Offshore Petroleum Licensing Bill

Baroness Hayman Excerpts

Committee stage
Tuesday 23rd April 2024 Grand Committee

Moved by

[Baroness Hayman]

1: Clause 1, page 1, line 3, at end insert—
“(A1) The OGA must not invite any new seaward area production application licences until the Secretary of State has by regulations brought into effect a ban on flaring and venting relating to new offshore installations other than that required in an emergency.(A2) From two years after the day on which this Act is passed, the OGA must not invite any new seaward area production application licences until the Secretary of State has by regulations brought into effect a ban on flaring and venting relating to existing offshore installations.(A3) A statutory instrument which contains regulations under subsection (A1) or (A2) may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.(A4) In subsections (A1) and (A2)—“flaring” means the burning of hydrocarbons produced during oil and gas extraction;“venting” means the release of un-combusted hydrocarbons directly into the atmosphere.”Member’s explanatory statement
This amendment prevents the invitation of new seaward area production licences until the Secretary of State has introduced a ban on flaring and venting by new offshore installations. It also requires the Secretary of State to prevent licensing rounds if a wider ban is not in place within two years of Royal Assent.

[Baroness Hayman (CB)]

My Lords, it is a pleasure to open this Committee stage, and I promise to resist the temptation to relitigate any of the issues of principle that we discussed previously. I declare my interests as chair of Peers for the Planet and director of the associated company.

In moving Amendment 1, I will also speak to Amendment 2, but I look forward very much to hearing the argument on Amendments 9 and 10, in the names of the noble Baroness, Lady Willis, and the noble Lord, Lord Randall of Uxbridge. I am grateful for the support of the noble Baroness, Lady Blake of Leeds, the noble Lord, Lord Randall of Uxbridge, and the noble Earl, Lord Russell, on Amendment 1. I would also like to thank those organisations that have supplied briefing, including Uplift, Oceana and the Green Alliance.

In the vein of trying to do what we can to improve a fundamentally flawed Bill, my Amendment 1 seeks to make progress on the important issue of greenhouse gas emissions from venting and flaring and builds on an amendment introduced in debates in the other place by Sir Alok Sharma. The amendment is a simple and pragmatic proposal, which seeks to give statutory force to existing voluntary guidance on this issue and to factor in the recommendations of the Environmental Audit Committee of the other place, made in January 2023, which recommended a ban on venting and flaring by 2025.

The amendment does two things. First, it says that there should be no invitations for new licences until the Secretary of State has introduced a ban on venting and flaring from new installations. Secondly, it would give the Secretary of State a maximum of two years to introduce a ban on venting and flaring from all installations if any further licensing rounds are to take place. The EAC’s report recommended a ban not later than the end of 2025. My amendment recognises that time has moved on since 2023 and amends the timeline appropriately. Adopting this change would help the Government to demonstrate that they are serious about maintaining their global leadership on climate action by turning their stated ambition into delivery.

The practice of venting and flaring is a serious issue. It takes place when extra gas is produced, usually as a by-product of oil extraction that producers need to get rid of, rather than sending back to shore. They do this by venting the natural gas, releasing it directly into the atmosphere as methane, or by flaring—burning the gas—which, as well as releasing methane, releases volumes of other greenhouses gases and pollutants such as black soot and nitrous oxide. Both practices are damaging and polluting, as well as being, in the words of the IEA, an “extraordinary waste of money”.

Methane is a highly potent greenhouse gas. It is the second biggest cause of global heating after CO₂ and has a far higher warming effect in the short term. However, its short lifespan in the atmosphere compared with other greenhouse gases means that taking action to cut methane now is one of the fastest and most cost-effective ways to limit global warming in this crucial decade.

It is also a very wasteful practice. Green Alliance research has found that just 18 of the highest polluting oil and gas platforms in the North Sea are losing enough gas through venting and flaring to power 140,000 homes, equivalent to a city the size of Aberdeen. The North Sea transition deal commits the industry to a voluntary cut in emissions of 50% by 2030 on a pathway to net zero by 2050. The Climate Change Committee described those targets as weak and significantly lower than its sixth carbon budget advice—but, even so, the industry is not on track to meet them. Added to that, the North Sea Transition Authority emissions monitoring report of 2023 shows that UK oil is more polluting than average, compared to that of other major producers, including gas imported via pipelines from Norway and other nations operating in the North Sea.

The Government agreed in 2020 to phase out routine venting and flaring by 2030. There is guidance in place from the regulator, the NSTA, which expects the industry to adhere to zero routine venting and flaring by 2030, and where all new developments should be planned on the basis of zero routine flaring and venting.

