It is always a pleasure to answer a question from my mother-in-law’s MP. As he knows, we have always made it clear that any hydraulic fracturing that takes place under current licences must be consistent with our regulatory regime, including the traffic light system, which is the toughest in the world. The Preston New Road site is the most monitored site for seismic activity, and among the 36 events recorded, the 1.1 local magnitude event was the equivalent at the surface of a bag of flour being dropped to the floor.

Not at all. Thanks to the superb seismic monitoring and the work of some excellent students at Liverpool University, it is clear that the most significant of the micro tremors that we are seeing is the equivalent of dropping a kilogram of flour on my mother-in-law’s floor in Earlsdon and feeling the vibration from that.

We are calmly and soberly going through the process of seeing whether this potentially valuable resource that can reduce our energy dependency on imports can be exploited, but it has to be done in a way that is consistent with our world-beating and tough regulatory regime.

The independent oil and gas regulator, the Oil and Gas Authority (OGA), is responsible for ensuring operators mitigate the risk of induced seismicity. The OGA is continually monitoring operations around the Preston New Road site to ensure they remain in line with Cuadrilla’s Hydraulic Fracture Plan, which was independently approved by the OGA and Environment Agency before the commencement of hydraulic fracturing operations.

The Traffic Light System, which dictates the required response to seismic activity, has worked at the Preston New Road site in exactly the way that it was designed to. The very minor seismic events recorded at the Preston New Road site cannot be felt at the surface.

The UK has world-leading safety and environmental regulations to ensure that shale gas exploration is carried out safely and responsibly, and the Government believes the current system is fit for purpose.

DEFRA and the Environment Agency take the environmental risks associated with oil and gas exploration very seriously. We have a robust regulatory regime, drawn from global best practice and more than 50 years’ experience of regulating the onshore oil and gas industry safely in this country. The Environment Agency will issue a permit only if it is satisfied that any risks to people and the environment can be effectively managed.

As always, the hon. Gentleman asks an insightful question. Our regulatory regime currently lets local residents have their say on two stages in the environmental permitting process: when the application is received by the Environment Agency; and at the draft decision stage, before the permit is finalised. A public consultation takes place once the planning application has been permitted. On 17 May, the Secretary of State for Business, Energy and Industrial Strategy and the Secretary of State for Housing, Communities and Local Government set out that they would be strengthening community engagement further by consulting in due course on the potential to make pre-application consultation a statutory requirement.

The independent Office for Budget Responsibility (OBR) produces forecasts for UK oil & gas tax receipts. Its latest Economic and Fiscal Outlook was published on 22 November 2017:

http://obr.uk/efo/economic-fiscal-outlook-november-2017/

The OBR also produces regular reports on wider trends in the economy that may affect tax revenues in the longer term.

The staff allocation to the shale gas team is 12.4 full time equivalents for this financial year (2017/2018).

The Government has been recently elected and its approach to implementing the manifesto proposals, including the establishment of a Shale Environmental Regulator, has yet to be finalised.

No landward Petroleum Exploration and Development Licences have been applied for, nor issued, during the last 12 months. However, in the latest (14^th) Onshore Oil and Gas Licensing Round, which closed for bids on 28 October 2014, 95 applications were received from 47 companies covering 295 Ordinance Survey Blocks. The Oil and Gas Authority announced on 18 August 2015 that a first tranche of 27 onshore blocks will be formally offered to companies, and that a second group of 132 further blocks has been subjected to detailed assessment under the Conservation of Habitats and Species Regulations 2010. Subject to the outcome of this consultation, the OGA intends to announce offers for the second group of licence blocks later this year. A map showing the location of the first tranche blocks and those being considered further can be found here:

https://decc-edu.maps.arcgis.com/apps/webappviewer/index.html?id=29c31fa4b00248418e545d222e57ddaa.

There are currently no sites approved for fracking in England and Wales. Any operator would need a Petroleum Exploration and Development Licence (PEDL) in place before commencing hydrocarbon operations. A PEDL does not, in and of itself, allow an operator to commence hydrocarbon operations. Rather, they grant exclusivity to licensees within a defined area. All operations would also require local planning permission,Environment Agency permits, Health and Safety Executive scrutiny, Oil and Gas Authority consent and access agreement(s) with relevant landowner(s).

The Infrastructure Act 2015 introduced a range of further requirements that must be met before an operator can carry out hydraulic fracturing in a responsible, sustainable and safe manner. A hydraulic fracturing consent will not be issued unless my rt. hon. Friend the Secretary of State is satisfied that the conditions are met. The Secretary of State must also be satisfied that it is appropriate to issue the consent.

The Government is of the view that there is a national need to explore and test our shale resources in a safe, sustainable and timely way.

It is too early to make an assessment of the future extent of shale gas and oil production. We do not yet know the full scale of the UK’s shale resources nor how much can be extracted technically or economically.

