Rosebank Oilfield: Environmental Impacts

Wednesday 28th June 2023 Westminster Hall

[Relevant documents: Fourth Report of the Environmental Audit Committee, Accelerating the transition from fossil fuels and securing energy supplies, HC 109, and the Government response, HC 1221.]

11:00

[Mr Laurence Robertson (in the Chair)]

I will call Caroline Lucas to move the motion and then call the Minister to respond. As is the convention for 30-minute debates, there will not be an opportunity for the Member in charge to wind up at the end.

[Caroline Lucas (Brighton, Pavilion) (Green)]

I beg to move,

That this House has considered the environmental impacts of Rosebank oilfield.

It is a pleasure to serve under you, Mr Robertson, and to open this debate on the UK’s largest undeveloped oilfield. I want to put this debate firmly in the context of the escalating climate emergency. Quite simply, approving the Rosebank oilfield would be a disaster for the climate. At nearly 500 million barrels of oil and gas, the development is enormous. It is triple the size of neighbouring Cambo, which drew nationwide protests back in 2021. If it were burned, its contents would produce over 200 million tonnes of carbon dioxide. That is more than the combined annual CO₂ emissions of all 28 low-income countries in the world, which together are home to 700 million people. Developing Rosebank would be an act of climate vandalism and would risk pushing us past safe climate limits.

In his reply, the Minister may seek to absolve himself of responsibility by saying, as he did in my previous debate on fossil fuels and the cost of living, that he is

“confident that our approach is compatible with the journey to net zero.”—[Official Report, 11 January 2023; Vol. 725, c. 248WH.]

The Climate Change Committee has now confirmed once and for all that that narrative is false. Its damning progress report, which was published just this morning, is clear:

“Expansion of fossil fuel production is not in line with Net Zero.”

Indeed, it goes on to spell out that while the UK

“will continue to need some oil and gas until it reaches Net Zero…this does not in itself justify the development of new North Sea fields.”

I hope that we can therefore now put to bed the Government’s disingenuous arguments and see them for what they are: a last-ditch, desperate attempt to justify propping up the fossil fuel industry.

If the Minister needs any more evidence to persuade him, I am happy to oblige. First, Rosebank’s emissions would blow the allowance in the UK’s carbon budgets for oil and gas production, exceeding the CCC’s recommendation in the sixth carbon budget by 17%. That is presumably why Equinor is reportedly looking at sourcing renewable energy from the Viking windfarm on Shetland to electrify Rosebank’s operations—but that is clean, cheap energy that should be used to power hundreds of thousands of homes and businesses, not an enormous oilfield. Developing Rosebank would actively reduce the UK’s energy security.

[Richard Foord (Tiverton and Honiton) (LD)]

On the point about the use of renewable electricity for the extraction of oil, does the hon. Lady agree that it is disingenuous for lobby groups to talk about oilfields potentially saving carbon dioxide emissions? Does she also agree that comparing carbon emissions in the extraction of oil in the UK with carbon emissions elsewhere is both a red herring and greenwashing?

[Caroline Lucas]

The hon. Member will not be surprised to hear that I do indeed agree. Unfortunately, an awful lot of greenwashing goes on when it comes to this debate.

Secondly, it is not just the UK that must reach net zero by 2050 if we are to avoid the worst effects of global heating. According to the sixth assessment report by the Intergovernmental Panel on Climate Change, the whole world must be there by 2050 to stay below 1.5°. If we are to act in accordance with the principle of common but differentiated responsibilities—which was, let us remember, a central tenet of the Paris agreement—it is clear that the UK, as one of the first countries to industrialise using fossil fuels, must go much further and faster than many others.

Thirdly, the Government’s so-called climate checkpoint fails to take account of scope 3 emissions. In other words, the checkpoint simply ignores all the emissions that are produced when the oil and gas are actually burned, so it is no safeguard at all.

Finally, although Ministers try to ignore our global climate reality, the truth is that there is already far more coal, oil and gas in existing developments than can be safely burned if we are to have a liveable future. According to the UN report “The Production Gap”, Governments already

“plan to produce more than double the amount of fossil fuels in 2030”

that would be consistent with staying below 1.5°. The International Energy Agency has made it clear that there can be no more oil and gas developments if we are to limit global temperatures to that critical threshold. Global scientists pretty much agree, yet we have a Government who somehow think they know better than hundreds of UK scientists and the vast majority of thousands of global scientists.

