Ed Davey - British Energy and Climate Change Secretary HARDtalk

Now on BBC News, it's time for HARDtalk.

I'm Sarah Montague. The British Government is going all out for

sale. These are the woes of the Prime Minister about his plans to

allow companies to extract shale gas from deep underground. It is a

contrast to most European countries. Many of banned it until there are

convinced it can be done safely without damaging water supply. My

guest is Ed Davey. If you want clean, green and affordable energy,

what role should fracking have? Ed Davey, welcome to HARDtalk. Do

you want a fracking being in the UK as seen in the US? It would be good

for the UK if we can, called for energy security, jobs, growth,

revenue for the Exchequer. We will use a lot of gas over the next few

decades. Even as we decarbonise and take fossil fuels out the economy.

Gas will be a critical part of the mix as well as nuclear and UK Carbon

Capture and Storage. We will the gas come from? We have a North Sea gas

firm for many decades. The production is still there. But it is

going down. We have to import more gas from the other side of the

world. To have gas in the UK is beneficial for our energy security.

That is why we should do this. In the words of Michael Fallon, 20 to

40 kilojoules in the next year? We have a framework to create

incentives to make sure we have tough regulations on the

environment. I spend a lot of time since I became Secretary of State to

make sure the issues are dealt with so we can reassure communities we

have taken the issues, from water pollution to water sustainability to

carbon emissions and methane emissions, we take them seriously

with controls in place. We now have them in place. We are creating a

faint -- says framework. This for companies to start drilling with

safety permits. In the US, VX gas is cheaper. They have a manufacturing

renaissance. They are making things again. They are self-sufficient in

gas. Can you see that here? It will not be a repeat of North America.

But the volume of shale gas will be at the peak. It will not completely

copy of America because of the sheer numbers involved. But it is still

beneficial. It still means we have to take these issues of industrial

competitiveness seriously. In Britain and Europe, the shale gas a

fact in America is a real challenge to European industry, the British

industry. That is because it has brought the cost of energy down.

Will that happen here? It is not going to and less we see European

wide production of shale gas on a scale that Britain itself cannot do.

Let me give you an example. When we had North Sea gas at its height, in

the European gas market, it can impact the price. We had any

security. We had secure supplies of gas, jobs, growth and tax revenue.

Shale gas, like North Sea gas, is a boom to energy policies. It can

bring lower energy bills. Is shale gas takes off across Europe and we

have the volumes as in America, this will -- there will be downward

pressure. We have a challenge. We shouldn't just think that British

and European production will enable us to copy the American experiments.

It is deeper to energy policy. We have to look at the single energy

market, RND. User is Europe -- you say is you get into shale gas, is

not there is no way. The Dutch and Bulgarians and Czech Republic and

Luxembourg have abandoned it. And making sure the does not regulate

unnecessarily the industry and stop us going. -- the EU. If you can do

it in a sustainable way, other EU states will say we were wrong to ban

it. At the moment, were they at those regulations that are to

restrict on the UK? There is a whole set of directives on mining, water,

in missions that can apply to the shale gas industry. I have been

arguing that we need guidance. There is existing directives that can be

applied. They can apply. They are all already. You do not want to tie

the ones? Exactly. The laws are already there. We have a strict

regime already. You are talking about shale gas. Jan Costa said a

recent report -- report showed that it cannot be done cleanly and

safely. Same with the typically Prime Minister in Germany. Their not

satisfied. Same with France. I would contest the evidence. We have public

health England evidence. They said there was a problem. I asked my

chief scientist, David Mackay, to ensure we looked to the environment

all issues in terms of mission emissions and carbon emissions. --

methane emissions. Could we ensure their were no other in the issues. I

have been reassured. Guess what? We published the information. Lib Dems

published a paper last July that said there had been significant

local environmental damage in the US and pollution of water tables. We

support a fracking of jail if we learn the lessons from America and

we have done that. We have learned from lessons where there were

problems. That our problems. There are concerns of treating methane

emissions. The Americans are onto this. We have to make sure that in

exploring and producing shale gas, but we do not let methane into the

atmosphere. It is a dangerous greenhouse gas. Duke University in

North Carolina is compiling a data pace. There is a higher

concentration of methane in well drinking water Wells in you were gas

is being extracted. We have done our research. The Environment Agency and

others have looked into this. We will continue to do that of course.

That is right. Is there a problem with methane in drinking water? I

have seen no evidence with that. The issue we were looking at which could

be a problem is not regulated properly is methane emissions. As

you drill the Wells and extract the gas, this happens in a conventional

oil, not just in conventional shale gas, there is always methane

emissions. We regulate the industry tightly in this country. It is

called fugitive emissions. The way that you take sure all the different

apparatus in your ribs is properly isolated to make sure that methane

does not escape. We do that already. What we were doing was making sure

that applies to the new technologies being used for hydraulic fracking.

