Energy Bill [HL]

Lord Teverson Excerpts

Wednesday 9th September 2015 Lords Chamber

[The Parliamentary Under-Secretary of State, Department of Energy and Climate Change and Wales Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, I will now speak to government Amendments 33 and 34. Amendment 33 inserts a new Part 2A into the Bill which amends the third-party access to upstream petroleum infrastructure regime found in the Energy Act 2011. Specifically, it amends Section 87 of the 2011 Act, which relates to powers to require information, and inserts new Sections 87A and 87B, which make provision for appeals and sanctions respectively. This amendment requires that where the Oil and Gas Authority issues a notice under Section 87 of the 2011 Act requiring information to be provided, it must specify a time for compliance with that notice.

The amendment also provides an appeal right to the First-tier Tribunal against the issuance of a notice on the grounds that the information required is not relevant to the Oil and Gas Authority’s functions relating to third-party access or that the length of time given to comply with the notice is unreasonable.

Amendment 34 also allows for any requirements imposed by such a notice to be treated as petroleum-related requirements and therefore to be sanctionable under Chapter 5 of the Bill. However, the Oil and Gas Authority will not be able to revoke a licence or terminate an operatorship in relation to such breaches.

Amendment 34 inserts two new sections into the Energy Act 2011, which established the third-party access to upstream petroleum infrastructure regime. New Section 89A allows for applications for access to upstream petroleum infrastructure made under Section 82 of the 2011 Act to be assigned to another party. New Section 89B allows for a new owner of infrastructure to which an application for access has been made to be treated as a party to that application. The amendment also ensures that where ownership of infrastructure in respect of which a notice under Section 82(11) imposing access rights has been issued is transferred, the obligations under the notice transfer as well.

Once such an assignment or transfer occurs, anything that was done by the original party is treated as having been done by the party to which the application was assigned or the ownership transferred. The provisions allow for the third-party access regime to continue rather than having to restart on a change of party, facilitate the transfer of non-commercially sensitive information already provided to the Oil and Gas Authority and ensure that all new parties are aware of the relevant history of the application.

The amendments will increase the utility of the third-party access to upstream petroleum infrastructure regime, which is an important tool in the Oil and Gas Authority's pursuit of maximising economic recovery for the United Kingdom. I beg to move.

[Lord Teverson (LD)]

I thank the Minister for his explanation of a somewhat technical new clause. I think that the Minister went through liability, but very quickly. Clearly, all sorts of liabilities are potentially incurred by someone who has these access rights. If there is a change of ownership or the rights are assigned to a further party, who takes any legal liabilities that may not have been resolved or may be found after the date of transfer that relate to the period before? I wonder whether that is clear, because I imagine that such liabilities could in certain circumstances be quite onerous. I would be interested to hear the Minister’s remarks on that.

[Baroness Liddell of Coatdyke (Lab)]

My Lords, perhaps I may ask the Minister a question relating to new Section 89A introduced by Amendment 34. I drew attention at Second Reading to my entry in the register of interests as a non-executive director of the Offshore Renewable Energy Catapult. I drew attention, too, to some interesting ideas that are developing about the use of decommissioned oil and gas facilities in the UK continental shelf for renewable energies, in particular in the area of offshore wind.

Given that the new sections introduced by the clause relate to the powers of the Oil and Gas Authority, would that be a limiting factor given that these renewable technologies are not hydrocarbons? I find it quite a complicated clause to work my way through. I am seeking to ascertain—it may be that the Minister cannot give me an answer today, but perhaps officials could take a look at it—whether there is protection of the possibility in future of previous hydrocarbon capabilities being used for offshore renewable energy. I took some comfort from the use of the word “facility”, which suggests that there might be some leeway there, but given that I am not a lawyer—although there are people in this Chamber who are—perhaps the Minister can give a slightly better answer to those of us who do not have that kind of expertise.

--- Later in debate ---

[Lord Howell of Guildford]

My Lords, I take it that the noble Lord, Lord Oxburgh, is referring to the very interesting paper put forward by Professor Stuart Haszeldine and his colleagues about the financing and development of CCS. The noble Lord, Lord Oxburgh, is himself always at the forefront of new thinking and developments in this important area, and this is certainly a very interesting set of thoughts. Basically, the idea in the paper, as I understand it, is to spread the costs of further CCS development away from falling exclusively on the already burdened consumer and also to spread them through time. The argument is that, as we get to the end of the 2020s and into the 2030s, the real crunch and crisis over CO₂ will come and that the burning of coal particularly is going to become absolutely decisive in shaping future influence on climate change.

