Carbon Capture, Usage and Storage

Harriet Cross Excerpts

Monday 7th October 2024 Commons Chamber

[Ed Miliband]

My hon Friend is absolutely right. The last Government cancelled the project twice, which tells us all we need to know about them. I had forgotten about the second cancellation; I actually had to check—I could not believe that they had cancelled it not just once but twice. That is going some. After three months, here is the reality: they talked, we acted.

[Harriet Cross (Gordon and Buchan) (Con)]

The Secretary of State will know that investment in these CCUS projects would not be possible without the private investment generated from our oil and gas companies. In the light of that, of him again confirming his policy on no new licences and of other policies that are set to close down the North sea, how will he ensure that that private investment continues so that more CCUS projects come forward in the future?

[Ed Miliband]

I listened to what oil and gas companies such as BP and Equinor said: they warmly welcomed this announcement. Frankly, there was a sigh of relief; after years of promises and delay, we finally had a Government getting this done.

Great British Energy Bill

Harriet Cross Excerpts

2nd reading
Thursday 5th September 2024 Commons Chamber

[Harriet Cross (Gordon and Buchan) (Con)]

It is hard to overstate the importance of the energy sector to my constituents and, indeed, to the whole of north-east Scotland, so I am grateful to be called today. First, I must address the reports that Great British Energy might be headquartered in Aberdeen. The Government are still yet to confirm that, saying that it is speculation, but the manner in which they have managed this announcement speaks volumes. The ambiguity and the joking about when an announcement might be made, and then just saying that the headquarters will be in Scotland, do absolutely nothing to help the speculation and delayed decisions or give the industry any confidence. These layers of uncertainty are driving away investment and creating a less secure job environment in north-east Scotland. Aberdeen has always been the energy capital of Europe. It has been that way for half a century, so it is the most logical choice for the headquarters.

I have significant reservations and concerns, which I will outline today. The North sea oil and gas industry is not just part of the economy in Aberdeenshire, but the bedrock on which our communities and my constituents in Gordon and Buchan have built their livelihoods for generations. It is not just about the direct jobs in the industry and the associated services in the hospitality sector, for example. An overall economic ecosystem has developed, and that is why it is critical that we manage the energy transition properly, so that the north-east of Scotland does not become the next region to suffer industrial decline as the mining areas did. I am sure that the Secretary of State, the Minister and the Labour party do not want that on their record.

The Government’s plan for Great British Energy, coupled with the energy profits levy, puts the industry at risk at this vital time. The proposed increases and the removal of the investment allowances could be a death knell for investment in our area. Let me be clear: this is not about protecting the profits of large companies just for profits’ sake; it is about protecting the jobs and skills and futures of our communities. Offshore Energies UK has warned that the tax increase could see investments in the UK cut, and that they might fall from £14.1 billion to £2.3 billion between now and 2029. That is not scaremongering; it is what the industry is facing.

We can take today’s figure of £14.1 billion of private investment and compare that with what the Government are suggesting: £8.3 billion of public investment into GB Energy just to create an investment vehicle. We already have an investment stream in the north-east of Scotland. It is not Government money that is needed, but a stable, fair, globally competitive market for our national and multinational companies. They will do the business. Public money to create GB Energy while simultaneously introducing these punitive taxation and other measures that are projected to drive away investment just does not make sense, because the same investment in capital, skills and personnel that we need for our energy security today are also vital for an effective and efficient transition to clean energy.

I have a number of questions for the Government about Great British Energy, and I will start with job security and creation. How will Great British Energy protect existing jobs in Aberdeenshire’s energy sector? We have already seen a significant loss of jobs due to the oil price downturn and market uncertainty. The Government boast that Great British Energy will create 650,000 new jobs, 69,000 of which are projected to be in Scotland, but we need specifics. Figures have been provided at a regional level across England, but we have only one figure for the whole of Scotland.

The distribution of jobs in Scotland is currently heavily weighted towards Aberdeen, Aberdeenshire and the north-east, so no matter how many jobs might or might not be generated by GB Energy in Scotland, my constituents want and need to know where those jobs will be. Can the Minister confirm when he sums up how many of the jobs will be in Aberdeenshire and the north-east, what types of roles they will be and when they will be created? Already, oil and gas workers are losing their jobs and moving abroad to maintain or progress their careers. They are the workers we need for the transition.

