Offshore Petroleum Licensing Bill

Debate between David Duguid and Jerome Mayhew

2nd reading
Monday 22nd January 2024 Commons Chamber

[Jerome Mayhew]

I am grateful to the hon. Lady for that intervention. The Climate Change Committee gives us the science, and the political decisions are taken in this House. We are not talking about an increase in exploration; we are talking about a managed reduction of 7% per annum.

Moving on, the question is not whether we have oil or gas, yes or no. We need oil and gas, certainly for the transition period between 2024 and 2050, and even beyond—according to the Climate Change Committee, around 25% of our energy will still come from oil and gas. The question is: where should that oil and gas come from? If we need to supply this economy with oil and gas, it is my belief that we should use UK oil and gas, and there are reasons for that. The first is that the industry employs 200,000 people. I would prefer that employment to remain in the UK economy, rather than export it to Russia, Qatar, Saudi Arabia or other oil and gas producing countries. That is a reasonable position, given that our consumption is required for the future.

The second reason is geopolitical. We need an alternative to Russian gas, and not just in this country. I accept the point made earlier by Opposition Members: that oil and gas is a global market, and that 80% of North sea oil is exported to Europe. But emissions are global and so are the geopolitics. It is right, and in our strategic interest, that Europe should have a viable alternative to Russia for the supply of hydrocarbons. We have seen in the last two years the awful consequences of an overreliance on the Russian supply of hydrocarbons, and more so in Europe—Germany, in particular—than in the United Kingdom. We have become a net exporter of gas to mainland Europe—a little from the North sea, but a lot from Milford Haven. Qatari liquid natural gas is imported into our country and transported by the connectors to mainland Europe. The Europeans are sucking up very polluting liquid natural gas because they do not have a viable, cleaner alternative, which North sea gas would provide.

[David Duguid]

It has been pointed out to me that gas in Qatar is produced at a broadly equivalent carbon footprint to ours, but the compression into liquid, the transportation and the de-liquefaction when it gets into this country quadruple that carbon footprint.

[Jerome Mayhew]

My hon. Friend is right. Opposition Members have no answer to that. In Germany in particular, misguided green policies have led to the extraordinary decision to decommission the low-carbon nuclear industry and replace it with coal-fired power stations. I could hardly make it up. Germany is massively increasing its reliance on imported liquid natural gas, which is much more polluting than the cleaner, more local and geopolitically more stable alternative of North sea gas and oil.

The third reason why I would prefer that we used UK oil and gas is that it pays UK tax. I am not ashamed to say that I welcome that. If we are to extract hydrocarbons that will be taxed, I prefer for that tax to be paid in the United Kingdom, rather than in some other country. Just between 2023 and 2028 it is estimated that those tax receipts will amount to £30 billion. We know how much trouble Opposition Members have trying to explain where they will get their £28 billion of borrowing each year, and how that will raise interest rates, debt and inflation. That would be more than doubled if they got their way and their policies destroyed the North sea oil and gas sector.