[Patrick Grady (Glasgow North) (SNP)]

I thank the hon. Lady for all the leadership she shows on these issues. Is it not also the case that a lot of our constituents are showing the way as well? They have probably communicated to most of us here today the passion they feel, and they understand the need for a just transition. There are ways to meet both our climate goals and our energy requirements without new oil and gas exploration, exactly as she is outlining.

[Caroline Lucas]

The hon. Gentleman is absolutely right. The majority of public opinion is on our side, and everyone from the Women’s Institute to the scientists is saying the same thing.

I want to talk about climate leadership. Approving Rosebank would destroy any last shred of the UK’s climate leadership. The UK’s record was built on the Climate Change Act 2008 and on being the first major economy to enshrine net zero in law, but as the Climate Change Committee’s report makes clear today, it has been decimated by the Government’s approval of the UK’s first coalmine in 30 years, and by the fact that they have issued more than 100 new exploration licences and are now failing to rule out this enormous oilfield. In the words of the CCC, the UK

“has lost its clear global leadership on climate action”.

[Olivia Blake (Sheffield, Hallam) (Lab)]

I thank the hon. Member for securing this valuable and important debate. I will speak freely and say that it is quite absurd that we are debating this issue today—the day after the four-year anniversary of the net zero target becoming law in the UK, and the morning that the CCC has released its scathing progress report to Parliament. The CCC says that its confidence in the UK reaching net zero is “markedly less” than it was a year ago, and that approving new fossil fuel infrastructure is sending mixed messages about the UK’s climate plans. Does the hon. Member agree that this is a depressing conclusion from the CCC that shows a deficit in climate leadership where there should be none?

[Caroline Lucas]

I absolutely agree. In one sense, it is quite exquisite timing to have this debate and this discussion about Rosebank on the very morning of the CCC report, which is not only depressing but frankly damning when it comes to the Government’s lack of action. On leadership, I will quote Lord Deben, the chairman of the Climate Change Committee, who has noted that the Government’s commitment to the ongoing expansion of North sea oil and gas means that they have

“perfectly properly been called hypocrites”.

Let me briefly turn to some of the bogus arguments that Ministers traditionally advance to try to justify the unjustifiable. I have been told time and again in this place that new licences are essential for our economy and for energy security. In reality, nothing could be further from the truth, especially when it comes to Rosebank.

[Richard Burgon (Leeds East) (Lab)]

I congratulate the hon. Member on securing this important debate. Of course Rosebank oilfield should not go ahead, and of course it is an act of climate vandalism for it do so in the context of a climate emergency. Given the bogus arguments we hear from Government Ministers who justify the unjustifiable, is it not the case that oil and gas giants have far too much influence in our politics, and that we cannot solve the climate crisis if our political system and Government are in thrall to the corporate oil and gas interests?

[Caroline Lucas]

To reinforce what the hon. Member said, we know that the president of COP28 is going to be somebody who absolutely comes from that background, so it is not just a question of domestic collusion with oil companies. The big climate meeting happening later this year will be presided over by a president who we know is absolutely involved in the oil industry. We need to get fossil fuels out of politics once and for all.

Rosebank will not improve energy security, because 90% of its reserves are oil, not gas. Like the vast majority of oil from the North sea, it will be put in tankers and exported overseas, because it is not suitable for UK refineries. Let us be really clear: there is no argument around energy security in favour of Rosebank.

Secondly, Rosebank will not bring down our energy bills, because it does not belong to us. Any oil and gas that is sold back to the UK will be sold at global prices. As the then Secretary of State, the right hon. Member for Spelthorne (Kwasi Kwarteng), said in February last year:

“Additional UK production won’t materially affect the wholesale market price.”

Thirdly, Rosebank will not deliver long-term job security. Equinor claims that Rosebank will deliver 1,600 jobs, but the real number is less than a third of that, with the rest being short-term, temporary jobs just during construction. There are far more jobs, as we know, in a green energy future. What we need is a proper, just transition, hand in hand with the unions, for those workers and communities, to enable them to reap the benefits and rewards of those decent green jobs.

Fourthly, Rosebank will not be better for our planet than imports. Stopping Rosebank does not mean that we will import more oil. Let me say it again: the vast majority of oil from Rosebank will be exported. Even if Rosebank’s oil did reach UK refineries, the development plans submitted show that it is likely to be more polluting than the oil and gas produced in Norway, our largest import partner. More oil production means more oil consumption, less oil production means less oil consumption—it is basic economics. What will bring down imports is reducing fossil fuel dependence across our energy system.

