Oil and Gas Authority: Remit

Baroness Sheehan Excerpts

Thursday 2nd December 2021 Lords Chamber

Asked by

[Baroness Sheehan]

To ask Her Majesty’s Government what plans they have to align the remit of the Oil and Gas Authority from seeking the “maximum economic recovery” of North Sea oil and gas, to meeting the United Kingdom’s net-zero emissions commitments.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)]

My Lords, even though renewable electricity capacity has grown five-fold since 2010, oil and gas are still essential for our energy needs and are vital to the production of many everyday essentials such as medicines, plastics, cosmetics and household appliances. They will remain so in declining amounts, even in a net-zero world. It is therefore essential that we have a managed transition away from fossil fuels, as set out in our landmark North Sea Transition Deal.

[Baroness Sheehan (LD)]

My Lords, the concentration of carbon dioxide in the global atmosphere stands at an unprecedented 417 parts per million. At the very least, we have to stop exploration for new fields. The truth is that the UK is the most profitable country in the world for large offshore oil and gas projects thanks to our MER policy. Companies can offset all spending on exploration against tax, as well as receiving millions of pounds in direct grants. What plans do the Government have to phase out such inefficient subsidies, as required by the Glasgow climate pact?

[Lord Callanan (Con)]

As the noble Baroness knows, we have some of the most ambitious climate targets of any major economy in the western world and we are committed to net zero; indeed, it is a legal obligation. However, we will still need declining amounts of oil and gas, and the choice we face is whether we wish to use that produced domestically or to import it. In every scenario set out by the reductions, we will still have a requirement for petroleum products.