Unconventional oil and gas: minister's statement

Speech by Minister for Business, Innovation and Energy Paul Wheelhouse to the Scottish Parliament.

Presiding Officer, this government has consistently taken a cautious, evidence-led approach to considering the potential exploitation of unconventional oil and gas in Scotland.

As part of this approach we have ensured stakeholders and the people of Scotland have had the opportunity to participate in the decision making process in an open, inclusive and transparent way.

Indeed, the Scottish Government has now undertaken one of the most far reaching investigations into unconventional oil and gas of any government including a four-month public consultation which concluded in May.

Our consultation, "Talking Fracking" embodied the Scottish Government's commitment to the full participation of local communities and stakeholders in decisions that matter to them and impact upon them.

It has been clear throughout this process that there are deeply held and sincere views on all sides of this debate, including in this Chamber.

Presiding Officer, today I wish to update the Chamber on the findings of our consultation.

I will also set out this government's preferred position on the future of unconventional oil and gas in Scotland, based on the findings of our consultation and the extensive evidence we have collated.

As I have previously stated, this preferred position will be brought to this Chamber for a full parliamentary debate and vote: we propose this happens shortly after recess.

As with our previous announcement on Underground Coal Gasification on 6 October 2016, and in line with our statutory responsibilities, a Strategic Environmental Assessment will be commissioned following the Parliamentary vote to assess the impact of the Scottish Government's position, prior to its finalisation.

Before I update the chamber on the consultation findings, it is important to set the context for this decision.

A policy decision on unconventional oil and gas in Scotland does not exist in isolation. It must be viewed within the context of our longer term ambitions for energy and the environment; manufacturing and the Scottish economy more generally; and of course, our climate change responsibilities.

The main product from unconventional oil and gas reserves is natural gas, which is our principal source of energy for heating. Shale deposits may also contain natural gas liquids, such as ethane – these important raw materials for our chemical and manufacturing industries are used in a wide range of high-value products including plastics, detergents, and clothing.

This government recognises that gas will be an important part of Scotland's energy mix for the foreseeable future, and access to a secure and affordable supply of energy and raw materials is fundamental to the competitiveness and productivity of Scottish business and industry.

A strong and vibrant domestic offshore oil and gas industry can play a positive role in our future energy system and is entirely consistent with encouraging a stable, managed transition to a low-carbon economy.

Achieving our vision for energy is crucial to our efforts to tackle fuel poverty and prevent the damaging effects of climate change, as part of the global community's fight to limit global temperature rises to below 2°C, whilst pursuing efforts towards 1.5°C.

In addition to support for our manufacturing sectors, the Programme for Government includes a commitment to the introduction of a new Climate Change Bill, which will set even more ambitious targets to reduce greenhouse gas emissions.

This government's view is that we have a moral responsibility to tackle climate change and an economic responsibility to prepare Scotland for new low carbon opportunities.

Presiding Officer, our comprehensive public consultation provided an opportunity for individuals, local communities, industry, academics and stakeholders to comment on and shape this policy decision. We have today published the full analysis of the consultation responses.

The consultation received 60,535 valid responses: the second largest response to a Scottish Government consultation, and a clear validation of our participative approach.

Of these responses, 52,110 (86%) were campaign responses or petitions; and 8,425 (14%) took the form of substantive responses.

Of those respondents in Scotland providing a substantive response, and a postcode, nearly two-thirds (4,151) lived in one of 13 local authority areas identified as potentially having significant shale oil and gas reserves or coal bed methane.

The consultation was not an opinion poll: that simply wouldn't do justice to the range of issues that need to be discussed and considered. However, it was clear that the overwhelming majority of respondents were opposed to the development of an unconventional oil and gas industry in Scotland.

Overall, approximately 99% of the responses were opposed to fracking and fewer than 1% were in favour.

Those opposed to fracking repeatedly emphasised the potential for significant, long-lasting negative impacts on communities, health, environment, and climate; expressed scepticism about the ability of regulation to mitigate negative impacts; and were unconvinced about the value of any economic benefit or the contribution of unconventional oil and gas to Scotland's energy mix.

Alternative views were received - some respondents were either supportive of an unconventional oil and gas industry developing in Scotland, or did not feel it was possible to come to a view on the available evidence.

Those in favour of an unconventional oil and gas industry emphasised the potential benefits they perceived for the economy, for communities, for the climate, and for Scotland's energy supply; and said that the risks associated with unconventional oil and gas extraction were no greater than those associated with any other industry. They argued that the development of a strong and robust regulatory framework could mitigate any adverse impacts.

Presiding Officer, reaching a decision on unconventional oil and gas is the culmination of a careful and comprehensive period of evidence-gathering. We have not taken the process or the decision lightly.

At each stage we have created opportunities for discourse and debate. I would hope that everyone in this Chamber, regardless of their views on the subject, would acknowledge the opportunities for meaningful participation that we have created.

