Oil and Gas Authority: Remit

Lord Oates Excerpts

Thursday 2nd December 2021 Lords Chamber

[Lord Callanan (Con)]

I know my noble friend speaks with great authority on this as a former Energy Minister himself, and I agree with him. Of course, the ultimate solution to the problem of high gas prices is to use less of it. Indeed, we are doing that, and we are continuing to develop our renewable sources. We have one of the largest productions of renewable sources in the western world. However, fossil fuel generation, such as unabated gas-fired generation, currently plays an important role in keeping Britain’s electricity system secure and stable. The development of clean energy technologies means that it will be used less frequently in future, but it will still be required.

[Lord Oates (LD)]

My Lords, I declare my interests as set out in the register. I think it is the Minister, rather than the Liberal Democrats, who may be failing to grasp the implications of the Government’s own policy. But is the Minister aware that if warming is kept to well below 2 degrees in line with the Paris Agreement, new oilfields such as Cambo will become stranded assets? In the light of that, will the Government ensure that the risks that such stranded assets pose to financial stability are properly reflected in increased capital adequacy requirements for those institutions that continue to finance them?

[Lord Callanan (Con)]

We have a role in the licensing of future developments, but whether to proceed with them is, of course, a commercial decision for the operators concerned. I am sure they will bear the noble Lord’s comments in mind. I am sure many of the big companies would not wish to end up with stranded assets either.