As if all that were not evidence enough, Rosebank is also disastrous for our marine environment. As the Minister will know, the pipeline required to transport Rosebank’s tiny gas reserves would cut through the Faroe-Shetland sponge belt marine protected area, a precious and fragile ecosystem that is home to myriad species. How can the Government possibly reconcile this development with their commitment to protect 30% of land and sea by 2030, especially in the context of Equinor’s assessment of potential damage to coral gardens having been questioned by the regulator? The development would lay infrastructure through a vital ocean habitat, and an oil spill from Rosebank would be potentially catastrophic. The UK already has the most fossil fuel developments in nature-protected sites in the whole world. Let us not add yet another.

There are also plenty of economic arguments against Rosebank, since the development would be staggeringly costly to the public purse. In the words of the UN Secretary-General, investing in new fossil fuel infrastructure is

“moral and economic madness”.

It is madness, because if the Secretary of State fails to stop this project going ahead, the British public will carry almost all the costs of developing Rosebank, while the Norwegian owner, Equinor, gets to pocket the profit. To be specific, Equinor would receive more than £3.75 billion in tax breaks, thanks to this Government’s subsidy regime. Will the Minister explain to me in what world it is acceptable to hand billions of public money to a climate-wrecking company that last year raked in record profits of almost £24 billion, let alone in the midst of a cost of living scandal when the NHS is on its knees, mortgage rates are going through the roof and parents cannot afford to feed their children?

[Tommy Sheppard (Edinburgh East) (SNP)]

The hon. Lady is making a compelling argument against licensing new extraction at Rosebank, and one that I agree with. Does it not seem common sense to most people that reliance on oil and gas will not be reduced by drilling for more of it? The ordinary folk of this country can see that. Why does she think the Government are engaged in this crass idiocy of arguing the opposite of common sense?

Would the hon. Lady also reflect on the differences in attitude between the Scottish Government—who have a more critical and hesitant view of new oil exploration in the North sea—and the current UK Government? Would it be better for the decision on the matter to be devolved to the Scottish Government to allow them to make a more considered decision?

[Caroline Lucas]

I broadly agree; I think it probably should be a devolved issue. I certainly think the Scottish Government are doing a much better job, with more progressive policies in the area of oil and gas. The hon. Gentleman would expect me to refer to the fact that there are Greens in coalition with the SNP in the Scottish Government, and I am pleased about the progress they have managed to make in this area.

I want to come to the position of His Majesty’s official Opposition. I am sad to see none of them here in a formal capacity, though I am delighted to see Back Benchers. While I welcome their commitment not to issue new licences if they were to become the next Government, let me be clear that the revelation that they would not revoke Rosebank’s licence is no less than a tacit endorsement of this climate catastrophe. I worry that the official Opposition, in refusing even to consider rescinding that licence, may as well have given the green light to the project.

I was shocked to hear hon. Members from the shadow Front Bench team saying that rescinding an existing licence sends exactly the wrong signal to investors all over the world. Frankly, that is absurd. It conflates projects that are already operating in the North sea with Rosebank, which is an entirely new development from which first oil is not expected until between 2026 and 2028. A final investment decision has not yet been taken, with developers saying that that will come shortly after approval. Investors are therefore still assessing whether to press ahead with Rosebank, so the official Opposition should have made it crystal clear to them that they should not press ahead with it.

While it would get more complicated to cancel Rosebank’s licence if this reckless Government approved it, that does not mean that it would be impossible. I urge Labour to leave no legal stone unturned and no avenue unexplored to overturn this disastrous decision. That could include, for example, passing new legislation strengthening climate and environmental requirements and thus allowing a licence to be reviewed or revoked, following the Dutch example of phasing out coal power.

The risk of potentially being required to pay costs once again reinforces the urgent need for the UK to withdraw from the energy charter treaty, which allows fossil fuel giants essentially to hold British taxpayers to ransom. Calls for that have so far fallen on deaf ears but have been bolstered by the Climate Change Committee today, which has said:

“There is a strong case for the UK to reconsider its membership”.

It was reported last week that Rosebank will be approved by the regulators in the next fortnight, after which the Secretary of State will have to decide whether to intervene or let it pass, giving the decision a de facto green light. Time is ticking for the Government to act. The only question is whether they will do the right thing for people and planet or commit a climate crime. The choice is clear, so I will conclude with a number of crucial questions for the Minister.

Will the Government review their approach to oil and gas licensing in the light of today’s guidance from the Climate Change Committee? If they do not, do they really want to send the signal that they think they know better than hundreds of scientists nationally and thousands globally? Will they finally scrap the investment allowance, which sees the taxpayer pay fossil fuel companies huge amounts of money to pump yet more filthy oil and gas? Will they withdraw from the energy charter treaty, following many other European countries including France and Italy? Crucially, will the Government stop the development of Rosebank, or are they content to be on the wrong side of history?

