Offshore Petroleum Licensing Bill

Baroness Sheehan Excerpts

2nd reading
Tuesday 26th March 2024 Lords Chamber

[Baroness Sheehan (LD)]

My Lords, I thank the House for allowing me to speak in the gap. Before I move on to what I had planned to say, I will ask the Minister three questions. First, will the successful licensees be eligible for grants? If so, how much will they be? Secondly, who will be responsible for decommissioning costs throughout the lifetime of the new fields? Thirdly, if in the fullness of time any of the new fields become stranded assets, what safeguards will he put in place to make sure that the British taxpayer is not liable for the bill?

I will keep my remarks very short. I want to make just a few points on the Bill’s conflict with the legally, morally and ethically binding net-zero commitments that the UK has made both domestically and in international fora.

I will start with the Bill’s conflict with the IEA, the International Energy Agency, which knows a thing or two about global energy security. In its 2021 report, Net Zero by 2050 A Roadmap for the Global Energy Sector, the IEA stated that there could be no new oil and gas fields after 2021 if we are to limit warming to 1.5 degrees centigrade. It reiterated this in 2023. Our own Climate Change Committee, in its COP28: Key Outcomes report of January this year, stated very politely that

“the UK should reassess whether further exploration for new sources of fossil fuels is aligned with the UNFCCC principle of Common but Differentiated Responsibility and the Global Stocktake”.

It refers, of course, to our NDC.

A red alert warning from the World Meteorological Organization just last week confirmed that 2023 was the hottest year on record by a clear margin. According to the FT’s editorial team in an opinion article just two days ago, on 24 March:

“More than 90 per cent of the world’s oceans suffered heatwave conditions, glaciers lost the most ice on record and the extent of Antarctic sea ice fell to by far the lowest levels ever measured”.

Given all that, surely discretion is the greater part of valour, and we must proceed with extreme caution and seek to reduce the greenhouse gas inventory as quickly as possible. I know that the Minister will say that he agrees with me and will assert that this Bill does not derail the UK’s direction of travel. But that is exactly what it does. The Bill does not sit comfortably with the Government’s commitments made at COP 28 just a few short months ago, along with 200 other countries, to transition away from fossil fuels and accelerate action in this critical decade. We cannot maintain credibility on the global stage while we say one thing and do exactly the opposite.

--- Later in debate ---

[Lord Callanan (Con)]

My Lords, I thank all Members from across the House for what has been quite a good debate, for the interest that they have taken in the Bill and for the many insightful contributions that we have had today. I think the debate has shown how interconnected the future of North Sea oil and gas production is with the huge effort we are making—and I am grateful to the noble Earl, Lord Russell, for instance, for pointing out the huge effort we are making —to decarbonise the UK economy through what is a renewables revolution. Nobody disputes that. I do not think anybody in the debate disputed the importance of net zero.

The Government’s position is entirely consistent with delivering on our targets, but we have to manage the decline of North Sea oil and gas production in a predictable and responsible way. I thought that was an excellent point made by the noble Lord, Lord Bruce, from the Liberal Democrat Benches. It is a pity that his two colleagues did not reflect his excellent contribution.

Restrictions on future licensing would be a grave act of national self-sabotage and would place in jeopardy more than 200,000 jobs that OEUK figures show are currently supported by our domestic oil and gas industry. It would forego up to 1 billion barrels of oil equivalent and, equally importantly, remove an important source of tax revenue. That would mean more imports, including of liquefied natural gas, which has up to four times the production emissions of our own natural gas—a point well made by my noble friends Lord Lilley, Lord Moynihan and Lord Ashcombe. It would mean that we forego investment in clean technologies and the energy transition that our oil and gas industry is vital to driving forward, and it would leave us more vulnerable to hostile states, as we saw during the invasion of Ukraine. We need this investment, and we need the sector’s existing supply chains, expertise and skills. Introducing annual licensing rounds through this Bill will help to protect this investment. It will strengthen our energy security and support that essential transition to net zero.

