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Agenda Item No. 6

 

 

Matter which the Chairman has decided is urgent by reason of the need to provide Members with the update position in respect of the issue debated at the Extraordinary Meeting on 17th October, 2011

 

 

SCRUTINY COMMITTEE (ECONOMY AND ENVIRONMENT)

 

Minutes of an extraordinary meeting held on 17th October, 2011.

 

Present: Councillor C.J. Williams (Chairman); Councillors Ms. M.E. Alexander, J.C. Bird, R.F. Curtis, G. John, Mrs. A.J. Preston, Mrs. S.I. Sharpe, R.P. Thomas, M.R. Wilson and Ms. M. Wright.

 

Also present: Councillors Mrs. S.M. Bagstaff, P. Church, E. Hacker, Mrs. V.M. Hartrey, N.P. Hodges, H.J.W. James (Cabinet Member), Mrs. M. Randall and J.W. Thomas.

 

 

522     APOLOGY FOR ABSENCE -

 

This was received from Councillor Mrs. M. Kelly Owen.

 

 

523     DECLARATIONS OF INTEREST -

 

No declarations were received.

 

 

524     ANNOUNCEMENT -

 

Prior to consideration of the matter, the Chairman advised those present of various housekeeping issues which included requesting that all mobile phones be switched off.  He also took the opportunity to remind Members who sat on the Planning Committee of their responsibilities under the Council’s Code of Conduct in relation to predetermination / bias of any applications.

 

 

525     POTENTIAL IMPACTS OF EXTRACTION AND BURNING OF SHALE GAS (DEER) -

 

At its meeting on 6th September 2011 the Scrutiny Committee recommended that an extraordinary meeting be arranged in order to consider evidence for and against shale gas extraction following the submission of requests for consideration by Councillors R.F. Curtis and M.R. Wilson ( copies of which were tabled at the meeting for information.) The Head of Service referred to the report that had been prepared for the previous meeting on 6th September 2011 which advised that current shale gas extraction uses a technique called hydraulic fracturing often known as “fracking”.  A well was drilled through the upper strata into the shale bed generally 1.5 - 1.6 kms below the surface and a mixture of water and solid particles - often sand, sometimes manmade ceramic beads - was pumped down into the shale at pressures up to 100MPa (145,000psi).  The rock was fractured and the solid particles would hold the crack open with gas released for capture.  The report highlighted that throughout the world there had been concerns raised about the possible health risks associated with “fracking” with exploitation of proven shale gas resources elsewhere in the world receiving mixed publicity and with some developments in the USA allegedly having had detrimental effects on water resources.  There had also been recent publicity about such exploration in Blackpool, Lancashire and potential links with earth tremors.  One of the key potential hazards that had been identified by opponents was the risk of ground and surface water contamination by gas and chemicals based on evidence gathered from the US where tens of thousands of shale gas wells were thought to exist. 

 

A report by the Energy Select Committee of MPs in June 2011, however, had found no evidence that the hydraulic fracturing process involved in shale gas extraction posed a direct risk to underground water aquifers, provided the drilling well was constructed properly.  The officer further stated that to date there had been no formal application for “fracking” in Wales, nor had the Welsh Government provided any technical advice in respect of the same.  The Leader of the Council had written to the First Minister to request that consideration be given to whether all such applications relating to test drilling and fracking itself should be matters for the Welsh Government to determine because of the significant sensitivities around such applications and the perception of potentially significant environmental impacts.  The Scrutiny Committee had also sent a letter to Assembly Members, MPs, Welsh Government, the Local Government Association and Welsh Councils requesting guidance on the matter.

 

Committee was also informed that an in relation to drilling was to be placed before the Planning Committee on Thursday 19th October 2011 and Planning Committee Members would be undergoing a site visit to the area concerned the same day. 

