Energy Bill [Lords]

Caroline Lucas Excerpts

2nd reading
Tuesday 9th May 2023 Commons Chamber

[Grant Shapps]

We are talking about energy security, and about a tyrant costing all our constituents a fortune, and SNP Members do not want to fix it. They do not want to have reliable nuclear power—they stand against it. They stand against oil and gas. I do not know where they expect all this energy to come from in a reliable way in the future. However, where there are differences, I want to be constructive with the hon. Gentleman and, of course, the devolved Administration. By and large, that is the way in which this Bill has progressed, so on the other issues—the amendments—we will of course try to find ways to work with the House in considering all of them.

[Caroline Lucas (Brighton, Pavilion) (Green)]

Will the Secretary of State give way?

[Grant Shapps]

I will make a little progress, and then I will give way again. I just want to say a big thank you to a lot of Members for their work on energy and on considering this Bill, such as the net zero review led by my right hon. Friend the Member for Kingswood (Chris Skidmore); the pre-legislative scrutiny that the Business, Energy and Industrial Strategy Committee carried out on parts of the Bill; the 1922 BEIS Back-Bench committee’s ongoing consideration of the issues we face; and many others in this House.

[Caroline Lucas]

Will the Secretary of State say a little about hydrogen? As he will know, there is real concern about putting a hydrogen levy on household bills at a time when so many people are already struggling to pay those bills. Will he look again at where to put the funding for hydrogen? Secondly, will he accept that using hydrogen for households—for home heating—is very inefficient? It is expensive, and it brings safety risks. We do need hydrogen for hard-to-decarbonise sectors, but will the Secretary of State rule out using it in homes?

[Grant Shapps]

It is certainly the case that hydrogen comes with complications when it comes to home heating, which is why we have a couple of different trials ongoing to understand some of the impacts. We will know more once those trials have been carried out. However, the hon. Lady asked specifically about a levy, so I should point out that the Bill will not itself introduce a levy. She is right that we need to see the results of trials before we understand how that should operate, so we will wait a little while.

--- Later in debate ---

[Caroline Lucas (Brighton, Pavilion) (Green)]

I appreciate that hon. Members want to demonstrate cross-party support for net zero. Yes, by and large, we agree about decarbonisation, but sadly we do not agree about the speed of that process. The UK has a responsibility to go much further and faster than most other countries because we are disproportionately responsible for the cumulative emissions that are already in the atmosphere.

We were the first country into the industrial revolution—the fossil-fuel industrial revolution—and we need to be the first country out of it. I have not heard enough urgency from Members on either side of the House about that this evening. Winning slowly on this issue is the same as losing. The bottom line is that there can be no new exploration for fossil fuels if we are serious about doing our fair share to avoid the worst of the climate crisis. The report by the United Nations environment programme on the production gap states clearly that

“governments still plan to produce more than double the amount of fossil fuels in 2030 than will be consistent with limiting global warming to 1.5°”.

Ministers often seek to justify new oil and gas developments in the North sea in the name of energy security, but that is profoundly misleading. The majority of fossil-fuel projects in the pipeline are for oil, not gas, which will do nothing to boost energy security, given that we currently export at least 80% of the oil we extract because it is not even the type that is used in UK refineries.

That defence also exposes a paucity of imagination and a failure to grasp what true energy security looks like. True energy security is about abundant and cheap renewables. It is about a flexible energy grid. It is about properly insulated homes and it is about better storage. I urge Ministers to grasp this opportunity genuinely to transform the future of our energy system so that it works for people and planet.

What is most striking about the Bill is its failure to wean us off fossil fuels—the very thing that is choking our planet and driving high energy prices. I endorse the Lords amendment on the prohibition of new coalmines. It was simple in its drafting but vital in its importance. The Minister will no doubt note that it does not only cover coal for energy; it covers coal in its entirety, extending its reach to the newly approved Whitehaven coalmine—and so it should, because that stranded-asset coalmine would produce vast amounts of climate emissions. It is neither wanted nor needed by the UK steel industry, and it is not wanted in Europe, which is rapidly moving towards green steel. I urge the Government to retain the amendment to the Bill.

We need to go much further than that, and reduce our wider reliance on all fossil fuels, not just coal. As a first step, that must involve a review of the outdated and dangerous duty to maximise the economic recovery of petroleum from the North sea. It is beyond imagination that at a time of climate crisis we still have on the statute book an obligation to maximise the economic recovery of oil and gas. We need to move away from that. We also need to move away from the extraordinary position on the so-called windfall tax.