I want to now set out some more of the considerations that have guided my decision.

In reviewing the research findings, I had particular concerns over the insufficiency of epidemiological evidence on health impacts highlighted by Health Protection Scotland.

I also note the conclusion of the Committee on Climate Change, our advisers on statutory targets, who concluded that unconventional oil and gas extraction in Scotland would make meeting our existing climate change targets more challenging.

Indeed, as the Committee states in its report, in order to be compatible with Scottish climate change targets, emissions from production of unconventional oil and gas would require to be offset through reductions in emissions elsewhere in the Scottish economy. Given the scale of the challenge we already face, that would be no easy task.

I also note that KPMG concluded in their report on the economic impact of an unconventional oil and gas industry in Scotland that under their central development scenario, just 0.1% annually would on average be added to Scottish GDP should fracking be given the go-ahead.

I have also been mindful of the important reality that the potential activity associated with an unconventional oil and gas industry would be concentrated in and around former coalfields and oil shale fields in the central belt, which are among the most densely populated areas of Scotland.

Our consultation demonstrated that communities across Scotland, particularly in areas where developments could take place, have yet to be convinced there is a strong enough case of national economic importance, when balanced against the risk and disruption they anticipate on matters such as transport impacts, risks of pollution and impacts on their general health and wellbeing.

Presiding Officer, while I am sure that an unconventional oil and gas industry would work to the highest environmental, and health and safety standards, it is our responsibility as a Government to make a decision we believe is in the best interests of the people of this country as a whole. We must be confident that the choices we make will not compromise health and safety or damage the environment in which we live.

Having considered this matter in considerable detail, it is also our view that the outcome of our public engagement shows that in those communities which would be most affected, there is no social licence for unconventional oil and gas to be taken forward at this time, and the research we have conducted does not provide a strong enough basis from which to adequately address those communities' concerns.

Presiding Officer, taking all of this into account and balancing the interests of the environment, our economy, public health and public opinion, I can confirm that the conclusion of the Scottish Government is that we will not support the development of unconventional oil and gas in Scotland.

To put this position into immediate effect, we have today written to local authorities across Scotland to make clear that the Directions that gave effect to the moratorium will remain in place indefinitely.

This action means we will use planning powers to ensure that any unconventional oil and gas applications are considered in line with our position of not supporting unconventional oil and gas.

Presiding Officer, let me be clear that this action is sufficient to effectively ban the development of Unconventional Oil and Gas extraction in Scotland.

The decision I am announcing today means that fracking cannot and will not take place in Scotland.

My comments today relate to the use of planning powers. Of course, this Parliament still awaits the transfer of licensing powers promised by the UK Government, and legislated for in the Scotland Act 2016.

The commencement order for these powers was expected in February this year but has yet to be progressed by the UK Government.

This licensing regime currently takes place under an EU hydrocarbons licensing framework. We are concerned that these powers appear in the list provided by the UK Government of areas it may re-appropriate as a result of Brexit.

This would be unacceptable. I have, therefore, also written today to Secretary of State Greg Clark, setting out our position on the future of unconventional oil and gas in Scotland, to seek assurances that no such power grab will take place and that the powers promised will be transferred to the Scottish Parliament as soon as possible.

However, while this is important, I want to make crystal clear today that using our planning powers in the way I have set out allows us to deliver our position, no matter what Westminster decides.

Presiding Officer, I am aware there is a proposal for a Member's Bill on this issue from Claudia Beamish. The use of planning powers is an effective, and indeed a much quicker way, to deliver our policy objective. As with our actions on nuclear power stations legislation is therefore not necessary.

I acknowledge that Scotland's chemicals industry has conveyed strong views on the potential benefits of shale on Scottish industry.

I want to be clear that notwithstanding our position on unconventional oil and gas in Scotland, our support for Scotland's industrial base and manufacturing sector is unwavering.

Manufacturing and the chemicals industry continue to play a crucial role in the Scottish economy. We understand that a supportive fiscal regime, affordable energy, access to the right skills, and good infrastructure are all essential to future success. That is why this government will continue to support industry in a range of different ways in the months and years to come.

At the outset of devolution one of the principle aims of this Parliament was to bring decision making closer to those most affected: that ethos has underpinned our approach to reaching a decision not to support the development of unconventional oil and gas in Scotland.

Taking full account of the available evidence and the strength of public opinion today, my judgment is that Scotland should say 'no' to fracking. This position will be reflected in our finalised Energy Strategy, which we will publish in December.

The next step in this process will be for the Scottish Government to table a motion for debate and allow Parliament to vote on whether or not to support our carefully considered and robust position on unconventional oil and gas.

Presiding Officer, I want to conclude by thanking everyone who has contributed to this process. It is right that this Government sought expert, independent, scientific advice, and that we took the time needed to seek the views of the people of Scotland. The people have spoken. The time has come to move on.

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