Secondly, we must consider the economic impact on our local communities. For example, how will the wealth that flows into our local infrastructure and economy and community projects be replicated in the future under Great British Energy? Looking at the national picture, the Oil and Gas Authority estimates that the total revenue from oil and gas production in the five years to 2024 was £5.3 billion. Are the Secretary of State and the Chancellor willing to sacrifice that in the pursuit of an accelerated transition? That would be a significant dent in the £8.3 billion of public investment.

We need a balanced approach. We are not against the energy transition, and we recognise that the transition will take time, but rushing it could have severe consequences for communities such as mine in Gordon and Buchan. We are after net zero, not absolute zero. They are different things, and we do not need to banish oil and gas from our energy mix immediately in order prematurely to be on the road to net zero.

The people of Gordon and Buchan and indeed all of north-east Scotland are not against change. We have been at the forefront of energy innovation for decades, but we need the transition to work for our communities and to build their strength, rather than dismantle them. We must protect jobs. I call on the Government to provide clear answers, not just high-level projections, on how we expect Great British Energy to benefit, not harm, the existing industry in Gordon and Buchan. Our communities have so much to lose if we get this wrong, and they deserve our help with a comprehensive plan, not ideology.

Making Britain a Clean Energy Superpower

Harriet Cross Excerpts

Friday 26th July 2024 Commons Chamber

[Michael Shanks]

My hon. Friend has raised two important points. To answer the first, GB Energy will invest in a range of projects and will have a key stake in them, delivering a return for the British taxpayer. There will be a range of projects, in some of which we will certainly have the controlling stake, and some of which we might help to get over the line, but in every single project there will be a return for the British taxpayer.

My hon. Friend’s second point is vital. I have been in this role for only a couple of weeks, but every meeting I have comes back to this question of connection, storage, and how we make sure that renewables can be delivered throughout periods in which there is electricity demand. Storage will be important, and GB Energy will have a part to play in that, as well as in answering wider questions about grid and network.

Let me return to the point about ownership by foreign countries. British waters are home to one of the largest offshore floating wind farms in the world, Kincardine, off the coast of Aberdeen. It is a good example of the problem with the current model. The foundations were made in Spain, the turbines were installed in the Netherlands, and only then was it towed into British waters. Our view is that British taxpayers should own some of that infrastructure, which is why yesterday the Prime Minister and the Energy Secretary announced an exciting new partnership between GB Energy and the Crown Estate to unleash billions of pounds of investment in clean power.

This partnership will enable two national institutions to work together for the benefit of the British people. As well as building supply chains, GB Energy will develop and own power projects in every part of the United Kingdom—in England, Wales, Scotland and Northern Ireland. It will be capitalised with £8.3 billion over the lifetime of this Parliament, money that can be invested in wind, solar, nuclear, tidal and other technologies, and it will deliver profits to the British people, playing a vital role in delivering the new jobs that we need.

[Harriet Cross (Gordon and Buchan) (Con)]

The Government’s plans to ban new oil and gas licences have been criticised by business leaders, unions and community groups throughout Scotland. As a fellow Scottish Member, will the Minister say whether or not he supports his Government’s plans, which it has been said will put up to 90,000 jobs across Scotland at risk?

[Michael Shanks]

We made it very clear during the election that the future of the North sea is incredibly important, but that future is a transition away from the oil and gas industries that we see at present. The Conservatives also need to recognise that the North sea is a declining basin. We have lost thousands of jobs there over the past decade, and that will continue in the future unless we accelerate our transition in the North sea to the clean energy jobs of the future. It is not good enough to bury our heads in the sand and pretend that this problem does not exist. We need a plan to give people secure, long-term, sustainable jobs for the future, rather than thinking that we can just carry on with business as usual.

--- Later in debate ---

[Harriet Cross (Gordon and Buchan) (Con)]

Thank you, Madam Deputy Speaker, and I welcome you to your position. I congratulate the hon. Member for Central Ayrshire (Alan Gemmell) on his first contribution to this House; it already sounds as if he has made a huge contribution to the UK around the world, and I am sure his constituents are looking forward to him acting for them.