 

Councillor Curtis had requested the issue of shale gas extraction be considered in order to debate the issues for residents of the Vale of Glamorgan and Councillor Wilson, had also requested that the Council make available the film “Gasland” to be shown. Cllr Wilson stressed that he particularly wanted to hear all sides of the issue and ensure that the matter was debated fully.  All present were advised that the film had been shown in the afternoon prior to the meeting which had been open to all Elected Members, stakeholders and the public albeit that space had been limited.  Also, following a request from Mr G Williams of Coastal Oil and Gas limited during the showing of the film copies of an e-mail from the Health and Safety Executive together with a paper from the APPEA (Australian Petroleum Production and Exploration Association) were distributed. A four minute website link namely www.anga.us/links--resources/the-truth-about-gasland was also shown prior to the Scrutiny Committee meeting in response to the film. 

 

Following the presentation of the officer report representations from witnesses who had been invited to speak at the meeting were then received.  Witnesses had been afforded 10 minutes each in order to make their representations to the Committee. 

 

 

Mr. Gerwyn Williams - Coastal Oil and Gas Ltd.

 

Mr. Williams in making his representations referred to a PowerPoint presentation which showed pictures of natural fractures in black shale, gas rich shales in the USA and core of same age shales within South Wales.  He stated that in comparison with the Appalachians, it was noted that the Marcellus shale area in the US showed an estimated 500TCF (trillion cubic feet) of natural gas that lay within the rock.  He advised that drilling had taken place for some time within the UK and that an application to drill in the Maesteg area had recently been approved. One of the presentation slides showed the number of PEDL licences that had been granted in South Wales and the UK.  Cuadrilla, a company drilling in Lancashire, was looking at potential shale resources of 200TCF whereas Coastal Oil and Gas Ltd were looking at 50TCF.  One of the main reasons that his application was being made was that an estimate of 17 years had been forecast for North Sea oil and gas reserves and as such other forms of energy would need to be considered. Gas was currently shipped to the UK from Russia and from Qatar.  He stated that shale gas could give the security of national energy supplies it also being noted that current gas and electricity prices were continually rising at 30% in 2011 and this was another reason to move shale gas extraction.

 

In his opinion the benefits of shale gas extraction were :

  • it offered lower prices,
  • lower emission alternative to petrol
  • as unemployment was on the increase ( e.g. 21,000 public sector jobs in Wales being lost) the revenue from shale gas extraction and the employment that could come with this could be significant for the country,
  • gas sales could create huge tax revenues for both local and central government. 

A recent Pennsylvania state university study had reported that the Marcellus gas  industry generated US$3.9 billion in revenue, equated to more than 44,000 jobs and £3,89m. in state and local taxes.  For 2011 the estimated potential was more than £10 billion in total value added revenue, with 100,000 jobs and nearly £1 billion in state and local tax revenues in Pennsylvania.  The UK could even become an exporter of gas in the same way the US was and we could change our LNG input facilities to export facilities. 

 

Mr. Williams referred to statements made by Minister Hendry “Shale gas exploration is just beginning here and is governed by one of the most robust and stringent regulatory frameworks in the world.”

As part of this application process operators are required to disclose the type of fracing fluids they propose to use, “...99.96%, of the fluid used has been made up of fresh water and sand,” 0.04% was made from polyacrylamide, commonly used in cosmetics. Other additives hydrochloric acid, typically at a concentration of 0.125% or biocide at a concentration of 0.0005%, which can be used if needed to purify the water used in the process.

 

“This scrutiny by the regulators is why we believe that shale operations, as they are being proposed in the UK, are safe”

 

The Committee was further advised of a Select Committee report in May 2011 that had concluded that shale gas resources in the UK could be considerable and that hydraulic fracturing itself did not pose a direct risk to water aquifers provided the well casing was intact before this commenced.

 

In referring to Eden Energy Europe, Mr. Williams stated that Coastal Oil and Gas Ltd were a subsidiary organisation with Eden Energy being an organisation with patented technology and were able to split methane into carbon and hydrogen with, carbon - as nanotubes, and hydrogen - nil emission fuel.  Carbon nanotubes were used for concrete, plastics, batteries, carbon fibres, lighter vehicles and planes.  He stated that methane had far more potential than just being used as an energy source and further advised Members that his organisation saw shale gas as a feedstock for an emission free future and, although he personally did not advocate total reliance on shale gas, in his view, the Country should be forging ahead with renewable energy, particularly tidal energy in parallel.  He urged the Council not to make the same mistake as those that had been made in the 1960’s in his opinion and urged the UK to develop its natural resources responsibly for the benefit of future generations.

