is based on reports by the Royal Society and the Royal Academy of Engineering, and Public Health England, which have considered a wide range of evidence and looked at the UK regulatory system. Their advice has outlined the risks and concluded:
“The health, safety and environmental risks associated with hydraulic fracturing … as a means to extract shale gas can be managed effectively in the UK as long as operational best practices are implemented and enforced”.
Following exhaustive discussions in this House and the other place, we have been considering the implementation and enforcement of operational best practices in the UK, which is why we accepted Amendment 21 during Report stage in the other place. We did so in order to show our acceptance of the intent of the 13 policy elements it sets out, but noble Lords—in particular, those with a legal background—will appreciate that, as currently drafted, the amendment cannot be included in the Bill. Although the courts would attempt to interpret the provisions, Amendment 21 is not viable as law and simply would not work in practice. Amendment 21 as currently drafted would have been wrong to accept, so we have been working hard to ensure that its spirit is maintained.
The government amendments in lieu are designed to ensure that the regulations we seek to introduce deliver the intended outcomes and support the growth of the shale industry while reassuring local communities that this will be done in a safe and responsible manner. They also ensure clarity for all interested parties by proposing clauses that are capable of being interpreted and enforceable.
Regarding the scope of our amendments, they will apply to hydraulic fracturing, which will be defined in UK law. Geothermal operations will be excluded, as the amendments are being taken forward through the petroleum licence, for which there is no geothermal equivalent. Conventional oil and gas well stimulation techniques will also be excluded—something that noble Lords will agree makes perfect sense, as these have been used for decades onshore.
The territorial extent of the amendments will be limited to England and Wales. In other words, Scotland will be excluded from the requirements of the new commitments. Noble Lords will be aware that, as a result of the Smith commission’s recommendations and the Command Paper published, it is planned that in the next Parliament responsibility for mineral access rights for underground onshore extraction of oil and gas will be devolved to the Scottish Parliament.
I now turn to the commitments themselves. First, our amendments mean that the Secretary of State will not issue a well consent, something that is required by an onshore licence for England or Wales, unless it prohibits associated hydraulic fracturing from taking place in land at a depth of less than 1,000 metres. The right-of-use provisions will be left unchanged at 300 metres. In land at a depth of 1,000 metres or more, hydraulic fracturing will not take place if the licensee does not have the Secretary of State’s consent for it to take place—something I will henceforth refer to as a hydraulic fracturing consent. For the hydraulic fracturing consent to be issued, an application for it has to be made by, or on behalf of, the licensee. Where an application is
made, the Secretary of State will only grant consent if he is satisfied that a number of conditions have been met.
Some of these conditions relate to the planning systems in England and Wales. In particular, the Secretary of State will need to be satisfied that the environmental impact of the development has been taken into account by the relevant planning authority. He will also need to be satisfied that the relevant planning authority has taken into account, where material, the cumulative impact of the development proposed and any other development involving hydraulic fracturing to obtain oil or gas. He must be satisfied that the relevant planning authority has considered whether to impose a restoration condition in relation to the development and that the relevant water companies have been consulted before any planning permission is granted.
Similarly, a well cannot be drilled, and associated hydraulic fracturing cannot take place, within protected areas. The precise definition of protected areas will be decided at a later stage, as our clauses put a duty on the Secretary of State to bring forward secondary legislation to be laid before and approved by a resolution of both this House and the other place no later than the end of July this year. We must be very careful not to put in place restrictions in areas that do not achieve the intended aim of the condition or that go beyond it and needlessly damage the potential development of the shale industry. In order to satisfy himself that the conditions relating to planning have been met, the Secretary of State may rely on notices given by the local planning authority. A notice, which, in practice, means specifically that the process of an environmental impact assessment has to have been carried out, would be sufficient to satisfy the Secretary of State that the environmental impact had been taken into account.
Similarly, notices from the relevant local planning authority confirming that the cumulative effects of permitted developments have been taken into account where material, that it has considered whether to impose a restoration condition, and that local water companies have been consulted before a decision to grant the relevant planning permission is taken, would allow the Secretary of State to be satisfied that the relevant conditions have been met. It would also be sufficient to receive a notice indicating that the area in respect of which the planning permission has been granted does not include any land which is within protected areas, once these have been clearly defined. I note that the absence of these documents does not necessarily prevent the Secretary of State satisfying himself that the conditions have been met. This is to ensure that if, for example, the kind of notice listed is not available, the Secretary of State could grant hydraulic fracturing consent provided he is satisfied that the conditions listed in the clause have been met. I should stress that it is not possible for the Secretary of State to grant hydraulic fracturing consent if these conditions have not been met.
Other conditions that would need to be met concern the environmental permitting regimes in England and Wales. Consent will not be granted unless the level of methane in groundwater has been monitored 12 months before hydraulic fracturing begins. Arrangements have
also to be made for monitoring emissions of methane into the air for the period of the environmental permit, and for the monitoring results to be published. The substances used, or expected to be used, in associated hydraulic fracturing have to be approved by the relevant environmental regulator .