[David Duguid (Banff and Buchan) (Con)]

I am listening to the hon. Lady’s speech with great interest, and want to pick up on one part of it. On moving away from maximising economic recovery, does she agree that we are already less than 50% dependent on our own domestic sources of oil and gas? Does she agree with the Climate Change Committee’s assessment that our dependence on oil and gas will decline more slowly than our ability to replace it, so we will become more dependent on imports? What she has recommended will not stop our use of oil and gas—it will just make us more dependent on imports.

[Caroline Lucas]

I thank the hon. Gentleman for his intervention, but I totally disagree. The option before us is not to use home-grown fossil fuels versus imported fossil fuels. The choice—[Interruption.] No, it is not. The choice before us is whether we continue to depend on fossil fuels or whether we shift to a green transition much faster. I appreciate why that is difficult for him to understand. Having listened to the right hon. Member for Epsom and Ewell (Chris Grayling), who spoke about the future of aviation, I was struck by the fact that nowhere in his speech was there anything about demand management. People are looking for technical fixes the whole time without recognising that the bottom line is that there are climate limits to what we can do.

[David Duguid]

Will the hon. Lady give way?

[Caroline Lucas]

No, I will not, I am sorry. Some climate limits mean that we need to change behaviour as well as depending on new technologies.

I was about to talk about the windfall tax and the gaping hole that allows corporations to claim £91.40 for every £100 invested if—perversity of perversities—they reinvest that money in yet more oil. This comes at a total cost to the taxpayer of nearly £11 billion—enough to give an inflation-matching pay rise to every NHS worker and teacher for a year. Instead, the North Sea Transition Authority should have a duty to help meet the UK’s climate commitments and deliver a managed and orderly phase-down of UK petroleum. This, of course, must come with a requirement to support a just transition for oil and gas workers and communities—a clear pathway coupled with financial support to enable them to move into green jobs. Crucially, we need to see no new licences, which means that Ministers must give up any idea of giving a green light to projects such as Rosebank, the UK’s largest undeveloped oil field, which would produce more emissions than 28 low-income countries combined. That would be the definition of recklessness.

The Energy Bill aims to deliver a

“cleaner, more affordable and more secure energy system”,

which is a worthy aim. I very much hope the Government listen to hon. Members on both sides of the House who have talked about introducing a new duty on Ofgem to abide by net zero requirements. The amendment on that tabled in the other place received cross-party support, and I cannot see why the Government would not want to make sure that we retain that.

The Government have repeatedly said that they wish to see more community energy generation, but they objected to amendments on that in the Lords on the grounds that they constituted a subsidy. That is not the case. Rather, those amendments would give community energy schemes fair access to the market. If the Government are serious about community energy, they have to find a way to bring community energy to market, precisely by the kind of mechanism—a fixing of price—that we already use with contracts for difference. I urge the Government to accept retain the amendments on community energy, or offer a workable alternative.

In the very short time I have left, I would love to say more about energy efficiency and the need to insulate our homes properly. The cheapest energy is the energy that we do not need to use in the first place, and I despair of the fact that the Government have still failed to come up with the community-led, local authority-led, street-by-street home insulation programme that would achieve proper progress on this.

In the very few moments that are left I want to say a few words about nuclear. Government support for this nuclear white elephant, formalised by the Bill, is beyond ludicrous. We have already discussed the cost of nuclear—it is massively expensive and going up in price—but it is also massively slow. The Government have accepted the goal of decarbonising the UK’s power system by 2035. Given that it will take eight to 10 years to produce new nuclear, it will make absolutely no difference to that decarbonisation target. It is too expensive, too slow and it needs to come out of the Bill.

Energy Bill [Lords]

Caroline Lucas Excerpts

Report stage
Tuesday 5th September 2023 Commons Chamber

[Andrew Bowie]

This is the biggest piece of energy legislation ever passed by the British Parliament. We are driving forward with schemes to help insulate houses, drive down bills, and deliver cleaner and more secure energy, and all we can get from the Opposition is criticism. We have ramped up our renewable energy production to over 40%. We have eliminated coal. We are developing new nuclear, which the Opposition failed to do over 13 years in government. Rather than carping from the sidelines, it would be useful if Opposition Back Benchers got on board, supported the Bill and supported our great British companies developing the technology to take this country forward, creating the new jobs, ensuring security of supply and driving towards net zero, which means we will leave this country and the planet in a better place for the next generation, instead of trying to score political points at the expense of this Government who are seeking to deliver for the British people. As such, I am immensely proud of the Bill. It was strong before and it is even stronger now. It is, as I have just said, the single biggest piece of energy legislation ever to be brought before the House.

[Caroline Lucas (Brighton, Pavilion) (Green)]

rose—

[Andrew Bowie]

I am afraid I will not give way.

