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Shale industry 'an urgent priority'

Developing the UK's shale resources should be "an urgent national priority" to deliver energy security and jobs and help cut emissions, a committee of peers has said.

The Lords Economic Affairs Committee backed the Government's decision to go "all out for shale" but said it needed to do far more to sell the benefits of fracking to the public.

Ministers also needed to do more to drive forward exploratory drilling and appraisal of shale resources to see how much could be developed economically, a report by the Lords said.

Since a moratorium was lifted on fracking in 2012, in the wake of an assessment of the risk of small earthquakes caused by the process, the Environment Agency has not received or approved a single application for the permits needed for drilling.

Complex regulation governing fracking should be streamlined, the peers said.

They also backed moves by the Government to change trespass laws so that shale companies could drill under people's property without their permission to ensure development could go ahead "without undue delay or cost".

A report by the committee said the successful development of shale gas and oil in the UK could reduce the country's reliance on energy imports from places such as Russia and improve energy security.

It could provide jobs, bring back energy intensive industries which had been driven abroad by high energy prices in the UK, and "dampen" expected gas price rises.

Shale gas extraction and use produces around half the emissions of coal and is less polluting than imported liquefied natural gas (LNG), so could make a positive contribution to the UK's commitment to tackle climate change, the report suggested.

Public concerns over issues such as the impact of shale extraction on water resources should be taken seriously, but could be addressed through proper regulation, it continued.

The committee's chairman Lord MacGregor said: "The Committee strongly supports the Government's decision to go 'all out for shale'.

"But here in the UK we have not yet left the starting gate.

"Developing a successful shale gas and oil industry in the UK must be an urgent national priority."

And he said: "Potentially it's a remarkable opportunity for this country.

"We're calling for streamlining not weakening the regulation and we believe the Government needs to get its act together faster and more comprehensively."

The report comes after the Department of Energy and Climate Change's latest public attitudes tracking survey showed that while awareness of fracking had grown significantly, the public was still divided on whether to support the industry or not.

Another poll revealed that 74% of people opposed plans to change the law so companies could drill under land without the property owner's permission.

But Lord MacGregor said that if people understood the enormous risks of not exploiting with shale gas and oil in terms of energy security and prices, and the benefits of doing so, the majority of them would back the need for getting on with it.

"We have a battle for people's minds and opinions," he said.

"I believe if we don't get ahead and find out what we can achieve, 10 years from now people will ask the question why were we led into this difficult situation without exploiting shale gas and oil here in our own country."

The report from the committee proposes a new Cabinet committee, headed up by the Chancellor, to drive forward the Government's bid to go all out for shale.

The committee welcomed benefit schemes that would pay local communities for fracking, to compensate for issues such as traffic disturbance when wells were being established, but also urged shale companies to engage better with local people.

Greenpeace UK chief scientist Dr Doug Parr criticised the report, warning fracking was a "non-solution" that would not deliver for many years, if at all.

" The real urgent national priority is to push ahead with the renewable technology and efficiency measures which would much more rapidly address the security issues flagged up by the Ukraine crisis.

"The Lords spent seven months cherry-picking the wafer thin evidence that fits a foregone conclusion about the benefits of shale gas.

"This is just more taxpayer-funded cheerleading from unelected politicians who seem all too happy to ignore the country's legitimate concerns about fracking."

He added: "On one page the Lords are saying public concerns should be taken seriously, on the other they urge the government to strip people of their right to say no to fracking firms planning to drill under their homes - a move opposed by three-quarters of British people."

Friends of the Earth climate and energy campaigner Tony Bosworth said: "Shale gas regulation in the UK to date has been a catalogue of errors and oversights as thinly-stretched regulators have struggled to deal with fracking firms with eyes on bumper profits.

"Today's report recognises that the regulations aren't working - but calling for the Government to 'simplify' regulations and speed up the process will not reassure local communities and a public unconvinced by this risky technology.

"But even with robust, effective and dedicated regulation and comprehensive enforcement, all of which are absent, shale gas has no part to play in the UK's response to climate change."

He said the answer to the UK's energy problems was not to develop infrastructure for a new source of fossil fuels but to cut energy waste and develop the UK's huge potential for clean renewables."

Nick Molho, Head of Climate and Energy Policy at WWF-UK said: "The Lords seemed to have overlooked the many serious analysts who have said that shale gas in the UK is unlikely to have much impact on either gas prices or the UK's rising exposure to gas imports.

"If we are genuinely going to reduce the UK's vulnerability to future fossil fuel price shocks, the main priority must be to reduce our dependence on fossil fuels in the first place.

"Moving rapidly towards an energy system that's more efficient, low-carbon and better integrated with those of our European partners should therefore remain the UK's highest national priority when it comes to energy policy."

Dan Lewis, senior energy policy adviser at the Institute of Directors, said: "The Committee makes clear that the shale gas revolution is already here - we can either import from the US, or we can benefit much more by developing it here.

"This report makes a conclusive case for the benefits of getting the British shale gas industry up and running as quickly as possible. Producing shale gas in the UK can improve energy security, reduce our gas imports and boost a manufacturing and industrial revival. Furthermore, by helping us to shut down dirty coal plants the industry can act as a bridge to renewable technologies.

"As the IoD found in its report on shale last year, there are still significant barriers facing the industry. It is vital the proper regulation is put in place to make drilling safe and address the public's fears, but we agree with the Committee that the rules are currently much too complex, involving many government departments and agencies. There should be clear processes for getting planning permission and a rigorous inspection regime, but unnecessary bureaucracy will just delay investment and the creation of jobs.

"We urge the Government to move quickly to implement the Committee's recommendations."

Energy Minister Michael Fallon said: "This report sets out that shale gas development has huge potential to provide the UK with greater energy security, investment and jobs.

"We welcome the committee's conclusion that risks to health and the environment are low if shale development is properly regulated."

But he said: "This Government has made great progress creating a tax regime and simplifying regulation in a way that fosters the UK's emerging shale gas industry and protects the public.

"It's now up to operators to seize these opportunities and step up the search for shale."

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