Energy Bill [HL]

Lord Howell of Guildford Excerpts

2nd reading
Tuesday 19th July 2022 Lords Chamber

[Lord Howell of Guildford (Con)]

My Lords, I declare my interests as a former Secretary of State for Energy, former Minister of State for International Energy Security, ex-president of the Energy Industries Association and of the British Institute of Energy Economics, chair of the Windsor Energy Group, and an adviser to interested energy companies.

The stated aims of the Bill are to increase the resilience and reliability of our UK energy system, deliver commitments to climate change and reform the system in various ways. Since the first two of these three aims depend heavily on outside and international trends and conditions and on close co-operation with international partners, I was looking in the Bill for any powers, laws or strategies in the international arena, but they are quite hard to find. That makes it somewhat limited and, frankly, a little disappointing.

We are now in the midst of the worst energy crisis for half a century, with inflation being driven by stratospheric increases in all fossil fuels to dangerous levels in already fertile inflationary soil here in the UK—not the other way round, as the Governor of the Bank of England seems to think. Further disruption of Russian energy supplies to the European oil and gas markets, whether initiated by Russia or European states, will accelerate this inflation, invite recession, impose impossible further hardships on half the families in our nation, and force business shutdowns in large quantities. There is now talk of energy rationing this coming winter and possible supply interruptions, with the worst, we are told, yet likely to come.

This is not security; it is insecurity on a grand and cruel scale, begotten of dismal lack of preparedness and a stream of policy errors going back decades—not just in energy decisions but in economic and monetary responses. It is against this background that the Bill before us must be judged.

Before I come to what the Bill purports to achieve, let there be no doubt that well before the Ukraine invasion, the global energy system, of which we are and will remain an inextricable part, was under severe stress. Ukraine now pushes us into a new world energy order. We were, and are, engaged in a mission of global decarbonisation to prevent climate disasters, which requires, but frankly has completely lacked, the most careful synchronisation of evolving fuel supplies, needs and demands, and as great a transformation as in the Industrial Revolution of the end of the 18th century—in fact much greater, given that since then there has been a sevenfold increase in population in the world and in this country. That is what the Bill aims to assist now.

We have to ensure that creative policy-making in the present crisis can help rather than hinder tomorrow’s transition. One of the most depressing features of the current debate is the utter inability of many of those with the loudest voices to distinguish between the absolute necessity now of immediate relief measures and the long-term climate priorities. What does the Bill do to unravel this muddle and tangle? In the short term, I am afraid, very little. It is all very well to give powers to the system operator and planning office and to renew the energy cap, which the Bill does, but how does that avoid repeating the appalling policy mess which bankrupted numerous small gas suppliers at a cost of £3.2 billion? We talk about billions; that is £3,200 million, which all then had to be dumped on already overwhelmed consumers.

To start with the immediate—the here and now—we have to understand that the very frightening inflation is an energy-driven phenomenon. Being told in a resigned way, “Oh well, it’s external, it comes from the gods”—or, to quote a former Prime Minister whom I rather admired, Jim Callaghan, that we have been “blown off course”—and that there is not much to be done, except some cushioning of the impact, is never adequate in many people’s eyes and it is frankly not much comfort.

What has happened to our famed diplomacy and influence in managing and containing international crises of this kind? Rather, we are sitting here at home, struggling as we can, introducing this Bill but in fact not tackling the real international roots of the crisis. Was it not striking and chilling—I suspect it was to many watchers—that when last Friday’s panel of candidates was asked what more could be done to fend off the forecast of a “horrific” autumn that we have been promised, they all just sat there and were silent? They had nothing to add.

In fact, of course there is a great deal more we can do, but it is not much helped, I fear, by the Bill. It is meant to be about energy security, which starts now but projects into the future. If the name of the game is security of supply—not 10 years hence but now—and at affordable prices, a lot more can indeed be done. That is just what President Biden was trying to do over the weekend in Riyadh; obviously he found it a little awkward, but he was there aiming to meet essential needs and demand with more oil production. Far from staying silent, we should wish him good luck.

