Offshore Petroleum Licensing Bill

John Redwood Excerpts

2nd reading
Monday 22nd January 2024 Commons Chamber

[Graham Stuart]

If Members oppose the Bill and allow no new licensing, the impact will be higher emissions, and they will not see the investment that we are seeing in new projects such as Rosebank. What is the carbon footprint of the product from Rosebank? It is expected to be much lower than the average across the North sea and what is expected globally. So, again, not only does closing off licensing mean that we will import more, but it will get in the way of investment into and transformation of our base.

[John Redwood (Wokingham) (Con)]

I want to see far less imported LNG. Can the Minister give us some good news on what we might be able to achieve in getting more gas out, and will he ensure that many blocks—not just one—are put up for a licence round to get rid of that LNG?

[Graham Stuart]

The estimate from the North Sea Transition Authority is that a billion of barrels of oil equivalent, including gas, would be lost if we did not have new licences. That is lost tax revenue for this country, on top of the 200,000 jobs and lower emissions—[Interruption.] So far, I have not mentioned the tens of billions of pounds of tax. [Interruption.] It is not surprising, given how comprehensively easy it is to destroy the Labour party’s arguments, that the right hon. Member for Doncaster North keeps up his constant chuntering. He cannot win the argument while he is on his feet, so he sits there and tries interrupting those who can. If we do not have new licensing, which is Labour’s policy, we will see emissions go up in the short term; 200,000 jobs undermined; tens of billions in tax not brought into the public Exchequer; and—for those who care about dealing with the climate emergency—we will lose the very engineering skills and talent that we need to retain in this country in order to make the transition.

Offshore Petroleum Licensing Bill

John Redwood Excerpts

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

[Sir Alok Sharma]

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

On Second Reading, I said that this Bill was something of a distraction and not necessary on the basis that the North Sea Transition Authority can already grant licences annually or, indeed, whenever it considers it necessary. That will not change with the Bill. I also noted at the time that the two statutory tests in the Bill have been designed in such a way that the computer always says yes to new oil and gas licences, but I also said that I would work with other like-minded colleagues to improve the Bill and bring in further tests that need to be met before any new oil and gas production licences are granted. That is what I and other Members have sought to do.

Amendment 12 seeks to do two things. First, it would stop the invitation of new production application licences until the Secretary of State has introduced a ban on the flaring and venting of methane by new offshore installations. Secondly, it would require the Secretary of State to prevent licensing rounds from 2030 if a wider ban on flaring and venting is not in place. Along with other Members who have signed up to the amendment, I argue that this is an entirely reasonable ask that the Government and all Members should be able to get behind, given that all it modestly seeks to do is put into statute existing guidance on flaring and venting that was issued by the North Sea Transition Authority.

Let me set out the precise wording of the principles that the NSTA expects industry to follow in relation to flaring and venting across all UK continental shelf areas. First,

“flaring and venting and associated emissions should be at the lowest possible levels in the circumstances”.

Secondly, there should be

“zero routine flaring and venting for all by 2030”.

Thirdly,

“all new developments should be planned and developed on the basis of zero routine flaring and venting.”

That is a set of NSTA principles with which amendment 12 in entirely consistent.

[John Redwood (Wokingham) (Con)]

Can my right hon. Friend explain why it would be better to import liquefied natural gas, with four times the amount of CO₂ produced, rather than have our own gas? His regulations would not apply to the foreign-produced gas we import.

[Sir Alok Sharma]

My right hon. Friend makes an important point: LNG has a higher carbon-intensity footprint. But the majority of the gas that we import comes by pipeline from Norway, and the production intensity of Norwegian gas is around half that of the UK’s.

[John Redwood]

Will my right hon. Friend give way?

[Sir Alok Sharma]

If I may, I will continue. In their response last year to the Environmental Audit Committee’s report on accelerating the transition from fossil fuels and securing energy supplies, the Government doubled down on the NSTA position. Responding to the EAC recommendation, which called for the banning of flaring from UK installations, the Government noted that they had already signed up to

“make every effort to ensure that routine flaring from existing oil fields ends as soon as possible, and no later than 2030.”

The Government response went on to highlight the NSTA guidance that new developments are approved on the basis of zero routine flaring and venting.

My right hon. Friend the Member for Wokingham (John Redwood) raised the issue of imported gas. I will just point out to him that, unfortunately, flaring is still a common practice in the UK. By contrast, Norway banned routine flaring in 1971, and the carbon intensity of Norwegian gas production is around half that of UK domestic production.