Furthermore, the noble Lord, Lord Oxburgh, is absolutely right about the centrality that he gives to the whole carbon capture and storage task. When one considers that 2,117 new coal plants are now being planned or built around the world, one begins to realise the enormity of the task to somehow ensure either that they are diverted or that the coal plants operate in ways that reduce carbon emissions. Carbon capture and storage clearly is the most satisfactory technical answer to that, although there are problems of cost, but there are of course much cleaner ways of burning coal, which both the Chinese and the Poles are urging, using very advanced technology built on the conventional platform but also supercritical boilers and other devices to ensure that much more energy emerges from a tonne of coal. That way, by definition, you get more energy or electricity out of a coal-fired station but save on the amount of emissions that would otherwise result. So there are other techniques as well, which are obviously decisive.

Most coal stations will be built in India, Indonesia and Turkey—mostly in Asia, although some in Europe. The whole attempt effectively to keep global warming to a 2 degrees centigrade rise will stand or fall on what happens to that vast number of new coal stations and the huge commitment to increased coal burn. It is the official policy of the Government of India that there must be a doubling of coal production and a very substantial increase in coal burning there, because the primary aim is the reduction of poverty and economic development. Unfortunately, given the economics of the present and near future, coal is much the cheapest way to produce the essential cheap power that developing nations of that size and with those challenges must have.

This is the problem. The noble Lord, Lord Oxburgh, and the noble Baroness, Lady Worthington, are absolutely right to call our attention to this, but the question left in my mind is how relevant it is to the extraction of oil and gas in the North Sea. If we are to carry forward experiments effectively, we need to develop the storage techniques that go hand-in-hand with carbon capture and storage. That is very important and there is a lot of work to be done on that.

I will strike a slightly diversionary note from what has been said in the debate so far. The aim here is maximum economic recovery. The aim is to cope with an industry which is shrinking very rapidly. On the front page of the Times this morning I read that 65,000 jobs are about to go in the industry. The industry is under very great pressure. As I understand it, our aim in the Bill and that of the OGA is to ensure that gas and oil are extracted economically, commercially and successfully in these shrinking conditions. We know that gas is considerably lower carbon when burnt than coal, so if we are trying to sequester our coal carbon emissions or move from coal to gas, it is more gas we want, not less. Everything needs to be done—as I understand the OGA is trying to do—to encourage the extraction at economic prices of gas from the North Sea that can then be burnt, thereby saving considerable carbon emissions. We need to copy the American example, where there has been a huge reduction in carbon emissions—at least on the production side; consumption is another story, of course—because they have switched from coal to gas as a result not of government policy but of the shale revolution.

I leave a question mark over the amendment as to whether it really applies as directly as some have suggested to the North Sea offshore operations. It is clearly vital that something is done to halt the massive increase in coal burn lying ahead. I think that 46% of the entire world’s electricity comes from coal, and that is probably rising, not falling. That is decisive, but whether at this stage the additional obligations in the Bill should be placed on this particular industry, which is struggling in desperately difficult conditions in both a geographic and an economic and commercial sense, I am not so sure. I end my comments with this question, although it may be that this is not quite the right place to think about this vital issue.

[Lord Teverson]

My Lords, I am a great disappointment to the noble Lord, Lord Oxburgh, because over the years, I have become a CCS sceptic in all sorts of ways. The reason for that is not because it is not necessary or a good way to move forward the decarbonisation agenda but because, exactly as he himself said—I have been talking about this for the nine years that I have been privileged to be a Member of this House—we have got a very short distance in terms of making it happen. Obviously there has been important progress, with projects in the formative pipeline at the moment, but one reason for that is that CCS is large scale, demonstration projects are very expensive and it stands aside from the fossil fuel-based industry that it is trying to help. The two are not directly tied up.

