Offshore Petroleum Licensing Bill

David Duguid Excerpts

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

[Dr Whitehead]

The proposition before us today is for mandatory licence rounds in a declining North sea field, which would make no difference in the long term to the total amount of gas that we get out of the North sea, as everybody knows. It would instead put us firmly on the back foot as far as international climate change discussions are concerned. That is the key issue that we need to address this afternoon.

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

Following on from the question from my right hon. Friend the Member for Wokingham (John Redwood), is it therefore Labour’s position not to allow any new oil and gas licences in the future, if Labour were to come into power?

[Dr Whitehead]

It is Labour’s position that we do not wish to see new energy exploration licences issued for the future, but that does not mean that the North sea will not continue in production over a long period of time and provide a substantial amount of oil and gas for our domestic market.

Our first amendments, 17 and 18, would introduce a new test that would safeguard the legally binding commitments that the UK and all other nations made in the Paris agreement and have reaffirmed ever since. Every credible independent analysis—the Intergovernmental Panel on Climate Change, the International Energy Agency, the Climate Change Committee—shows that new exploration licences are not compatible with limiting warming and avoiding the worst of the devastating impact that climate change will have, and is having, around the world and here in the UK.

The test that we have put in amendments 17 and 18 is possible if we have achieved or are achieving our climate change goals internationally. Amendment 18 states:

“The climate change test is met in relation to a relevant year if the latest reports of the Intergovernmental Panel on Climate Change on the mitigation of climate change find that the granting of additional seaward area production licences is consistent with limiting warming to 1.5°C.”

No one who is serious about this can take that to mean that existing fields will not continue to produce for years to come—of course they will—but anyone who argues that business as usual and a few new licenses are the route to good, long-term jobs and energy security is frankly peddling a myth.

We must accelerate the transition to new opportunities for North sea workers in the low-carbon economy, including through carbon capture, usage and storage, through hydrogen and through floating offshore wind. We do not believe that tests are the best route to achieving that goal. We need a holistic strategy, but within the framework set out in this Bill, the climate change test we propose is the only way to achieve a policy that is consistent with being a responsible and leading actor on the world stage in the fight against climate change, with managing our existing North sea assets carefully and for the long-term, and with maximising the low-carbon economic potential of the North sea.

The other two amendments I will speak to highlight the extent to which the Bill fails even on the narrow terms it has set out. Amendments 19 and 20 would address the glaring deficiencies in the bogus carbon intensity test set out by the Government. Currently, the test compares UK gas production carbon emissions only against an aggregate of liquefied natural gas production emissions, ignoring pipeline-delivered gas, which makes up most of our imports, as the right hon. Member for Reading West reminded us. This amendment would correct that. As it stands, the test is designed to be impossible to fail, so it is barely worthy of the name. Including only LNG is a serious logical flaw. Before the Minister jumps to his feet, it is not true to say that every marginal unit of imported gas must be LNG. Indeed, we support substantial amounts of natural gas coming into the UK via the pipeline from Norway. The production of that gas is substantially cleaner than that of UK natural gas.

Apart from anything else, the Bill takes no account of the UK’s likely future gas demand profile. Demand for gas will decline as we rapidly decarbonise our power sector and electrify more and more of our economy. Indeed, this decline in demand, not just supply, is at the heart of a successful net zero transition.

Approving new exploration licences for fields that will take years to come online, on the assumption that the alternative must otherwise be LNG, without taking any account of future demand, is absurd. A fairer test would consider gas imports in the round.

[David Duguid]

I take on board the hon. Gentleman’s comment that, overall, 30% of our gas comes from Norway. Yes, that is the majority of our imports, but it is still 30% overall. Nobody in this House has authority over Norway’s future oil and gas prospects, but would he be in favour of the Norwegian Government exploring for new oil and gas to supply to us?

[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.

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[David Duguid]

My hon. Friend is making some very good points, particularly on the spatial squeeze. She says that this is not a choice between one thing and another. Opposition Members tend to see this debate as black and white, and that we have to go in either one direction or the other. Does she agree that, whether from the perspective of fishing, offshore wind or offshore oil and gas, it is very important that we come together so that everyone has a say?

