Offshore Petroleum Licensing Bill

Debate between David Duguid and Alan Whitehead

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.

Energy Trilemma

Debate between David Duguid and Alan Whitehead

Thursday 23rd March 2023 Commons Chamber

[Dr Alan Whitehead (Southampton, Test) (Lab)]

This has been an interesting debate, and I congratulate the right hon. Member for South Northamptonshire (Dame Andrea Leadsom) on securing it. I thought that it was about tackling the energy trilemma, so I have prepared all sorts of interesting things about the energy trilemma and how it works. However, although the contributions have been interesting, the debate has not necessarily been about the energy trilemma.

The right hon. Lady spent a lot of her contribution talking about the 1922 Back-Bench committee report on energy, which sounds very interesting. Indeed, it appears to contain quite crucial insights, particularly on the need for speeding up the planning system as far as grid development is concerned, speeding up connections, and developing new connections and ring main in offshore wind. As far as I am concerned, those things are crucial to delivering the rest of our green agenda. I can offer her a slogan, “no transition without transmission”, which she might want to put on the front of a future report. They are crucial insights, and it would be a good idea for her to provide a submission to the Labour party national policy forum on this, because she would get a better hearing than she would from the present Government.

The right hon. Lady mentioned the three-legged stool. This is about how we achieve our net zero outcomes while taking the whole question of affordability and of energy security along with us as we go. This is not a zero-sum game. It is not the case that if we consider affordability and security, we take away from our net zero ambitions. After all, we in this House already decided which of those legs we are going for most strongly when we decided on net zero as our target as far as climate change is concerned. That means we have to consider the energy trilemma from the point of view of not whether we will get there but how we can get there with those other matters being taken into account.

I would prefer to put the question of energy security into a slightly different mode, and that is the one it was put in by the World Energy Council, which has done a lot of work on the energy trilemma as a tool for deciding how we make progress in these areas together. It has produced an isosceles triangle—I am confident that the word “isosceles” has not been recorded in Hansard before—that has spines going to the centre of it, and we can advance further along to each corner from the centre with various elements of the energy trilemma in it. We have decided to advance substantially down the left-hand spine, which is the sustainability part of the triangle. The job we have to do is make sure that what happens with the other two legs does not draw back the sustainability leg but enhances it, which is exactly the point that the hon. Member for Kilmarnock and Loudoun (Alan Brown) made.

It also means we have to take decisions in other areas that are compatible with the particular length of spine we have gone down on that triangle. I would politely say to the hon. Member for Banff and Buchan (David Duguid) that, while it may be the case that the hydrocarbons we bring into the UK are more carbon-intensive than the ones we produce in the UK for transport reasons and others, they are still hydrocarbons. With what we have decided, yes, we are going to need oil and gas in our future economy, but in far smaller quantities than is the case in our economy at the moment. We have to think about the right use for oil and gas in our future energy economy, making sure that as much of that as possible is produced in the UK as opposed to importing, but also that the total that we have coming into the economy as a whole is compatible with that net zero goal on the left leg of the sustainability triangle.

[David Duguid]

I appreciate the hon. Gentleman giving me the chance to come back on that point. Surely he will recognise, as I think he did in his statement just now, that there will be a gap for some time, and that we need to keep that gap closed. As rapidly as we all want renewable and low-carbon energy to be developed, we need to make sure that that gap is closed, and that we do not become even more dependent on foreign imports than we already are.

[Dr Whitehead]

The hon. Gentleman is absolutely right: we should not be dependent on foreign imports. However, we need to be thinking about a long-term overall reduction in what we are doing. I do not think that simply saying, “We’re going to increase oil and gas production over the next period” is an answer to our present problems, because in the end, that is incompatible with the commitments we have made on net zero. We cannot go down that path in the long-term future.