Fossil Fuel Extraction

Caroline Lucas Excerpts

Tuesday 26th April 2022 Commons Chamber

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

In this global week of advocacy for fossil fuel non-proliferation, I call on the Government to deliver on the climate leadership that was promised, while the UK still has the COP26 presidency, by helping to initiate a negotiation process on an international fossil fuel treaty to phase out fossil fuels. I will set out the context for this treaty, the idea for which originated several years ago with parliamentarians in the global south and that has now been endorsed by more than 200 worldwide. I will lay out some of the reasons why such a treaty is necessary and ask the Minister some key questions about the Government’s strategy for ending fossil fuel production.

According to the latest Intergovernmental Panel on Climate Change report, the burning of coal, oil and gas accounts for around 86% of all carbon dioxide emissions in the past decade. There is global consensus that, on scientific, economic, public health, justice, moral and countless other grounds, we have to end our deadly addiction to fossil fuels, and we have to do it fast. At the Glasgow climate summit, under the UK’s ongoing COP presidency, for the first time since the original UN framework convention on climate change was negotiated in 1992, fossil fuels were finally referenced in the outcome text, albeit by committing only to a “phase down of coal”. But the fossil fuel age is well and truly over, and the only debate to be had is how quickly, successfully and fairly we act: whether we urgently transition to a zero-carbon economy or decline into climate chaos.

[Sir Robert Goodwill (Scarborough and Whitby) (Con)]

Does my colleague on the Environmental Audit Committee agree that one problem we face is as a result of her colleagues in Germany forcing the closure of nuclear power plants? The Germans are burning more fossil fuel than before, and if we had a nuclear future, we would be able to have a lower carbon footprint in this country. If only Germany would follow that lead.

[Caroline Lucas]

I think I thank the right hon. Gentleman for that intervention. The truth is that although mistakes have certainly been made in Germany in the past, the idea that new nuclear now can help the UK get to net zero fast enough is simply misguided; it is too costly and too slow, and it simply will not get us where we need to be quickly enough. What is clear, however, is that phasing out fossil fuel production, and fast-tracking progress towards safer and more cost-effective alternatives, will require unprecedented international co-operation.

I want to begin with a quick reminder of the science and with what climate experts are saying about fossil fuel production. Last year’s United Nations Environment Programme production gap report concluded that in order to limit warming to 1.5°C, the world will need to decrease fossil fuel production by at least 6% per year between 2020 and 2030. At the moment, there is no collective means of reaching that hard scientific deadline together, of accounting for the global impacts of choices made unilaterally by individual nations on our shared planet. Yet a universal and equitable approach is critical, as the Tyndall Centre’s own production phase-out report warns. It says:

“For a 50% or better chance of 1.5°C, our analysis shows that all producer countries must peak their production immediately and begin an uninterrupted decline. Expanding production in wealthier producers would either shift poorer producers (in fact all producers) onto more steeply declining pathways with earlier end dates, or put the temperature commitments beyond reach.”

Let us be absolutely clear: the UK is one of those wealthier producers, which together produce more than a third of the world’s oil and gas. Moreover, the UK has a moral responsibility to go further and faster than the vast majority of the world, because our historic cumulative emissions are so much greater. Tyndall analysis finds that the UK must reduce our oil and gas production by 50% in six years, which equates to an 8.3% reduction year on year, and must cease it completely by 2034—and that is just for a 50% chance of staying below 1.5°C once equity is factored in.

[Wera Hobhouse (Bath) (LD)]

We now have an end date to phase out diesel and petrol cars, which has forced the industry to put its mind to it and follow very quickly. People and organisations can then follow suit. If we had an end date for extracting fossil fuels, would that not concentrate minds, with people working much faster than they do now, when they think we can have business as usual?

[Caroline Lucas]

I thank the hon. Lady for her contribution and I completely agree with it; that is exactly what this fossil fuel treaty is all about. It is about countries setting those end dates and then working towards that reduction swiftly but in a coherent and co-ordinated fashion.