The Bill is a revolution in community energy: restarting our nuclear sector; regulating for fusion; developing carbon capture, usage and storage; supporting the technology of the future; liberating private finance; developing our own oil and gas reserves; building an energy network of the future to secure our energy supply; securing our energy base so we are powering Britain from Britain; growing our economy; investing to ensure lower bills; and driving towards a cleaner future. That is what the Bill achieves. It was brought here and delivered today by the Conservative Government, moving the country forward into a brighter, more secure and cleaner future. Therefore, Mr Deputy Speaker, with great pleasure, I commend the new clauses and amendments to the House.

--- Later in debate ---

[Dr Alan Whitehead (Southampton, Test) (Lab)]

The Minister is quite right: the Bill has been with us for rather a long time. I am personally delighted that it is before us this afternoon, but we need to remember that Second Reading was over a year ago, in July 2022, in another place. The Bill has survived four Secretaries of State and two Departments in its passage through the House, so it certainly should be an improved Bill by now. I am concerned, however, that the long passage of the Bill to the statute book has had a real effect on investors and various other people seeking to invest in the low-carbon economy. We should not forget that.

What is this Bill about? As the Minister has said, it is essentially about the decarbonisation of the energy system and making that system fit for net zero. It is, overwhelmingly, a Bill that enables that decarbonisation to take place, and it has been described in a number of instances as a “green plumbing” Bill, which I think is not a bad description. It provides the necessary mechanisms and the details of how we will reach our targets in a variety of areas, as the Minister said: on hydrogen, on carbon capture and storage, on licensing, on the introduction of an independent system operator—which is very important to good construction—on low-carbon heat schemes, on district heating, on energy-saving appliances, and on fusion power. It also makes a number of regulation changes in relation to civil nuclear decommissioning and oil and gas management. It is, moreover, a Bill that the Opposition have welcomed, both for its extent and for its “green plumbing” activities. We were supportive of its measures in Committee, while also tabling amendments that we thought would strengthen its approach. Indeed, the Government have inserted some of them in the Bill, with very slight changes, and we welcome that as well.

However, in my view the Bill is incomplete and unsatisfactory, given its ambition as a green decarbonisation Bill, in that it fails to complete the three tests, or tasks, that are necessary to provide the clarity and consistency that would ensure that the policy will deliver what is claimed. Those tests are these. First, what are the targets for a policy, and how firm are they? Secondly, what are the technical means whereby the proposed targets can be actioned? Thirdly, what is the plan, both financially and procedurally, to make the targets real and not just hot-air aspirations? It is essential to the process of energy decarbonisation for all three of those tests to be in the Bill as we proceed against very tight timescales and immense challenges of implementation.

In some instances, the Bill has succeeded in that regard. The Government’s targets were set out in a number of documents on clean energy, such as the energy security strategy and the 2020 Energy White Paper. Indeed, in a number of instances, the targets contained in those documents have been substantially added to in the Bill. For example, the target of 10 GW of low-carbon hydrogen production by 2030 has been underpinned by the clauses relating to such matters as hydrogen levy management procedures. I applaud the Government’s change of heart on the hydrogen levy. Although a number of Committee members knowingly voted the wrong way, with the honourable exception of the right hon. Member for Elmet and Rothwell (Alec Shelbrooke), the Government have put that right now. We would have liked to see them go a little further with a clear statement that the money would come from the Consolidated Fund, but we will live with the change that they have undertaken to make. I think we can count that as both a win for our pressure on the Bill and a win for the Bill itself.

[Caroline Lucas]

I agree that those three tests for decarbonisation make a lot of sense, but does the hon. Gentleman agree that as well as targets for some of the good stuff, we need to see the Government stop doing the bad stuff? In this case, the bad stuff is more and more new licences for oil and gas in the North sea. Would Labour support my amendment, which would see an end to the MER rule on maximising the economic recovery of petroleum and replace it with a just transition to a greener economy? As long as we have a statutory duty to maximise the economic recovery of oil and gas, it does not matter how many targets we have on renewables, because we will not meet the targets that we need to meet.

[Dr Whitehead]

I do not think it would be appropriate for me to indicate exactly which amendments from various Members we might or might not support, and it would take a great deal of time for me to do so, but the hon. Member will recall that we tabled an amendment on maximum economic recovery in Committee. I think she can take from that that, broadly speaking, we support the principle of “stop doing the bad things and start doing the good things”. Whether the detail of her new clause fits exactly with that picture is another matter, but I hope she can take some encouragement from that.

--- Later in debate ---

[Craig Mackinlay]

My right hon. Friend has put his finger exactly on the pulse. This is a substantial Bill. I say to the Minister that I hope the Government will strip out criminal penalties for not adhering to unknown net zero certification, EPCs and all the rest of it in the future for something as simple as not complying with some of these net zero regulations. This is really serious. I hope that when the Bill returns to the other end of the Palace, consideration can be given to strip out such proposals.