Let me now deal with some of the specific point made during the debate. I thank my noble friends Lord Moynihan and Lord Ashcombe for their speeches, which recognised that the Bill will support our essential energy security. However, I am aware that other noble Lords, including the noble Lord, Lord Lennie, the noble Baronesses, Lady Hayman and Lady Young, and the noble Earl, Lord Russell, suggested the opposite. As I outlined in my opening speech, the UK still relies on oil and gas for most of our energy needs and will continue to do so well into the future, despite our excellent record on rolling out renewables. The UK is exceptionally well placed to support our own energy security and that of our neighbours and allies. As has been pointed out, we have pipelines connecting us to Norway, the Netherlands, Ireland and Belgium. We have the second-largest liquefied natural gas port infrastructure in Europe, and our infrastructure was essential to helping out our European friends and allies during the Russian crisis that they all suffered last winter.

Of course, we also have our domestic oil and gas production, which is a vital part of ensuring our own and our allies’ energy security. We currently produce about half our gas demand from the North Sea. The vast majority of UK-produced gas lands in the UK and combines with imports and storage to provide a healthy and well-supplied gas market. While 80% of the oil produced here is indeed refined abroad, 90% of that takes place in Europe, where it is made into the products that we need in the UK. Maintaining this resource reduces our vulnerability and that of our European allies to hostile states and leaves us less exposed to unpredictable international events. If the invasion of Ukraine pointed out anything to us, surely it pointed out that. Following that invasion, it was our domestic capability that helped us to support our European neighbours to wean themselves off Russian gas and oil, which most European states have now successfully done. By giving industry certainty about the future of licensing rounds, the Bill will help safeguard our domestic production and, in doing so, enhance the UK’s energy security.

Next, let me respond to the points raised by the noble Lord, Lord Lennie, and the noble Baroness, Lady Hayman, that the Bill will not reduce energy bills. Of course, it is true that oil and gas are traded on a global market. As a net importer of oil and gas, this benefits us. The Government have also ensured that excess energy profits are being used to ease pressures on families across the country. This support helped to save the average household £1,500 on its energy bill last winter. The difficult but necessary decision to further extend the energy profits levy for one more year will raise an additional £1.5 billion contribution from the sector to help us cut taxes for hard-working families, reward hard work and support economic growth.

I have also heard claims that the Bill affects the UK’s international leadership on climate. I thank my noble friend Lord Lilley for his excellent speech, which showed why that is not the case. By contrast, some noble Lords—the noble Lord, Lord Lennie, the noble Baronesses, Lady Hayman, Lady Sheehan and Lady Blake, and the right reverend Prelate the Bishop of Norwich—suggested that somehow the Bill would negatively impact our climate leadership. Our record speaks for itself. We are, as I constantly repeat, the first major economy to halve our emissions, and we are leading the world with our climate performance. Our 2030 target is one of the most ambitious among major economies, and again I am glad that the noble Earl, Lord Russell, recognised this. The Bill, I repeat, will not undermine those commitments.

Not proceeding with new licensing, as is the Opposition’s policy, is the real risk to our climate leadership. If we lose the skilled jobs that will transfer from oil and gas to renewables, we put at risk the transition to renewables and net zero. Some other noble Lords, including the noble Baroness, Lady Hayman, and the noble Baroness, Lady Jones, who I am sorry to say is no longer in her place—apologies, she is sitting on the Bishops’ Bench, which is a great surprise to us all; I did not see the noble Baroness down there—raised concerns about the tests in the Bill. These tests have been carefully designed to ensure that new licensing supports our important net-zero commitments. The tests are in fact meaningful. Those tests being met would be a reflection of the fact that the UK is a net importer and that production emissions associated with North Sea gas are lower than imported liquefied natural gas.

There was also some discussion of carbon capture, usage and storage. This point was raised by the noble Baronesses, Lady Jones and Lady Young. The Climate Change Committee, often quoted in this debate, has described CCUS as

“a necessity not an option”

for the transition to net zero. CCUS will be essential to meeting the UK’s 2050 net-zero target, playing a vital role in levelling up the economy, supporting the low-carbon economic transformation of our industrial regions and creating new high-value jobs. The first two CCUS clusters are in the north-west and north-east of England, and we are proceeding as fast as possible to final investment decisions for those clusters. They are already generating thousands of jobs in Merseyside in the north-west and in Teesside, areas that the noble Lord, Lord Lennie, and I know well.

I move on to the points raised about marine protected areas. The noble Baronesses, Lady Hayman, Lady Willis and Lady Boycott, raised the important matter of marine protection. Let me also address the questions posed by the right reverend Prelate the Bishop of Norwich. I assure the House that the Government share the desire to protect the marine environment. Indeed, we have committed that we will be the first generation to leave the environment in a better state than that in which we found it. The UK is committed to the 30 by 30 global target under the Kunming-Montreal global biodiversity framework.

