Offshore Petroleum Licensing Bill

Caroline Lucas Excerpts

Committee of the whole House
Tuesday 20th February 2024 Commons Chamber

[Dr Whitehead]

No, in line with the IEA and the IPCC, I am not in favour of new exploration licences. The point is that, in a declining market, Norwegian supply will continue to be very substantial, even if no new exploration licences are granted in Norway.

The figure cited by the hon. Gentleman is almost right —the actual figure is 34%. The United Kingdom supplies 38% of its own gas, with the United States supplying 14%, Qatar supplying 9% and other countries supplying smaller amounts. Norway already occupies a very substantial position in our present gas supplies, and I am sure it will continue to do so.

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

Does the hon. Gentleman agree that it might be useful to remind Conservative Members that, according to the UN production gap report, Governments are already planning for their existing developments to produce more than double the amount of fossil fuels in 2030 than is consistent with keeping global heating to 1.5°C or below? The idea that anyone can have vast new developments is not compatible with keeping below our climate target.

[Dr Whitehead]

The hon. Lady is absolutely right. New licences are an international issue. If we had new exploration licences around the world, we would simply produce far more oil and gas than is compatible with the 1.5° climate target. We should just keep it in the ground.

Finally, amendment 21 would go some way towards correcting another element of the carbon intensity test. As currently drafted—the Minister will want to listen to this bit—the test will not take account of methane emissions, which is a serious flaw. The whole case for comparing UK-based natural gas with LNG is based only on production emissions. The emission of methane at various stages of the production and transportation of LNG is, in aggregate, worse than the emissions of UK-produced and piped natural gas, but they are not carbon dioxide emissions, which is what the Bill says should be measured.

LNG’s potential carbon dioxide emissions upon burning are roughly the same as, or perhaps slightly greater than, the carbon dioxide emissions from UK natural gas. As the right hon. Member for Reading West said, that is elevated by the current UK practice of flaring surplus gas, which can be measured in carbon dioxide emissions.

Methane is a much more potent greenhouse gas than carbon dioxide over 20-year and 100-year timeframes. Its lifetime in the atmosphere is shorter than the lifetime of CO₂, but its impact is far more significant. The Climate Change Act 2008 is quite specific on how this should be measured. Section 93, which the Bill mentions but does not act on, states that

“greenhouse gas emissions…and removals of greenhouse gas from the atmosphere shall be measured or calculated in tonnes of carbon dioxide equivalent.”

Proposed new section 4ZB(1) of the Petroleum Act 1998 mentions the carbon intensity of natural gas, but proposed new subsection (3) defines “carbon intensity” as

“the carbon dioxide emissions attributable to its production”.

But carbon dioxide emissions in production are not the principal concern here, as the gas has not been burned at that point. Indeed, I can conceive of smart climate lawyers challenging the test’s validity on precisely that point. The Minister might therefore see amendment 21 as providing a vital lifeline to the integrity of his Bill. To that extent, the amendment might be seen as helpful, but I somehow doubt that he will take it up. To coin a phrase, “It’s the methane, stupid.” The Bill should say so.

Proposed new section 4ZB(4) already gives the Secretary of State the power to amend the carbon intensity test to include emissions other than carbon dioxide. Perhaps the Secretary of State or the Minister will shortly take that up to save the test. We can anticipate a fairly amusing statutory instrument debate when he tries to do that.

Amendment 21 would simply require the Government to produce a report analysing what the impact of that change will be. In the spirit of trying to improve a Bill that, by design, is fairly resistant to improvement, we welcome the amendments tabled by the right hon. Member for Reading West and the hon. Member for North Devon (Selaine Saxby).

The Climate Change Committee and the Environmental Audit Committee have called for a ban on routine flaring and venting, and such a ban is long overdue. A marine spatial prioritisation policy would help to organise and plan an optimal long-term, low-carbon economic strategy for the North sea.

There is clearly significant strength of feeling across the Committee that this is an inadequate Bill, and some of the proposed tests could undoubtedly make a bad Bill a little better, although some of those tests have internal problems. We would not want to vote against those tests, but the only comprehensive climate change and net zero compatible test is the one that we and, in principle, the hon. Member for Brighton, Pavilion (Caroline Lucas) have set out. It is the best available route, within a severely constrained process, to align this deeply flawed Bill with our essential energy security and climate change priorities.