 

In conclusion Mr. Williams stated that his organisation was heavily scrutinised/ regulated by the Environment Agency and the Health and Safety Executive. 

 

 

Mr. Paul Henderson - Environmental Policy Manager, Dwr Cymru

 

Mr. Henderson presented supplementary information which had been forwarded (via email) to all Members of the Committee, placed on the Councils website and which was made available at the Scrutiny Committee meeting itself. 

 

Mr. Henderson advised that Dwr Cymru’s interest in shale gas and coal bed methane exploration was confined to the possible impact on its organisations water supplies. He stated that Dwr Cymru would be very concerned if gas exploration and production risked polluting directly or indirectly any of the groundwater which Dwr Cymru was able to extract to maintain public drinking water supplies. The Committee was further informed that the organisation was currently not a statutory consultee for planning applications and representations in relation to this matter were being made to the Welsh Government. He reiterated that the organisation would wish to be consulted on and involved in any applications relating to shale gas and coal bed methane so that they could safeguard the interests of their customers.  The organisation had tried to keep itself aware of any new proposals or rely on local planning authorities to realise that they may have an interest and seek the views of Dwr Cymru on relevant applications. 

 

 

Mr. John Harrison - Environment Agency

 

Mr. Harrison referred to three issues for the Environment Agency i.e. to acknowledge risks, consider how they could be managed and Agencies role as a consultee in view of the planning process.  With regard to the issue of shale gas extraction should any planning permission be granted, an environmental permit may be required.  He was aware that there was currently borehole drilling throughout the country and that there were some risks associated with this i.e. the possibility of fluid and gas escaping.  Poorly installed borehole casing could result in the fluid and gas escaping but that there were preventative measures that could be put in place and the agency worked closely with the Health and Safety Executive.  The Agency also published prevention guidelines in relation to these matters. In referring to any proposal he stated that the Environment Agency would work with the organisation to manage the risks and that it would be responsible for the evaluation of all the information provided in order to assess the risks and undertake public consultations as part of its normal permit procedure.  If there was no requirement for a permit to be applied for, the Environment Agency would still provide pollution prevention advice in respect of the issue.  The Agency was also currently evaluating operations that were taking place in Lancashire and working closely with national colleagues. 

 

 

Ms. Louise Evans – “Vale Says No”

 

Ms. Evans provided PowerPoint slides for further clarification and commenced her representations by referring to the process of hydraulic fracturing which she stated had been banned in New York state and France.  Her concern was that if shale gas extraction was ever approved within the Vale of Glamorgan it could affect the Vale for many years to come.  One of the “Vale Says No” campaigns main concern was the cocktail of chemicals that were used in order to extract the gas.  She referred to 58 chemicals that were used in the process with side effects that could lead to, for example, cancer and problems with the reproductive system. When accidents did occur, they could also be catastrophic.  In America many incidents had been recorded in a number of homes with water from taps being hazardous and unfit for human consumption.  In her opinion the film “Gasland” clearly demonstrated a significant range of such issues.

 

The lack of regulations within the countries also had a detrimental effect on such a process and although it had been argued that similar processes had been in existence in the UK over previous years, the actual hydraulic fracturing process for “fracking” had not been and all regulators needed to fully appreciate the extent of the problem and consider what measures should be put in place.  Recently in the UK two earthquake tremors had been noted in Blackpool near Lancashire following drilling exploration and a detailed report in relation to these incidents was due shortly.  The company drilling in the Lancashire area Cuadrilla had planned 800 wells over the next 15 years in the UK and the Vale Says No Campaign did not want this type of procedure in the Vale of Glamorgan.  Te Campaign considered that such processes could have a detrimental effect on tourism, property value and increased traffic in the area as well as health and environment issues.  Ms Evans urged the Authority to call for a temporary ban on the process until all the necessary checks, investigations and regulators had fully investigated the process. 