We already have a robust regulatory framework in place to ensure that marine protected areas are effectively protected. Licences will be awarded only after ensuring that the environmental regulator OPRED is satisfied that activities will not have negative effects on those important protected areas. Future licensing will not affect our ability to reach our targets for ensuring that our marine protected areas are in a good or recovering state.

Furthermore, it is important to emphasise that human activity is not banned in marine protected areas. We constrain activities in MPAs, but the intention of the policy is not to forbid activity, especially where the environmental impact is assessed as not causing damage and is closely evaluated and monitored. Work is under way to ensure that we strike the right, important balance between our different marine priorities. The soon-to-be-commissioned strategic spatial energy plan and the cross-government marine spatial prioritisation programme will ensure that we take a more strategic approach to identifying future sites for marine developments and energy infrastructure, while allowing for nature’s important recovery.

In response to the questions from the noble Baroness, Lady Sheehan, the North Sea Transition Authority is responsible for ensuring that operators decommission abandoned wells within the recommended timeframe of two to five years. The noble Baroness also asked me if we would be giving any grants for oil production: no is the answer. In fact, the opposite is the case: any new production will generate billions in tax revenues, the very opposite of giving out government grants. The Government continue to work with the NSTA and the Health and—

[Baroness Sheehan (LD)]

The Minister has not addressed my third question, about stranded assets. Should these fields become so in the fullness of time, will he put in place safeguards to make sure that the British taxpayer is not liable for the costs?

[Lord Callanan (Con)]

The noble Baroness often raises this point. The industry pays billions of pounds in taxes every year, and oil companies are ultimately responsible for decommissioning their assets. As has been pointed out, they are commercial operations. If the fields are stranded assets and the oil companies lose money on them, I doubt whether anybody will shed any tears for them. They are responsible for decommissioning the assets, as is taking place now in many of the depleted fields. I think she needs to have a friendly cup of coffee with her noble friend Lord Bruce, who will fill her in on the details of how the industry works.

[Baroness Sheehan (LD)]

Yes, we get billions in taxes; that is because trillions are made in profits. What I am really concerned about is that if the businesses fold, the profits have been pocketed but the taxpayer will be left with the costs. Does the Minister accept that?

[Lord Callanan (Con)]

If the noble Baroness is asking me if they pay billions in taxes and make billions in profits, then yes, I guess the answer is that the international oil companies do very well out of it. Of course, some of them are also financing renewable infrastructure. Some of the big oil and gas companies are helping to invest in CCUS in this country. We very much hope that they will continue to make profits, because it pays our pension funds and a lot of investors, and a huge amount of money into the UK Exchequer that the Liberal Democrats are normally very keen on spending. The noble Baroness needs to allow that money to be raised in the first place. The companies are responsible for decommissioning their assets.

The Government continue to work with the NSTA and the Health and Safety Executive to ensure that well decommissioning is progressing in line with the relevant safety and environmental regulations and standards. That is exactly the same as has been happening previously. The UK has a very robust decommissioning regime whereby operators are responsible for decommissioning their assets at the end of their useful life. This regime of course includes protections for taxpayers, so that the costs fall on those operators. I hope the noble Baroness is reassured by that.

I was of course also pleased to hear the support of the noble Lord, Lord Bruce, for the jobs in the sector. He has a lot of relevant experience, particularly in north-east Scotland. This is in line with the words of Sir Ian Wood:

“Owing to a world-class oil and gas sector, the North East … is home to the critical mass in skills and expertise that will be crucial to ensuring that we successfully accelerate new and green energies, protecting and creating jobs as we do so”.


I am pleased to have the support of the Labour Party, but we must retain those skilled jobs in the industry, and our firm belief is that this Bill will help us to achieve exactly that.

To conclude, the Bill will give industry the certainty and confidence it needs to continue to invest in the North Sea, strengthening our energy security and supporting the energy transition as we move towards our goal of net zero, through the introduction of annual licensing rounds, subject, of course, to all the appropriate tests being met. I look forward to continuing the scrutiny of the Bill as it progresses through the House, but in the meantime, I beg to move.