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[David Duguid]

I find myself looking for a point that I might agree with in the hon. Gentleman’s intervention, and sadly failing. However, his point about the decline of oil and gas in the UK has been made time and time again. Ever since 2004 we have been a net importer of oil and gas, so my point about new oil and gas not being more oil and gas is about managing that decline to make up for the fact that we are not replacing that oil and gas generation with renewables as fast as we would like. I will address that point in more detail in a moment.

Those comments from the SNP leader just go to show the staggering hypocrisy and inconsistency of the SNP, but neither the industry nor the electorate are so easily fooled, particularly in the north-east of Scotland. If asked whether they support new oil and gas licences, as we have seen today, some SNP Members—and, I dare say, some Labour Members as well—may find it difficult to commit to a position, particularly when facing their constituents in the north-east of Scotland. However, this Conservative Government and, in particular, the Scottish Conservatives have maintained consistent support for the oil and gas industry—the companies, and the tens of thousands employed from right across the UK. We recognise, as this Bill does, the potential for the people in this industry not just to keep our lights on and keep the economy moving in the near term, but to lead the world in showing how a successful energy transition from oil and gas to renewables can be done. Sadly, as has been confirmed a couple of times today, all His Majesty’s Opposition seem able to offer is to lead the world in virtue signalling.

[Caroline Lucas]

In following the hon. Member for Banff and Buchan (David Duguid), I have to say that his speech was one of startling complacency, which still seems to be based on the misunderstanding that just because we exploit oil and gas in the North sea, that somehow means that it is ours—that it gets used here, rather than being sold on global markets at international prices. So many of us have said that so many times in this Chamber, but it still does not seem to have penetrated.

I rise to speak in support of my amendments that have been selected for debate: amendments 2, 3, 13 and 14. Before I begin in earnest, I want to emphasise that seeking to amend this sham of a Bill in no way legitimises what is nothing more than a political stunt. It is not a serious piece of legislation; rather, it is a desperate and dangerous attempt to create yet another culture war. It will make no practical difference at all, given that there have been annual licensing rounds for most of the past decade, with even the board of the North Sea Transition Authority expressing the unanimous view that this legislation is not needed. The amendments I have tabled are designed to expose the falsehoods that have been told by the Government in attempting to justify new fossil fuel extraction in the midst of a climate emergency. The first is that new oil and gas licences can in any way be compatible with delivering our climate targets, and the second is that propping up oil and gas can possibly be in the interests of workers, rather than genuinely engaging with the need for a just transition and the practicalities of how it is delivered.

I will first address my amendments 2 and 3. Taken together, those amendments would insert a new climate test into the Bill alongside the Government’s carbon intensity test and the net importer test, which as we know are not so much robust assessments as they are free passes to pollute. The climate test is very simple: it would be met in a given year only if the IPCC finds that current global fossil fuel infrastructure will not emit more greenhouse gas emissions than is compatible with limiting global heating to 1.5°. According to the climate Minister, the right hon. Member for Beverley and Holderness (Graham Stuart), that critical threshold is supposedly the Government’s “north star”—a threshold that, as we all know, was passed for the first time across the entirety of last year. I therefore hope that the Minister will support my amendments, which would ensure that proposed licensing rounds do not undermine global efforts to secure a safe and liveable planet for the future and keep that north star shining.

Indeed, as I mentioned earlier, the UN production gap report has warned that Governments already plan to produce more than double the amount of fossil fuels in 2030 than would be consistent with limiting heating to 1.5°. If we look at what the IPCC itself has said, its sixth assessment report was clear:

“Projected CO2 emissions from existing fossil fuel infrastructure without additional abatement would exceed the remaining carbon budget for 1.5°C”.

Closer to home, the Climate Change Committee observed in its latest progress report:

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

Regardless of the claims from Conservative Members that the UK will continue to need some oil and gas up to 2050, this, and I again use the words of the Climate Change Committee,

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

Indeed, last month its interim chair, Professor Piers Forster, was forced to correct the Chancellor on this front, reiterating:

“UK oil and gas consumption needs to fall by over 80% to meet UK targets.”

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[David Duguid]

I am very familiar with the report the hon. Member has just quoted. Does she recognise that what Offshore Energies UK is referring to—the Goldilocks zone, as I have heard it described—is the point at which we need to make maximum benefit of the skills, supply chains and technologies that currently exist in the oil and gas industry, so that we can make the best use of those skills to deliver net zero?

