Offshore Petroleum Licensing Bill

Lord Lennie Excerpts

2nd reading
Tuesday 26th March 2024 Lords Chamber

[Lord Lennie (Lab)]

My Lords, it is a pleasure to follow the Minister, who set out the Government’s reasoning for the Bill. It is very straightforward in what it does: it would require the North Sea Transition Authority to run an annual oil and gas licensing round, inviting applications for new production licences in our offshore waters.

What is less clear is what the Bill will actually achieve. While families and businesses across the country are feeling the impact of the Government’s energy policy, which has left us the worst hit in western Europe, the Government have brought forward this Bill. It is a Bill that the Government have already admitted will not take a penny off the outrageously high energy bills that people are struggling to pay. It was our high dependency on fossil fuels that put British households in the recent situation that they have been in, so the Bill doubles down.

It is a Bill that will not do anything to address our energy security, as oil and gas are sold, as the Minister knows, on the international market—a case made expertly by the noble Lord, Lord Browne of Madingley, who, I suggest, knows his stuff. The more we depend on fossil fuels, the more we will depend on those who control, and set the prices on, that market.

It is a Bill that is not necessary to bring down energy imports; the only way to do that for good is to produce more clean power at home that we can control. It will not send the right signal to investors on the UK’s commitment to green industry. It is not good for jobs as the number of North Sea workers decreases, or for the public purse, which has spent far more on subsidies recently than any possible tax revenue. It is certainly not good for the environment; in the words of the Government’s former net zero tsar:

“There is no such thing as a new net zero oilfield”.


So what exactly is it intended to achieve? All we can see is areas where it takes us in the wrong direction, not least on protecting the environment. We are certainly not alone in this view. The way to enhance energy security, according to the National Infrastructure Commission, is to move away from fossil fuels. In its words:


“Reliance on fossil fuels means exposure to geopolitical shocks that impact the price of these internationally traded commodities”.


This Bill does the opposite.

As for investment, the CEO of Aviva made it very clear that new oil and gas drilling


“puts at clear risk the jobs, growth and the additional investment the UK requires to become more climate ready”.

Then there are the thoughts of the former net zero tsar who quit Parliament over this Bill, the right honourable Chris Skidmore, and the widely respected former COP president, the right honourable Alok Sharma. Chris Skidmore called the Bill

“another historic mistake and a grave error”

that is

“totally against the sentiment and direction of the global stocktake”.

Furthermore, he reported from Dubai that the UK’s international leadership will be undermined until a moratorium on new licences is resumed. Alok Sharma said that it would

“reinforce the … perception of the UK’s rowing back from climate action … and that does make our international partners question the seriousness with which we take our international commitments”.—[Official Report, Commons, 22/1/24; col. 52.]

With how little of substance the Bill will achieve, the only obvious answer is that the Government see it as a symbol. As we have made clear, the symbol that is being sent is very much the wrong one.

We will try to improve the Bill during the remaining stages, but let me be clear. First, what is needed is not an improvement to the Bill but a whole different approach. We need the UK to be made a clean energy superpower with cheap and secure energy so that families and businesses are protected from spiralling bills, and jobs and investment are boosted across the country. That is the Labour Party’s mission: to cut bills, create jobs, deliver energy security and provide climate leadership. This Bill does pretty much the opposite. But given that the Government are determined to press on with a Bill that will achieve nothing, it would be irresponsible not to seek to improve it. So we will look to see what we can do.

The Bill contains two tests that should be passed before the North Sea Transition Authority can proceed to issue a licence—but these tests, as drafted, cannot be failed. Liquefied natural gas will always be more greenhouse gas intensive in production than UK natural gas. There is no situation in which the North Sea field will meet our total demand for gas and oil. Tests that cannot be failed are simply pointless. We seek to replace these tests with ones that produce a proper judgment about whether a licence should be issued. These tests will be based first and foremost on whether issuing a licence would be in line with our climate change goals. I also look forward to the House considering other areas in Committee—methane, leak detection, protection of green areas—and seeing where we can find cross-party agreement to maybe even give this purposeless Bill some purpose.

The Bill does, however, have one merit. It has given rise to one of the most remarkable speeches made in the other place, by Dr Alan Whitehead MP. I will finish by quoting part of his speech:

“The whole Bill appears to have come about as a result of a wheeze, cooked up by a couple of strategy advisers over a heavy lunch, to put the Opposition on the wrong foot … Quite honestly, that wheeze should have been put down as soon as the effects of the heavy lunch wore off, but instead it has … finally made it to the Floor of the House in the shape of this risible Bill”.—[Official Report, Commons, 22/1/24; col. 105.]


Exactly so.

--- Later in debate ---

[Lord Lilley (Con)]

I am grateful to the noble Baroness for that clarification. Somebody used the 200,000 figure—it must have been the noble Lord, Lord Lennie. Anyway, it does not matter.

[Lord Lennie (Lab)]

The Minister.

[Lord Lilley (Con)]

The Minister did. The noble Baroness has acknowledged that the figure is about 30,000, rather than 27,600; I do not really see the difference, frankly. The point is not which figure is bigger. Why should we sacrifice 30,000 jobs?