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Natural gas forms a key part of the UK's energy supply, and is important not only for electricity production, but also for domestic heating, cooking and industrial production. In recent years, the UK has become increasingly dependent on gas imports and, based on current trends, the Government forecasts that nearly 70% of the UK's gas supply will be imported by 2025. We note the growing dependence of Western Europe on gas supplies from countries that may be subject to political instability. We consider it to be vital that the UK identifies new sources of gas if it is to safeguard the UK's security of supply.
Shale gas production in Wales, as elsewhere in the UK, is currently at the exploratory stage. There is currently a lack of data regarding the amount of shale gas in Wales. Should considerable reserves of shale gas be present—as industry representatives predict—it could be a decade before a viable shale gas industry is created in Wales.
Our inquiry examined the potential impacts of the development of a shale gas industry in Wales on local communities, from both an economic and environmental perspective. We conclude that shale gas represents an opportunity for Wales but that this must not be at the expense of Wales's natural environment.
The Committee's key conclusions and recommendations are:
· The UK Government and the Welsh Government should work with commercial companies and others to provide a reliable range of estimates of shale gas available in Wales. This should be published by the end of 2014.
· We recommend both the UK Government and the Welsh Government assess the overall impact of shale gas supply on the level and mix of energy produced in Wales and the UK. This should include an examination of how the combination of nuclear, hydro-power, coal, wave and solar, alongside efforts to reduce overall energy demand, impacts upon carbon emission targets.
· We encourage the Welsh Government to begin considering now how the employment opportunities presented by shale gas production could be maximised. This should include a detailed examination of the skills required by the industry and the extent that Wales already has people with those skills.
· The UK Government must provide further information about how local communities in Wales will benefit, financially or otherwise, from shale gas operations in their area.
· Both the UK Government and the Welsh Government must ensure that the regulatory and planning framework gives due weight to the traffic and noise caused by commercial shale gas operations, in addition to the visual impact and other environmental risks associated with fracking.
· The issue of treatment, transportation and disposal of wastewater is a growing concern. There is a need to ensure toxic and radioactive water is treated and not allowed to contaminate water courses. Therefore comprehensive impact assessment and mitigation measures need to be ensured in all cases.
· We recommend that the UK Government considers the case for minimising ground-level shale gas operations in sensitive areas in Wales, such as Areas of Outstanding Natural Beauty, Sites of Special Scientific Interest, and National Parks. In its reply to this report, the Government must set out how it would ensure that such development did not compromise designated sites, in particular those in environmentally sensitive areas.
· We encourage the Welsh Government to develop a Technical Advice Note for unconventional gas.
· We recommend that the UK Government and the Welsh Government require commercial companies to pay for an independent Environmental Impact Assessment at the exploratory stage of any significant shale gas development.
In this report, conclusions are printed in bold and recommendations are printed
in bold italics.
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