[Caroline Lucas]

The best way to make use of those skills is by making sure that we put resources behind those workers so that they can make the transition, which so many of them want to do, into renewables. Right now, those workers are actually having to pay to make that transition themselves. They have to pay for the training. [Interruption.] They do. I tabled an amendment to a previous piece of legislation on education and training to try to make it much less onerous for oil and gas workers to shift into, say, the renewables sector. We need to have those plans, and we need the resources behind them to make that a lot easier than it is today.

The result and the reality is that the number of jobs in the oil and gas sector has already dropped by more than half over the past decade, despite hundreds of drilling licences being issued. The just transition plans test would be met in a year if the Oil and Gas Authority assessed that all existing seaward area production licence holders have published just transition plans for their workforce that are compatible with limiting global heating to 1.5°. Amendment 14 specifies that those plans must be agreed through formalised collective agreements with unions, and that they apply to all workers whether they are directly or indirectly employed—or, self employed, which is vital with the heavy casualisation in the oil and gas workforce.

Indeed, a report in 2020 revealed a high level of concern about job security and working conditions in the oil and gas industry, and that 80% of surveyed workers would consider moving to a job outside that particular sector. Furthermore, given the opportunity to retrain to work elsewhere in the energy sector, more than half would be interested in renewables and offshore wind. Workers are ready to lead a just transition, yet a more recent report has revealed that

“companies are increasingly announcing net zero targets—but there is no example in the UK oil and gas sector of worker involvement in decision-making on decarbonisation.”

That must change.

This amendment would be a step towards delivering a just transition that would see workers at the centre of transition planning, with a clear and accessible pathway out of high-carbon jobs. Rather than propping up jobs that we know are not going to exist in the future, the Government should be actively supporting workers to transition out of the oil and gas sector now, while also addressing their very real concerns, such as the cost of retraining, which is often borne by workers themselves, or the inferior employment protections offshore, which can lead to wage under-cutting. There are even some cases of seafarers working in the offshore wind sector being paid below the minimum wage. That is a scandal, and the Government should urgently establish a wage floor to apply to all offshore energy workers, regardless of nationality, who are carrying out any work on the UK continental shelf. The failure to deliver a just transition is not an inevitability, but a political choice. If the Government are serious about listening to workers and protecting jobs, they should have no problem supporting this amendment, which puts job security at the heart of the transition.

I note that the hon. Member for Angus (Dave Doogan) has tabled amendments 10 and 11 on a just transition, but I have to say that I do have two serious concerns. First, according to the drafting of amendment 11, the SNP test will be met

“if the OGA assesses that…new licences will support the delivery of the North Sea Transition Deal’s…emission reduction targets”.

Yet, as we know, the 50% reduction by 2030 which is in the NSTD proposal, against a 2018 baseline, is far weaker than the 68% reduction recommended by the Climate Change Committee, which it says is achievable. It is also important to note that this only includes scope 1 and 2 emissions, so it fails to take account of emissions produced when oil and gas is burned. Secondly, there is no provision to consult workers as part of this test. Therefore, given that it would fail to deliver a worker-led transition and it also exceeds the advice of the CCC, I sadly cannot vote for that.

Before concluding, I offer my support to a number of other amendments. First, I support amendment 12, on banning flaring and venting, tabled by the right hon. Member for Reading West (Sir Alok Sharma). As others have mentioned, Norway banned routine flaring back in 1971, giving the lie to the Government’s claim that UK gas has lower emissions.

Secondly, I support amendments 19 and 20, tabled by the right hon. Member for Doncaster North (Edward Miliband), to amend the carbon intensity test and to include all gas, not just LNG. Given that we import most of our gas through a pipeline, it is utterly ridiculous to compare UK production with LNG that is vastly more polluting.

[Barry Gardiner]

There has been much debate today about the alternative of LNG from Qatar, but there has been a failure to take into account whether our being more dependent on LNG from Qatar would in any way change what Qatar does about its own production. It has been recorded that Qatar will increase its production by 67% by 2027, which means that that energy will be produced and will have certain emissions. At the end of the process, we might have produced something with fewer carbon emissions, but it would be better not to produce them at all.

[Caroline Lucas]

The hon. Member makes a characteristically wise and useful point. That figure of 67% is startling and deeply worrying.

Thirdly, I support amendments 22 and 24, tabled by the hon. Member for Brighton, Kemptown (Lloyd Russell-Moyle)—I hope I can call him an hon. Friend—setting out a home energy efficiency test. As we all know by now, that is the most effective way of delivering real energy security for households that are struggling so much to pay their bills.