Whatever we do, oil and gas are going to be with us for decades. The International Energy Agency says that they will provide 28% of world energy in 2045. The focus on what are called “core fuels” in the Bill, on which there is a whole part, reminds us of this basic fact. Eventually, of course, the energy gap will largely be filled not by the wind blowing—which it does for 60% of the time in the winter, and 25% in the summer—but by stored green hydrogen and ammonia, about which the noble Baroness, Lady Hayman, has just spoken. The powers, incentives and regulations—although, please, not too many—in the Bill will one day help us to get there. We are not there yet, but this is good; it is the right way to go, and we should back it in every way we can.

In the meantime, there is a crisis at the forecourt spreading through transport costs and affecting the price of everything. How do we stop that happening again? How do we convince ourselves that we are providing the security of the future unless we can answer that question?

First, the Gulf-state members of OPEC, whom we often describe as our friends, could be induced by the right approach to pump at least another half a million barrels a day right now. Although they have at last moved a little way towards that, they could quite easily do a lot more with their remaining spare capacity, although some of them deny that it exists. Also, the gas producers could ship more gas.

Secondly, Iran could put another million barrels a day into the market, if only the US Congress would let up and move to the nuclear agreement we once had. Perhaps we should point that out to our American allies.

Thirdly, we must encourage a crash programme of refinery-capacity building and resetting, which I do not see all that much of in the Bill. This is often said to be holding up supplies of petrol and diesel products and pushing up oil prices. Powers to rebuild the gas storage that we once had and should never have been allowed to run down—I do not know why it was—are also one of the immediate needs, and the present Bill helps there a bit.

Fourthly, of course, as many others have said in many debates, we need a constant increase in user efficiency and home insulation and a decline in oil intensity—that is, using less oil per unit of output.

Our UK net-zero goal, which is very much in evidence in the Bill, is admirable but everyone knows that it is not nearly enough. It has to be asked whether we, the British, with all our skills, are making the best contribution in the right way to rescuing the situation. Is the prioritising of a rather modest 1% reduction in global emissions, which is what we would achieve if we got to net zero, anything like adequate? Of course it is not. We proclaim climate leadership, but this has to be through a vast uplift in carbon capture and recovery from the atmosphere to prevent the world boiling. This requires us to raise our sights from narrow insularity to accelerated international action everywhere we can, working with like-minded friendly nations.

Greenhouse gases will not stop at the white cliffs of Dover just because we have done quite well with our net zero so far. Somehow we must be at the forefront in off-setting the millions of tonnes of carbon which the thousands of coal-fired stations across Asia and Africa are continuing to puff into the atmosphere, with more stations being added and old ones renewed.

The twin challenges of security now and tomorrow and freedom from appalling and crushing volatility and inflation, and at the same time finding an honest and effective way forward on climate change—the path we are not now on—are right before us, staring us in the face, and they are inextricable; they cannot be separated. I agree that many proposals in this Bill are needed and overdue, from opening the way back to a realistic nuclear replacement programme, to encouraging heat networks—I think that is a grandchild of what we used to call combined heat and power, like on the famous Pimlico estate—and to halting the huge scams associated with carbon offsetting arrangements. Anything that speeds up heat pump installations and makes them cheaper is very welcome: at 600,000 houses a year, which is the proposed aim, it will take four decades to retrofit 24 million homes, and goodness knows how many hundreds of billions of pounds.

All this amounts to only a tiny fraction of what is needed. For example, the whole nuclear replacement programme is on very shaky foundations. The current proposal is to build eight more large-scale replicas of Hinkley, or similar. The one now being constructed by the French and Chinese at Hinkley is already 10 years behind time, well above budget and facing component problems to boot. I know about these sorts of initiatives and the inevitable decades-long delays which ensue, having myself launched, in the other place in 1979, a programme of eight new pressurised water reactors, of which only one ever got built, and that took 15 years. A secure nuclear future has got to rely on much smaller 300MW to 400MW reactors which can be built quickly and which are privately financeable, a prospect now made easier by the sensible EU decision to register nuclear and gas investment as ESG approved; that is, labelled as green energy sources. Does the Bill open up that pathway, or take account of the international dimension? The Bill has also given a helping hand to fusion, which is good, but of course that is still years ahead and is again a completely international project.

