Energy Bill [Lords] — House of Commons, 2016-01-18
Topic: Energy
Alan Patrick Vincent Whitehead (Labour, Centre-left): We have had a wide-ranging debate on the Bill. Indeed, it has been so wide-ranging that in some instances I forgot there was a Bill in front of us. I was pleased to hear from the hon. Member for Waveney (Peter Aldous) who, in a thoughtful contribution, kept us on track. I intend to talk about the Bill in my closing remarks, as well as about what various hon. Members who did address it had to say My hon. Friend the Member for Greenwich and Woolwich (Matthew Pennycook) spoke about the original Bill being thin gruel, improved by amendments in another place. He is exactly right. My hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds) dispelled some of the myths and inaccuracies of some of the anti-renewables contributors tonight. He was also right about the missing parts and the ambition of the Bill, as was my hon. Friend the Member for Wakefield (Mary Creagh), who reminded us, in the light of our move to an Anthropocene age, of the ambition we need to have for our energy policy, in particular in relation to fuel poverty and energy efficiency The hon. Member for Brighton, Pavilion (Caroline Lucas) appeared to suggest that the best idea we could take was to close down the North sea. That is not something I buy into. Since we know gas and oil will be with us for some time, albeit in reduced amounts relative to the overall energy mix and more concentrated in transport and heating, it is better that it is sourced from a secure resource in the North sea than bought in from across the world. The North sea is a great sustainer of jobs, industry and supply line for the UK, as we have heard from a number of hon. Members. It is right we look to gain the best out of it for those jobs and that industry and for the security of the UK. It is not an either/or. It is right that we should pay full attention to the climate change commitments we have made. Labour will be seeking to strengthen some of the commitments as part of the Bill. The creation of the OGA to secure the best outcomes for the next phases in North sea development is an essential plank of Sir Ian Wood’s report. We fully support its creation as a free-standing body with powers to develop and co-ordinate the industry The North sea is, as Sir Ian Wood states, a mature resource. While we inevitably strain to know knowns and known unknowns, a number of authorities estimate that the North sea is up to 80% exploited already. Future finds and future fields will be small, possibly increasingly difficult to exploit, and will require support from existing infrastructure to ensure that production is logistically and economically possible. Increasingly, production will be underpinned from now on by co-operation and sharing of resources. One of the OGA’s particular tasks will be to ensure that this works equitably and effectively—a point underlined by the hon. Member for Richmond (Yorks) (Rishi Sunak), who in his contribution quoted a reminder from his local Unite official about the importance of jobs and security in his region There must be concerns about current responses to the low price of oil and their effect on longer-term considerations of the future development of the North sea. BP has just announced further job losses in the North sea that may well impact on maintenance work, safety and operation, and readiness for exploration, which reminds us of the sort of short-termism that, if the OGA works well, it can tackle effectively. Through the MER—maximising economic recovery—consultations, we need to see that the OGA really has suitable powers to sustain the UK offshore skills space and that phrases such as "cost reduction" are about efficiency and operation, not just code words for stripping back safety and imposing longer shift patterns and cuts to pay and conditions. In thinking about the future of the North sea, it is right that we take care to ensure that what is there in the form of infrastructure—both in structures and skills—is used to best advantage. That is not a theoretical point about future exploration; it is a very practical point about present realities. According to Oil & Gas UK, there are currently some 300 finds that have not been exploited further, some dating back 10 or so years. That is due not only to the current low oil price but to difficulties with infrastructure, and since the bulk of those fields are below 50 million barrels of oil equivalent, they are unlikely to sustain infrastructure connections by themselves The OGA has some powers in the Bill to ensure that decommissioning is thought about, and that platforms and pipelines are not just taken away and disposed of in a rush to develop what some might see as a new industry for the North sea—important though that is. That thought carries over to what could be a very important future for the North sea as a repository for carbon dioxide sequestered as part of the carbon capture and storage process. This is not just for the UK, because the capacity and extent of potentially available strata for deposit mean that the North sea could be Europe’s depository of choice in the future. An elegant underpinning of the need for a carbon capture strategy came from my hon. Friend the Member for Greenwich and Woolwich The fact that the Government very unwisely scrapped the UK’s plans to get ahead of most of the world in CCS at scale technology does not mean that CCS will not come or that it is needed any less for future energy and intensive industry production. It just means that we will be buying someone else’s technology more slowly at a greater cost, but the least we can do now is to ensure that the storage end of the process is secured in one of the best places in the world to undertake such activity and, on the back of it, to develop jobs, supply chains and income in parallel with the continuation of that mature field—and possibly at some stage even securing crossover between what is happening with oil recovery and the storage of CO2. I do not agree with the hon. Member for Aberdeen South (Callum McCaig), who said that these two issues, though connected, should be proceeded with separately. They are completely connected in respect of how the North sea will work now and for the future, so it is important to take careful note of what CCS has to offer the North sea in the longer term. We will therefore be pressing in Committee to secure a better overview of CCS by the OGA, and indeed to ensure that for the future the Government have a full strategy for dealing with CCS both in the North sea and across the country We will not divide the House tonight because some of the work to improve the Bill, which comes to us from the other place, has already been done. We shall seek in Committee to maintain those improvements, particularly in the part that deals with renewables and low-carbon energy, most notably in the Government’s clear intention—it is yet not with us as the Bill goes into Committee—to close the renewables obligation for offshore wind early. I am reminded of the strong contribution from my hon. Friend the Member for Sunderland Central (Julie Elliott), who told us just how wrong-headed a decision that looks to be I am afraid that the agenda that we have seen over the past few months—one of downgrading options for renewables in order to pursue a gas-based strategy overall —is at the heart of this particular issue. We say that there is, and should not be, a contradiction between supporting the continuing secure supply of the gas and oil that we will need for the foreseeable future and the development of renewable energy as a key component of the United Kingdom’s energy mix The hon. Members for Selby and Ainsty (Nigel Adams), for Daventry (Chris Heaton-Harris) and for Hertsmere (Oliver Dowden), who talked about subsidies for renewables, should be reminded that all energy is in effect now subsidised in one way or another. Indeed, we have just completed an exercise that subsidises gas, coal and nuclear generators to the tune of £940 million in one year —just to be there, not to produce anything. Perhaps that puts the figures for renewables subsidies that we have heard today into context In Committee, we will seek to defend the present status of the Bill without early closure of the renewables obligation, and will remind ourselves that we are talking about an existing subsidy rather than a new one. We will also seek, by means of new clauses, to clarify Britain’s longer-term low-carbon energy targets.