 

 

Professor Joseph Cartwright - Cardiff University

 

Professor Cartwright stated that he had recently undertaken a “straw poll” with various friends and colleagues and although the outcome had shown that there was concern, many of the people he had spoken to did not know much about the process.  He suggested that the Council received an objective view of the process from possibly an independent consultant before making any firm decisions.  He stated that risks occurred in many areas in life and that this needed to be borne in mind when decisions were being made. However, he was concerned as to whether all the regulatory authorities had all the facts in order to fully comprehend the procedure that could be applied for.  He was aware that potentially it was a proven resource but, in his opinion, not a clear resource and the Council needed factually based evidence in order to analyse the matter. He stated that it was not correct to say that no one knew exactly what hydraulic fracturing meant as there was a significant amount of independent information available on the subject.  Professor Cartwright urged the Committee to try to encourage any decision-maker to seek assistance where they needed it in order to fill any gaps in knowledge and to weigh up all risks.  In his opinion shale gas did carry the risk of pollution, but that this could be minimised with the support of the regulators. He was aware that the Vale of Glamorgan also urgently needed employment, as did the rest of the UK. 

 

 

Dr. C.A. Pearce - Cowbridge and Llanblethian Residents Group

 

In making his representation to the Scrutiny Committee, Dr. Pearce referred to the report he had prepared that was tabled at the meeting.  He stated that the Residents Group considered that the negative potential impact of the extraction and burning of shale gas represented an extremely large environmental threat to communities on both a local and national scale.  He referred to Planning Policy Wales and its principles, in particular the first principle “putting people and their quality of life now and in the future at the centre of decision-making”.  His Group had considered that from what they knew of the risks involved they far outweighed any potential benefits.  The Group had obtained information on the topic which he classified into three types -

 

(i)         Media reports of environmental incidents

(ii)        Statements and conclusions from Government and other agencies and academic geologists assessing various aspects of the risks, usually with reassurances that the process was safe if properly executed, monitored and controlled

(iii)       A comprehensive independent academic study and report published by the Tyndall Centre, University of Manchester, which had been commissioned by the Co-operative.

 

The Residents Group’s concerns were listed as:

 

1.         “Risk of aquifer groundwater contamination.

2.         Pollution risk of land and surface water by fluids used in the extraction processes, including flowback fluids.

3.         Very large water consumption and demand in the fracturing operations putting pressure on local supplies.

4.         Adverse landscape impacts.

5.         Impact of noise pollution during drilling.

6.         Impact of construction traffic.

7.         Widespread extraction pads not limitable by normal industrial zoning.

8.         New natural gas resources produced would add to greenhouse gas emissions (GGE) when burnt and be counterproductive to national and global GGE targets and delay the incentive to invest in renewable technologies such as carbon capture and solar energy.

9.         The Tyndall Centre Report conclusions.”

 

He stated that within the Tyndall Report one of the conclusions had been that evidence from the US suggested shale gas extraction brought a significant risk of ground and surface water contamination and until the evidence base was developed a cautionary approach to development in the UK and Europe was the only responsible action.  Dr Pearce further referred to the requirements for water in shale gas extraction that could put considerable pressure on water supplies at a local level in the UK.  His report also contained pictures of a well site during a single hydraulic fracturing operation in New York State in 2009. 

 

 

Mr. R. Simpson - Campaign for the Protection of Rural Wales

 

Mr. Simpson stated that the CPRW were the leading guardian of rural Wales who encouraged the sustainable use of land.  The main concern of the organisation was that shale gas extraction did not impact on the environment.  In their opinion the loss of the environment could have a devastating effect on the landscape.  Extraction would also be intrusive to the eye and again not good for the environment.  Whilst accepting that shale gas had a place to play, the opinion was that the significant exploitation would give rise to the risk of destroying the environment and the character of the Vale of Glamorgan. 

