Rosebank Oilfield: Environmental Impacts
(Limited Text - Ministerial Extracts only)
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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.
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.
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—
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)).