What I like about the amendment, and why I have put my name to it, is that it tries to find a number of ways through that puzzle. First, it says that CCS is important, and is a future technology. I really welcome the Government’s positive messages about this. From where I stand, the decarbonisation agenda seems to be rather on the back foot and going in the wrong direction, but in this important area I really welcome the Government’s positive mood music. But there are a couple of other things. One was referred to strongly and effectively by the noble Baroness, Lady Worthington. If there is greater stakeholdership of CCS by the fossil fuel industry, there is likely to be more push for there to be a real effect and for something to happen. It is also an ongoing basis on which this technology can be funded, rather than on the erratic one-off mega-subsidies and funding systems that we have at the moment.

For those reasons, this is a really positive suggestion and a way in which we can start to move forward. It is also in line with the philosophy, with which we all agree, that the polluter pays—or it is in that ballpark, if not absolutely perfectly. For that reason, I was very pleased to put my name to the amendment, as it helps to bring that forward. But as other noble Lords have said, clearly this is the start of an idea. That is why it is absolutely right that the amendment talks about a consultation process, rather than saying that it should happen. So I very much welcome this amendment and welcome the Government’s positive view towards CCS, and I hope that this can be seen as a way of moving this agenda forward more practically than we have achieved in the past.

[Viscount Ridley (Con)]

My Lords, I apologise for not being here on Monday to take part in the debates then, and I hope that the House will indulge me in speaking today. I declare my interests in surface coal-mining in the north of England. None the less, and to their astonishment and probably horror, I would like to support the amendment in the names of the noble Lord, Lord Oxburgh, the noble Baroness, Lady Worthington, and the noble Lord, Lord Teverson. It has enormous merits and is a good suggestion, although they should not worry because I will disagree with them on things towards the end of my remarks.

I welcome the remarks of my noble friend the Minister that he wants to discuss CCS further, and I hope that he might be able to include me in those discussions. I want to suggest as an extra twist—and the noble Lord, Lord Oxburgh, touched on this—that we must link this to some kind of alleviation of the carbon imposts on the industry, which are throttling various British industries at the moment, in particular the carbon floor price. What I like about the suggested amendment is that it avoids the distortion of supporting carbon capture and storage through the contracts for difference, and that it should work at no cost to the taxpayer and makes use of market mechanisms.

I think that we now have to agree that the world needs fossil fuels during this century, if only to give the billion people in the world who have not got access to electricity the chance to have access. We cannot get emissions reduction without using CCS, if we are going to use fossil fuels. We are still searching for a way in which to get emissions down without hitting affordability and security, to solve the trilemma. So far, the two main ways in which we have tried that have not worked. Subsidising renewables has worked very poorly in getting emissions down and has done so at the cost of affordability. So far, wind and solar have managed to take 1.3% of global energy use, after billions of pounds invested in it worldwide, while having a minimal effect on emissions reduction. So the renewables agenda is putting affordability at risk without achieving its goals.

The other tactic that we have tried is simply to put heavier and heavier taxes on fossil fuels, and we can see the effect of that on our electricity supply in this country. Power station after power station is closing. In the Queen’s Speech debate on 4 June I suggested rather rashly that there was now a risk that Eggborough would close—and now that has come to pass. Therefore we are genuinely looking at a worrying lack of energy security in this country. The two mechanisms we have tried for cutting emissions have either hit affordability or security, so we are still searching for a way to do decarbonisation cheaply and without hitting energy security. The best way to achieve that would be to build more gas-powered power stations and to encourage the use of gas instead of coal, but that is not possible at the moment in this country, because renewables are making it uneconomic for anybody to build or open a new combined-cycle gas turbine.

Energy Bill [HL]

Lord Teverson Excerpts

Wednesday 22nd July 2015 Lords Chamber

[Lord Teverson (LD)]

My Lords, I admit to having been quite reassured when the Conservative manifesto was published back in April. It had two key comments on this area. One was that the Government were aiming very hard for a good solution and a good agreement in Paris at the end of this year, and I am sure that that is the Government’s true intent. The other one, which I almost expected not to see, was that the Government were committed to the Climate Change Act and, I assume from that, all the follow-ons involving carbon budgets and so on. So I thought that those were two good parts of a cornerstone of energy and climate policy for the Government. The Benches opposite have mentioned the emphasis on hard-working families—used all the time as a phrase—and I was also quite encouraged because page 57 of the manifesto said:

“We will cut emissions as cost-effectively as possible”.

