Oil and Gas Authority: Remit

Baroness Boycott Excerpts

Thursday 2nd December 2021 Lords Chamber

[Lord Callanan (Con)]

No decision has yet been made regarding the proposed Cambo field. The export market for oil and gas produced from Cambo is purely a commercial matter dictated by the market, the quality of oil and the different refinery capabilities. But, as I said, even with continued development, we expect the UK to remain a net importer of both oil and gas throughout the transition period when following the Climate Change Committee’s balanced net-zero pathway.

[Baroness Boycott (CB)]

My Lords, HMRC estimates that decommissioning will cost the taxpayer £18.3 billion over the next few decades. Oil and gas companies can claim tax back on all decommissioning as well as R&D, as the noble Baroness, Lady Sheehan, pointed out. We also have one of the lowest tax burdens for oil and gas in the world. Shell paid $1.8 billion in tax to Norway last year, but the UK gave it $99.1 million towards decommissioning costs. What has happened to the polluter pays principle? After all, the oil companies have made a lot of money and trashed our planet, and now we are going to help them continue to make money in order to transition to a better future.

[Lord Callanan (Con)]

It remains the case that the petroleum sector is a net payer of taxes to the UK Exchequer. I frankly do not understand the argument that we should stop all production in the North Sea and instead import those materials that we will continue to need in every scenario. We would be declining to give ourselves the revenue and spending extra to import those same products.