The International Energy Agency has been similarly clear that countries, including the UK, must halt all new fossil fuel exploration and development from the end of 2021 if we are to keep below the 1.5°C threshold. In its recent assessment of the climate compatibility of new UK oil and gas fields, the Climate Change Committee stressed that extra extraction of gas and oil will simply support a larger global market overall. We know that if oil and gas are produced, they are consumed, so extra oil and gas production can reasonably be assumed to result in extra global consumption. Although the CCC has not been able to quantify accurately the impact of new domestic production on global consumption, every expert is clear that the direction of travel globally has to be weaning ourselves off fossil fuels. The Committee therefore recommended a presumption against exploration, explaining that

“an end to UK exploration would send a clear signal to investors and consumers that the UK is committed to the 1.5° C global temperature goal”.

When it comes to the UK’s ongoing diplomatic responsibilities as COP President to strengthen climate ambition internationally, it is clear that any domestic policies that increase the fossil fuel market undermine that ambition and open us to the accusation of gross hypocrisy. Of course, I understand that the Government have other responsibilities too and that this debate is happening in the midst of a cost of living crisis. While companies such as BP and Shell are raking in eye-watering profits, millions of households are pushed into poverty. Yet only a tiny proportion of the oil and gas industry’s total capital expenditure is going into renewables—just 1% in 2020 and still only in single figures today. I wholeheartedly support efforts to cut the UK’s reliance on Russian fossil fuels and to shield families from the effects of high global gas prices. What I do not support is the pursuit of policies that will end up exposing people to more costs in the long term.

I do not support historic decisions such as gutting energy-efficiency subsidies, effectively banning onshore wind in England and scrapping the zero-carbon homes standards, which together have actually added £2.5 billion to UK energy bills over the past decade. When we know that energy security quite literally starts at home, it is frankly shocking that the Government’s energy security strategy failed to deliver a retrofit revolution for the UK’s leaky homes. I do not support any strategy that defines winning at this critical juncture in human history in terms that literally sacrifice the future of humanity, or indeed policies like a climate checkpoint that would somehow greenlight the pumping of new North sea oil and gas when there is no global scenario in which that is compatible with keeping 1.5° alive and climate justice—a critical threshold which, let us remember again, means that every producer country must peak their production immediately and begin an uninterrupted decline.

It is very possible to reduce people’s energy bills here in the UK, cut carbon dioxide emissions, end fuel poverty, and stop oil and gas profits from filling Putin’s war chest. If we choose that, we can manage our way fairly and safely through this crisis. We can choose not to fall into knee-jerk responses that undermine our shared prosperity. Ambitious investment in insulation and heat pumps through a retrofit revolution, alongside meaningful direct financial support for struggling households, is the first step.

As the CCC states:

“The best way of reducing the UK’s future exposure to these volatile prices is to cut fossil fuel consumption on the path to Net Zero—improving energy efficiency, shifting to a renewables-based power system and electrifying end uses in transport, industry and heating. Any increases in UK extraction of oil and gas would have, at most, a marginal effect on the prices faced by UK consumers in future.”

Systemic change is the next step: ambitious, consistent and aligned with 1.5°. It is the very opposite of immediately turning off the taps now, which is not something I have ever advocated, so I hope the Minister will not repeat his Department’s regular assertions that those of us who are campaigning against new extraction are envisaging an immediate closing of the taps. We are not, and never have. In fact, many of us are fiercely calling for a just transition for offshore workers. I remind the Minister that it was MPs on the Government Benches who voted against my amendment to the Skills and Post-16 Education Bill, which would have helped oil and gas workers access jobs in renewable energy more easily.

Given that we are operating within the immutable reality of hard physics, it is short-term policies such as licensing more oil and gas production that increase the likelihood of being forced into unplanned shock actions. To put it another way, if we turn on more taps, as the Government’s energy security strategy suggests, it is inevitable that we will end up watching the flood waters rise on the future and be forced to take drastic action—inevitable because pumping more fossil fuels from new wells undermines our fundamental ability to keep the global temperature increase to 1.5°. Why would anyone choose that trajectory, no matter what the perceived short-term benefits, rather than take a sensible, managed global approach to fossil fuel production? Why indeed? And yet, without a fossil fuel treaty to guide us constructively through what is a life-critical mission, we risk sleepwalking into just such a scenario.

