HM Treasury. Horse Guards Road. London. ZHQ 24 September 2014 To Economic Affairs Committee Members Dear Colleagues. Economic Affairs Committee Shale recommendations First. let me thank everyone for the work that they and their Departments had put into preparing for the Economic Affairs Committee on shale. As you know, this unfortunately had to be postponed. However, the Implementation Unit's helpful review on the development of the shale gas industry in the UK has identified a number of actions. We must make rapid progress on implementing these. I understand your officials have been heavily involved in the drafting of the recommendations, and in many cases are already driving them forwards. I would ask that you make it a personal priority to ensure that these are implemented within the agreed timescales below. I would be grateful if you could provide a written update on the actions set out in Annex A by 5 October. in particular, I expect to see rapid progress on the following recommendations and would welcome a further update on the four areas below by 6 October: i) a clear timetable (for an Autumn Statement announcement) to implement the development of 3-4 exemplar drilling sites to prove the concept of safe shale gas exploration, including locations ii) a firm proposal for moving towards more central regulation, up to and including a single national regulator - a clear set of actions to influence the new EU Commission on the importance of shale gas to Europe's future. The primary objective should be to provide clarity on areas of guidance that are currently open to legal challenge. This should include specific actions for departments. It is essential sufficient resource is dedicated to this. and iv) an action plan to ensure Government agencies (EA and HSE) have the necessary resources and skills in place to publically defend the robustness and safety of the regulatory regime. This need to cover action in the media, with local communities and through the regulatory process I have asked the Cabinet Office to remain involved to drive progress at official level and provide regular updates on the actions set out below. awash. GEORGE OSBORNE i" l. Respond totheas from Cuadrilla over which government has in?uence and that will impact on ?rst well Communicate to Lancashire County Council and others the intention behind the Planning Guidance requirements. speci?cally to address Mineral Planning Authority concerns that they must satisfy themselves that regulators are doing their job. it 201 to continue providing comprehensive responses to planning applications. outlining their role and the range of issues which have been considered. Ongoing DWP chlarify the commitment to publish chemical composition of fracking ?uid -Cuadrilla has now supplied information to the EA on the chemical composition of fraclting ?uid and this will be provided as part of the second public consultation. Sept 2014 Defra d}Clarify the use of MOD land for truck movements at the Roseacre site - terms are being considered subject to 505 approval of operational impact. Oct 2014 DECUMOD e) Establish whether boreholes for groundwater monitoring are allowed under permitted development rights. Oct 20M DCLG filf permission is granted, work with Lancashire County Council and Cuadrilla to ensure that planning conditions are discharged as quickly as possible. Nov 2014 onwards DCLG 2. Be prepared for the risk that permissron is turned down or progress injuncted a) Consider whether to provide additional technical support to Lancashire to help determine current planning applications. Oct 2014 DECC b) if permission turned 0r undetermined. Cuadrilla to respond to concerns and appeal asap. 1401:2014 c} Prepare PINS to respond promptiy to appeal or 505 recovery if appropriate. Nov 2014 onwards DCLG 3.Further work to improve public engage-merit 4.Improve the regulatory regime to support full exploration ainevelop segmented and tailored plan for public engagement in Lancashire and other potential ?rst mover sites, including national actions where needed. chDec 2014 DECC bJDemonstrate tangible bene?ts locally. Oct-Dec 2014 DECUEE c)Make better use of local growm interactions with LEP and Enterprise Zone to promote importance of shale to local growth. a} Work with Mineral Planning Oct 2014 onwards 2014 DCLG Authorities to boost short term onwards capacity, e.g. through funding consultancy. supporting secondments. supporting discharging of planning conditions as quickly as possible. b) Ensure the recovery criteria New 2014 DCLG enable the 505 to recover shale onwards applications at his discretion. c) As public support builds. EA to 2015 Doha consider undertaking a single onwards consultation on permits. as appropriate, rather than two. d} Consider monitoring boreholes Oct 2014 DCLG under permitted development. onwards elEnsure that the EU focus on energy security includes a focus on the use and development of indigenous resources including unconventional resources. In light of upcoming EU developments. refresh the strategy to capitalise on the bene?ts of wider EU engagements and achieve clarity on guidance while avoiding the imposition of additional regulatory burdens. Oct 2014 onwards 5.Further improve communications and public engagement alBuild on existing network of neutral academic experts available to provide credible evidence-based views on matters of public concern. Develop a coherent national communications plan on shale exploration. This should build on the long history of onshore operations 'in the UK using examples such as Farm. as part of a broader education campaign on energy. This should use relevant research to establish which messages resonate with the general population and focus on building these into a core narrative. Nov 2014 DECC blSupport HSE and EA to increase visibility and public understanding of their role as strong regulators of the shale industry. The additional resource required to ensure HSE and EA have the skills and resources necessary to engage and communicate positiver to the planning process and as regulators should be put in place. In future, HSE should not provide nil returns or no comments to planning consultations but set out why they do not have signi?cant concerns. Sept 2014 onwa DECCf'Defra clExamine the nature of benefits to be offered to local communities where shale developments take place. 201 5 onwards DECC (with industry) already working with HM Treasury and UKOOG the wider Oil and Gas Industrial Strategy: Sept 2014 onwards 6.Demonstrate the concept a) A cross-Government and Nov 2014 to DECC industry group should be establish established with OUGO, HMT. group and CLG. Defra. BIS. EA and HSE to remit of work assess the value and viability of focusing on a small number of Jan 2015 to sites in less contentious locations assess the that have potential for viable viable options production. while following due processes. bJPublic sector land (particularly Oct 2014 DECC MOD darned) should be mapped to mapping; potential sites and explored for Jan 2015 possible concept testing. without onwards adverse effect on the operational emit)an defence use of sites. options more centralised regulation (including use of the National Infrastructure Regime). may look and work in practice should start this year. Options to be worked up in 2015it: 58pt2014 Bis bids have been submitted and are curren onwards being reviewed by We: work should start on ensuring grid Jan 2015 use: connections can be made quickly, and that a means for exporting oil onwards and gas and for using oil and gas as chemical feedstock in the UK and abroad is developed with industry; to. 'n lo Oct 2014 DECUDCLG memo! - initial internal work on how this, and other options for onwards