In response to Sir Alok’s similar amendment in Committee in the Commons, the Minister argued against putting its ambition into legislation. However, this is not groundbreaking: Norway has had a ban in place since 1971 and even the US Bureau of Land Management is now taking action. Voluntary guidance is just not doing what is needed; it is not always followed by industry or the regulator. Just last year, the NSTA granted approval for the , permitting the operators to flare unwanted gas until 2037, in spite of the guidance that new developments should have zero venting and flaring by 2030. Progress to reduce methane emissions in the UK has, according to the Government’s 2022 methane memorandum, been very slow, particularly in the energy sector, where percentage drops year on year have stayed flat.

The CCC, the EAC and the net-zero review have all highlighted that the UK is not going fast enough on methane reduction. There are no technical barriers to ending routine venting and flaring, as the IEA has said. As for cost, industry spending on reducing emissions from venting and flaring is subject to a tax break of £1.09 for every pound spent. As the Government’s 2022 methane memorandum put it,

“Action on methane is … recognised as the ‘last low hanging fruit’ in tackling climate change because measures are readily available and in some cases very cost effective”.


If the Government are serious about their commitments to reduce methane, there really is no excuse for not using this Bill to make faster progress to reduce the emissions from oil and gas production. At Second Reading, the Minister said that he would listen carefully to views on this, so I look forward to his response to the debate that we are about to have.

I move on to Amendment 2, which is also in my name. I am grateful to the noble Lord, Lord Knight, and the right reverend Prelate the Bishop of Norwich for adding their names. At Second Reading, many noble Lords highlighted the need to address the long-term employment prospects of those currently working within the oil and gas sector. My Amendment 2 seeks clarification from the Government on their plans for workers currently employed in our declining North Sea basin to transition to the sustainable jobs of the future. Rather than losing the 30,000 or so direct roles in oil and gas and the valuable skills of those workers, who may be forced to move elsewhere, we need to nurture their transformed skills into the new net-zero roles.

My amendment proposes that there should be no new applications for licences until the Secretary of State has published a green skills retraining plan setting out what support the Government will provide for those in the oil and gas sector who wish to transition to work in green economy jobs. Specifically, it proposes the introduction of a skills passport for workers, which will provide financial and practical support to access training so that those workers can, easily and without additional cost to them, reskill and retrain for the future and be part of the green economy.

The Government recognised in Committee in the Commons that the skills and expertise of the oil and gas industry will be needed to support the net zero transition; however, action to achieve this appears to have stalled. The CCC has pressed for more to be done on net zero skills. It noticed in its 2023 progress report that its earlier cross-cutting policy recommendation for an action plan for net zero skills was “overdue”. It focused on the need for a strategy for those

“workers and communities affected by industries that are expected to experience job losses as a result of the Net Zero transition, including by providing reskilling packages and tailored support to transition to alternative low-carbon sectors”

A recent POST briefing note on green jobs noted that the UK Government’s green jobs delivery group planned to publish a net zero and nature workforce action plan in the first half of 2024. Can the Minister provide an update on when this is likely to be published and any insight into what it is likely to offer? The North Sea transition deal involved commissioning an integrated people and skills plan, which was followed by an Offshore Energies UK 2023 Workforce Insight report that promised to deliver a skills passport so that people can move seamlessly between sectors. Can the Minister provide an update on the skills passport and when this is likely to be produced? Can he confirm that it will provide financial support for workers looking to move into green jobs?

The second part of my amendment probes another recommendation of the Workforce Insight report: the creation of a green skills retraining task force to co-ordinate the retraining provisions that are required across the UK. Will the Government be progressing this recommendation? If not, how will the required skills transition be delivered? I hope the Minister will be able to provide some insight into the Government’s thinking on this important issue and give much needed assurance to workers in the oil and gas sector that their skills are valued and needed, both now and in the future. I beg to move.

[Lord Randall of Uxbridge (Con)]

My Lords, I shall speak to Amendment 9 in my name and say a little about Amendment 10. I have also put my name to Amendment 1, about which we have just heard from the noble Baroness, Lady Hayman—I thank her for moving that amendment so well—and Amendment 10 in the name of the noble Baroness, Lady Willis.