Global Heating

Baroness Sheehan Excerpts

Thursday 18th January 2024 Lords Chamber

Asked by

[Baroness Sheehan]

To ask His Majesty’s Government what assessment they have made of recent reports that global heating is likely to pass the 1.5-degree Celsius threshold this year, and how they intend to cooperate with international partners to mitigate the impacts of climate change.

[Baroness Sheehan (LD)]

My Lords, I thank all noble Lords who will be contributing to this debate; their participation is much appreciated. I also draw attention to my role as a director of Peers for the Planet and to the excellent briefing produced by it for this debate, entitled Why UK Action Matters. My own contribution will focus primarily on the 1.5 degrees Celsius target, its significance, and why breaching it matters.

Let me take us back to the last day of the Paris COP in 2015, when euphoria broke out because, against all the odds, 196 nations had signed up to the common intent of keeping global temperature rises well below 2 degrees Celsius, and to pursue efforts for a rise of no more than 1.5 degrees higher than pre-industrial levels. This agreement was important because it reflected the acceptance of the overwhelming consensus among climate scientists that greenhouse gas emissions from the industrialisation of western economies since the 1800s are heating our planet to unacceptable levels. The evidence was incontrovertible then and it is even more so today.

I will just say a few words about the Keeling curve, named after its creator, Dr Charles David Keeling, who first started to plot the concentration of carbon dioxide in the earth’s atmosphere in 1958, taking measurements at Hawaii’s Mauna Loa Observatory. Keeling was interested in the seasonal variation of the concentration of carbon dioxide, which showed, if you like, the respiration of our planet as a living, breathing organism. However, as measurements accumulated, he noticed something odd: the annual trend in the concentration of global carbon dioxide was upwards, rising from about 360 parts per million in 1959 to about 370 parts per million in 2000 and around 420 parts per million today. The more numerically inclined noble Lords among us will notice that the rate of change is increasing. When taken together with measurements of concentration of atmospheric carbon dioxide from Antarctic ice cores, and plotted on a graph, as NASA has done on its website, a frightening picture emerges. In the span of the 800,000 years for which we have data, there is an exponential spike in the concentration of carbon dioxide since the start of the Industrial Revolution—a comparatively tiny speck of time.

We also know that there is a direct link between atmospheric concentration of carbon dioxide and global warming, which is manifesting itself as the climate chaos and threat to nature that we see today. The Intergovernmental Panel on Climate Change was created to provide policymakers with regular scientific assessments on climate change, its implications and potential future risks, as well as to put forward adaptation and mitigation options. Through its assessments, the IPCC determines the state of knowledge on climate change. IPCC climate scientists are urging political leaders to do all they can to keep within the l.5 degree Celsius target because, in a world with a rise of 1.5 degrees Celsius, many of the deadliest effects of climate change are reduced—some of which we heard addressed in the previous debate on infectious diseases. Beyond 1.5 degrees Celsius, the catastrophic, irreversible melting of ice sheets on Greenland and Antarctica is likely to be triggered, meaning that sea levels would continue to rise well beyond 2100.

There are signs that this is happening already. Yesterday, the New York Times reported that NASA studies show that Greenland is shedding 20% more ice than previously estimated. The loss of the ice sheet could mean that the associated albedo effect would be lost—that is, the reflectivity of the ice would disappear with the ice sheet, and the newly-exposed bare ground would absorb the sun’s heat instead and release methane into the atmosphere, exacerbating heating even further. In addition, melting freshwater would reduce the salinity of the surrounding ocean, with consequences for the system of ocean currents that govern our weather, including the Gulf Stream. We would quite literally be in uncharted waters.

The year 2023 was the hottest by far ever recorded—shockingly, even hotter than scientists had predicted. Despite that, we have not yet breached the IPCC 1.5 degrees Celsius target, which is a longer-term average, but are we going to overshoot it? The answer to that question has to be yes, very probably, but what matters is by how much and how we deal with it. That is still within our control. Indeed, COP 28 has instilled hope that we can limit the damage. The early success of COP 28 on day one, when the loss and damage fund was announced, boded well.

I cannot overstate the importance of the fund. Small island nations and low-lying nations are already suffering the consequences of the climate emergency. To ask them and other developing countries to pay to reduce emissions that they were not responsible for, and to put in place costly adaptation measures for their very survival, is to rub salt into the wound and unjust. In any case, they simply do not have the resources to do so. Yet research from Oxford University tells us that cumulative emissions from small emitting countries, ourselves included, add up to a significant 31% of total development global emissions. We are all in this together.