[Selaine Saxby]

As always, I agree with the points my hon. Friend makes. Prioritising space is critical, as the Government have committed to delivering 50GW of offshore wind, which this represents approximately £93.3 billion-worth of investment and requires nearly 8,500 sq km of new marine space. I need to declare an interest, as the chair of the all-party group on the Celtic sea. As such, my particular concern is about the deployment of floating offshore wind, as it will open up areas such as the Celtic sea so that we can generate energy no matter which way the wind blows. As it can be deployed in waters deeper than 60 metres, that technology opens up 80% of our offshore wind resources.

The Celtic sea is an environment where strategic planning at this early point in the development of FLOW—not just for spatial prioritisation on the seabed but for clear planning of cable routes to optimise how power transitions to the grid—minimises blue carbon disruption from our ocean floors and onshore environmental damage from multiple plug-in points. Indeed, given the long-term commitment to energy generation in the Celtic sea, as well as the North sea, the chance to plan strategically and include all future leases within a national framework comes now. More renewable energy and greater energy efficiency contribute more to energy security than new oil and gas. This integrated spatial planning will require new licences to ensure that enough sea space is allocated for nature recovery and climate change mitigation. Otherwise, there is a risk that industrial activities could crowd out those important environmental purposes, which, with the right strategic planning early enough in the evolution of these vital new technologies, can coexist alongside those that are now waning.

Currently, the Bill has no provisions to require spatial prioritisation testing of the geographical blocks that become available for oil and gas search and production. That means that the North Sea Transition Authority will be able to grant new licences in areas of the sea where the cumulative impact of activities is incompatible with the achievement of Government targets in the Climate Change Act 2008 and the Environment Act 2021.

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[David Duguid]

I was not sure if the hon. Gentleman had moved on from his glowing appraisal of the North sea transition deal, but can I take it from his reference to that deal that the SNP’s position is to support and welcome it in its entirety?

[Dave Doogan]

I am not going to meet the hon. Gentleman’s ambition to nail those colours to the mast, but I will tell him that through the Bill, the UK Government are turning a blind eye to the implications of a free-for-all when it comes to emissions and who benefits from revenue receipts. I am sorry if he finds that difficult, but he will to have to deal with it.

The prosperity that comes from oil and gas in Scotland is finite, as we know all too well. We have seen what deindustrialisation with no transition plan looks like—we witnessed it at first hand in the 1980s, when coal, steel and heavy industries were all torn asunder on the altar of monetarism and share prices in the City of London. That is set to happen again for oil and gas, under Thatcher’s willing disciples, the Leader of the Labour party and the Prime Minister. We cannot allow that to happen again. It is therefore essential that north-east Scotland and other areas reliant on oil and gas are afforded the investment required. That is what our amendment speaks to; it is about creating new jobs and transitioning in a managed, strategic fashion to accelerate our post-carbon future.

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On Second Reading, I suggested that we should consider a more ambitious climate compatibility checkpoint and bring forward a ban on routine venting and flaring. Those are sensible ambitions, as I have said, but they do need to be worked up in conjunction and partnership with the NSTA and industry, and not imposed on them. On amendment 12 and new clause 2, it should be added that the NSTA has a good track record with regard to both venting and flaring and marine spatial planning.

[David Duguid]

My hon. Friend mentioned the role of the NSTA in the facilitation and delivery of the North sea transition deal, which, as he said, was negotiated between industry and the UK Government. Does he agree that what he is advocating is precisely the purpose of the North sea transition deal—to facilitate the delivery of energy transition to net zero?

[Peter Aldous]

My hon. Friend is quite right: the North sea transition deal is the foundation stone on which we should be building, involving industry, involving the NSTA and giving industry the confidence to make the significant investment that we need.

The North sea transition deal includes the target to cut greenhouse gases and emissions by 10% by 2025 and by 25% by 2027. The NSTA wants to halve emissions by 2030. It is also committed to all new developments having no routine flaring and venting, with zero routine flaring across all North sea platforms, whether new or existing, by 2030 at the latest. Good progress is being made. Although figures are not yet available for 2023, emissions were reduced by 23% between 2018 and 2022, while flaring has been reduced by 50% over the same period. In addition to tracking, monitoring and reporting performance, the NSTA closely scrutinises operators’ applications for flaring consents, pushes back against requests to increase flaring, and has ordered operators to restrict production to stay within agreed limits. It has, where necessary, issued fines for breaches.

On marine spatial planning, the NSTA follows a precautionary approach and is acutely aware of the need for co-ordination and collaboration in what are increasingly crowded and sometimes very sensitive and precious waters. It is thus working closely with such organisations as the Crown Estate and the Marine Management Organisation in delivering the marine spatial prioritisation programme of the Department for Environment, Food and Rural Affairs.