Amendment 9 is in my name and I am very grateful for the support of the noble Lord, Lord Teverson, and the noble Baronesses, Lady Willis and Lady Young. It would require the Secretary of State to publish a marine spatial prioritisation policy, and a spatial prioritisation test to be passed before future licensing could take place. It would mean that before any more oil and gas licensing is permitted, it would have to fit into what the North Sea of the future looks like, with space set aside for other priorities—the priorities of the future, I suggest: marine health and renewable infrastructure. Specifically, the plan would need to ensure that the targets under both the Climate Change Act and the Environment Act are prioritised and achieved.

For the purposes of this amendment, the test could not be passed unless a marine spatial prioritisation policy was in place. This is something the Government have committed to, but there is a risk that, without this amendment, we could be inviting future licensing rounds which will not take account of, or even be in accordance with, a strategy the Government are currently producing. I believe it is wholly pragmatic in its approach. The NSTA did not run licensing rounds while it waited for the now redundant climate compatibility checkpoint to be published, so there is a precedent here for this approach.

--- Later in debate ---

[Baroness Hayman (CB)]

My Lords, I am extremely grateful to everyone who took part in this very useful debate. I very much take to heart the comments made by those with long experience in the North Sea about the need to make sure that the scale and pace of change is appropriate. I remain unconvinced that the voluntary system on venting and flaring is going fast and comprehensively enough to meet the targets we need. The Minister said that the 2030 target we have is “ambitious”, and others questioned whether we could get there by 2026 or so, which is the date in my amendment. I will say only that the Environmental Audit Committee in the other place thought that those were attainable targets. So, there is a lot to think about and I hope a lot to talk about with the Minister between now and Report.

Unfortunately, the noble Lord, Lord Lilley, is not in his place. I would have said to him that I take the stricture that using the licensing process to institute a ban on flaring on current installations is not a very elegant way. However, it has one enormous advantage: it is in the scope of this very narrowly drawn Bill. But with that, and hoping that we can have further conversations, I beg leave to withdraw the amendment.

Amendment 1 withdrawn.

Surplus Carbon Emissions

Baroness Hayman Excerpts

Wednesday 27th March 2024 Lords Chamber

[Lord Krebs]

To ask His Majesty’s Government whether they intend to carry forward surplus emissions from the Third Carbon Budget, in the light of the advice of the Committee on Climate Change published on 28 February.

[Baroness Hayman (CB)]

My Lords, with the leave of the House, I beg leave to ask the Question standing in the name of the noble Lord, Lord Krebs, on the Order Paper.

[The Parliamentary Under-Secretary of State, Department for Energy Security and Net Zero (Lord Callanan) (Con)]

My Lords, the Government have overachieved on all their carbon budgets to date. As required under the Climate Change Act, the Government have consulted the Climate Change Committee and the devolved Administrations before taking any decision on carrying forward overperformance from carbon budget 3. The Government are considering the CCC’s and DAs’ responses and will make a decision, ahead of the statutory deadline, on 31 May.

[Baroness Hayman (CB)]

My Lords, I declare my interests as set out in the register and thank the Minister for that reply. The advice of the Climate Change Committee on carryover was unequivocal: that surplus emissions must not be carried forward to loosen later carbon budgets, since most of the surpluses in the third carbon budget period were due to external factors. I seek assurance from the Minister that the Government will consider that unequivocal advice very carefully and make a stringent assessment of the effect of carrying forward surplus emissions from the third carbon budget on their pledge to cut emissions by 68% by 2030.

[Lord Callanan (Con)]

I can say no more than I said in my initial Answer. Of course, we will take into account the advice from the Climate Change Committee and the devolved Administrations. But this is a problem of success; we have overachieved on all our carbon budgets so far, and we should celebrate that. As I said, in terms of carryover, we will take a decision before 31 May.

Offshore Petroleum Licensing Bill

Baroness Hayman Excerpts

2nd reading
Tuesday 26th March 2024 Lords Chamber

[Baroness Hayman (CB)]

My Lords, I declare my interests as chair of Peers for the Planet and director of the associated company. Perhaps I will take up from where the noble Lord, Lord Lennie, left off.

With just one substantive clause, this could be called a modest Bill, but I am afraid that, to coin a phrase, it has much to be modest about. Its central provision, providing for an annual round of licensing, was deemed unnecessary by the North Sea Transition Authority. We learn from the Financial Times that the authority was concerned not only that it was an unnecessary “wheeze”, to use the words of the noble Lord, Lord Lennie, but that potentially it undermines the independence of that authority. The two so-called tests to be fulfilled before licences are granted are, as has been pointed out, essentially unfailable—so what about the Government’s justification that the Bill would strengthen the UK’s energy security and reduce reliance on volatile energy markets?

