Annual Energy Statement
Debate between Chris Huhne and Robert Smith
Chris Huhne
I certainly did not want to imply that the right hon. Gentleman, who has considerable expertise in this area, was in any way slacking when he was an Energy Minister—although I think he might have had better support from his colleagues on certain occasions.
CCS is a key technology. The right hon. Gentleman is absolutely right to say that we are going to continue to be reliant on gas and other fossil fuels. If we move to unabated gas rather than coal, that in itself will save about half the carbon emissions. For the longer term however, CCS is essential if we are going to be able to use gas, especially if we find, as I hope we will, that we have considerable exploitable reserves of shale gas under Lancashire and elsewhere.
As I have said, Longannet was a disappointment—I made a statement to the House on that—but other projects are coming forward. Peterhead is nearer the reservoirs than Longannet, so the pipeline costs are likely to be lower, and less investment will be needed to upgrade the plant in line with the large combustion plant directive. All the parties who were involved in the Longannet negotiation are confident that we can deliver a commercial-scale CCS plant for within that £1 billion budget, and we intend to do so.
Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)
The Secretary of State highlighted the future role of gas in the economy, and producing our own gas is obviously the best option. To that end, will he stress to the European Union that its attempt to regulate the offshore oil and gas industry is in danger of creating regulatory confusion and more uncertainty, and that it would be far better to go down the directive route?
Chris Huhne
I am grateful to my hon. Friend for making that point. He is absolutely right. If we are going to introduce minimum standards for offshore oil and gas—the Commission has been kind enough to say they should be modelled on those for the UK continental shelf—that should be on the basis of a directive, so that we can use our own legal means to enforce the standards, rather than a regulation. A regulation that would apply directly in all the member states would be inappropriate because countries’ circumstances are inevitably different.
Oral Answers to Questions
Debate between Chris Huhne and Robert Smith
Chris Huhne
As I said in a previous answer, we are doing two very practical things. One is providing the warm homes discount and ensuring that it is made available to those most in need; the other is ensuring that we tackle the root causes of these problems. Another key issue for anyone facing high energy bills is the need to switch, as I have been trying to encourage them to do. As the hon. Lady may have noticed, customers of the big six who are already on dual fuel direct debit accounts could have saved between £160 and £200 in 2010 merely by getting on to the cheapest tariff available at the beginning of the year.
Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)
But for people to make the savings they need to understand what they are being charged. Does the Secretary of State think that there could be improvements to and reductions in bills and that the market could be opened up if there was more clarity on the tariffs available and less confusion about what things were going to cost?
Chris Huhne
I entirely agree with my hon. Friend, and what he describes is one of Ofgem’s objectives in tackling this issue. It is also one of the objectives we are introducing in legislation: we want to ensure that people can see on their bill that there will be a clear alternative with the same supplier at the cheapest tariff.
Annual Energy Statement
Debate between Chris Huhne and Robert Smith
Chris Huhne
I have great respect for the right hon. Gentleman’s expertise in this area. We work very much as a team in the Department, and my hon. Friend the Member for Wealden (Charles Hendry), the energy Minister, and I have been working very closely with nuclear suppliers and attempting to meet some of their concerns about the regulatory framework. It was precisely because we had two different views, from the Conservative side and the Liberal Democrat side, that we dealt with the issue right at the beginning, with a coalition agreement that makes very clear what is going to happen.
On the point that the right hon. Member for Doncaster North made about whether we should commit to a particular target, I simply say that I do not believe that it is the job of government to micro-manage how we put in place a framework for, and facilitate, low-carbon energy. However, there is no doubt that the coalition agreement sets out that there is a place for new nuclear, and I believe that there will be investment in new nuclear to meet our energy needs in the future.
Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)
The Secretary of State will know, from his visit to north-east Scotland so soon after his appointment, just what skills have been developed in the sub-sea engineering field and the world-leading companies that are in my constituency. Does he recognise that those skills will be very much needed to drive forward further gas and oil production, the carbon sequestration projects in the North sea and existing marine renewable skills? Will he build on those skills to ensure that we have a British-based solution to the carbon problem?
Chris Huhne
I am very grateful to my hon. Friend for that question. Nobody who has visited his part of the world can fail to be impressed by the professionalism and expertise in the area. Interestingly, such skills not only exist in oil and gas exploration, where it started, but are extending right the way across the piece. For example, companies that were involved in building rigs for oil and gas exploration are now involved in building bases for wind turbines. I can assure my hon. Friend that we in the Department are very conscious of the extremely valuable resource that we have in north-east Scotland among all those energy sectors.
Gulf of Mexico Oil Spill
Debate between Chris Huhne and Robert Smith
Chris Huhne
The hon. Lady is absolutely right. I spoke yesterday to BP chief executive Tony Hayward, and I spoke this morning to another board member, Iain Conn. Until those conversations took place, I had not realised the extent of the co-operative effort across the industry in attempting to find a technical solution. Frankly, it is in the interests of all the oil and gas companies that operate in the gulf of Mexico and, indeed, more widely to ensure that they can reassure their publics and the people who are affected in Louisiana and the other coastal states that there are genuine technical solutions. That is one of the encouraging signs of what is now going on.
Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)
I reinforce the Secretary of State’s welcome recognition of the human tragedy involved in this disaster. This tragedy has a human face as well as an environmental one. Although the President was reassuring us that he did not intentionally want to affect BP’s finances, he may have unintentionally done so. If we can ensure effective co-operation across countries to make sure that the focus is on finding a solution to the problem, that would be most welcome. Specifically, for the north-east of Scotland, his reassurance on the safety regime that applies to the North sea is most welcome—in particular, that our blow-out preventers are subject to rigorous testing and inspection to ensure that such an incident could not happen here.
Chris Huhne
My hon. Friend is absolutely right to draw attention to that. In fact, both in our regime and in the United States regime, blow-out preventers are checked regularly. One of the mysteries appears to be the fact that the blow-out preventer was checked within two weeks of the disaster and still failed. Clearly, that is one of the things that the investigation must get to the bottom of. One of the things that we will need to learn about operating at such depths and pressures is whether yet further fail-safe mechanisms need to be built into the blow-out preventers, and we will certainly look at that. He is also absolutely right to draw attention to the human tragedy and, indeed, the importance of maintaining safety for all those who work in the industry.