In conclusion, the Bill and the amendments raise very important matters, but to tackle them properly, we need to adopt a long-term approach that transcends the four-to-five-year political cycle and that fully involves business.

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I remember phrases from the anti-war movement, such as, “You can’t bomb for peace,” and another about not being able to do something for virginity. It feels to me that this is a very similar thing: we are trying to do something that is the very opposite of what we want to achieve. If the Government want to be committed to their climate targets, and if they think that more licences are needed, they need to ensure that those licences actively achieve our net zero targets. I am afraid that the Bill will not do that. It will make things worse, energy bills will continue to be high, and it will ensure that we are bound for a generation. That is why all my amendments should be supported. I am sure that we will push the Opposition Front-Bench amendments to a vote.

[David Duguid]

I rise to speak in support of the Bill and of all the employees of companies right across the country, including in my Banff and Buchan constituency, that will play a critical and successful role in the UK’s ongoing energy transition to net zero by 2050.

I remind the Committee that, for 25 years prior to being elected in 2017, I worked in the energy sector—in the oil and gas sector specifically—in a wide range of roles for several different companies and in various places around the world. I also declare that I have a close family member with a financial interest in one of those companies, which is below the threshold required for registering interests. I can also assure the Committee that that financial interest has never had, and will never have, any bearing on my contributions in this or any other debate.

On Second Reading, I spoke about the potential for increased confidence and certainty that the Bill brings to the energy industry. For many people watching, including a few hon. and right hon. Members in this place, there would appear to be a perfectly polarised distinction between maximising oil and gas on one hand and promoting renewables on the other. The truth exists on a continuum between those two extremes, however. We have in fact been on a transition away from the most polluting of fossil fuels towards cleaner, lower-carbon, renewable sources of energy for a number of decades now. That transition is happening at various rates in different parts of the world, but it is fair to say that the United Kingdom is at the forefront, as the first major economy not only to legislate for net zero but to set the most stringent decarbonisation targets.

The Conservative Government have presided over the UK’s becoming the first major economy to have reduced carbon emissions by 50% from 1990 levels. That compares to only 7% that had been achieved by the time the Conservatives came to power in 2010. We have effectively transitioned away completely from coal power, and continue to reduce our demand for oil and gas and increase our renewable and low-carbon capacity, but not as fast as our domestic supplies will continue to decline, even with new production.

A critical point that needs to be reinforced in considering this legislation is that new oil and gas does not mean more oil and gas—a mistake that I heard in the speech of the hon. Member for Brighton, Kemptown (Lloyd Russell-Moyle). Even with new production, the North Sea Transition Authority predicts that UK oil and gas production will decline, not by the 3% to 4% suggested by the International Energy Authority to stay within the global 1.5°C target, but by twice that rate of decline, at around 7%. We are today 75% dependent on oil and gas for our energy needs, and not just for electricity generation, but for heat and transportation as well. Of that 75%, about 50% is produced domestically with the rest having to be imported.

The arguments for producing our own oil and gas closer to home have been well rehearsed. There is the obvious benefit of having that source of energy under our control, not that of other states and countries that are not always friendly. We have also heard how liquefying natural gas for transportation and shipping that LNG halfway around the world to then be de-liquefied back into gas when it arrives in the UK can produce up to four times the carbon emissions of domestically produced gas. We know from the Climate Change Committee that we are likely still to be up to 25% dependent on oil and gas by 2050. It therefore follows that carbon capture, utilisation and storage will be required for the UK to reach net zero by 2050. That includes, of course, the Acorn CCS and hydrogen project at St Fergus in my constituency, and in particular the role it will play in decarbonising gas-fired power generation at Peterhead.

What will also be required to get to net zero are precisely those skills, technologies and supply chains that currently exist and will, no doubt, continue to be developed within the oil and gas industry. However, those critical elements would sadly no longer be available to us if we shut down our domestic oil and gas industry prematurely, which is what would happen if the Opposition parties had their way, whether it is the SNP’s “presumption of no new exploration” for oil and gas—a direct quote of the SNP’s draft energy strategy—or Labour’s “just stop oil” approach.

I am seeing some nods of agreement from across the Floor, but there has recently been something of a war of words between the two main parties—I am referring to Labour and the SNP—in Scotland following Labour’s screeching U-turn on its £28 billion a year green investment plan. Of course, we on the Conservative Benches always saw that plan as undeliverable without massive tax increases. Labour announced that it would not only increase the energy profits levy and make it last longer, but remove the investment allowance.