I could have gone on at huge length this afternoon. I tabled many amendments because these are overweening powers trying to push and nudge us and to ban things. All I can imagine is that the Chinese embassy will be looking at the Bill with great enthusiasm, as it will drive even more of our high-energy businesses offshore. China will be pleased that it will be able to sell us more solar panels and wind turbines based on its steel, produced on the back of very cheap coal power. That is what we are doing here: driving our high-energy businesses offshore. This is not a recipe for energy security; this is a recipe for energy disaster.

I could talk at length about what is wrong with the net zero proposals banning cars, banning oil boilers, banning this and banning that. That is not what we do as Conservatives. We actually allow freedoms. We allow the market to decide. The Bill goes in the wrong direction.

[Caroline Lucas]

There are some elements of the Bill to commend, not least the net zero duty on Ofgem, but overall it fails to deliver the scale of ambition we need or to set out a vision of an energy system free not just from Putin’s influence but from expensive and polluting oil and gas in their entirety. My amendments would address that failing.

New clause 29 would prohibit the approval of new oil and gas field developments and the issuing of new oil and gas exploration and production licences. I am sure that the Minister will seek to paint the new clause as somehow incredibly radical and the policy of Just Stop Oil, pretending that it would recklessly turn off the taps tomorrow. He will no doubt trot out the same tired lines about a quarter of the UK’s energy continuing to come from oil and gas in 2050. In reality, the new clause is far from radical. It would simply do what the science tells us is necessary if we are to secure a liveable future for ourselves and our children and rule out any new oil and gas licences. In doing so, it would follow the advice of experts including the Climate Change Committee, which in its latest report was clear:

“Expansion of fossil fuel production is not in line with Net Zero.”

It acknowledges that while the UK will continue to need some oil and gas until the target is met,

“this does not in itself justify the development of…North Sea fields.”

Yet rather than heeding that warning, just one month later we had the former Secretary of State vowing to max out the North sea’s remaining oil and gas reserves. The Government re-announced 100 new licences and it was not ruling out the prospect of Rosebank.

However hard they try to obfuscate and evade, Ministers cannot deny the fact that, without additional abatement, the projected CO₂ emissions from existing fossil fuel infrastructure would already exceed the remaining carbon budget for a safe climate. Any oil and gas extracted from the North sea belongs not to us but to multinational companies, which will sell it to the highest bidder on the global market. The majority of fossil fuel projects in the pipeline are for oil, not gas, and will do nothing to boost energy security, given we currently export 80% of the oil that we extract.

--- Later in debate ---

[Jerome Mayhew (Broadland) (Con)]

Thank you, Mr Deputy Speaker. I am just going to talk about one new clause, new clause 29, which I oppose. It seeks to prevent further licences of North sea oil and gas. The reason I oppose it is that we have a plan for the decarbonisation of our economy and it is policed, if I can put it that way, by the Committee on Climate Change. In the path to net zero by 2050, we recognise that we have a continuing need for oil and gas at least until 2035, when more than 50% of our energy needs will still come from fossil fuels, and actually up to 2050 included, because it is net zero, not absolute zero. We have to have oil and gas, so let’s get it from the most efficient and environmentally friendly source. The most environmentally friendly source is Norway, but that is not an unlimited resource; the CO₂ equivalent per barrel of oil there is about 7 kg. The additional oil and gas we use comes not from Norway but from Qatar; it is liquid natural gas and the CO₂ equivalent per barrel there is 79 kg, whereas the figure for the North sea is 21 kg—a quarter the level of environmental damage per kilogram of CO₂ equivalent. The consequence of closing down the North sea prematurely would be to increase emissions and make our carbon footprint worse. It would be the triumph of virtue signalling over the practicalities of decarbonisation.

[Caroline Lucas]

Will the hon. Gentleman give way?

[Jerome Mayhew]

I will not; I am sorry, but I only have one and a half minutes.

It is logical on environmental grounds, therefore, to support new licences in oil and gas. But there are other arguments. There is the balance of payments—we used to talk about the balance of payments. In 2022, our trade in goods deficit was £63.9 billion. I would rather have our imports of oil and gas coming from the UK and not being imports at all, supporting our balance of payments.

There is the tax income. The Office for Budget Responsibility says that in 2023-24 we are going to get £10.4 billion of tax revenue from North sea oil. That pays for a lot of public goods. We should be supporting that, and we should be supporting business profitability and jobs, because that supports our communities. It also gives time for the phasing of what is described as the just transition to renewable jobs. There is an irony in that the proponents of new clause 30, led by the hon. Member for Brighton, Pavilion (Caroline Lucas), talk about just transitions, but it is this longer process away from North sea oil and gas, managing decline, that provides the space for a truly just transition to new renewables employment in this country. I do not support new clause 29 as a result.