Offshore Petroleum Licensing Bill

Kenny MacAskill Excerpts

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

[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.

[Kenny MacAskill (East Lothian) (Alba)]

I rise to support amendment 15 in the name of my hon. Friend the Member for Kirkcaldy and Cowdenbeath (Neale Hanvey), and in particular subsection (b) to proposed new section (1ZA), which relates to Grangemouth. There is something perverse and absurd about using Scottish oil if Scotland’s refinery is to close.

We have to transition. It has to be a just transition, which cannot just be a glib phrase. It must also be paced, because we cannot get there overnight. In my constituency of East Lothian, we can see the turbines on the Lammermuirs, and we can see them growing in number daily, and the growth in the number of columns, as offshore wind capacity comes. But we require fossil fuels to deliver that renewable capacity. We require diesel for the trucks, and marine diesel for the ships, out setting the columns and turbines. We also require the plastics that go with much of that. So we need to continue using and exploiting oil to get to a renewable future. We have to do so at a pace that is appropriate, but also ensure that our country benefits. That is why subsection (b) is so important.

There is something perverse in the fact that Scotland is energy-rich, yet people face fuel poverty. In my constituency, we are not seeing the benefits in employment that should come from being in a county that is so energy-rich. The county faces the same problem as Scotland: it is energy-rich, yet people can only look wistfully at the turbines offshore, while they are unable to pay their bills. We must ensure that we get jobs and work here. The refinery at Grangemouth is pivotal to that.

I grew up not in East Lothian but in West Lothian. The Grangemouth refinery has been there for a century—since 1924—not for North sea oil but for its precursor: the shale industry, which was centred in West Lothian, from which came BP, Paraffin Young and others. BP was the centrepiece, along with Imperial Chemical Industries in its various iterations; it is now Petroineos. The refinery initially dealt with the shale industry, but, once North sea oil was discovered, we used it for that oil.

The Forties pipeline comes ashore from the North sea at Cruden Bay, and oil is piped down to Grangemouth because it was meant to be refined there. Grangemouth is also capable of refining oil from elsewhere: a pipeline runs from Finnart in Argyll through to Grangemouth, which allows oil imported from abroad to be refined in Scotland. Yet we face a situation where unless we support the amendment, Grangemouth refinery will likely close. Although a spat has been going on between the SNP, Labour and the Tories about the North sea and its oil, little has been said about what is happening at Grangemouth. The threat has been growing, and action from the Government both here and in Scotland has been in inverse proportion to that.

[Dave Doogan]

I am sure that the hon. Gentleman will have heard me reference Grangemouth and its future in my contribution. I support his ambition to maintain our hydrocarbon future at Grangemouth, as long as it can be sustained economically and environmentally. Does he agree that if we are to prevent the jeopardy that workers at Grangemouth face from ever re-emerging, we need to make sure that sustainable aviation fuel, biofuels and hydrogen are an integral part of Grangemouth’s output? We need to ensure that they overlap with hydrocarbons and leave them behind.

[Kenny MacAskill]

I have had discussions with the shop stewards and unions, whom the Scottish Government may wish to follow and not brush off with cursory meetings. We want a biofuel strategy for Grangemouth, but that is for some significant time in the future. Unless we act now, the refinery could close in 2025. Biofuels will not be refined in Grangemouth or anywhere else in 2025. The shop stewards and the unions wish us to get to biofuels, and Grangemouth must be declared a hub for that, but if it is to survive until then, we must ensure that it is a refinery, not simply a terminal, and that we maintain those skills.

It is absurd that we will continue to exploit Scotland’s oil, yet its refinery will close. There is something perverse about that. Scotland will be the only major oil-producing nation in the world—we are ranked No. 21 along with the UK in the top 25 oil producers—that does not have a refinery capacity. That will put us with large developing countries that produce less oil. We will join a club hosted by the likes of the Republic of Congo and Trinidad and Tobago. I am sure that they are lovely countries—I have never visited—but they are not developed nations with an industrial economy. The danger is that we will become a developing nation, in terms of our industrial base.