Finally, unless we embark on new initiatives in almost every area of our current energy and climate policies, I see insecurity and failure ahead on all three counts: failure of reliability and security; more failure of affordability than now, and we could not go much further than now; and failing to combat the much hotter, much colder and much wetter climate violence ahead. Instead, we should now be learning the lessons and building and adapting better, far better, for ourselves, for our children’s children and for the whole planet. That is what I would like to see a really focused energy security Bill do. This one, frankly, is only a start.

Energy: Prices and Supply

Lord Howell of Guildford Excerpts

Thursday 14th July 2022 Lords Chamber

[Lord Callanan (Con)]

The noble Baroness is of course right, and the answer to the question is yes, we recognise this maybe unlikely risk, which is nevertheless a risk. That is why I indicated in the Answer that we have acted to secure additional back-up capacity if needed for this winter.

[Lord Howell of Guildford (Con)]

My Lords, there is a good deal more we can do internationally with our like-minded friends to curb the appalling increase in energy prices which is about to hit households in this country yet again, and even more ferociously. However, does my noble friend accept that in fact, indirect taxes on energy add to the headline consumer prices index, and that if one could bring that down, it would also vastly reduce the Government spend on having to update their outlays on index-linked causes, including benefits? Does he accept that if you take down one, you will take down the other? I do not think that is widely understood by the social experts and commentators in the press, and I wonder whether it is understood by the Treasury. However, it is a way forward.

[Lord Callanan (Con)]

My noble friend is tempting me to say what is understood and is not understood by the Treasury, which is perhaps a road I should not go down. Of course, the point is right. The contribution of energy to the consumer prices index is particularly important, and my noble friend is also correct about the proportion of indirect taxes on energy bills.

Winter Heating Initiatives

Lord Howell of Guildford Excerpts

Thursday 7th July 2022 Lords Chamber

[Lord Callanan (Con)]

The House and I need no convincing of the value of energy efficiency. As I constantly remind the House, we are already spending considerable sums on energy-efficiency schemes, but I am sure that there is always more that can be done.

[Lord Howell of Guildford (Con)]

First, as well as the improvements that the noble Baroness, Lady Worthington, wisely suggested, has my noble friend noticed that international oil and gas prices are falling quite quickly? They are well away from their original peak. Should we not be ensuring that somehow these benefits get through to households before they are hit by an enormous energy bill increase in the future? Secondly, does my noble friend accept that if we took half the fuel duty revenue off consumers, that would be a huge hit on public revenues, but it would be an even larger saving in public expenditure from the public payments that have to be made linked to indexes? As a result of the fall in the CPI, that would be a win all round. Will he pass that on to the Treasury?

[Lord Callanan (Con)]

I will certainly pass my noble friend’s thoughts on to whoever occupies those great offices in the Treasury in the next few weeks. Regarding his first point, we want to ensure that any reductions in international energy prices are passed on to consumers as quickly as possible.

Small Modular Nuclear Reactors

Lord Howell of Guildford Excerpts

Tuesday 28th June 2022 Lords Chamber

[Lord Callanan (Con)]

We are always open to new ideas for how we can speed the process up. We want to see both existing nuclear technology and the SMR process brought forward as quickly as possible, but it is important that we go through all the relevant design approval phases to make sure the technology is safe. Many communities are willing to accept SMRs, particularly those that already have nuclear reactors in their area, so it is not the case that everybody is opposed to them. Nevertheless, it is important that we go through the proper processes.

[Lord Howell of Guildford (Con)]

My Lords, I declare an interest both past and present in this area. I welcome the support the Government have so far given to SMR development in this country. Of course, it is going on in many other countries as well. How does this play out in relation to the plan at Sizewell C, where the idea is to build another large-scale reactor as a replica—I repeat, replica—of Hinkley Point C? Hinkley Point C has had its own problems; it is over time, over budget and has component difficulties. Do we really want to think in terms of a large-scale replica there or in other sites, when the SMR option is coming on fast? We are at the edge of new technology in nuclear power; should the Government not think very carefully before deciding between SMRs and another large-scale reactor with all its problems, as already indicated?