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In order to satisfy himself that these environmental conditions have been met, the Secretary of State may rely on permits granted by the relevant environmental regulator. These environmental permits must contain conditions requiring compliance with a waste management plan providing for the monitoring of methane in groundwater for a 12-month period prior to hydraulic fracturing, and of methane emissions for the period of the environmental permit. The permit will also need to contain a condition requiring approval of substances used in associated hydraulic fracturing by the environmental regulator. I note that the absence of these permits does not prevent the Secretary of State from satisfying himself that the conditions have been met. Again, this is to ensure that the Secretary of State could be able to grant hydraulic fracturing consent if satisfied that the conditions listed in the clause had been met.
With regard to the environmental permitting regime, hydraulic fracturing consent cannot be granted if operations are to take place within protected groundwater source areas. For the same reasons as outlined above, the precise definition of protected groundwater source areas will be specified in secondary legislation at a later stage. Our clauses put a duty on the Secretary of State to define protected groundwater source areas in secondary legislation to be laid in draft before and approved by a resolution of both Houses by no later than the end of July this year. Once this has happened, the Secretary of State may satisfy himself that this condition has been met through the receipt of a decision document given by the relevant environmental regulator, in connection with an environmental permit stating that hydraulic fracturing will not take place within these areas.
The three final conditions that need to be fulfilled before hydraulic fracturing consent is given concern notification, well inspections and community benefit schemes. On the first, before granting a hydraulic fracturing consent, the Secretary of State will need to be satisfied that the public were given notice of the application for the relevant planning permission. The Secretary of State will look to the relevant planning authority to confirm that the notification requirements in respect of the relevant planning permission have been met. It is not feasible to require separate notifications for each individual resident as there would be no way for the Secretary of State to confirm that an operator had fulfilled this condition. If the Secretary of State were required to satisfy himself of such a condition despite being unable to obtain the evidence that he would need in order to do so, it would leave every hydraulic fracturing consent issued by the Secretary of State wide open to legal challenge by third parties.
On the second condition, appropriate arrangements have to have been made for independent inspections of the integrity of the relevant well. The Secretary of
State may satisfy himself that this has happened if the Health and Safety Executive provides him with a certificate stating that it has received a well notification and the necessary information about the well, and that the HSE itself has visited the site of the relevant well.
Lastly, a scheme would have to be in place to provide financial or other benefit for the local area before the Secretary of State granted a hydraulic fracturing consent. This puts in legislation the requirement to provide financial or other benefits to the local area. We have already welcomed a package of community benefits that was brought forward by the industry, through which operators will pay £100,000 for each hydraulic fracturing site at exploration and 1% of revenues at production. Operators will publish evidence each year of how these commitments have been met.
We have worked tirelessly over the past week to come up with a set of clauses specific to the shale industry that, in keeping with the spirit of each of the points in Amendment 21, will provide the public with confidence that it is being taken forward in a balanced and responsible way. I hope my explanation of the government amendment in lieu satisfies noble Lords that this has been done. I restate that shale gas is an exciting new energy resource for the UK. It offers huge potential when countries all over the world are looking to greater self-sufficiency. Now is the time to seize, not lose, the opportunity to develop the United Kingdom’s shale industry. I beg to move.
Amendment to the Motion
Moved by Baroness Jones of Moulsecoomb
Leave out from “do” to the end and insert “agree with the Commons in their Amendment 21 and do propose Amendment 21F as an amendment thereto”.
21F: Line 21, at end insert “and have consented to the carrying on of the activity”
Baroness Jones of Moulsecoomb (GP): My Lords, I shall try to reintroduce the original Amendment 21 that went through the other place. It was a Labour amendment, supported by the Government. The Minister has said that this government amendment has the spirit of the original Amendment 21 but, to be quite honest, the Government have missed out some detail that is absolutely crucial. I am also quite interested in some of the scientific advice that the Government have taken; some noble Lords may know that in Wales there was a vote last week to pass a fracking moratorium, as there was in Scotland the week before, until the risks could be assessed. It is those risks that I would like to mention today. A scheduling farce has meant that there has been very little time to debate this, and no time for a vote on Report in the Commons.
I feel that the Government are doing a U-turn here. It is not good enough to pass something in one place and then change part of it quite substantially. There are two issues in particular that I want to raise. The first, crucial point is the possibility of fracking near groundwater sources. There is also the issue of trespass under people’s homes. The amendments that went through the other place were already probably not sufficient to protect against all sorts of risks, but at
least they were there. The amendments submitted by the Government today may overturn even those quite limited protections.
On the issue of fracking within groundwater source protection zones 1 to 3—that is, the areas around aquifers that safeguard our drinking water—we have heard that the Government might possibly redefine those areas, but they have already been defined by the Environment Agency. There is no reason to redefine them when they have been defined for many years. Our drinking water needs protection; I cannot believe that anyone here does not agree with that.