A coruscating commentary from academics at the UK Energy Research Centre described it as a distraction, saying:

“Annual licensing rounds will not ensure the UK’s energy security … Any oil and gas developed as a consequence of new licences is unlikely to come to market quickly and will be sold at international market prices”.


These themes were taken up by the former COP 26 president, Sir Alok Sharma, during debates in the other place, who emphasised that

“the oil and gas extracted from the North sea is owned by private enterprises and the Government do not get to control to whom it is sold”.—[Official Report, Commons, 22/1/24; col. 52.]

Not even the Secretary of State for the Environment still claims that this legislation will help customers with their energy bills because, as Sir Alok pointed out, the products will be sold on the international market. The flaws in our domestic pricing systems mean that the unnecessarily high costs of sustainably produced energy will continue to be high until we solve the problem of the pegging of energy prices. No wonder the Bill was what finally broke the camel’s back for Chris Skidmore, the man who signed the net-zero target into law for the Conservative Government, who was chosen by the Government to undertake the net-zero review and who, as has been said, resigned over it.

We all recognise that we are in transition and—as the Minister often reminds us and did again today—we will need supplies, albeit reducing supplies, of oil and gas for some time. However, we need to move that transition along with more investment in cheaper, cleaner, homegrown power and in the alternative sources that are necessary to cater for the issues of intermittency.

Rather than offering encouragement to oil and gas companies, which, despite their claims, do very little in the renewable sector—it receives only a tiny percentage of their UK investment—we should focus attention and incentives on investing in onshore and offshore wind, tidal power, nuclear power, battery storage and the back to basics energy efficiency with which the Minister knows many in this House are deeply concerned. Moreover, the Institute for Energy Economics and Financial Analysis is concerned that the Bill could make our existing challenge of decarbonising, to which the Minister referred, harder. The institute says:

“Stimulating both offshore wind and oil and gas sectors will spur competition over limited supply chain resources. This will increase costs which will disproportionately affect the offshore wind sector”.


The Explanatory Notes to the Bill state that annual licensing will

“provide greater certainty to the industry and potential investors”,

but we need that certainty and encouragement for the industries and technologies of the future, not of the past. We need to look at the interests of workers in the energy sector in terms of their future and how we can transfer their invaluable skills—not abroad, as the Minister said, but into the sustainable, clean energies in this country where the opportunities are and where the growth is higher than it is in oil and gas.

New licensing rounds are unlikely to restore offshore oil and gas jobs that have been lost steadily over the years as the basin declines, as the Minister said. Despite increasingly favourable tax regimes having been implemented since 2015 and high levels of investment, North Sea oil is a declining basin and roles in oil and gas in Scotland decreased by 36%. Over the same period, renewable roles increased by 70%. In hard numbers, recent ONS figures stated that there were nearly 48,000 roles in renewable energy—considerably more than the roughly 30,000 direct roles remaining in oil and gas. This is the growth economy of the future and we should invest in its workers. We should recognise that the net-zero economy is outstripping the rest of the economy, with 9% year-on-year growth, as recently reported by the ECIU.

In many ways, the Bill is a paradox. It achieves very little in energy security and in fulfilling the Government’s stated aims. It does not do what it claims or what is necessary. But because it does not do very much that does not mean that it is harmless. It has a very clear impact in the negative messages that it conveys about the Government’s real commitment to the action that we need to transition successfully to the economy powered by clean energy that we need. Sadly, it reinforces the messaging that has been dripping out from the Government in the last 18 months and the perception of “slowing UK climate ambition”, as the CCC puts it. That perception—indeed, that reality—is deeply damaging to the international reputation on climate change that the UK has built, certainly since the passing of the Climate Change Act and arguably since Margaret Thatcher recognised the centrality of the issue of climate change in her speech 35 years ago. We cannot continue to lead, as the Government say that they have been proud to, if we continually water down our national commitments and priorities.

It is a modest Bill but, sadly, a damaging one, which looks backwards to the technologies and industries of the past rather than to the sustainable growth of the future. However, this House concentrates on improving legislation so, however wrong-headed in principle we consider this to be, I look forward with others to our discussions in Committee and on Report and to exploring amendments on the marine environment, on supporting workers transitioning to new roles in clean energy and on ending the unnecessary practice of venting and flaring, which continues to add such potent pollution to our atmosphere.

I do not hold out much hope that the Minister will move much on the objections in principle to the Bill, but I hope that he will at least be willing to look seriously at changes that could contribute to the thriving low-carbon and nature-positive economy which the Government recognise that the UK needs.