The University found that the concentrations are in drinking water

Wells. But concentrations were substantially higher, closer to

natural gas wells. 17 times higher than shallow wells. Yet, you are not

aware of the problem. The issue would be whether or not it was the

drilling that was creating the concentration or the fact that water

was near the gas in the first place. In the UK... 17 times? In the UK, we

have strict regime is about Wells, a system they do have in America of

independent will examine is to make sure the Wells we drill have to make

skins and are properly examined independently to make sure there can

be no leaks. We looked at the details. We have been reassured.

People are not. The polls have been done. The protesters at the sides,

in Sussex and Barton Moss and Manchester, or a recent opinion poll

of the sedition of Mecca -- mechanical engineers, they do not

want it neither homes. We have to reassure people. We have robust

regulation that we have taken into account all of the environmental

issues. You have to bribe them? That seems to be done. 100% for local

authorities, rather than 50%. I am sorry. I do not accept your analogy.

If you look at what we have done with other types of energy, whether

renewable or nuclear, it is normal to have community benefits to

renewable or nuclear, it is normal these technologies in their areas.

It is not special, or favours. It is right that people living locally get

the benefits. We have a different system. Some companies are offering

100,000 to local communities and 1% of revenues in the future. Some

local government said, should we can't them? It is 10% profit rather

than 1% of revenue. So 1% of revenue is a good deal and they shall take

it? We think it is attractive. People need to stand back. This is

good for the country with good jobs and revenue. It will help out energy

security. As long as it is environmentally safe and the

community can benefit, surely that is good. As long as it is

environmentally safe. Ed Davey says there is an way of doing this which

is safe, which you will not need to worry about what water you are

giving your family. There was a report done by my predecessor on

seismic activity being detected in some drilling. Not only did I

publish the report but there was a Royal Society 's report. We put into

place a tough regime for seismic activity. A green amber red light

system. As well as pre- drilling checking. The way we went about this

is to make sure the public... All of your tests... We have been doing

that throughout the process. That Smith on. You gave the go-ahead for

a power plant. The liberal Democrats said we would reject a new power

station. Why did you change your mind? We had an agreement at the

start of the Government. We look at all aspects of energy and policy. On

nuclear, as long as there was no public substance, we would go ahead

with nuclear. I have changed my mind on nuclear force to make main

reasons. The party has changed its position at a conference. The first

is climate change. The threat of climate change is the biggest

environmental challenge to our world, probably ever. Any low carbon

technology, whether wind, solar, tidal, uniquely, it would be

irresponsible to take that off the table. I have been engaged in a very

detailed examination of the cost of nuclear, looking at issues,

comparing it with wholesome market prices and the cost of carbon and it

seems to me that nuclear can be competitive. If we put it at a low

carbon market in the UK, holding the world's first electricity market, it

has to compete with renewables and carbon capture storage... We should

explain that you have said that he had changed your mind and you

certainly have because a few years ago you said that nuclear power

stations would cost consumers tens of billions of pounds in addition to

personal safety and environmental risk. It would only be possible with

average market or subsidies. You have given a guarantee those

companies were building this, the French company and the Chinese that

you will guarantee a price for energy from that plant for 35

years, a price that is double the wholesale price. If you look at what

we are doing with the reforms in the electricity market, we have looked

for low carbon storages. We want a market we have revenue certainty,

you son a contract which gives you revenue certainty so you can have

certainty and the costs are low. That is the way we are moving from

the existing market... At double the existing price was to mark if you

look at the wholesale price, most people expect and accept that over

the next decade or two decades, the wholesale price of energy is likely

to increase but more of it than that, the price of carbon is likely

to go up, needs to go up, if we are going to tackle climate change.

Comparing these prices, it is important you compare apples with

apples. So when the owner of the company says, nobody in

manufacturing is Cogin go near that price, you to say, they have to

because that is what the market is going to be like ? Yes. If you look

at the nuclear deal, we don't explain electricity to be generated

from any points of the power station that we are working on with EDF

until 2023. That honour is talking about the electricity markets and

2023, what will happen to carbon prices I bet here. That he is just a

deal for nuclear power with France where he has than half of that price

that you have said, ?92 50. If he wants to supply the UK, he is

welcome. He can compete. I don't believe he will be able to. If you

look at what people said when we did the steel, they were surprised with

got such a low price. Except look at what the European Commission said.