Licensing and consent of onshore oil and gas activities in England is now a matter for the Oil and Gas Authority (OGA). Petroleum Exploration and Development Licences are not specific to shale gas. They grant exclusive rights to extract hydrocarbons, including shale gas but also other hydrocarbons, within a particular onshore area. A separate consent from the OGA is required before any drilling or hydraulic fracturing (fracking) can take place, as well as planning permission, environmental permits and review of the well design by the Health and Safety Executive.

The OGA does not have any undetermined consent applications.

The Written Ministerial Statement by my rt. hon. Friends, the Secretary of State for Energy and Climate Change and the Secretary of State for Communities and Local Government on 16 September 2015 (Official Report, Column 34-38WS), sets out the Government’s view that there is a national need to explore and develop our shale gas and oil resources in a safe, sustainable and timely way, to help meet our objectives for secure energy supplies, economic growth and lower carbon emissions.

A successful shale industry could help create jobs and grow local economies. Investment in shale could reach £33billion and support up to 64,000 jobs in oil, gas, construction, engineering and chemical sectors. The opportunity to extract this energy, as well as to secure jobs and investment, cannot be ignored.

Shale gas represents a huge economic opportunity for the UK. It could create thousands of jobs, generate significant business investment and provide substantial revenue for the Exchequer in the future. The Government will not be able to forecast the scale or timing of this revenue, however, until more work is done to determine the extent of gas that can be technically and commercially recovered. It would therefore be inappropriate to indicate now how potential future revenue would be used.

In addition, it should be noted that diverting revenues from the Government's finances to a specific shale fund, or one created by revenue from other natural resources, would come at a cost. The money cannot be spent twice. The Government would likely need to either raise additional tax revenue elsewhere or cut spending, to maintain the fiscal balance. The Government has no plans to assess the possibility, of creating a sovereign wealth fund from this revenue.

Shale gas represents a huge economic opportunity for the UK. It could create thousands of jobs, generate significant business investment and provide substantial revenue for the Exchequer in the future. The Government will not be able to forecast the scale or timing of this revenue, however, until more work is done to determine the extent of gas that can be technically and commercially recovered. It would therefore be inappropriate to indicate now how potential future revenue would be used.

In addition, it should be noted that diverting revenues from the Government's finances to a specific shale fund, or one created by revenue from other natural resources, would come at a cost. The money cannot be spent twice. The Government would likely need to either raise additional tax revenue elsewhere or cut spending, to maintain the fiscal balance. The Government has no plans to assess the possibility, of creating a sovereign wealth fund from this revenue.

[holding answer 10 February 2014]: The Government is determined that the UK economy will benefit from any shale gas development that might take place through benefits such as increased tax revenues, greater energy security, growth and jobs.

[holding answer 10 February 2014]: While there is potential for shale gas to provide substantial revenue to the Exchequer in the future, until more work is done to determine the extent of gas that can be technically and commercially recovered, we will not be able to forecast the proportion of revenue that might accrue to the Exchequer or to private companies.

The Government is committed to ensuring that communities hosting shale developments benefit from development in their local area. That is why on 13 January the Government announced 100% local retention of business rates for shale production projects. In addition,

the industry has brought forward a community benefits package which the Government has welcomed. At exploration stage, the industry will provide £100,000 per hydraulically fractured well site. The industry is also committed to providing 1% of revenue at production stage.

There is potential for shale gas development to provide a substantial contribution to the UK economy in the future. Until more work is done to determine the extent of gas that can be technically and commercially recovered, we will not be able to accurately predict the entire contribution it can make.

The Government is determined that the UK economy will benefit from any shale gas development that might take place through benefits such as increased tax revenues, greater energy security, growth and jobs. On 13 December last year, we published for consultation, an environmental report as part of the process of strategic environmental assessment for further oil and gas licensing onshore. On a high activity scenario, the report estimates that oil and gas activities which might be carried out on new licences might create 16,000 to 32,000 new full-time equivalent positions in the peak development phase, including direct, indirect and induced jobs.

Prior to this report, the Institute of Directors estimated that 74,000 direct jobs could be created from the entire shale industry, including those direct jobs created from new licences.

Shale gas and oil operations involve hydraulic fracturing in wells drilled over a mile down, which at that depth are highly unlikely to have any discernible impacts closer to the surface.

Like any other industrial activity, oil and gas operations require access permission from landowners.

Operators prefer where possible to agree this through negotiation with the landowner, but there is an existing legal route by which they can apply for access where this can't be negotiated.

The Government is currently considering whether this existing route is fit for purpose, and what impact this could have on the development of shale gas.

Shale gas and oil operations involve hydraulic fracturing in wells drilled over a mile down, which at that depth are highly unlikely to have any discernible impacts closer to the surface.

Like any other industrial activity, oil and gas operations require access permission from landowners.

Operators prefer where possible to agree this through negotiation with the landowner, but there is an existing legal route by which they can apply for access where this can't be negotiated.

The Government is currently considering whether this existing route is fit for purpose, and what impact this could have on the development of shale gas.