[Lord Lilley (Con)]

My Lords, it is a great pleasure to follow the noble Baroness, Lady Hayman, and the noble Lord, Lord Lennie, both of whom seem to be against the Bill because the positives are small. One is normally against things because they are negative. The only negative the noble Baroness, Lady Hayman, came up with was that it sends out the wrong messages. I have observed a general rule in politics, that when the only argument anyone has against something is that it sends out the wrong messages, they do not really have an argument against it at all.

The question that faces us is whether this Bill is compatible with our commitment to reach net zero by 2050. It is a huge challenge: a huge engineering challenge that, according to the former chief scientific adviser to the Department for Environment and professor of engineering at Cambridge, Professor Kelly, is impossible to achieve; let us hope he is wrong. It is a huge economic challenge that, according to a former economist at the World Bank and now professor of energy economics at Edinburgh University, is economically impossible to achieve; let us hope that he too is wrong. Let us assume for the purposes of this debate that these objectives are achievable. What we cannot do is add problems, even small ones, to those mammoth engineering and economics problems by doing things that add to emissions, rather than reduce them; that add to costs, rather than reduce them; and that reduce, albeit by a small amount, our own GDP and tax revenues, which we will need to pay for the transition to net zero.

The sensible path to net zero that we, like other like- minded countries, have adopted is to phase out demand for fossil fuels, not their supply. If energy companies choose to invest in more fossil fuel capacity than is needed, they will lose money; that should not be our primary concern, except for those who happen to have a financial interest in the oil industry. If the UK unilaterally stops producing fossil fuels, which would be a bizarre thing to do if we do not ban their import, others will step in and supply the fossil fuels that we failed to produce but could have. They will also replace any fossil fuels that we provided to the rest of the world. If the whole world were to try to reduce the supply of fossil fuels, as well as phasing out demand, that would have no effect if we did not phase out the supply as rapidly as we reduced the demand. Or, if we phased out the supply more rapidly than we reduced the demand, it would create shortages, massive price rises and huge profits for the oil industry. It would do to ourselves and the world exactly what Putin did to us when he invaded Ukraine and reduced supplies. Is that what the opponents of this Bill want to achieve? Or are they solely interested in the UK stopping the production of oil and gas, rather than the rest of the world stopping it?

Even if our fossil fuels did not involve fewer emissions in extraction and transport, or, in the case of gas, additional emissions over and above that in liquefaction and regasification, there would still be a very sensible case for us to keep producing such oil and gas as is available in the North Sea. Remember, the UK plans to reduce emissions not just by reducing demand for and use of fossil fuels, but by employing carbon capture and storage. That is a sensible thing to do because, according to the Climate Change Committee, our estimates and those of others suggest that without resort to carbon capture and storage, the cost of meeting the 2050 targets would be twice as high. We will use carbon capture and storage, which means we will continue to use oil and gas up to and after 2050—unless, of course, people on the other side want to double the cost of meeting the net-zero commitment.

I got the impression from the noble Lord, Lord Lennie, that the Labour Party’s approach to this is based on the assumption that there is a choice between continuing to produce new oil and gas fields in the North Sea and developing renewables in the North Sea and elsewhere. There is no such alternative. We can do both, we are doing both and we should continue to do so. He also argued, as did the noble Baroness, that all the benefits of producing oil and gas in the North Sea are small ones: there will be only a small benefit in emissions reductions; there will be only a small benefit to the economy; there will be only a small benefit in extra tax revenues; and there will be only a small benefit in saving jobs and energy security. Well, small benefits are better than none, and we should pocket them if we can. The noble Baroness quoted Global Witness evidence that the claim that the oil and gas industry employs 200,000 jobs is wrong. She said— and I have no reason to doubt her or Global Witness—that the real figure is 27,600. Global Witness says that this does not matter, but it still seems a lot of jobs. It is pretty heartless to say to those 27,600 people, who are largely in Scotland, that their jobs do not matter and they can probably find a job in the renewables industry, if they are lucky, because they have transferable skills, notwithstanding the disruption and the need to move.

The other argument—

[Baroness Hayman (CB)]

I am grateful to the noble Lord for giving way. He quoted me; otherwise, I would not interrupt him on Second Reading. I did not quote the Global Witness figures—which I do have—because they are complicated and quite difficult to discern. I quoted the ONS figures, which state that, over the period to which they refer, renewable roles increased by 70%, whereas in hard numbers, there were nearly 48,000 roles in renewable energy, which is considerably more than the 30,000 direct roles remaining in oil and gas. I did not talk about the 200,000 figure; I gave simply the ONS figures showing that there are more jobs in renewables than in oil and gas, and they are growing faster.