They are investigating it. I expect them to. That investigation is

whether the plans to subsidise the construction and operation of the

plant, and they make the point that total public support for the project

could reach 17 billion. The costs ?16 billion to build. It could have

been cheaper for the government to build the plant. I don't accept

that. We were expecting that the European Commission would take that

investigation. That is what happens with any issue where there are

issues that need to be looked at by them. The whole electricity market

reform has to difference. Any is to be looked at. But they concern is

that it is a subsidy and you say it shouldn't happen without public

subsidy but it is a subsidy. It isn't. Let me explain. You look

at the state aid is it is about how the system is being brought to the

market. They are bringing World carbon to the market through

electricity market reform through contracts for difference. They are

the same for all the carbon technologies. All low carbon

technologies are being treated the same. A predecessor gave a statement

to parliament about our approach to nuclear in October 2010. He made it

clear that I have delivered on that. They will be no special favours for

nuclear compared to other low-cut and technologies. When they look at

the case were nuclear and look at the case for contracts for different

renewables they will seek that that is the approach we delivered on.

So you make the state that for the next 35 years this price it will be

guaranteed is ?92 50. I wonder how you... It is proper gun to be ?89 if

they go with... Am thinking about the consumer when they are paying

energy bills. What can you do to protect them it energy prices are

going Nattai? They will be paid. We need to look at the world up to 2023

and beyond. Most people are looking at that scene that energy prices

will go up and carbon pricing because of a net change, that means

we will be looking at a slightly different world. But will it be

doubled by the time we get to than? I don't expect that because there is

a difference between prices and will. One of the key things that we

are doing in this country is energy efficiency before households and for

businesses. If you use less energy, your bill is going down, even at the

price has gone up. So why, at the end of last year, did you remove one

of the most significant thing is that this government was doing which

was the energy companies because obligations. We didn't remove it.

What happened was that we were a part of it. One of the three

components were reduced by one third. There is a myth being

perpetrated that we had somehow slashed energy efficiency activity

but it is quite the contrary. Let me finish. Not only are we keeping

property elements and rolling for two more years, at the same rate,

with a good energy efficiency for people who are poor. The other

element, the carbon emission element that is going forward for another

two years at the third-rate. I must get this point and because it is

important. ?540 million of extra public money for energy efficiency

so we are taking energy efficiency... Why is the expert

chair the energy efficiency to plummet office within your own

departments, Peter, what is his energy efficiency is the one part of

the policy that can really cut bills in the future. He said we have

policies that are among the best in the world which we are unfortunately

watering down. I haven't spoken to him about why he made that statement

but I find that it showed him that not only have we keeping a lot of

the eco- forward full to my years at rates that we were already doing

which is really good news for the energy efficiency industry, but we

have ?540 million of new money. At two that the fact that I put into

the energy act of 2013 the first ever market incentive for investing

not a new capacity, it demand reduction, permanent demand

reduction which is a long-term boost. I am proud we have the most

ambitious energy efficiency policies and the whole world.

What is that like government last year when you and the government

were under pressure because the Labour party had, with this idea to

freeze energy prices for several months and the public seemed to like

it and then suddenly this is pulled out of the hat. He were, the Liberal

Democratic in charge of climate change and energy in a Conservative

government. I just wonder how difficult those couple of months

were. It is not a Conservative government. The Liberal Democrats

have delivered on some many policies whether it is taking the low paid

out attacks allowance... You honestly say that they delivered on

green policies consumer yes. We have a green investment bank, the world

's first ever low carbon market. This is the greenest government at

the foreshore. -- for sure. Basically, I think Ed Miliband of

the Labour Party has made the most irresponsible statement on energy

policy and bills probably ever from an opposition. Ed Miliband ought to

know that a community used to do my job. Yes, he has made a running on

that for a little while because he tapped into a concern that I share.

People are facing high energy costs and the question is, his solution

will make it worse. So after the next election, if the polls suggest

there should be a Liberal Democrat Labor Government and you are in a

position we say, actually, withered like and our energy and I'm a

changed secretary, will you say, not that policy you will have me. I can

support the policy because it is a con. The first of all, people 's

bills will go up. We already see energy bills going up. After the

freeze, or is ever to be implemented, energy bills would go

up as energy companies pay and regain their profits. It is a con in

the first place. It doesn't do what it says it is going to do. With the

Netcom it undermines competition. One of the problem is that Labour

has and Ed Miliband needs to face, they have the big six. When we came

into power we deregulated the competition. There are now 15

companies competing with the big six. Ed Miliband, himself, switched

to one of those, and guess what? The boss of the company he switched to

service that Labour's energy price freeze it will feed into the hands

of competition. We will leave it there. Thank you.

Fault and frost have not much of a look in. --