The 2021 UNEP production gap report warns that Governments currently plan to produce more than twice the amount of fossil fuels in 2030 than is consistent with limiting heating to 1.5°. The IPCC’s latest report warns that emissions from existing and currently planned fossil fuel infrastructure are higher than the pathways for 1.5° allows. No amount of political wishful thinking can magic away the science or the threat of catastrophic global heating if we do not start to act globally now to manage fossil fuel production and its phasing out. My first question to the Minister, then, is whether he will tell us whether the UK has a date by which it plans to end fossil fuel production. Does it have a coherent road map to get there?

Let me say a few words about the fossil fuel non-proliferation treaty. It originated in 2015 in Pacific island nations. It has been endorsed by 43 cities and sub-national Governments, from France to Costa Rica to Australia. It is backed by more than 2,700 global scientists, Nobel peace prize winners and climate leaders. It stems from the recognition that the world ultimately needs a formal process—a legal architecture—to deliver a negotiated instrument on the managed transition away from fossil fuels. Of course, that will require building political momentum both within and outside the UN community. International co-operation is vital to enable countries to reduce their mutual dependence on fossil fuels, to manage the decline of production to support workers and communities, to transition rapidly to renewable energy, and to build more diverse economies.

There are three main elements to the treaty proposal: first, to prevent the proliferation of fossil fuels, with a worldwide moratorium on the development of all new oil, gas and coal reserves so that we see an end to new exploration and production; secondly, to manage the decline of production by phasing out existing stockpiles to include the removal of production subsidies, the dismantling of unnecessary infrastructure and the shifting of support to safer and more sustainable alternatives; finally, to speed up a just and equitable transition to 100% renewables. Will the Minister tell us whether the Government disagree with any of those objectives? If they do not, is he prepared to join others in advocating globally for such a treaty?

Of course, we do not have to wait for the treaty; we can start now by scaling up domestic measures to reduce fossil fuel supply, alongside the reduction of demand. As the Minister will know, the CCC’s pathways would see the unabated consumption of gas “virtually eliminated” by 2050. The CCC recognises that, even with a significant role for carbon capture and storage, total UK gas consumption must fall by 50% by 2035 and by 75% by 2050. According to official figures, it takes on average 28 years to go from the discovery of a new oil or gas field to production, which would bring us neatly to that same date. That reinforces, yet again, the unsustainability of the granting of new exploration licences. What is more, 70% of what is left in the North sea basin is oil, not gas—and it is not even the type of oil that we use in UK refineries anyway.

The Government are fond of saying that it is better to produce gas at home than to rely on imports but, of course, it is not our gas: it belongs to private companies and will be traded on global markets to the highest bidder. Contrary to what the Government often claim, the carbon intensity of oil and gas produced in the UK is pretty average and in fact higher than that of Norwegian gas, which is our main source of imports. Ministers need to scrap the very notion of the climate checkpoint and the outdated legal duty to maximise the economic recovery of North sea oil and gas. They need to rule out once and for all the possibility of drilling at Cambo to signal clearly, right now, that Shell will not be given approval for the new Jackdaw gasfield.

Jackdaw will not lower bills or make our energy more secure, but it will produce pollution equal to half of Scotland’s annual emissions. No Government in their right mind would consider such a move, and nor would they continue to support the fossil fuel industry through tax breaks and financial support for exploration and for research and development, yet that is happening, to the tune of £12 billion a year. I know the Treasury does not consider a penny of that to be a subsidy, but New Economics Foundation analysis found that around £10 billion-worth is indeed covered by the subsidy definition used by, for example, the International Monetary Fund.

In fact, the UK’s tax regime makes it the most profitable country in the world for oil and gas companies to develop big projects. Shell alone received a £92 million tax rebate from the UK in 2021—the largest total from any country in which it operates. Yet when I have challenged Ministers previously, I have been met with arguments about how much tax the sector pays, or a refusal to recognise the definition of a subsidy that I use. I stress that that definition follows exactly the principles used by the World Trade Organisation, the IMF, the OECD and the Overseas Development Institute. It is at best quibbling and at worst dissembling.