I am indebted, as always, to the noble Viscount, Lord Ridley, for his work in this area. On 24 June this year he asked a Question of the Minister. He asked what estimate the Government had made of the cost in pounds per tonne of CO₂,

“of greenhouse gas emissions abatement in the most recent year”—

what were the costs of those technologies? The Minister replied—absolutely correctly, I am sure—that the abatement cost per tonne of carbon dioxide in 2014 was,

“£65 per tonne of carbon dioxide for onshore wind, £121 for offshore wind and £110 for solar PV”.—[Official Report, 24/6/15; col. 1583.]

It was a very useful Question. I find it somewhat difficult to reconcile that Answer with the Bill before us today. I agree that the Conservative manifesto was very anti-onshore wind. In Cornwall, an equally beautiful part of the countryside as Northumberland, we have a large number of wind turbines. At the last count I could see about 30 from my own house. Strangely enough, there has been a direct and positive correlation between tourism success and the number of turbines that have gone up in Cornwall. I am not saying they are absolutely related but I do not think it is really the problem that sometimes we make out. It is great to see a living countryside rather than a preserved and backward-looking countryside. That is something that Liberal Democrats would stand for: growth and a good economy in rural areas.

I find it very strange that the Government have taken against onshore wind in this way but are promoting other technologies, although I have no argument with them about offshore technologies, which, as we have seen from those figures, are roughly twice as expensive. Again, I agree with the noble Viscount, Lord Ridley, that there are other renewable technologies that are even cheaper. Hydro is one but of course the problem with hydro is that we have more or less used our total capacity in the UK to produce it. I would be standing shoulder to shoulder with the noble Viscount on hydro schemes if we had the ability to produce them. So I find this part of the Bill very regrettable and difficult for our very successful renewable industry to deal with.

However, my biggest concern about the Bill comes back to a number of excellent comments made by the noble Lord, Lord Oxburgh; that is, once again we have an Energy Bill that concentrates purely on supply issues rather than demand—the coalition Government were not a lot better but they were slightly better on this. Of course, it is the demand area that really is the challenge to us as an economy moving into the future. In his excellent speech, the noble Lord, Lord Howell, said that we still have not solved the energy trilemma: the difficulty between affordability, security and low carbon. But, as he went on to mention, we have the solution to that, which is the whole area of energy efficiency and making sure that we decouple economic growth from our energy usage. In the UK we have actually been pretty good at that over recent years. That ratio has come down and we have managed to do that decoupling, but there is nothing in the Bill—or any sign in government policy—of energy efficiency really being core to what they are doing.

My final point comes back to another point made by the noble Lord, Lord Oxburgh. I was very dismayed indeed by the announcement that the policy of zero-carbon homes from 2016 was going to be discarded as if it was something that had been an idea for a short while but is too difficult and will be got rid of in order to produce thousands more houses from 2016 onwards. That is not the case. That policy started in 2007 under the then Labour Government and went through the coalition Government; in fact, some of the standards were raised at the beginning of the coalition period. The industry had prepared itself for that. It was understood that that was going to go ahead but after eight years of negotiation, planning and enthusiasm to go ahead with that, six months before we reach 2016 that policy is screwed up and thrown in the bin.

One of the biggest issues of affordability in this country is fuel poverty. We still have some 2 million households suffering from fuel poverty and some 18,000 excess winter deaths, a significant number of which are due to fuel poverty and inadequate heating. Stopping that move to greater thermal efficiency of homes is not just the abstract issue of solving that energy trilemma; it concerns actual households and individuals who will suffer into the future because of higher energy bills over the life of those buildings of 50 to 75 years; and the rate of excess winter deaths in the United Kingdom, which is substantially above those of other European nations, will continue. What will we have to do in another 10 or 20 years? We will have to reinvent the Green Deal to retrofit all those post-2016 buildings to bring them up to a standard that a civilised society expects. Would that have cost extra to the building industry? The estimates are £3,000 per house—not insignificant, of course, but something that would be paid back within a very short number of years. As always, I am afraid I point at the automotive industry, which has had considerable constraints, mainly through European directives, on the carbon emissions of vehicles produced. That industry actually objected—unlike the building industry, which has been very pro-moving forward—but has the cost of cars in real terms gone up because of that policy? Absolutely not: in real terms, those costs have come down.