Fourthly, I support amendments 23 and 25, again tabled by the hon. Member for Brighton, Kemptown, requiring the UK to have made arrangements to withdraw from the energy charter treaty before new licences can be awarded. It is totally unacceptable that the Government are mandating annual licensing rounds without having withdrawn from a treaty that allows companies to sue for lost profits. The Government previously committed to reviewing the UK’s membership of the ECT, including consideration of withdrawal from the treaty if proposed modernisation reforms were not agreed at November’s energy charter conference. As I understand it, those proposals were not even discussed at the conference, so may I ask the Minister, when he sums up, to say what is holding up their withdrawing from that treaty, given that they acknowledge that

“there is now no clear route for modernisation to progress.”

Finally, last week it was reported that British Gas profits soared tenfold last year following the changes Ofgem had made to the price cap. In the same week Government figures showed that almost 9 million households—well over a third—spent more than 10% of their income after housing costs on domestic energy bills, and it was also revealed that not a single new proposal for public onshore wind was made in England last year despite the Government’s policy changes. Those three examples are all from just one single week; this week and next week there will be more, and together they demonstrate the utter failure of this Government to make decisions that would benefit people and planet and to unleash our abundant renewables, massively upscale energy efficiency installations and work to get us off expensive and volatile gas altogether. Instead, each week we see yet more evidence that this tired and divisive Government are prioritising increasingly desperate attempts to save their own skin over measures that would improve all our lives by ensuring that everyone has a warm and comfortable home to live in, communities have been supported to make the most of the green transition and our one precious and infinitely fragile planet is finally restored.

[Neale Hanvey (Kirkcaldy and Cowdenbeath) (Alba)]

I rise to speak to amendment 15 tabled on behalf of the Alba party.

The choice we face is not between shutting down North sea oil and gas and carrying on regardless but how to make its continued exploitation compatible with the environmental challenges and to acknowledge the role that oil can and will play in a sustainable future for the planet. I do not disagree with the four broad objectives of the UK Government proposals, and amendment 15 would strengthen those ambitions on energy independence, safeguarding domestic energy supplies, energy security, reducing higher emission imports, protecting domestic oil and gas industry jobs and working towards our net zero target in a pragmatic, proportionate and realistic way. But I am not convinced that the Bill—and certainly Government policy as it is currently being delivered—will meet those ambitions.

If the provisions are to be truly applied to all parts of the UK as the Government state, then Scotland, the source of oil and gas and whose waters contain the lion’s share of carbon storage sites, cannot be left out of the action. Depleting Scotland’s industrial capacity has increasingly been the direction of travel from this Government in recent years and this strategy will not strengthen the Union as they claim they wish to do. They should be aware that eroding our industry and jobs will further drive up support for independence. They should also be aware that 74% of the Scottish population support domestic oil and gas exploitation and 54% of the Scottish public support new licences being granted for that purpose. Our amendment is without question helpful to all those ambitions, and indeed others, and should be supported by all sides. Its proposals are pragmatic, realistic, responsible and, most importantly, fair.

The infrastructure in Scotland is already in place to meet these objectives. In the north-east we have St Fergus and the Acorn project, in my Kirkcaldy and Cowdenbeath constituency we have at Mossmoran one of Europe’s four cracker plants alongside an LNG plant operated by Exxon and Shell, and at Grangemouth we have one of the UK’s current oil refineries. I reference the points made by the hon. Member for Banff and Buchan (David Duguid) with regard to the environmental impact of exporting oil and gas abroad, which should dissuade the Government from even considering closing the refinery at Grangemouth. All those operations have interconnecting pipelines that are bi-directional, so the infrastructure is all there and it is completely feasible to transport carbon from Grangemouth and Mossmorran north to St Fergus for offshore storage.

From my discussions with the operators in my constituency, I know their carbon reduction teams have been willing and ready to look at the opportunities since I was elected. Exxon has recently made a multi-million-pound investment in Mossmorran, securing its future. That is particularly relevant to some earlier comments on amendment 12 with regard to flaring. That was a persistent problem at Mossmorran where we had an elevated flare that caused light, noise, vibration and pollution, not to mention the environmental impact of the flaring. That investment has reduced flaring significantly, and all plants should seriously consider that to reduce the impact on the communities and the environment around them. That investment from Exxon is well in excess of the modest amount that is required to keep Grangemouth going; it is a multimillion-pound investment and significantly more than what is required to keep the refinery operating at Grangemouth.

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

It is hard to know what more can be said about this farcical and unnecessary Bill. It feels as if we are running out of adjectives. Taking part in this debate, listening to the ridiculous heckles from the Government Front Bench, almost legitimises this desperate and dangerous attempt to create yet another culture war out of something as serious as the climate emergency, but I put on record my deep disappointment that the Government are playing such dangerous games.