[Lord Callanan (Con)]

My noble friend makes an important point, and we will take into account all these factors, including value for money, when we make decisions in the next Parliament on whether to proceed in these cases.

Fuel Poverty

Lord Howell of Guildford Excerpts

Monday 13th June 2022 Lords Chamber

[Lord Callanan (Con)]

It is very generous of the noble Lord to offer to give it up, but of course the point he makes is valid. It is a combination of the expense and bureaucracy of means-testing schemes as against the universality principle, but the vast majority of support schemes, of course, are means tested and focused on those in receipt of benefits and on the lowest incomes, and that also applies to all our energy efficiency schemes.

[Lord Howell of Guildford (Con)]

My Lords, I declare energy interests as in the register. Does my noble friend accept that by far the largest driver behind these hideous energy and fuel prices, with more apparently to come, which are really damaging and frightening millions of households, would be tackled if there could be far more oil and gas pumped into short-term world markets to bring down the price of oil, petrol, gas and electricity very quickly indeed? Some of us would really like to see evidence of more co-ordinated vigour and diplomacy in international markets in driving down these prices. Something can be done. Could we see more effort in that direction, please?

[Lord Callanan (Con)]

My noble friend makes a very good point. There is a lot of diplomatic action going on with organisations such as OPEC, precisely in the terms that he alludes to. We are also, of course, attempting to produce as much oil and gas as we can from our existing British North Sea fields as well.

Costs of Living

Lord Howell of Guildford Excerpts

Wednesday 25th May 2022 Lords Chamber

[Lord Callanan (Con)]

I know that the Opposition like to use these easy soundbites, as if there were an enormous pot of free money that we can somehow access, but, of course, money that is taken off those companies is also money that does not go to shareholders, many of which are pension funds that pay the pensions of people up and down this country. They are not greedy plutocrats who can just absorb the money. We are, of course, keeping all options under review, but it is not a cost-free option: it would result in lower investment in the renewable energies, which everybody keeps telling me they want to see in the future.

[Lord Howell of Guildford (Con)]

My Lords, since China has stopped demanding extra gas because its rate of growth has come to a halt, and as there is now plenty of gas available on the high seas, for both contract and spot prices, why can we not get some benefit from that for our consumers? Why do we have to assume that gas prices remain five or six times as high as last year, when there is plentiful gas—LNG in particular—around?

[Lord Callanan (Con)]

The noble Lord makes a good point, but, as a result of the price cap, most energy companies are hedging their supplies, based on current prices. There are plentiful supplies of LNG, but, of course, capacity able to be injected into the system is limited, due to our number of offshore loading points. We actually have a good number in the UK, but they are being fully utilised.

Queen’s Speech

Lord Howell of Guildford Excerpts

Monday 16th May 2022 Lords Chamber

[Lord Howell of Guildford (Con)]

My Lords, it is a huge pleasure to follow the right reverend Prelate the Bishop of St Edmundsbury and Ipswich in his maiden speech. I note in passing that St Edmundsbury Cathedral celebrated its 1,000-year anniversary last weekend, so the right reverend Prelate is in a position to take the long view on certain things. He has huge international experience combined with parish experience on the ground—both angles. He is engaged, I have been informed, in a “Transforming Effectiveness” project in the Church of England. I think we could all do with a bit of transforming of effectiveness, so maybe he will take the lead on that as well. I note personally that he is an honorary canon of Ely Cathedral, a most graceful and beautiful cathedral and certainly my favourite. Aside from all that, his is just the voice we want here in London on the great social and other challenges that he has mentioned; I hope that we will hear a very great deal more from him.

I shall speak mostly about energy, climate, prices and inflation. I declare my interests as in the register, including as an adviser to the Kuwait Investment Office. The cost of living and inflation crisis is basically driven by the energy prices and energy crisis, and energy price roots are international and demand immediate international understanding and action. Obviously, we can try, and we are trying, to marginally alleviate the suffering and damage here, which affect not merely the very poorest households but more or less half the households in this nation; but the real and immediate solutions to this intolerable situation lie elsewhere. The only effective short-term—I emphasise, short-term—answer to all this demand and shortage is more supply. The OPEC countries can easily add 3 million or 4 million barrels a day in quite short order, and their current refusal to do so must be vigorously challenged.