The fact is that, unless we get smaller developing countries on board, we cannot transition away from fossil fuels—a phrase that is now in the world lexicon thanks to the final agreement document of COP 28; although in my view, and I believe that of the Government’s team of negotiators at COP 28, “phase out” would have been the preferred term. Nevertheless, finally, after 26 or so COPs, we have a mention of fossil fuels—a belated but welcome recognition globally of the cause of the climate emergency.

However, even if we were to stop emissions from fossil fuels tomorrow, according to the Royal Society and other esteemed sources, it would take many thousands of years for atmospheric CO₂ to return to pre-industrial levels, due to its very slow transfer to the deep ocean and ultimate burial in marine sediments. What is needed today is global leadership to move us away from fossil fuels as quickly as possible. We must stop adding to the inventory of greenhouse gases while ramping up energy from renewables, because the world needs more energy.

For many years, the UK has been in the vanguard, particularly in generating renewables. Where we have led, others have followed. However, the world is aghast at this Government’s recent actions to give the go-ahead to a new coal mine in Cumbria and their insistence on pushing ahead with the unnecessary Offshore Petroleum Licensing Bill to issue new annual licences to oil and gas companies. My own view is that both measures are gesture politics and neither will ultimately matter. The real damage is the loss of our powerful voice on the international stage, helping the world to move away from the precipice of climate breakdown and the associated collapse of our planet’s natural ecosystems.

I will leave noble Lords with one very important example of why our presence on the world stage matters. Action on methane is essential because methane is a much more powerful greenhouse gas than carbon dioxide and responsible for a whopping 30% of global warming since pre-industrial times. However, it is much shorter-lived than carbon dioxide and achieving significant reductions would have a potentially rapid effect on atmospheric warming. In Glasgow at COP 26, we led the world on getting a global methane pledge signed. I ask the Minister: where is our leadership on the issue today? What action have we taken?

In conclusion, hope has always sustained humankind and experience has shown that, when the global community acts as one, we can move mountains—and move mountains we must to safeguard our planet. Britain’s place must be at the forefront of that effort.

Limiting Global Temperature Increase

Baroness Sheehan Excerpts

Wednesday 13th December 2023 Lords Chamber

[Lord Callanan (Con)]

I understand the point that the right reverend Prelate is making, but one person’s disinformation is another person’s free choice and free speech. There is always robust debate about all of these issues. There will be continue to be robust political debate about it, and I think that is right in a democratic society. We are very clear on the policy that we should be following and that we are committed to. We are committed to net zero; it is a legal obligation. The Government are committed to that trajectory.

[Baroness Sheehan (LD)]

My Lords, the agreed wording of COP 28 in the small hours of this morning does not go far enough, given that scientific consensus is strongly in favour of a phase-out of fossil fuels. Nevertheless, this is what we have signed up to. Can the Minister say whether the Government will publish a plan to say how they will meet our commitment to

“Transitioning away from fossil fuels in energy systems, in a just … and equitable manner, accelerating”

—and that is a key word—

“action in this critical decade”.

[Lord Callanan (Con)]

We are into semantics and wording, but a transition away with clear deadlines is, in our view, a phase-out in all but name. It is not the language that we would have preferred, but in a multilateral negotiation there has to be compromise. We are very clear on the trajectory we are following. We have published numerous plans about our transition. We are accelerating the rollout of renewables and reducing our use of oil and gas, and that will continue.

Hydrogen Heating

Baroness Sheehan Excerpts

Monday 11th December 2023 Lords Chamber

Asked by

[Baroness Sheehan]

To ask His Majesty’s Government what assessment they have made of the finding of the National Infrastructure Commission that there is no public policy case for hydrogen heating, set out in the Second National Infrastructure Assessment published in October.

[The Parliamentary Under-Secretary of State, Department for Energy Security and Net Zero (Lord Callanan) (Con)]

My Lords, heat pumps and heat networks will be the primary means of decarbonising heat for the foreseeable future, and will play an important role in all 2050 scenarios. Of course, we welcome the NIC’s input, are carefully considering the analysis and will respond to the report in due course.

[Baroness Sheehan (LD)]

I thank the Minister for his reply. My first question is about the residents of Redcar. Their council leader has written to the Secretary of State to say that they do not want a hydrogen heating trial. Am I correct in saying that they will be allowed to follow the residents of Whitby and veto the proposal? After all, the Minister himself has said as much from the Dispatch Box. Secondly, what assessment have the Government made of recent scientific developments that show that hydrogen leaked into the atmosphere has an indirect global warming impact around 12 times greater than that of carbon dioxide?