[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 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?

[Baroness Hayman (CB)]

We are not sacrificing them.

[Lord Lilley (Con)]

The proposal is to sacrifice them if we phase out that industry more rapidly than would otherwise occur. I give way to the noble Baroness if she has some alternative.

[Baroness Hayman (CB)]

I think I quoted the Minister correctly. He talked about the invaluable skills of people in the oil and gas industry, and how those could be transferred into our own industries and not lost to foreign competitors. When I went to a wind farm, the guy who was helping us to go right to the top of the wind turbine told me that he used to work on the oil rigs in the North Sea. He had seen the way the wind was blowing—if that is the correct term—and he took a job in renewable energy, so I am not in the business of sacrificing anybody’s jobs.

[Lord Lilley (Con)]

I mentioned the possibility that people were claiming they could move across, and some of them will, but it will mean disruption. We should not unnecessarily require people to give up a job and —hopefully—take on another one. As the noble Baroness said, these jobs already exist and will go on increasing in number if we increase investment in renewables. I have not argued against that at all. The two types of job are perfectly compatible. Both can exist side by side, instead of there being only one lot of jobs.

The other argument is that 80% of our oil is sent overseas to be refined, and so production of our own crude oil does not result in any security. I used to be an oil analyst in the City, examining how these things work. If, in a crisis, a country has supplies of crude, it can trade it for other types of crude that work in its own refineries. This is how the market works. It does give you security because you can say, “We will send you that and, in return, we want products or the equivalent amount of crude that we can refine ourselves”. It gives greater security—not a huge amount because we do not have a huge amount of oil and gas, but a bit of security is better than none.

The arguments used by the noble Baroness and the noble Lord, Lord Lennie, and in most of the briefing notes that I have seen, are all about how small the advantages from the Bill will be. The Climate Change Committee—the Government’s official independent adviser—has come out against this Bill and the Government’s decision to continue licensing new fields in the North Sea. I put the arguments I have made so far to its outgoing chairman, the noble Lord, Lord Deben, who is a colleague and my old friend, when he appeared before the Environment and Climate Change Committee. I asked him whether he wanted the whole world to phase out oil and gas, or just the UK. He said, in effect, “Just the UK”. He said:

“The world is producing oil sufficient to meet our needs … There are many countries in the world that will still be producing oil and have no intention of reducing that. There are other countries that could produce oil and gas and have to make a choice between going down that route and going down the route of renewables. We have a duty to try to get them to make the right decision because otherwise we will destroy our world and ourselves … We have to get other countries to do the right thing … If you say to a country that does not have oil, ‘You have a chance to produce oil and your future will be with oil’, I am afraid it will not go for renewables, even though this is the real answer … We have to set an example”.


I find that argument absolutely pathetic and incredible. The idea that phasing out production in the North Sea more rapidly than need be is going to persuade some African country which finds oil not to produce its oil but to go down the route of producing renewables is just ludicrous. It could, of course, do both. We should recognise that this is the only argument that the Government’s own independent advisers have against the Bill.

We should recognise that, in law, the Climate Change Committee has no role in advising about the supply of oil and gas. Its role is about phasing out emissions, so it is acting ultra vires even in coming out with its recommendations against this Bill. That is as maybe.

Other arguments suggest that it would be bad for the environment—that dolphins and other wildlife would be disturbed by offshore oilfields. Of course, they would be equally disturbed by offshore wind farms. This does not seem a wholly credible argument.

Most people argue as if allowing petroleum licences and producing renewables are alternatives. The Bill will not stop renewables at all. In so far as it boosts the economy and tax revenues, it will help fund the transition. There is no time limit on speeches. In my view, by the same logic that applies to the Bill, we should also allow the production of oil and gas on shore. We should license onshore exploration and drilling for shale gas, subject to a local referendum in the area where it occurs, and to allowing the companies that wish to drill to offer incentives to those in that area. I have been told that they are prepared to pay £1,000 per head and subsequently to offer cheap gas if they find it.

Why do we not do this? I know enough about the oil industry to know that everything is uncertain, but there is a lot down there. I do not know whether or not we can get it out of the shale. If we can, all the arguments that there is only a small amount disappear because the potential quantities are very large.

I hope that we will not be carried away by those who object to producing oil and gas. It is a luxury belief. They can oppose production because it has no direct effect on them, but it will marginally impoverish the rest of us. This is not something to which we should give in.

