Energy Policy Update:Written statement - HCWS68

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Department for Business, Energy and Industrial Strategy
Made on: 04 November 2019
Made by: Andrea Leadsom (Secretary of State for Business, Energy and Industrial Strategy )
Commons

Energy Policy Update

This statement provides an update on the Government’s policy regarding shale gas exploration.

The Government continues to recognise the importance of natural gas as a source of secure and affordable energy as we aim to reach net zero emissions by 2050. The Committee on Climate Change predict that we will still be consuming almost 70% of the gas we consume today in 2050 under our net zero target as significant reductions across building, industry and power are offset by demand for gas to produce hydrogen. It is therefore critical that the UK continues to have good access to natural gas from both domestic and international markets.

Given shale gas has the potential to provide a new source of domestic energy, the Government has supported the development of the UK shale gas industry. Domestic gas production provides jobs and other economic benefits. The industry is currently in an exploration phase and the Government has always been clear that it will only allow development in a way which is safe and sustainable – both for the environment and local people. We have therefore taken a precautionary, evidence-based approach to exploring this potential, underpinned by world-leading environmental and safety regulations.

Following seismic events in 2011 that were connected to shale gas exploration, the Government introduced regulations to mitigate these risks. A ‘Traffic Light System’ was introduced to monitor real-time seismic activity during operations, with a clear framework for stopping operations in the event of specified levels of seismic activity.

The Government also introduced tighter controls over the shale gas industry through the Infrastructure Act 2015. This included the requirement for operators to obtain Hydraulic Fracturing Consent from the Secretary of State which requires careful consideration and detailed scrutiny of the necessary technical and legislative requirements. This Consent ensures that all the necessary environmental and health and safety permits have been obtained before activities can commence.

While the regulatory and legal framework for shale gas activities has operated effectively to date, it is right that Government and regulators regularly review whether it remains fit for purpose in light of further evidence from shale gas operations.

Cuadrilla, a private company exploring for onshore oil and gas, obtained Hydraulic Fracturing Consent in 2018 to undertake shale gas exploration activity at their site at Preston New Road, Lancashire. Hydraulic fracturing operations took place in 2018 and 2019. Their operations were tightly controlled by the relevant independent regulators, including the Oil and Gas Authority, who are responsible for regulating the licensing of exploration and development of England's onshore oil and gas reserves, including shale gas.

Following a seismic event of magnitude 2.9 on 26th August 2019, hydraulic fracturing at Preston New Road was suspended by the Oil and Gas Authority, in accordance with its strict regulatory controls. While seismicity was at a level below that at which we would expect significant damage, seismic activity at this level does impact local communities and was clearly unacceptable. An event of this significance was considered highly unlikely in the detailed plan that Cuadrilla provided to the regulator before their activities began.

In parallel to their action following the 26th August 2019 event, the Oil and Gas Authority have been analysing in detail data drawn from Cuadrilla’s earlier operations that took place at Preston New Road last year. This included commissioning a series of expert reports to better understand and learn from the induced seismicity observed in 2018. The Government has recently received these reports and they are being published alongside a summary of their findings by the Oil and Gas Authority today. The Oil and Gas Authority summary report contains a number of findings and interim conclusions and highlights that the causes of seismicity are highly dependent on local geology. While we cannot draw definitive direct comparisons between this site-specific evidence and other prospective shale gas sites, the limitations of current scientific evidence mean it is difficult to predict the probability and maximum magnitude of any seismic events, either in the Fylde or in other locations.

The Government has always been clear that we will take a precautionary approach and only support shale gas exploration if it can be done in a safe and sustainable way, and that we will be led by the science on whether this is indeed possible. It remains our policy to minimise disturbance to those living and working nearby, and to prevent the risk of any damage.

The Oil and Gas Authority intends to commission further research to incorporate new data from Cuadrilla’s more recent operations. The Oil and Gas Authority has made clear that it cannot evaluate with confidence whether a proposal to resume hydraulic fracturing in the Fylde, or to start operations elsewhere, will not cause unacceptable levels of seismicity. The OGA are therefore unlikely to approve future Hydraulic Fracture Plans unless new evidence is presented.

On the basis of the current scientific evidence, Government is confirming today that it will take a presumption against issuing any further Hydraulic Fracturing Consents. This position, an effective moratorium, will be maintained until compelling new evidence is provided which addresses the concerns around the prediction and management of induced seismicity. While future applications for Hydraulic Fracturing Consent will be considered on their own merits by the Secretary of State, in accordance with the law, the shale gas industry should take the Government’s position into account when considering new developments.

Finally, alongside the Secretary of State for Housing, Communities and Local Government, I can confirm that the Government will not be taking forward proposed planning reforms in relation to shale gas that were subject to consultation last year. These include the proposals on the principles of a permitted development right for non-hydraulic exploratory shale gas development; making community pre-application consultation compulsory for shale gas development; and proposals to bring shale production development into the Nationally Significant Infrastructure Projects (NSIP) regime. Full Government responses which summarise the responses to these consultations have been published today.

This statement has also been made in the House of Lords: HLWS68

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