Offshore Petroleum Licensing Bill

Debate between David Duguid and Barry Gardiner

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

[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.

Offshore Petroleum Licensing Bill

Debate between David Duguid and Barry Gardiner

2nd reading
Monday 22nd January 2024 Commons Chamber

[Barry Gardiner (Brent North) (Lab)]

I refer to my entry in the Register of Members’ Financial Interests.

Mr Deputy Speaker, I know you were not around at the time, but you will know that the stone age did not end because of a lack of stone, and the oil age will not end because of a lack of oil. It will end because decent people of all political persuasions, such as the former right hon. Member for Kingswood, are farsighted enough to recognise and brave enough to stand up against the vested interests that would consign our children and the natural world to a costly, disruptive and, frankly, terrifying future. He was right to say that history will judge harshly those who continue down the reckless fossil fuel path that this Bill represents.

This Bill is founded upon a lie—in fact, several lies. The Government say it will safeguard our domestic energy supplies and boost investment; it will not. They say it will enhance our energy security and reduce our dependence on imports from overseas; it will not. The truth is that it is a political distraction that will reduce investment in and delay our transition to the clean energy that is the only sustainable and secure future both for our country and for the global community. This Bill is not a credible plan to fix Britain’s broken energy system; it is a sad attempt to sew division and polarise our politics. It shows that the Government have given up governing and are out of step with the British people’s priorities. When 6 million people live in fuel poverty and when 4,700 people died last winter as a result of living in cold, damp homes, this Bill falls well below what our constituents deserve.

As the world’s hottest year on record was concluding, nearly 200 countries agreed at COP28 to transition away from fossil fuels. The contrast between the promise made in Dubai and what the Government seek to do today could not be more profound, nor more depressing. By inviting Parliament to enable annual licensing rounds for offshore oil and gas extraction, the Government are failing to understand that to transition away from fossil fuels, we have to stop producing them. The Government argue, “But it is still a declining field.” “This simply slows the rate of decline,” they say. The problem is that it also slows the rate of investment in a just transition that will unleash the power of wind, solar, tidal and energy efficiency.

The North sea is a declining basin. Its reserves are predominantly oil, not gas. Between now and 2050, new licences are expected to provide just 103 days of gas, which is four days of gas on average each year. The Government know that once oil and gas is licensed, it belongs to the companies that hold the licence. As the Government recently admitted to my hon. Friend the Member for Brighton, Kemptown (Lloyd Russell-Moyle), 80% of UK oil reserves are sent abroad by these companies and sold on the international market to the highest bidder. No wonder the former executive director of BP said last year that the Government’s decision to expand North sea drilling is

“not going to make any difference”

to Britain’s energy security.

If the Government’s ambition is to minimise gas imports, there is a very simple solution—insulate homes. The best way to cut imports is to reduce domestic fossil fuel consumption by building renewables and insulating homes. This would have the additional benefit of reducing people’s energy bills and tackling fuel poverty. By channelling investment into oil and gas, the Government are heading precisely in the wrong direction. I do not deny that there is a role for existing oil and gas, but it is in the journey to a clean energy economy. What there is not a role for is the production of new oil and gas. We already know that to stand a 50% chance of keeping below the 1.5° threshold, 90% of the world’s coal reserves and 60% of oil and gas reserves would have to stay in the ground.

[David Duguid]

Is the hon. Member aware of this? He mentioned the pathway to the 1.5° target, and the IEA’s description of what is required is a 3% to 4% reduction in oil and gas production year on year between now and 2050. Does he agree with the assessment of the NSTA itself, which expects that, even with the new oil and gas licences, North sea oil and gas is predicted to decline by 7%, or twice that amount?

[Barry Gardiner]

I am well aware of that—of course I am—but the hon. Member will have heard the discussion that took place earlier about global leadership. He will know that other countries around the world are not declining at the required rate, and leadership is about taking a lead.

The logic of drilling for more when the world has already more than it can safely burn is that of the myopic salesman, not the visionary politician, or to use the Prime Minister’s words, it is the logic of the zealot. The Government’s actions are already making the UK a less attractive place for green investment. Three quarters of all North sea oil and gas operators currently invest nothing at all in UK renewables. The largest operator, Harbour Energy, has ruled out such clean investment altogether, yet last year the five oil super-majors—BP, Shell, Chevron, ExxonMobil and TotalEnergies—rewarded their investors with record payouts of more than £79 billion, so we know the money is there to do it.