Home Insulation: Health and Mortality Rates

Baroness Hayman Excerpts

Tuesday 19th March 2024 Lords Chamber

[Lord Callanan (Con)]

My noble friend asks a really good question. We have a number of innovative pilots with lenders, such as green mortgages and different ways of structuring finance that can help people to upgrade their homes. There are some potential tax changes —which, of course, are a matter for the Chancellor—that could help, but we will continue to make the case.

[Baroness Hayman (CB)]

My Lords, I declare my interests as set out in the register. The Minister referred to the amount of money being put into insulation schemes, but does he accept that over the last 10 years a rota of schemes has been introduced, and that they have failed and been closed down? Does he accept that the industry needs consistent, clear policy, so that it can invest in training in particular, so that the money the Government put in is actually value for money?

[Lord Callanan (Con)]

No, I do not accept that. There has not been a rota of schemes. The most successful scheme, the ECO scheme, has been going since the early part of the previous decade and we have committed funding for a number of years to come. The more successful schemes, such as the social housing decarbonisation fund and others, are also multi-year programmes precisely to provide the long-term certainty to industry that so many contractors say they desire. We have already announced the funding for 2025-28—another £6 billion—and we have set out the schemes on which it will be spent. So, no, I am afraid I do not accept the noble Baroness’s analysis.

Heat Pumps

Baroness Hayman Excerpts

Wednesday 6th March 2024 Lords Chamber

[Lord Callanan (Con)]

The noble Baroness is right; it is lower than it needs to be, which is why we have plans to expand the installation rates up to the levels that I mentioned. We have a number of schemes to support that: the clean heat market mechanism, which I mentioned; the boiler upgrade scheme; and we increased the grants to £7,500. We support it under the social housing decarbonisation fund, and under the eco scheme as well. We have ambitious plans to expand the installation rate.

[Baroness Hayman (CB)]

My Lords, I declare my interests as set out in the register. If we are to improve the uptake of heat pumps, does the Minister agree that we need to improve the uptake of energy efficiency measures, so that the pumps are more effective in the homes they are installed in? At ping-pong on the then Social Housing (Regulation) Bill, his colleague the noble Baroness, Lady Scott of Bybrook, promised that the Government would issue a consultation on heat efficiency standards in the social housing sector within six months of Royal Assent. That six months has now run out, but the consultation has not even started. I wonder if he knows when it is going to start?

[Lord Callanan (Con)]

There are a number of aspects to the noble Baroness’s question. With regard to the consultation, I do not want to speak for the noble Baroness, Lady Scott—I do not know if she is in the Chamber—but I believe it will be issued imminently. With regard to the first part of the question, I say that we need to expand energy efficiency, irrespective of whether your home is powered by a heat pump or by a gas boiler. Using less gas and less electricity are both a good thing.

Global Heating

Baroness Hayman Excerpts

Thursday 18th January 2024 Lords Chamber

[Baroness Hayman (CB)]

My Lords, I declare my interest as chair of Peers for the Planet. I congratulate the noble Baroness, Lady Sheehan, both on securing this serious debate and on her comprehensive, well-evidenced introduction to it.

I accept and find myself in accord with the analysis of the scientific evidence given by the noble Baroness and the noble Baronesses, Lady Kingsmill and Lady Jones of Moulsecoomb. I will leave it to the Minister to respond to the analysis of the IPCC report—the whole report, not only the bar charts and the analysis of the noble Lord, Lord Lilley. I know that the Government do not agree with what he is suggesting and that their 2030 strategic framework for international climate and nature action, published in March 2023, stated that climate change and nature loss were

“two of the defining challenges of our time”.

I do not find it totally reassuring to be told that whatever climate change does and whatever its threats and challenges, it does not mean the extermination of the human race. That does not make me sleep better in my bed, thinking about my children and grandchildren’s future, or the future of the people who live in countries threatened by sea level rises, floods, famine or drought.

We have enormous challenges before us. This country has done well, and we have led in this area. What worries me is the backtracking we are seeing on our own commitments; as a result, we risk losing credibility in providing leadership. I worry that the Prime Minister’s change of direction has led to a loss of credibility and undermined our own efforts. One of the problems is that we are dealing with a phenomenon that impacts a huge number of sectors, as we heard in the last debate. We see them individually, but we do not see issues of supply and demand together, or health alongside business, transport and energy. We do not have a co-ordinated and comprehensive approach.