Ever since the Climate Change Act 2008 was first introduced, there has more or less been a consensus of a kind, with a recognition on both sides of the House that the climate crisis was real and that we needed to act fast to address it. Of course, there were differences on some of the detail, but not on that substantial issue. Now, however, it feels as if we have a Government who are putting all that at risk and that the legislation is all of a piece with Ministers rolling back pledges on home insulation, the boiler replacement scheme, electric vehicles and so on—the ludicrous list we had from the Prime Minister about all sorts of things he was going to scrap that were never Government policy in the first place.

I will add one further argument to those we have heard over the past few hours: projects such as Rosebank will not enhance our security, not just because the oil is mainly exported, but because public opposition to such projects and their unlawfulness mean that developments are subject to lengthy legal battles. That is a very real risk. Would it therefore not be better to accelerate the roll-out of cleaner energy, which is much more popular with the public, and not give, in this case, Rosebank’s owner Equinor nearly £3 billion in tax breaks? Lawfulness is particularly topical today, with a law case going on right now about whether the Government are meeting their climate objectives and whether the reports they have produced contain enough policy detail to persuade the population that we are on track to meet our climate targets. That also demonstrates, frankly, that the boosterism we have heard from the Minister is entirely misplaced. Complacency does not address the climate crisis or the fact that while the UK once had a leadership position on climate, it has one no longer.

When I listen to some of the voices on the Conservative Benches, I sometimes feel as if this place is on another planet from the one that is overheating. It is undeniable that we are living through what many are calling the sixth mass extinction. We are living through a risk of earth’s systems collapse. Scientists are running out of words to describe the seriousness and to try to wake up policymakers to exactly what is at stake. We have just heard that there is a risk of a total loss of late summer sea ice in the Arctic. That is now baked in and could happen as early as the 2030s. That, in turn, is likely to trigger even more extreme weather events in the northern hemisphere, through the weakening of the jet stream. In the Antarctic, melting of the sea ice has accelerated dramatically, which could lead to cascading collapses of the fresh water ice shelves, with catastrophic results for rises in global sea levels. New research in the Amazon has found what scientists call precursor signals of an approaching critical transition. Deforestation and climate breakdown could now cut off circulating rainfall in the basin, triggering a rapid flip from rainforest to savannah. This is what we are talking about here. Future generations will look back to this time—they may even look back, who knows, to this debate—and wonder what on earth we were thinking by giving a green light to more oil and gas licences.

When we ask ourselves why that is happening, we might also reflect on the role of the fossil fuel lobbyists. A few weeks ago, when I held an Adjournment debate on the subject of the fossil fuel lobbying that goes on in this place, I noted that Offshore Energies UK and its members, including BP and Shell, had

“met UK Government Ministers more than 210 times in the year following Russia’s invasion of Ukraine—that is nearly once every working day.”—[Official Report, 30 January 2024; Vol. 744, c. 833.]

The combined profits of Shell and BP alone have reached £75 billion, and I would suggest that that is not unrelated to the direction of the Government’s discussion today.

Let me end by quoting from a letter from more than 700 UK scientists who wrote to the Prime Minister last year urging him to halt the licensing of new oil and gas. They included Chris Rapley, a former head of the Science Museum and a professor at University College London, and Mark Maslin, a world-famous professor of earth system science at UCL, and they all warned against any new development of oil and gas. They wrote:

“if the UK allows any new development of oil and gas fields, it will severely undermine…claims of leadership by contributing to further oversupply of fossil fuels, and making it more difficult for the world to limit warming to 1.5°C. Therefore, the UK should commit to preventing any new oil and gas field development, and the Government should state this commitment clearly… There are those who might claim that stopping new developments of oil and gas fields would raise concerns about the affordability and security of future energy supplies, but there is now overwhelming evidence that the UK is far better served by a rapid transition to domestic clean energy sources, particularly renewables, and decarbonisation of our economy. Doubling down on fossil fuels will not lower energy bills or enhance our energy security… The IPCC report stated: ‘The choices and actions implemented in this decade’”—

now, at a time when we are all in decision-making positions—

“will have impacts now and for thousands of years’.”

The moment for political leadership is here and now, and I beg Ministers to rise to the occasion.

[Mr Deputy Speaker (Mr Nigel Evans)]

There are about 18 minutes left. I call Wera Hobhouse.