[Dave Doogan]

Will the hon. Gentleman give way?

[David Duguid]

Before I give way, I will gently point out to Opposition Front Benchers—I am not sure whether they are aware of this—that the 78% tax rate they are so keen to copy from Norway comes with an equivalent 78% investment allowance in that country. Labour’s plans would remove the investment allowance, putting future investment across the energy sector even further at risk.

Of course, as we heard earlier, Labour still maintains its position of banning all new oil and gas licences, which has inevitably led to an outcry from the sector in recent weeks. Among others, Offshore Energies UK’s chief executive David Whitehouse has said:

“We remain deeply concerned about what Labour’s proposals could do to our people. If we can’t get companies to invest here, there are no jobs. It’s that simple.”

He went on to describe Labour’s proposals as

“a hammer blow to the energy we need today and to the homegrown transition to cleaner energies that everyone in the UK wants to see.”

That is the key point, which often goes over the heads of so many on the Opposition Benches: the skills and technologies to deliver net zero are not going to appear magically over the horizon, and the talent and expertise in what would become a defunct oil and gas industry will not automatically and immediately transfer across to the renewables sector. More likely, companies and their employees who will find themselves squeezed out of oil and gas in the UK will simply move overseas to deliver someone else’s energy security and someone else’s energy transition—and, no doubt, deliver oil and gas that we would end up having to import.

Of course, the SNP has come out of the woodwork to jump on the bandwagon, criticising Labour’s approach while completely contradicting its previous stance and—more than likely—that of its Scottish Green coalition partners in Holyrood. SNP leader Humza Yousaf said last September that he did not want Scotland to be Europe’s oil and gas capital, presumably wishing to pass that mantle to our North sea neighbours in Norway. A little over a year ago in its draft energy strategy, the SNP stated—I quote again—that there should be a “presumption” against new exploration for oil and gas. I am not sure whether the hon. Member for Angus (Dave Doogan) is still looking to intervene, but I wonder whether he would take this opportunity to answer that question.

[Dave Doogan]

I am grateful to the hon. Gentleman for taking my intervention, even though it was about five minutes ago on a different subject. He made a really interesting point in his speech: that new licences do not mean more oil and gas. Conversely, having a more circumspect and rational approach to licence issuance—taking it out of the political arena and putting it into the bureaucratic space—does not mean less oil and gas. I am sure the hon. Gentleman will accept that if that is true for one, it is true for the other. Does he not agree with my position, and that of my party, that as the oil and gas industry continues on its journey to its natural conclusion of a much reduced industry, for whatever reason—the transition to renewables, or depleted resources—it is much more important, and in fact elegant, to make sure that those tax receipts are invested in the energy of the future, not squandered by His Majesty’s Treasury?

[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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“the transferability of the offshore energy workforce can be optimised”.

[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.

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Carbon capture can be at the heart of an energy revolution in Scotland, but political will and investment are required to make it happen, and it is wholly at the mercy of Westminster.

[David Duguid]

I am reluctant to intervene, because the hon. Gentleman is making some interesting points, many of which I agree with, but I have a burning question. He makes a point about the amount of storage we have around the UK, which is equivalent to more than we have produced out of the North sea, and we must take advantage of that. In his amendment, he refers to licensing conditions for specific fields been tied to having a net zero effect through carbon capture and storage. He has already explained that carbon capture and storage is typically taken from flue gas from the likes of Mossmorran in his constituency, or Peterhead power station in mine, so how does he make that link between offshore exploration licences and the resultant carbon capture, which will be way down the production line?

[Neale Hanvey]

The hon. Gentleman makes an important point. Many of the operators are serious about exploiting the resource not just in Scottish or UK waters but in other countries, and other countries can leverage those types of concessions when they grant licences. The UK Government can therefore make no serious argument that they cannot do that.

One of the refrains we heard during the Brexit debate was about the reclaiming of national sovereignty. It was one of the reasons for Brexit. One of the most limiting factors for job creation in renewables was that contracts for difference and European rules prevented conditionality from being applied to the granting of oil, renewables and other licences. If the UK now has that sovereignty, why not use it to ensure that the communities that are part of the supply line get some form of benefit out of the process? One of the most obvious benefits is to reduce at source, through a levy on any licence, the carbon footprint of the exploitation of that resource. That would seem a reasonable expectation, and certainly we feel it is essential in granting any future licences.