[Lord Callanan (Con)]

With respect to the noble Baroness’s first question, I think she needs to read the letter from the leader of Redcar Council more carefully. I do not think it supports the analysis she gave. Nevertheless, I have said on numerous occasions that no hydrogen village trial will take place without strong support from local residents. On the noble Baroness’s second question, yes, hydrogen does have a high global warming potential, which illustrates the importance of not allowing it to leak at all.

Climate Change: Phasing Out Fossil Fuels

Baroness Sheehan Excerpts

Wednesday 6th December 2023 Lords Chamber

[Lord Callanan (Con)]

We are not pursuing climate delaying tactics. Our legally binding net-zero commitment and carbon budget remain exactly the same. I do not know whether the noble Baroness was listening to the answer I gave to the noble Lord, Lord Teverson, but we are attracting record amounts of inward investment. At the Global Investment Summit, a whole range of inward investors promised considerable new funding in the order of £30 billion to all these exciting new industries, in which the UK is a world and European leader.

[Baroness Sheehan (LD)]

My Lords, in his COP 28 speech, the Prime Minister referenced the 48% reduction in UK territorial emissions, but he did not refer to the consumption emissions related to goods made outside the UK. One tool for addressing emissions leakage is via effective carbon pricing, so can the Minister tell the House when the Government will publish their response to their consultation on measures to mitigate carbon leakage, including via a carbon border adjustment mechanism?

[Lord Callanan (Con)]

The noble Baroness highlights an important matter. We consulted on this in the summer. We are currently doing the work to consider all the implications of carbon leakage measures, including CBAM, which we are looking at closely. We will have more to say on that very shortly.

Climate Change: Aims for COP 28

Baroness Sheehan Excerpts

Tuesday 28th November 2023 Lords Chamber

[Lord Callanan (Con)]

I do not want to repeat the five points that I have made. Obviously, we want to make progress on all of them. That is probably unrealistic; it is a negotiation and there are many countries with different agendas going into it, but we will negotiate in good faith and the overall pledge to take action on 1.5 degrees is probably going to be the most important point, but there are a number of other important negotiating points as well.

[Baroness Sheehan (LD)]

My Lords, we get quite a lot of our gas from the UAE. What assessment have our Government made of the pollution caused by the flaring and venting of methane by that state?

[Lord Callanan (Con)]

Flaring and venting is something to be avoided by all member states. The noble Baroness is right that we do import a lot of liquid natural gas. Of course, if she and others were not so keen to halt the UK’s extraction of oil and gas, we would not need to import so much from the UAE. So perhaps she might want to indulge in a little bit of introspection.

Biomass Strategy 2023: Cross Sectoral Sustainability Framework

Baroness Sheehan Excerpts

Wednesday 15th November 2023 Lords Chamber

[Baroness Sheehan (LD)]

My Lords, I declare at the outset that I have a biomass boiler, which came with the house I live in—but, honestly, we are trying to get rid of it. It takes trees between 44 and 115 years for sequestration of carbon. The lower estimate takes us well beyond 2050, the upper beyond the lives of anyone born today. So clearly biomass is not renewable within the timeframe needed to tackle climate change. Will the Government take that into account and ensure that the UK applies the precautionary principle and ends the ridiculous classification of biomass as a renewable power source?

[Lord Callanan (Con)]

I am pleased to hear that the noble Baroness has a biomass boiler. In fact, she does not need to get rid of it, because if she sources her pellets from the appropriate sources, that is a renewable resource. These are not pellets from virgin forests but by-products from the timber production process. There are very strict sustainability criteria attached to them and, even if those pellets were not used for biomass production, they would be a waste product because the timber would still be harvested for its other uses. So the noble Baroness does not need to feel so guilty.

--- Later in debate ---

[Lord Callanan (Con)]

I am not sure I know what third and fourth generation biomass is. I will have to have a cup of coffee with noble Lords afterwards and we can have a chat about it.

[Baroness Sheehan (LD)]

Does the Minister agree that trees decompose only once they are felled?

[Lord Callanan (Con)]

I suppose, if we want to get into a debate about that, they absorb CO₂ when they are growing. If they are felled and just rot on the ground they emit CO₂, but also when they are burned.