It is deeply disappointing that the UK has consistently bowed out of G20 efforts to grapple with subsidies by refusing to take part in its peer review on the ground that the Government disagree with the definitions in use. Will the Minister reconsider that position? Whether fossil fuel companies pay tax and how countries interpret what counts as a subsidy are not the issue. The issue is whether the net effect is public money being given to fossil fuels when the world promised in the Glasgow climate pact to stop inefficient fossil fuel subsidies, bearing in mind that even the IMF says that any fossil fuel subsidies are inefficient.

Glasgow also gave us promises about coal. As the Minister will know, the UK made addressing the issue one of its four priorities at COP26, with the Prime Minister declaring that

“Glasgow sounded the death-knell for coal power.”

We are also, of course, a founding member of the Powering Past Coal Alliance. All that makes it particularly puzzling that the Government have failed to take a stand against the Aberpergwm deep coal mine in South Wales, extending its licence. That would allow it to run until 2039, extracting a further 40 million tonnes of coal and emitting up to an estimated 100 million tonnes of CO₂.

Just this weekend, we have also seen the prospect of the first new deep coal mine since the 1980s rear its ugly head again. We are told that the proposed Cumbria mine is needed to provide coking coal for the steel industry until 2049, yet less than 10% of that coal is expected to be used by the UK steel industry; 85% of it is planned for export to Europe. We should be investing in green steel production instead. The CCC is clear that coking coal used in steelmaking could be displaced completely by 2035, only halfway through the mine’s proposed lifetime. The Tyndall centre says that, for developed nations such as the UK, coal production needs to fall by 50% within five years and be effectively eliminated by 2030—nine full years before Aberpergwm would cease production and 19 years ahead of when the Cumbria coal mine is projected to close.

The IEA is similarly explicit: if we want even a chance of limiting the global temperature rise to 1.5°, no new unabated coal plants, no new coal mines and no new mine extensions can be approved for development after 2021. Globally, we know that the world already plans to produce 240% more coal than is consistent with 1.5°. Some may argue that Aberpergwm is a drop in the ocean, but this is the bigger picture we need to keep in mind. Will the Minister assure us that his Government will not permit any new coal extraction in the UK?

To sum up, meeting the demands of the science has implications for where our pensions are invested and what our banks are funding. It has implications for the donations given to political parties, for the ways in which insurance companies operate, for how food is grown and produced, for how we travel and for the offsetting rules that incentivise continued extraction and use of fossil fuels.

A fossil fuels treaty would enable the necessary disentangling of our economy, our politics and every other aspect of our lives from fossil fuels. One of the stepping stones towards a treaty is setting up a global registry of fossil fuels. That could be hosted by an organisation such as UNEP and would be a comprehensive, transparent, public source of data on estimated fossil fuel reserves and production. If we want to manage fossil fuel production, we need to know what reserves are out there, and who is planning on using them. Some countries have already embraced the principles behind that approach—those that back the Beyond Oil & Gas Alliance, for example. The UK could and should be next.

As I said at the beginning of this debate, we are in a week of global advocacy for the fossil fuel non-proliferation treaty, and I want to end by recapping the questions I have asked the Minister. First, will the Government revisit the UK’s decision not to take part in the G20 peer review of financial support for fossil fuel production? Will they instead engage meaningfully with the process, including being open to assessing the UK’s support against various definitions of subsidy? Secondly, will Ministers undertake to discuss the proposal for a global registry of fossil fuels with counterparts in countries such as Denmark, France, Sweden and Luxembourg, which seem to have successfully overcome the commercial confidentiality objections mooted by the North Sea Transition Authority? The authority should itself be required to publish its field level data on oil and gas reserves.

Thirdly, Stockholm+50 in June is a key moment to build significant political momentum around the proposal for a fossil fuel non-proliferation treaty. Will Ministers commit to going there with the intention of helping initiate a negotiating process for a treaty to phase out fossil fuels within the UN system? Finally, have the Government set a proposed end date for oil and gas extraction and production? When will that be and is there a road map, beyond what is set out in the north sea transition deal? I look forward to the Minister’s response.