The machinery of governance for climate change issues is a real problem that we need to tackle. We need a more comprehensive approach that recognises the effects across different sectors and policies. As I said earlier, I am worried about the Government’s announcements telling us that a better, fairer way of meeting our obligations would involve putting back the planned date for phasing out the sale of new petrol and diesel cars, putting back the date for phasing out the installation of oil and liquid petroleum gas, and exempting households from the requirement to phase out some fossil fuel boilers. They will all have an effect on demand, and that will make it more difficult for us to meet our targets. I put in a plea for a comprehensive government approach to this and to the delivery of the very high-level aspirations that the Government have in this area.

Hydrogen Heating

Baroness Hayman Excerpts

Monday 11th December 2023 Lords Chamber

[Lord Callanan (Con)]

I do not think my noble friend is correct about attitudes in Germany. The latest information I have is that 10 homes in Germany—no more than that—are subject to the trial. The issue of blending hydrogen into the gas network is of course a separate issue, and that too is something on which we will have more to say shortly.

[Baroness Hayman (CB)]

My Lords, I declare my interests as set out in the register. Is the noble Lord, Lord Howell of Guildford, not completely right in one respect: that there is confusion about the transition—how it will be funded, how it will come about, how North Sea oil and gas will fit into that, when it will diminish, when it will completely finish being important in our energy mix? Is it not time we got below some of the very high-level aspirations of the Government and into the detail of what a transition plan will actually mean for the country?

[Lord Callanan (Con)]

The noble Baroness is absolutely correct. We have set out in great detail what the transition plan looks like. As I said in my Answer, electrification—heat networks in particular—will play a very important role in the decarbonisation of heat.

Climate Change: Phasing Out Fossil Fuels

Baroness Hayman Excerpts

Wednesday 6th December 2023 Lords Chamber

[Lord Callanan (Con)]

The noble Baroness highlights an important matter. We consulted on this in the summer. We are currently doing the work to consider all the implications of carbon leakage measures, including CBAM, which we are looking at closely. We will have more to say on that very shortly.

[Baroness Hayman (CB)]

My Lords, I declare my interests as set out in the register. There was reference earlier to imminent decisions. Can I press the Minister on the question of the Energy Charter Treaty, which he answered last week? When will we know the Government’s decision on this? Will it be, as I hope, to withdraw from the treaty?

[Lord Callanan (Con)]

I have certainly heard what the noble Baroness has to say on this. I cannot go any further than what I said last week. As soon as I have some further news, I will be sure to update her.

Climate Change: Aims for COP 28

Baroness Hayman Excerpts

Tuesday 28th November 2023 Lords Chamber

[Lord Callanan (Con)]

Obviously, the reports that we saw in the last few days were concerning, but of course we are not aware of what was discussed in private meetings. The UAE presidency was not appointed by us, but we support it in what it has said publicly in terms of advocating for an ambitious deal.

[Baroness Hayman (CB)]

My Lords, I declare my interests as set out in the register. The Government announced in September that they were renewing our membership of the Energy Charter Treaty. Does the Minister agree that the treaty, and our membership of it, does nothing to support the objectives of COP 28 that he has just outlined to the House? Will a decision be made before COP 28 meets to withdraw, as other countries have done, from this outdated and damaging treaty?

[Lord Callanan (Con)]

The noble Baroness makes an important point. As she mentioned, we are reviewing our membership. I do not know when a decision will be taken. I hesitate to use the word “imminently” after the last question, but I am sure that we will want to act as quickly as possible.

Electricity Network Connection Action Plan

Baroness Hayman Excerpts

Wednesday 22nd November 2023 Lords Chamber

[Lord Callanan (Con)]

I am not sure I understand the point my noble friend is making. The reason we have a national grid is to distribute electricity around the country so that all communities get the chance to benefit. If you had a much more localised system of grids, it would be much more inefficient. The whole idea or principle of the national grid is that the whole country can benefit from all our renewables infrastructure.

[Baroness Hayman (CB)]

My Lords, I declare my interests in this area and very much welcome the Minister’s original reply. Does he agree with me that, as well as the expansion of the grid and connections, we need to look at the demand side and at reducing demand and increasing energy efficiency? The Government promised several consultations on this issue in different sectors and on building standards. Is the Minister confident that the timescales promised for those consultations will be kept?

[Lord Callanan (Con)]

I agree with the noble Baroness that energy efficiency is really important. It is much cheaper than building new energy infrastructure. She will be aware that we are spending £6.5 billion on energy efficiency and clean power over this Parliament, and we have already managed to secure £6 billion from the Treasury for 2025-28. We need to take forward all these measures. There are a number of key consultations coming up that will make a big difference, not least that on the future homes standard.