My challenge to the Government in this Bill is to tackle the inconsistency of the treatment of onshore wind against solar, and to refocus on the demand and efficiency side of electricity and make sure that we solve the trilemma. What concerns me most, very much reflecting what the noble Lord, Lord Whitty, said, is that we seem to have a Government who are “1984” Orwellian in their style, in that what we read is not borne out by the actions that we see.

Parliamentary Voting System and Constituencies Bill

Lord Teverson Excerpts

Thursday 20th January 2011 Lords Chamber

[Lord Soley]

I ask Members to think about this. They know, I know and everyone in this House knows that this is an important constitutional Bill. They also know, as was pointed out a number of times in the debate, including in the debate on the amendment that I moved a couple of days ago, that it is extremely unusual—in fact, I know of no other case of this in a modern parliamentary democracy—for two parties forming a Government to force a decision on the number of seats in the House of Commons where there is neither all-party agreement nor an independent assessment of the needs of Parliament. The Government are not just breaking the rules of normal constitutional procedures; they are breaking the rules of what is normally done in modern democracies. That is why, as I pointed out a few days ago, we look very carefully when we conduct investigations on elections overseas at how those Parliaments are constructed. If they are constructed by one or more political parties trying to dominate the others, they invariably run into trouble and damage the reputation of the whole country.

I say again to noble Lords that there have been plenty of opportunities for serious negotiation. A number of people on this side of the House have made it clear that there is a willingness to accept the referendum; some people are for the alternative vote and some people are against it. The noble Lord, Lord Wills, and I, as well as a number of others, have made the point that we are willing to negotiate quite happily on the number of seats, because we take the view that the House of Commons is too large, just as the House of Lords is too large. But what you cannot do, should not do and should not try to do is to force a position on the constitution with far too little thought and no agreement between the political parties and organisations that are part of it.

[Lord Teverson]

My Lords, I have found that the last few amendments that we have discussed in this House have been dealt with remarkably constructively. However, while on the whole I am a great admirer of the noble Lord, Lord Soley, I think that his intervention at this point is starting to pull things apart again. I ask noble Lords to think again before they intervene at this point.

[Lord Soley]

I thank the noble Lord for his intervention. I am quite happy to accept what he is advising me to do. I simply say, as I said a few moments ago, that the House is doing itself no favours and the Government are doing themselves no favours by not negotiating.

Scottish Parliament (Constituencies and Regions) Order 2010

Lord Teverson Excerpts

Tuesday 26th October 2010 Lords Chamber

[Lord Martin of Springburn]

I first apologise, as I was unavoidably delayed. I have listened to my colleagues and friends. The case put on consultation is so important. A boundary change was to be brought in in the city of Glasgow in 1983. The noble Duke, the Duke of Montrose—I think that is who it was—mentioned the Scotland Act. The original boundary report said that there should be no more than 71 seats for Scotland. The case that Glasgow had to put in the old city hall, the Candleriggs Hall, was that it was to be no less than 71, which meant that the city of Glasgow would lose not two seats but one. That meant a great deal, as the noble Lord, Lord Maxton, will know.

Consultation was so important then, as it is now. We had a QC, the late Hugh Martin, whose brother George was in the House. Hugh put the case, and he won because the presiding sheriff accepted his arguments. At the lunch break, when we still did not know the result, we went to a restaurant and had what they call in Scotland a “fish tea”. There was Donald Dewar, myself and Bruce Millan, former Secretary of State, and we agreed to pay for Hugh Martin’s lunch—it was the decent thing to do. I tell you, it was a lunch worth paying for, because we won. Even Donald Dewar, who was known to watch his pennies, weighed in with the bill.

In the west of Scotland, unfortunately, we have had sectarian problems, and we have managed to overcome them. A late colleague of ours, Frank McElhone, was a great leader in overcoming those problems. When he asked his honourable friend for Rutherglen, the noble Lord, Lord McAvoy, if the community organisations could come along, the Union of Catholic Mothers and the local Orange Lodge put the case in Frank McElhone’s constituency. That was bringing the sectarian groups together and calling for unity. They were unified that day, and they won.