[John Redwood]

The marginal gas we would import would come from Qatar or the United States of America. There is not an infinite supply of Norwegian gas, so my right hon. Friend is missing the main point.

[Sir Alok Sharma]

With respect, I do not think I am missing the main point. The point that the Government are pursuing is to ensure that we have less use of fossil fuels overall and that we expand our renewable capacity, including nuclear, which I know my right hon. Friend supports. That is where we should be going with this strategy. The ban on flaring in Norway is one of the key reasons that Norway has become a leader in the cleaner production of oil and gas, which this Government have clearly indicated that they also want for UK production.

I am looking forward to hearing the Minister’s response to amendment 12. I hope he will say that, given that it is consistent with Government policy and guidance, the Government will introduce a similar amendment in the other place. If they choose not to do that, I am pretty sure that a similar amendment will be tabled in the other place anyway, and that it is likely to be supported. I would just humbly observe that if the Government whip against this or any similar amendment, either in this House or in the other place, they will put colleagues in the absurd position of effectively having to vote against existing Government policy. I am really looking forward to listening to what the Minister has to say.

--- Later in debate ---

[Dr Whitehead]

That was the mild version.

As the right hon. Member for Reading West (Sir Alok Sharma) has informed us, the Bill legislates for something that happens anyway. It will make no difference to bills, according to the Secretary of State. It will make no difference to our energy security, according to the former chair of BP. It will undermine the independence of the North Sea Transition Authority, according to the NSTA’s own board, and it and will reinforce the perception around the world that the UK is rowing back from climate action, according to the former COP President, the right hon. Member for Reading West. We regret that this insubstantial and damaging Bill has proceeded this far, and we will vote against it on Third Reading.

We do not need this one-clause Bill. We need instead a strategy for managing the North sea that supports our energy security, meets our climate commitments and secures the economic and jobs benefits of the transition to a low-carbon economy. We would have liked to debate a new clause setting out a new principal objective for the North Sea Transition Authority that would have put such a strategy into effect. However, because the Bill is so short and tightly drawn around the narrow issue of mandatory licensing rounds, amendments to put a more sensible strategy into place are regrettably not in order. We must therefore take the Bill on its own terms, even if that means treating it with significantly more respect than the drafters have treated this House with in presenting such a trivial and nakedly political proposal.

We have in the Bill at present two tests that should be passed if the Oil and Gas Authority is to proceed with mandatory licence issuance, and we know that the two tests cannot be failed. It is a fact that if properly drafted—we might come to that in a moment—liquefied natural gas will always be more greenhouse gas-intensive in production than UK natural gas and we will always be in a position where gas and oil produced in the UK and in a declining North sea field will not meet our total demand for gas and oil.

I learned in my first year at university—as I think the Minister did, because he did a similar degree to me—that a proposition that cannot be falsified cannot stand as a valid proposition. Here we have two completely non-valid propositions in the Bill. They are bogus and cynically contrived to give the appearance that something has to be achieved before mandatory licencing takes place. At the very least we need a test or tests that can be failed and that produce a proper level of judgment into the advisability of proceeding with such mandatory licences. The best test surely has to be whether such action is compatible with our climate change goals. The Government had previously introduced climate change compatibility tests into production generally. It is strange that these appear nowhere in the Bill.

[John Redwood]

The shadow Minister has said that getting more of our own gas out of the North sea would help our security of supply and reduce CO₂ because it would displace imported LNG, so why does he not support that proposition?

[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.

--- Later in debate ---

[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.

[John Redwood]

Does my hon. Friend accept that in several cases potentially useful oil and gas deposits in the North sea are adjacent to existing pipes and existing development production platforms, so one great advantage would be that the infrastructure is already in place and it has spare capacity because of the decline of traditional fields? That would be far less intrusive, would it not?

[Selaine Saxby]

My right hon. Friend makes a valid point. However, for me, this is about opening up that conversation and making sure that these things are considered in the round. If we are going to put an extra pipe in, we should consider what we are offsetting somewhere else.

Polling found that 80% of the UK public believe our ocean protection laws must be strengthened, and I know how important our waters are to the residents of North Devon and the wider UK. We must ensure that we do all we can on this, while understanding the vital role that oil and gas plays and will play in our energy security. Spatial prioritisation is important to ensure that continuing to drive forward our new green energies is not done at the expense of our traditional industries, such as fishing, and gives due consideration to the marine environment, which we on land owe so much to and are still finding out more about. Balance and optimisation are the objective of this amendment, and I hope the Minister will consider this opportunity, so that we really can have it all and decarbonise our energy, improve our biodiversity, support our fishermen and improve our energy security.