I hope that when the Minister responds, he will make reference to the Climate Change Committee’s report today. If he has not had time to read it all, I hope he will scroll back on this morning’s “Today” programme and listen to Lord Deben at 8.45 am, where he will hear his fellow Conservative colleague, former Minister and now chair of the independent Climate Change Committee say that there is reduced confidence that targets will be met, that just because past targets have been met there is no guarantee that future ones will be, that only 33% of measures necessary to achieve the targets are actually in place and that, in terms of future targets, the Government

“are in no state…to achieve those ends and it is…not true to say they will”.

Lord Deben also said that

“the Government is relying, for example, on technologies we don’t have. It is not doing the things which we have to do.”

I very much hope the Minister will reflect on those words, as well as my own, and tell us today that the Government will not go ahead with the reckless decision to give a green light to Rosebank.

11:18

[The Minister for Energy Security and Net Zero (Graham Stuart)]

It is a pleasure to serve under your chairmanship, Mr Robertson. I congratulate the hon. Member for Brighton, Pavilion (Caroline Lucas) on securing this important debate and on bringing us back into the positions in which we often seem to be in this Chamber.

The hon. Lady made reference to the Climate Change Committee. Lord Deben is coming to the end of a distinguished 10 years as chairman of that committee, which was set up in the Climate Change Act 2008 precisely to challenge Government, critique what we do and encourage further ambitious action. It is in no small part thanks to his leadership and his being waspish— I think his friends would say he was often waspish—from beginning to end that Governments have been challenged and driven to do what they should to deliver on climate. It is thanks to the Climate Change Committee and his leadership that this country has cut its emissions by more than any other major economy in the world since 1990. It is partly thanks to him that we have gone from the risible position, left by the Opposition when they left power in 2010, of generating less than 7% of our electricity from renewables to now generating well over 40%. As recently as 2012, nearly 40% of our electricity came from coal, the most polluting of fossil fuels. Next year, it will be 0%.

The hon. Member for Brighton, Pavilion is fully aware, and I am sure she understands, that I cannot comment on the detail of the application for the proposed Rosebank oil and gas development. Development proposals for oilfields under existing licences, such as Rosebank, are a matter for the regulators—the North Sea Transition Authority and the Offshore Petroleum Regulator for Environment and Decommissioning—following their standard regulatory processes. As such, it would be neither appropriate nor helpful for me to engage in a running commentary on a live application ahead of a final decision being reached by both regulators.

What I can say is that, as is normal for such applications, the regulators submit all proposals for extensive scrutiny. That scrutiny includes a detailed environmental impact assessment process and an extensive consultation. Comment is invited on the proposals from a number of statutory nature conservation bodies, and there is an opportunity for members of the public and non-governmental organisations to engage in the decision-making process. Once both regulators have made their final decision about the Rosebank application, that decision, along with a detailed summary of OPRED’s conclusions on its likely environmental impact, will be published on the OPRED website for all to see and critique.

To move away from the specifics of the Rosebank development, I am proud to say that, unlike those of most other countries, the UK’s climate commitments are set in law. Of course, it was this Conservative Government who not only transformed the parlous state that we inherited from the previous Labour Administration, but set in law that we should move to net zero by 2050—we were the first major economy to do so. The UK is unswerving in its determination to meet its climate commitments, and has one of the most ambitious 2030 targets in the world. Between 1990 and 2021, we cut our emissions by 48% while growing the economy by 65%—we decarbonised faster than any other G7 or major economy. As we rapidly transition our energy systems, we are supporting emerging economies to do the same. We are advocating the phase-out of coal power and ending unabated fossil fuel use.

The reality is very different from the picture painted by the hon. Lady and those who intervened on her. This country, the most decarbonised major economy in the world, is more than 75% dependent on fossil fuels for its energy right now; that is the basis of this civilisation. Our aim is to accelerate the reduction in oil and gas use, but we recognise that they are essential to modern life, and will remain so for many years to come, including in the production of cement, steel, plastics, chemicals, medicines and fertilisers. We are a net importer of oil and gas, and a fast-declining producer, so I ask the hon. Lady not to use words such as “expansion”. By supporting new licences, we are moderating the savage decline in domestic production, and that is the right thing to do.

[Caroline Lucas]

Will the Minister give way?

[Graham Stuart]

I will make a little more progress, and then I will come back to the hon. Lady.