I accept what the noble Lord, Lord Maclennan, has said about distance. I was a union officer both in Argyll and in the Highlands, and I had not realised how lucky I was, living in Glasgow, that I could get from A to B in a short time. To go from Fort William to Inverness was a major journey in itself for a lowlander like me, and there were places further north that were even more difficult to get to, yet these places are encompassed in the same constituency boundary. The law officer himself knows this; it was a surprise for me when I went to Orkney and I spent the night on the ferry. I had not realised that it would take so long—on the map, Orkney looks so close to the mainland. In fact, I met the noble and learned Lord there the other day when I was up there.

It surprises me that the Deputy Prime Minister, Nick Clegg, had a slogan throughout the general election that every vote should be equal and therefore we should have equality among the constituencies. Constituencies that are represented in the other place by Liberal Members are so far spread, yet no one even approached them and said, “Look, by putting this argument, you are destroying the argument for us to be good representatives for far-out constituencies”.

The noble Lord has mentioned Argyll. We in the west of Scotland are so fond of our country. It is lovely that within three-quarters of an hour you can go from Glasgow to the banks of Loch Lomond, but from the outskirts of Helensburgh to Campbelltown is such a distance that you could actually drive from Glasgow to Fort William quicker. By the time that you get to Campbelltown, you are further south than the town of Ayr, which my noble friend knows about—yet it is all the one constituency. This document says that it is giving us consultation, but the other place is saying, “You are not going to have consultation”.

I go back to my native city of Glasgow. People would go into Glasgow and think, “Well, it’s just one big city”. That is as naïve as going to London and saying that it is just one big city. Since I was 14, I have lived most of my life in Springburn. It is a far cry from Shawlands; it is a different world. The people of Partick feel differently from the people of Parkhead. They are different communities. In the old days they used to be boroughs in their own right, with their own police officers. I come back to what the noble Duke, the Duke of Montrose, said. There was an area called Grahamstown, which was named after his ancestors. In my younger days I stayed in the borders of Grahamstown and the Anderson district. The Anderson district is a far cry from the Gorbals, although the sketch writers never quite got that right. They did not know the geography of Glasgow.

I know from my experience of going to Boundary Commission hearings that even those Members of Parliament and those communities that felt they had lost out always felt, at the end of the day, that they had been given a good hearing at those boundary change tribunals. It would be a very sad day if we just threw numbers into a computer and said, “There you are. That is what your elected representatives have to fight for”.

[Lord Teverson]

My Lords, I will make a short intervention. I was born in Dagenham—made in Dagenham, effectively—which was then part of Essex and is now in occupied Essex, since it is occupied by the London Borough of Havering. I am interested in the debate on this order. I say to noble colleagues from Scotland: be thankful that, whatever this order and the Bill in the other House say, at the moment there is no question of boundaries crossing the Scottish-English border. I ask you to keep that in mind when it comes to other nations in the United Kingdom. Cornwall is a Celtic nation. I ask for noble Lords’ support when the other Bill comes to this House. There is a possibility of boundaries crossing the Tamar river. I ask the Government to take that into consideration as they think about the Bill before it crosses to this House.

[Lord Hunt of Kings Heath]

My Lords, I am very grateful to the noble and learned Lord the Advocate-General for Scotland for his introduction to this order, and for his explanation. I am also grateful to his officials for the helpful information that I received this morning. It has certainly been a wide-ranging debate. I am sure the noble and learned Lord is looking forward to responding to all the pithy questions put to him.

I would particularly encourage him to respond to the noble Lord, Lord St John of Fawsley. It is quite remarkable, given the current size of the House, that the Government are proposing to bring dozens of new Peers into the House. I am a member of the Leader’s Group, which is looking at retirement options because of concern about the size of the House. I find it remarkable, given that the Government now have a notional majority which we are seeing as the votes come through, that they seem determined to pack this House. It is difficult to see how this House can perform as a revising Chamber if the Government are determined to win every vote. What is the point of the second Chamber in that respect? I hope the Minister will respond to that.

As he said, the orders follow the submission of the Report on the First Periodic Review of Scottish Parliament Boundaries by the Scottish Boundary Commission. The intention is that they will apply to the Scottish Parliament elections in May 2011. I start by paying tribute to the Boundary Commission for Scotland. Clearly, not all noble Lords agree with the entire outcome of the commission’s work. However, I do not think that any noble Lord has criticised the thoroughness with which it embarked on this exercise.