Amendment 15 would create a requirement for a specific field commitment of a net zero carbon footprint, as we have just discussed. That would be achieved mainly through connection to the carbon capture network. The prize is to be a world leader in research and development, with an economy built on renewable energy, of which Scotland has an absolute abundance. The UK Government’s dither and delay on Acorn has gone on for far too long. It is time for Scots Members on the Government Benches and their Government colleagues to back a secure future for Scotland’s North sea oil and gas sector and to back this amendment.

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No matter where we look, whether it is to the UK Climate Change Committee, the North sea transition deal, EY, Transition Economics or elsewhere, the projections are the same: there will be further decline in oil and gas employment. In fact, research by the University of Aberdeen has found that the decline of oil and gas is already visible in places such as Aberdeen and cannot be reversed, regardless of new licensing or other attempts to bolster the oil and gas industry. An honest Bill would set out the facts clearly and seek to manage that transition, not to ignore it.

[David Duguid]

I feel almost obliged to intervene, if only to agree totally with what the hon. Member just said. The Aberdeen University study relates specifically to the decline over previous decades. We have lost a lot of workers in the industry, not just because of the decline in production, but because of new technology and the desire to remotely operate offshore platforms in the interest of safety. There has been decline. What he seems to be missing is that we are talking not about a return to the glory days of peak production in the late ’90s, but managing that decline with reference to how much energy we need. As was mentioned, we need to promote a Goldilocks period in which we make the most of the skills and technologies in that industry for the renewables-based future.

[Barry Gardiner]

The hon. Gentleman is absolutely right to say that we must manage the decline, but we must manage the decline in the community’s livelihood, which is not necessarily the same thing. If we make sure that we have a just transition, and introducing support for retraining and gaining skills, as outlined in the amendments that I am supporting, he will find that his constituents and many others around the country will much better weather that decline and prepare for the sort of future that we want.

The Bill, unfortunately, does the opposite. It ignores the 30,000 hard-working people directly employed in today’s oil and gas industry, and the further 100,000 individuals supported by the supply chain. It provides false hope. It sends confusing signals to energy companies, to investors, to the global community, and indeed to unions and the workers they represent. It pretends that nothing needs to change—that business can continue as usual, and that jobs in oil and gas are safe. The Government are acting as if maxing out the North sea can happen indefinitely, or at least until they are no longer in office and therefore do not have to pick up the pieces.

Amendment 14 sets out the need for formalised collective agreements with unions and the workforce to create just transition plans. In Spain, we have seen what can be achieved when Governments, businesses, workers and unions come together. The just transition agreement that the Spanish Government have negotiated with affected workers, unions and businesses is popular, economically responsible and environmentally sound. It is a settlement for all involved. That is the approach that ought to be taken in the North sea. The region needs a new settlement, in which: there is an increase in domestic manufacturing; a new generation of renewables, such as green hydrogen, turbocharges employment in energy-intensive industries; the technology of carbon capture, usage and storage and the UK’s unique storage capacity for sequestering carbon can provide a new service that is exportable to the world; the benefits of the energy system are shared fairly; jobs are truly safe and secure; and, above all, those communities who were once the proud purveyors of our fossil fuel energy become our proud sequesterers of the world’s emissions and the champions of the renewable powerhouse of the future.

Before I conclude, I want to mention one further spurious reason that the Government have put forward to justify the Bill: that it stops us from being dependent on oil and gas from dictatorial regimes such as Russia. Yesterday in the House, my right hon. Friend the Member for Barking (Dame Margaret Hodge) pointed out that a loophole in our sanctions regime means that countries such as China and India import Russian crude oil, process it and then sell it to the UK as refined oil. In 2023, we imported 5.2 million barrels of that oil. That means we sent something like £141 million in tax revenue to the Kremlin’s war chest. Britain is also the biggest insurer of Russian oil moved by sea, most of which is sold at prices well above the price cap, again violating sanctions. If the Government really wanted to stop such dependence, they could tighten the sanctions regime—they know how to do so, but they do not.

I will not vote for this piece of 20th-century legislation that instructs the House to look backwards and not forwards. I will not vote to make Britain colder and poorer. I will not vote to increase flooding. I will not vote to leave communities and workers behind. I will not vote to lock volatile fossil fuels into our already broken energy system. Sadly, we must wait for a future Parliament—and, I trust, a future Government. I look forward to working with Members from across the House in pursuit of those goals.