Offshore Energy Industry

Debate between Charles Hendry and Mike Hancock

Tuesday 13th July 2010 Westminster Hall

[Charles Hendry]

We are trying to ensure that we have cohesion across the whole range of issues relating to the grid, including the offshore transmission system, transmission access and transmission charging, which is particularly critical as far as Scotland is concerned. I want to ensure that we have a complete response to all the issues involved as we try to move forward in this area. The hon. Lady will not have to wait much longer. I understand that the industry attaches a great deal of importance to the sector, and this is very much at the top of the list of things that we are seeking to resolve.

Questions were asked about the ports project. It has not been suspended or cancelled, but, within the framework of the comprehensive spending review, we are trying to ensure that all such major projects are handled in the most sensible and constructive way, to deliver the best response and to make the best use of taxpayers’ money. We are committed to taking the work forward, but it will be handled within the network of the comprehensive spending review.

We will also be looking at how we take forward work on carbon capture and storage, which offers many partnership opportunities. Some of the most extraordinary academic work on CCS in the world is being carried out in Scottish universities. People such as Professor Jon Gibbins and Professor Stuart Hazeldine at the university of Edinburgh are doing wonderful work to ensure that we lead the world in that technology. I want to work closely with them in ensuring that we make the best and strongest case for Britain in that respect.

There was a question about the working relationship with the Crown Estate. We believe that the regime is working at present. There is clearly a difference between the role of the Crown Estate as the landlord and the role of the Government who, as the regulator, are able to issue licences. If there is evidence that the regime is not working, we will certainly look at how the matter can be addressed.

The hon. Member for Islington South and Finsbury asked about our continuing commitment to renewables obligation certificates. We have said that we are looking at introducing feed-in tariffs. We indicated prior to the election that there is a strong case for using feed-in tariffs for the third round of offshore wind because investors have told us that that would be more attractive. We have also been told that feed-in tariffs would be more attractive for marine technologies, so we are looking at the most appropriate balance between the renewables obligation and feed-in tariffs to see how we can best stimulate investment. At the core of all that we are doing is a desire to make this the most attractive place to invest in energy infrastructure, and that applies to oil and gas, nuclear, coal with carbon capture and renewables.

The debate has touched on many critical issues, and there is an overwhelming sense on both sides of the House that the industry will continue to make an enormous contribution to the British economy. The North sea sector is sometimes seen as an old industry, but it is, in fact, a ground-breaking industry in the development and application of technology. Probably only space travel has the same level of involvement.

Let us look at what is happening in the gulf of Mexico at present, where BP is drilling down 18,000 feet below the surface of the water, through perhaps 13,000 feet of rock. It intends to intersect a pipe that is just a few inches across in order to stop the flow of oil from the well. We should pay tribute to it for the work that it is doing and the cap that it appears to be putting in place successfully. The technology involved is extraordinary.

In all our debates about the industry, we should see it as an industry of the future which has an extraordinarily important role to play. I can say to right hon. and hon. Members who have spoken this morning that, even though I may be a Conservative Member of Parliament from the south-east of England, I have an absolute commitment to being a champion of the industry. I want to visit Aberdeen regularly and know about all aspects of the industry. I want to know the industry and the trade union sides, and to work with both of them to deliver the best possible outcomes for investment. We have an absolute national interest in ensuring that we secure the best from our indigenous resources.

We have had an outstanding debate this morning, which has raised many critical issues. I look forward to working closely over the coming months and years with right hon. and hon. Members, who have great expertise in the sector, and with the companies and people in their constituencies who work in this sector and deliver so much in terms of our energy security.

[Mr Mike Hancock (in the Chair)]

Thank you, Minister. I thank all those Members who have taken part in the debate for the courtesy that they have shown to the Chair and for their indulgence of each other. I wish you much luck with your dunking exercise, Mr Hendry. I hope that the safety procedures are all in place when you do it, by the way. I am sure that the whole House would regret any mishap. Do not forget the wet suit.

As we are now all in place, we can move on to the next debate. Before we do so, several Members have indicated that they want to take part. I want to try to get as many in as possible, so I ask that interventions be short and to the point, and that replies be quick as well. I ask for the indulgence of the Minister and the Opposition spokesman: could they give me an indication at some stage of how long they will want to speak so that I can ensure that we can get in as many people as possible?