 

 

Mr. D. Campbell - Journalist, UK Progressive Magazine

 

Mr. Campbell was an investigative journalist by trade and had been heavily involved in a number of projects e.g. the crisis in the Middle East.  He stated his purpose was to look at the facts and to “get to the bottom of things”.  The benefits reported for shale gas extraction as “lots of new jobs and a cheaper source of gas” he refuted, as it took approximately 30 years to see the number of jobs that were anticipated.  Hydraulic fracturing was in the first instance undertaken with 5 - 7 people who were highly skilled in the process.  For local farmers etc., there was a possibility of realising a significant amount of income from the sale of land, but the damage to the environment would be considerable.  He referred to the fact that the industry involved asked the public to trust them and advised that they were under strict controls, however various catastrophic incidents had taken place which were evidenced for example the Sea Empress disaster, where gallons of oil was released onto the ocean floor, disasters had also taken place n Pennsylvania and BP had been fined following oil spill in the United States.  He urged the Authority to consider the implications for people in the Vale and the implications for future generations.  He reminded the Council that France and New York had banned the process and that a long term view should be taken. 

 

Following the representations of the guest speakers, the Chairman referred to two written representations that had been received from Mr. D. Dobson, Head of Discipline - Well Engineer and Operations, Health and Safety Executive and Ms. A. Harvey, Department of Energy and Climate Change.  These were attached to the agenda. 

 

The Chairman then requested the permission of the Committee for two further speakers who had requested to speak following the despatch of the agenda.

 

 

Mr. M. Wallis - Friends of the Earth

 

Mr. Wallis stated that the gas was not a clean fuel and that, in his opinion, it would be as “bad” as coal and should be considered with a precautionary approach.  In referring to the exploration of shale gas, he stated that this automatically led to the process of fracking.  The Council also needed to consider the issue of green house emissions and that the law stated that an environmental impact assessment should be undertaken and that a screening report should be undertaken.  Any application should also indicate the intention of how to reduce greenhouse emissions. 

 

The Chairman however reminded those present that the issue of drilling was not a matter for the Scrutiny Committee, that it was a Planning Committee matter and the role of the Scrutiny Committee was to consider the “pros and cons” of shale gas extraction  


 

Mr. I. Benjuja - Anderson Associates

 

Mr. Benjuja referred to the planning policies that were in existence to protect the public’s health and the environment and that there was no planning policy that referred to shale gas extraction as this was a new process.  He agreed that most people would be interested in the use of natural resources but that any extraction had to be beneficial for jobs, energy and the environment.  In his opinion cost shale gas extraction would have a negative impact on public health and the environment and that such a process should not be established near where people lived. He was opposed to any extraction that would be undertaken near people and their properties.

 

Following the above representations the Chairman took the opportunity to thank all the speakers for their attendance and a question and answer session ensued as below :-

 

Questions  

Response

Questions to Mr G Williams Coastal Oil and Gas limited

 

What guarantees can you offer the Council for the future?

 

 

 

 

We have learned from previous mistakes by other organisations, for example in the USA some years ago the ingredients for “fracking” included anti-freeze.  This is now seen as an inappropriate method and the chemicals now proposed are different.

In relation to the work being undertaken, he referred to the fact that Shell had undertaken similar operations some time ago and that his organisation was currently in the process of making an application which would allow for the shale to be sampled before any decision to submit an application was made. 

 

What other areas have you planned for in the future?

 

The organisation has plans for areas in Kent, Somerset and other areas in Wales e.g. Caerau -Maesteg. 

 

Reference was made to the amount of greenhouse gas emissions that could be emitted.

Mr. Williams responded by stating that the methane would be converted into carbon and hydrogen.  Carbon was currently being sold in the USA and the long term plan would be to market the carbon which was envisaged would ultimately be far more environmentally friendly.

 

What proportion will be carbon and hydrogen?

No concrete information on this at present. 

 

What company do you represent?

We are a subsidiary of Eden Energy and do not front for a different company.

 

How much profit are you likely to make?

None initially, it will take at least two years for the first part of the licence to be implemented.  The first stage is the application to drill in order to assess whether further applications will need to be made before the next tranche of finances can be sought if required. 

 

A resident from Rhondda Cynon Taff in attendance questioned whether any operation will have an effect of subsidence on properties.

The company would not drill on any working mines and would not be allowed to operate if there was any likelihood it would harm the environment or local communities.