If we followed this course and could make some precious advance there, we would send all fuel prices, and by knock-on effects gas and petrol prices and so on, tumbling and take the steam out of inflation far more effectively than any subsidies, grants, or jiggling with the bank rate—which anyway only has an effect a year ahead, if at all—or other relief measures. Even an extra £10 billion one-off windfall from the oil companies’ vast and fortuitous profits—a take which I am at all not against as it is a sensible thing to do—will be only marginal relief from the biggest cost jumps in a generation, with much more to come, so they say. I cannot see that accelerating more North Sea oil development, with results in maybe three to four years’ time, will help either the immediate crisis or our longer-term security. People forget that the North Sea is an international province, as Ted Heath discovered in 1972 at the time of the oil shock and, of course, has to supply its oil into world markets.

We should be using all our famed soft power and diplomacy to get our Middle East so-called friends to stop their dogged refusal to help and start pumping more right now, and point out the sheer foolishness and short-sightedness, both political and commercial, of not doing so. How is that to be done? If the EU is divided and cannot decide which way to go and the United Nations is hamstrung by the fact that Russia is in the chair, our own country should seek to lead a coalition of like-minded nations to confront our so-called OPEC friends with the immorality and danger of their persistent refusal to use their spare capacity now and offset the effect of Russian exports being cut. Even Iran, if we can get through the JCPOA crisis, wants to add another million barrels a day. Every day that OPEC leaders delay in pumping more ensures that billions continue pouring into Russian coffers to finance the Ukrainian butchery.

In fact, the scene for gas is changing fast. Covid has already shrunk the Chinese market, and I am told that Milford Haven and other ports are now jammed with diverted LNG ships wanting to put more gas into the UK grid system. The global price for gas has dropped sharply, so why on earth are we still being told about charging consumers hundreds more for gas this autumn? Why we cannot we get this production into our pipelines and to hard-pressed households beats me, and I hope that the Minister will explain that odd conundrum.

I turn to our longer-term energy security and to the climate struggle in the White Paper. Yes, the promise of expanded nuclear power is good, although it is disgraceful that a firm and reliable block of low-carbon nuclear power has ever been allowed to run down the way it has. Some of us tried to begin the replacement of outdated nuclear plants 40 years ago, when I announced 15 gigawatts of new nuclear in December 1979 in the other place. It was nearly all defeated by political weakness, public fears and, above all, short-termism. Only one plant ever got built—Sizewell B—and that took 15 years from my announcement.

There is much more to say on whether the programme is going the right way but, as I am over my five minutes, I shall just add that I look with sadness on the numerous blunders in our energy policy over the past 30 years under all parties. Warnings were consistently neglected and short-termism prevailed, politically and financially. Here we are in a total energy mess, and it is time to start digging ourselves out of it.

--- Later in debate ---

[Lord Callanan (Con)]

Of course there will be other increases in the likes of VAT and other taxes, which are estimated by the OBR. I will certainly speak to the Treasury and ask whether we can give my noble friend a more complete number. However, as I said, the Government keep all these taxes under review. We made it clear that companies must reinvest in the UK. In fact, Shell and BP are already investing hundreds of millions into our economy, including carbon capture infrastructure in the Humber and on Teesside.

But it is not just about energy production. Many noble Lords, including the noble Baronesses, Lady Jones, Lady Parminter and Lady Hayman, the noble Lords, Lord Teverson and Lord Birt, and my noble friends Lord Bourne and Lord Moynihan, talked about the important subject of energy efficiency. Huge progress is already being made in the energy efficiency of UK homes. In 2008, 9% had an energy performance certificate, or EPC, of C or above; today, the figure is 46%. We are already investing more than £6.6 billion over this Parliament to improve energy efficiency, much of it targeted at the poorest in our society. This includes a £1.1 billion home upgrade grant and the energy company obligation scheme, which has been extended from 2022 to 2026, boosting its value from £640 million to £1 billion per year.