I will begin by echoing the words of my hon. Friends the Members for Mid Bedfordshire (Blake Stephenson) and for South Northamptonshire (Sarah Bool) about the impact on agricultural and rural land of the Government’s plan to cover them with cables, pylons and other energy infrastructure. The sheer concentration of this infrastructure on prime agricultural land in communities such as New Deer, Maud, Turriff and Leylodge in my constituency and the apparent lack of ability for communities to engage in meaningful discussion on this will in no way bring the public along on this crucial national endeavour.

However, I am going to focus on the key issue for my constituents and those across north-east Scotland, and that is the oil and gas sector: the jobs, expertise and investment that we will be putting at risk if the Government rush towards their green energy agenda. No matter how much the Minister may wish otherwise, we cannot and will not have a green energy revolution without the existing oil and gas sector, its skills and, crucially, its funding. The companies that make their money from oil and gas developments now are the key investors in our renewable energy sector and carbon capture projects—that is undeniable. We must make the UK an attractive place to invest in all energies in order to attract and keep multinational companies here, and to keep them investing here in the future. We have to draw only a very short line to realise that if we dismiss, alienate and penalise the traditional oil and gas parts of energy companies, the boards of those same companies will turn their backs on the UK for more sympathetic and attractive investment opportunities elsewhere. We would lose not just the current investment in oil and gas, but the potential for investment in renewable energy.

Does the Secretary of State for Energy Security and Net Zero or the Minister expect that we will have stopped using oil and gas by 2030? Of course not, so why are we banning new oil and gas licences and cutting off our own domestic energy supply? Why are the Government happy to see tens of thousands of home-grown jobs put at risk, and why are they happy to increase our reliance on imports of oil and gas produced with a higher carbon footprint from more volatile markets overseas? If there is a reason other than simply to fulfil their narrative of being a “green energy superpower” I am yet to find it.

The UK, thanks largely to Aberdeen and the north-east, has long been an energy superpower—an oil and gas superpower. That status, built over half a century, has led to the energy sector’s skills, expertise, companies and workforce being honed and housed in north-east Scotland—not just the subsurface and technical skills of the likes of geologists and engineers, but, crucially, the experts in supply chains. Those will be vital to the renewable energy projects of the future. Our workers in the oil and gas sector know how to deliver huge, multinational, high-budget projects—exactly the skills that will be needed to deliver the Government’s green energy revolution. Again, the Government risk losing those crucial skills by moving too fast and not planning for a jobs and skills transition alongside the energy transition.

Labour idly calls the investment allowance aspect of the windfall tax a “loophole” and plans to remove it and increase the tax rate to 78%; indeed, it boasts about doing so. Yet there are estimates that the combination of no new licences and changes to the windfall tax will cost £20 billion in tax revenues and risk up to 100,000 direct and indirect jobs. Last year, the leader of the GMB union said that Labour’s plans to end new oil and gas licences are “self-defeating”. I agree.

[Mr Holden]

Does my hon. Friend agree that while windfall taxes can be levied on oil and gas that is extracted in the UK, we will not get those revenues for decades if we do not have oil and gas exploration in the North sea? We will see windfall taxes going to foreign Governments across the world but none coming here. Does she agree that it makes no sense at all, for jobs in Scotland or for the UK Exchequer, not to have oil and gas exploration in the North sea?

[Harriet Cross]

I absolutely agree. It is so important for all those reasons—for jobs and future tax revenues—that we retain our domestic supply of oil and gas. Alongside the leader of the GMB calling the Government’s plans “self-defeating”, the former leader of Aberdeen council quit Labour last year, saying its plans were a “brutal attack” on the sector. Again, I agree.

Just as Rome was not built in a day, the experience and expertise of the oil and gas sector—the energy sector—did not develop in a day. However, the vital skills and investment that we will rely on to deliver the transition to cleaner, greener energy will be lost in no time at all if the Government do not listen, appreciate them and act to protect them. The warning signs are there, and we must not ignore them. Without the existing workforce, the energy transition will take longer, be more expensive, and be less efficient—truly an unwanted trilogy for any Government.

[Madam Deputy Speaker (Caroline Nokes)]

I call David Baines to make his maiden speech.