Offshore Wind

Baroness Sheehan Excerpts

Monday 11th September 2023 Lords Chamber

[Lord Callanan (Con)]

My noble friend certainly highlights a concern, but lots of protections are built in and lots of environmental regulations need to be adhered to when these projects are consented to and all the matters are gone into fully, in both environmental and regulatory permitting. Every energy source has its drawbacks. Those who are against nuclear would point to its drawbacks; with coal-fired power stations, there are obviously drawbacks; gas-fired power stations have their drawbacks. There has been an increase in new solar farms being developed in the UK. I can assure noble Lords that, from my postbag, lots of people write in to complain about those as well. We have to get generation capacity and electricity supplies from somewhere. No system is absolutely perfect but offshore wind is certainly one of the best.

[Baroness Sheehan (LD)]

My Lords, it is unacceptable that last week’s offshore wind auction was a failure because of the Government’s insistence on an unrealistic strike price, yet we remain none the wiser about the cost of another source of electricity—nuclear energy. The cost of Sizewell C’s electricity remains shrouded in secrecy. The only thing we can be sure of is that it will be exceedingly expensive. The Commons Science, Innovation and Technology Committee has called for greater transparency on Sizewell’s cost. Will the Minister take this opportunity to give an updated cost estimate for Sizewell C? We need to be sure that we are on a level playing field.

[Lord Callanan (Con)]

I will be happy to supply those figures to the noble Baroness in writing if I can. Again, it is worth saying that, in a diversified energy system, it is important to have different sources of supply. I am very enthusiastic about solar and offshore wind; they are intermittent but they are cheap when they are generating. We also need baseload supply, so there will a role for nuclear and for gas-fired power stations, ideally with CCUS fitted as well. It is important that we have diversity of supply, including such things as tidal on a relatively small scale. Geothermal is another technology that was successful in getting contracts under this allocation round. Again, these are nascent technologies that are starting to build up. We need diversity of supply for our future generating mix.

2030 Emissions Reduction Target: Heating

Baroness Sheehan Excerpts

Tuesday 5th September 2023 Lords Chamber

[Lord Callanan (Con)]

That depends on what target the noble Lord is referring to. There are a number of different targets but a substantial amount of government funding is going into this—some £450 million for the boiler upgrade scheme and £6.6 billion to decarbonise heating generally.

[Baroness Sheehan (LD)]

My Lords, this July, residents of Whitby in Ellesmere Port vetoed plans to be one of two proposed sites for hydrogen village trials out of safety concerns—concerns which were extremely well-founded, I might add, given that hydrogen is the lightest element in the periodic table and notoriously difficult to control. I have two questions. Can the Minister confirm that the residents of Redcar in Teesside will have a similar right of veto? Which other locations are now being considered for these ill-advised hydrogen boiler trials?

[Lord Callanan (Con)]

Public acceptability is a key component; that is why we ruled out Whitby for the trial. Redcar is the only other location being considered.

Oil and Gas Windfall Tax

Baroness Sheehan Excerpts

Wednesday 19th July 2023 Lords Chamber

[Lord Callanan (Con)]

I do not know where the noble Baroness gets her figures. I responded in my previous answer to the question about investment allowances—policies that the Opposition have called for. The energy profits levy is expected to raise about £26 billion and is set at a rate of 75%, which is one of the highest in the world. I realise that the Labour Party’s policy is to tax firms into extinction, but we need to leave them with some profits. Much of the profits of oil and gas companies goes towards pension funds and other shareholders which many pensioners and others rely on for their income.

[Baroness Sheehan (LD)]

My Lords, the IEA’s report World Energy Outlook 2022 is clear that the solution to the energy trilemma of economic, climate and security issues is to accelerate the move to greener energy. For us in the UK, among other things, that means urgently equipping our workforce with transferable skills for the energy transition. What are the Government doing to make sure that a single offshore energy skills passport that aligns training standards in all offshore energy sectors is introduced?

[Lord Callanan (Con)]

The noble Baroness is essentially right: of course we need to transition to renewable energy sources, and that is exactly what we are doing. The North Sea transition deal between the Government and North Sea companies is helping to move them, as far as the transition is going, to transfer their skills to many of the new industries. For example, many drilling companies operating in the North Sea also drill geothermal heat sources to use for renewable energy. The two things are not mutually incompatible.