Furthermore, the noble Lord, Lord Teverson, and my noble friend Lord Bourne rightly spoke about the importance of reducing energy demand. We are scaling up our consumer advice and information service to help households understand how to reduce their energy demand effectively and what longer-term actions they may need to take as part of the transition to net zero. Noble Lords also asked me about protecting those 4 million consumers on pre-payment meters. Not only were special measures put in place in March 2020 but customers are also protected by the price cap.

To move from the local to the global, my noble friend Lord Howell called on the country to stand up to OPEC. He will be pleased to know that we are in fact working with partners across the G7, the IEA, OPEC+ and other oil-producing countries to press for measures to stabilise oil prices, and with the IEA and our allies on strategic oil reserve releases. However, the current—

[Lord Howell of Guildford (Con)]

It sounds as if my noble friend is coming to the end of his very good speech. I actually asked why, when our ports are crowded with frozen gas ships anxious to put gas into the British system—this is bearing down on the gas price now—this is not coming through to consumers in the way that surely it should.

[Lord Callanan (Con)]

We hope that it will do. Of course the market is in turmoil at the moment, but the noble Lord rightly pointed out that we have some very advanced LNG offloading facilities in the UK. We can play our part in helping parts of the EU that do not have LNG terminals, through the interconnection pipeline. But it is an international market; there is reduced supply and, of course, we all know that the price is at sky-high levels at the moment.

However, the current volatility in global energy prices and security concerns only underscores the importance of building strong home-grown renewable sectors and reducing our reliance on all fossil fuels. The ultimate way to deal with the high gas price is of course to use less of it. That is why this Government are so excited about hydrogen, which the noble Lord, Lord Bilimoria, and others asked about. My noble friend Lord Liverpool and the noble Lord, Lord Grantchester, asked specifically about our plans for so-called green hydrogen. I am pleased to tell the House that we are introducing a comprehensive package of measures to get these projects off the ground and help this outstanding new technology to thrive in the British marketplace. The global market for these technologies is for the taking, and we have the innovation and engineering expertise to be world leaders, just as we are becoming world leaders in EV battery technology.

I reassure my noble friend Lord Young that we have provided £30 million-worth of funding to support vehicle-to-everything projects, and we will provide a further £11.4 million of innovation funding. The noble Lord, Lord Birt, and my noble friend Lord Leicester raised an important point about electric vehicles—EVs. We recently announced our electric vehicle strategy, which sets out our vision and action plan for the rollout of effective vehicle charging infrastructure in the UK; I actually agree that there is much that we can do to improve that. Of course, electric vehicles will not take off unless the appropriate charging infrastructure is in place.

The noble Baronesses, Lady Whitaker and Lady Hayman, and my noble friend Lord Liverpool all spoke about the important subject of tidal power, and they are right in some respects. Along with copious wind, the UK is also blessed with strong tides. The Government’s position is that tidal power could well contribute to our energy mix, as we transition towards a carbon-neutral power sector. Indeed, the energy security strategy commits to aggressively exploring the potential of tidal power to contribute to our net-zero ambitions.

Of course, building these projects requires finance, which is why the Government are introducing the UK Infrastructure Bank. This also answers the question of the noble Baroness, Lady Kramer—

Energy Security Strategy

Lord Howell of Guildford Excerpts

Wednesday 27th April 2022 Lords Chamber

[Lord Howell of Guildford (Con)]

My Lords, I declare my interests in energy as in the register. Can I couple that with a plea that we have a full debate in the new Parliament on all these issues? There are things here which affect both the immediate situation for all of us—certainly most of the households in this country—and the long-term condition of this country facing its energy needs in the future. We have heard some very unchallengeable and sensible ideas on this, but I am not sure they meet the immediate crisis effectively.

Can I draw the Minister’s attention to the section in the energy security policy paper which points out that there is “no contradiction” at all between short-term concerns to boost oil and gas production, referring to the North Sea, and the long-term climate aims? On the contrary, the two are linked together; that is what it rightly says in the paper. Can the Minister extend that thought to say that there is no contradiction in now seeking major oil producers in the Middle East to produce a lot more oil and gas to cause prices to tumble and partly replace Russian exports? It would really help bring down electricity, petrol and gas prices, and begin to meet the further huge increase coming our way like a rolling wave in October.