 

What is the current situation in the Bridgend County Borough?

An application for drilling exploration has been approved. 

 

 

Questions to Mr. Henderson (Dwr Cymru)

 

Do you have confidence in the fracking process?

The required standards are not sufficiently known yet.

 

In your representation reference is made to 5% of ground water could this increase?

We have limited aquifers and would be more likely to use backup ground water. 

 

If contamination occurs, what would be the response?

Contamination would be treated, with the aim of eradication.

 

Who would pay for any clean up operation if contamination occurred?

There was no definitive answer to this as yet. Dwr Cymru were making representations to Central Government as they were not named as a statutory consultee. 

 

 

Questions to Mr. J. Harrison (Environment Agency)

 

Members referred to the lack of regulation and that the country needed to keep pace with industrial techniques.

Mr. Harrison stated that in relation to such applications environmental permits would be required.  The Environment Agency was currently consulting on its ground water statement and reviewing its policy.  The Agency would also consult with all statutory consultees and interested parties when any application was submitted.  Where there was a programme of evaluation, controls were in place but the Agency’s position on the matter would be neutral until the evaluation of the application had taken place. 

 

How can you ensure that the issue is managed effectively? 

It was noted that further guidance in respect of regulation was required on the matter as the current regulatory regime did not appear to be appropriate for the industry. 

 

A member of the public queried the role of the Environment Agency and where their income was derived from.

The Agency received its income from Central and Welsh Government and although resources had been cut the income received was meant to cover costs.  The Environment Agency collected samples of ground water on a regular basis and under the Water Framework Directive monitored around 250 locations either quarterly or twice a year.  Any permit would also contain a monitoring schedule.

 

How do you guarantee an unbiased assessment of an application?

 

 

 

 

 

 Has agency visited sites in America to assess the process of shale gas extraction?

 

What do you know of the issues in Lancashire (Blackpool)?

There are a number of mechanisms in place, one includes being called to a Government committee to explain the agencies position in front of a select committee.  An evidence based approach was used and discussions took place along with other regulators who had a good knowledge of the process. The issue would be evaluated and a full consultation process undertaken.  Public meetings also took place and an open and transparent process existed. 

 

No - but equivalent colleagues in Germany had.

 

 

 

The company had suspended its operation on one site until the findings of a full investigation were received.

 

 

Question to Professor J. Cartwright (Cardiff University)

 

The Health and Safety Executive had advised in correspondence that such a process had been in use since 1949. Arguments put forward at the meeting refer to this not being the case?

Hydraulic fracturing had been around since the turn of the last century but this largely evolved vertical drilling compared to today where horizontal drilling could be undertaken as a result of new technology.

 

Professor Cartwright also referred to the geology in Lancashire and the Vale as being very different and that generalisations should not be made.

 

 

In considering the representations and following the question and answer session Members referred to public concerns following the incidents in Blackpool and considered that further evidence was needed for such processes aswell as Government guidance on the matter in view of the potential implications.  Members also raised concerns as to the amount of water that would be required in the process and were advised that a water application would have to be submitted.  They were informed that it was also important to note that water extraction above minimum limits (such limits however varied throughout the UK) required a permit from the Environment Agency which would also be assessed in regard to sustainability issues. 

 

A member of the public took the opportunity to thank the Chairman and the Scrutiny Committee for allowing the public viewing of the film “Gasland”, arranging the meeting and for the ability to speak. 

 

There being no more questions, the Chairman thanked all for their attendance the invited guests for their representations and for their cooperation in answering questions from both Members of the Council and the public.

 

Having considered the views of all present, the Scrutiny Committee, with one abstention,

 

RECOMMENDED -

 

(1)       T H A T due to the level of public concern, the Scrutiny Committee writes to Westminster and Welsh Government and the WLGA to support calls for a moratorium on shale gas extraction until public concerns are allayed on the issue.

 

(2)       T H A T the above recommendation be also referred to Cabinet with the request that they support the call for a moratorium.

 

Reason for recommendations

 

(1&2)  To advise of the concerns of the Scrutiny Committee in respect of the evidence received and the level of public concern on the matter.

 

 

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