Reducing the decline in domestic production will not increase the use of fossil fuels in the UK. The hon. Lady’s economics seem rather upside down. It is demand that typically drives supply, rather than supply driving demand, although I recognise that there are movements in both directions. Increasing domestic production will avoid the need to substitute British gas with foreign liquified natural gas, which has much higher emission intensity. The effect of the proposal from the hon. Lady and His Majesty’s Opposition would not be that we consume less fossil fuel; it would be that we import more in tankers. There is not the option to have more Norwegian gas. Not producing our own gas would result in generating higher emissions directly. As well as that, to pick up on the economics of this, they say that the proposal will not affect price. There is a global price; it is a global market. Our oil is traded. It goes to refineries and comes back in the form of medicines, plastics and other things that are vital to our modern society. It is an international market and we are net importers. It is important to recognise that there are tens of billions of pounds coming into the Exchequer, especially at the moment with the energy profits levy tax rate at 75%.

We cannot make out that new projects would somehow cost the taxpayer, or be subsidised by the taxpayer. North sea production brings tens of billions of pounds into the UK Exchequer. It makes a material difference to our energy security because we produce it here at home. It also supports hundreds of thousands of jobs, which His Majesty’s Opposition and the Scottish National party have turned their faces against—and for what? Will there be an environmental gain? There will not be. It will not make a difference, by a single barrel of oil, to how much we consume. What it will do is lose hundreds of thousands of jobs, lose tens of billions of pounds for the Exchequer and lead to higher emissions. And it is worth the House recognising this killer point: it will remove the very supply chain that we need for the transition. The Climate Change Committee and every international body looking at this issue say that we need carbon capture, usage and storage, and we need hydrogen. Which companies, capabilities or engineering capacities are going to deliver those? It will be the jobs, people, balance sheets and skills that are vested in the traditional oil and gas companies, all of which are now involved in delivering the transition.

[Tommy Sheppard]

Will the Minister give way?

[Graham Stuart]

I will. Perhaps the hon. Gentleman can explain why Scottish nationalist policies will have a negative effect on the environment and cause the loss of hundreds of thousands of jobs in this country—for what?

[Tommy Sheppard]

With the greatest of respect, what the Minister says does not make sense. If most of the oil and gas coming out of Rosebank will be exported, how does not doing this lead to an increase in imports?

[Graham Stuart]

As I say, we are net importers in a global market. Oil and gas is processed in different places. It goes out and it comes back. As net importers, the alternative to using that gas here is that we will have more tankers coming in. As the hon. Gentleman knows, or certainly should, the upstream emissions attached to that are two and a half times higher than the emissions attached to gas, which Scottish workers are producing from British fields to the benefit of every taxpayer and the energy security of this nation.

[Caroline Lucas]

It is interesting that the only alternative to one set of fossil fuels is another set of fossil fuels. That is exactly what Lord Deben criticised in his report today. If the Government had done what they were meant to do, and actually set out the investment in home insulation schemes and reduced energy demand, we might not be in this position. If they had scaled up much more in the many other technologies that are out there, we would perhaps not be in this position.

I come back to what the CCC said. I expect the Minister to disagree with me, but does he disagree with Lord Deben and the Climate Change Committee? They said:

“Expansion of fossil fuel production is not in line with Net Zero”.

They said that the UK will need “some oil and gas”, but that that does not

“justify the development of new North Sea fields.”

Does the Minister disagree with his colleague?

[Graham Stuart]

As I said, North sea oil and gas production is declining. It will continue to decline with new licences—

[Caroline Lucas]

That was not my question.

[Graham Stuart]

It will not be expanding; it will actually be reducing. Throughout that time, even as we bring down our demand—ahead of nearly all other countries—we will still be net importers of oil and gas. It makes no sense, or only in the parallel universe occupied by the bizarre fringes of politics does it make sense for us to import—[Interruption.] It will not make a difference, by a barrel of oil, to our consumption. However, it will make a difference to the balance sheet, the jobs and the capabilities that we need to do the transition.

The hon. Lady is quite right to challenge me on this country’s past record on insulation—on the parlous state of the housing stock, for instance, and energy efficiency. In 2010, when we came into power, just 14% of homes were decently insulated with an energy performance certificate rating of C or above; in other words, 86% were not. That was the legacy from Labour. By the end of this year, it will be 50%; we have moved from 14% to 50%—

[Mr Laurence Robertson (in the Chair)]

Order. I do not want to bring this very lively debate to a close, but I am afraid I have to.

Motion lapsed (Standing Order No. 10(6)).

11:30

Sitting suspended.