Can I plead that we go back to the great oil producers and press them hard that, unless they do this, they are financing Putin’s child murder in Ukraine? If they do it, we will begin to see a much greater easing of prices than any of the present well-intentioned short-term subsidies and additions we have had so far. That is the aim. Anything else is splendid, but it does not help the huge crisis in energy which will affect 70% of households of this country. I have heard nothing from either opposition party which will do that.

[Lord Callanan (Con)]

As usual, given his experience of the subject, my noble friend makes important points. On the subject of a debate, regrettably that is above my pay grade, but I will pass on his comments to the Chief Whip. Obviously, I stand ready to assist the House in any debates that it wishes to have. Regarding my noble friend’s comments about North Sea oil and gas, I say that he is completely correct. We are clear that oil and gas will continue to have a role as a transition fuel in the medium term. In carbon footprint and security terms, it makes eminent good sense to source these from the North Sea. That has to be preferable to importing them either from Russia or as LNG. That is why we will ensure a future for the North Sea, making use of our great reserves as we transition. We are holding a new licensing round in the autumn subject to the climate compatibility checkpoint.

International Energy Agency Report

Lord Howell of Guildford Excerpts

Tuesday 26th April 2022 Lords Chamber

[Lord Callanan (Con)]

I do not disagree with the noble Lord. We are encouraging people to play their part and, of course, we encourage people to drive as slowly as possible and responsibly. We encourage people to turn down the temperature of their boiler if this can be achieved while still heating their home properly and providing the appropriate levels of comfort. Of course we will support people to make responsible choices.

[Lord Howell of Guildford (Con)]

My Lords, I declare an interest in energy matters, as set out in the register, and a long time ago I was a rotating chairman of the International Energy Agency. The noble Lord, Lord Rooker, is quite right that increased efficiency and reduced oil intensity are ways to reduce the growth of demand and renounce Russian exports. However, is not the best way, in the very short term, to get the OPEC producers of oil and gas to increase their supply, which they can easily do, and bring down petrol and gas prices very quickly, which that would do? As OPEC has broken with the IEA recently, should we not be pressing that issue much more directly with our so-called friends in the Gulf?

[Lord Callanan (Con)]

My noble friend makes an important point. As well as encouraging OPEC to increase production, we are trying to increase production from our own domestic sources and ensure that there is increased investment in our own resources in the North Sea.

Energy Security Strategy

Lord Howell of Guildford Excerpts

Thursday 7th April 2022 Lords Chamber

[Lord Callanan (Con)]

I cannot comment on leaks of draft documents to journalists. All government documents go through a long drafting process. As I said, we are supportive of the deployment of onshore wind, but we want to do it in co-operation with and with the agreement of local communities, so we will seek to roll out a number of partnerships to enable us to do that.

[Lord Howell of Guildford (Con)]

My Lords, I declare my energy interests. It is a bit difficult to comment on a paper we have not seen, but by the sound of it, it is going to be full of admirable longer-term proposals, including the nuclear one—although I think that actually, as usual, they are going to get that wrong. Generally, it is in the right direction, as the noble Baroness, Lady Hayman, has rightly emphasised. But is there a recognition of the unavoidable fact that, for the next five to eight years, we are going to remain inextricably embedded in dangerous and volatile global oil and gas markets, and we cannot get out of this? There is only one short-term answer, which is to cut demand—as again the noble Baroness, Lady Hayman, and others, have suggested—and increase supply substantially. What are we doing to get Middle East suppliers, who are supposed to be our friends, to replace Russian exports—which are of course financing Russian atrocities by the day—by pumping much more oil and gas in the short term, which they can easily do? When are we going to get on with that?

[Lord Callanan (Con)]

The noble Lord is right: we will have an ongoing requirement for oil and gas in the transition period. We will seek to obtain as much of that as possible from our own domestic sources and will roll out an additional licensing round for North Sea oil and gas projects this autumn—they will of course all be done in co-operation with our climate compatibility tests—because it is much better to get those resources locally than source from unstable parts of the world. I cannot comment on discussions that have taken place with various regimes in the Middle East.