Energy Bill [Lords] — House of Commons, 2016-01-18
Topic: Energy
Amber Rudd (Conservative, Centre-right): I make two points to the hon. Gentleman. First, the reasons for the fall in the oil price are multiple and complex. I will not analyse them here now, but there is not, as he suggests, just one cause. Secondly, the US has considerably reduced its emissions because of fracking, which of course we welcome Any oil and gas demand that we do not meet ourselves through domestic production has to be met by imports, at significant extra cost to the economy. Industry and government share the same ambitions and are working closely together to manage the remaining resources effectively and efficiently. As we progressively decarbonise our economy, we will continue to need oil and gas for many decades to come. It is far better that the jobs and revenue are in the UK, offsetting imports where we can. Maximising economic recovery from the UK continental shelf must be part of a balanced plan for a diverse and progressively lower-carbon mix This Bill will complete the work started in the previous Parliament to implement fully the Wood review. Key to Sir lan’s recommendations is the establishment of the Oil and Gas Authority as an independent regulator with a clear and focused mandate to maximise economic recovery of UK petroleum. Clauses 1 to 76 formally establish the OGA as an independent regulator and steward, which would take the form of a Government-owned company, transferring regulatory powers and functions to the OGA, and giving it new powers to support maximising economic recovery The OGA will take forward the principle of maximising economic recovery, set out in Part 1A of the Petroleum Act 1998, with powers taken in the Infrastructure Act 2015. In November, I launched a consultation on the strategy for maximising economic recovery of offshore UK petroleum, which is central to the OGA’s future effectiveness. An amendment made in the other place, which we will try to overturn, seeks to broaden the principal objective, greatly expanding the scope of the OGA’s role and going far beyond the vision set out in the Wood review. In our view, and indeed in the view of the industry and the unions, diluting the focus of the OGA at this critical time is not the right way to proceed. The OGA should be focusing on maximising economic recovery, as that is what it has been set up to achieve. In the current difficult and challenging circumstances, nothing should distract from that vital task The OGA requires clarity on its objectives, and we intend to provide that. This Government are committed to the Climate Change Act 2008, and to our target to reduce emissions by 80% by 2050. We will see the Climate Change Act framework in practice this year when we set in law the fifth carbon budget. Amendments made in the other place seek to change how we count carbon for carbon budget purposes from the fifth budget onwards. Given that the work to set the fifth carbon budget is well under way, and has been for nearly a year, and although it is right to keep our accounting practices under review, now is not the right time to change. To do so now, this far into the process, would threaten serious delay. Therefore, we will seek to overturn those amendments Let me turn now to the delivery of the Government’s manifesto commitments to end new subsidies for onshore wind and to ensure that local people have the final say on where onshore wind is built. On 18 June, I set out to the House our intention to close the renewables obligation for new onshore wind in Great Britain from 1 April 2016, with a grace period available to those projects which, as of 18 June 2015, already have planning consent, an offer of grid connection and access to land rights. The provisions we made in the Energy Bill to achieve that were removed in the other place, and will be reintroduced There is no ambiguity on this matter, as it is a manifesto commitment. We signalled our thinking on ending new public subsidies for onshore wind long before the last election and put it before the British people in black and white. There are long-established and well understood conventions with regard to manifesto commitments and we will stand firm on them Onshore wind has deployed successfully to date and is projected to meet the planned range of 11 to 13GW by 2020. Without action, there is a risk of deploying beyond this range, potentially adding more costs to consumer bills and squeezing out opportunities for other renewables, such as offshore wind, to mature and bring down their costs. We have engaged widely on the June proposals, including with devolved Administrations, supply chain, investors and developers. It is important that Northern Ireland closes the renewables obligation to onshore wind on terms equivalent to those of Great Britain.