Offshore Petroleum Licensing Bill

Lloyd Russell-Moyle Excerpts

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

[Peter Aldous]

My hon. Friend is quite right: the North sea transition deal is the foundation stone on which we should be building, involving industry, involving the NSTA and giving industry the confidence to make the significant investment that we need.

The North sea transition deal includes the target to cut greenhouse gases and emissions by 10% by 2025 and by 25% by 2027. The NSTA wants to halve emissions by 2030. It is also committed to all new developments having no routine flaring and venting, with zero routine flaring across all North sea platforms, whether new or existing, by 2030 at the latest. Good progress is being made. Although figures are not yet available for 2023, emissions were reduced by 23% between 2018 and 2022, while flaring has been reduced by 50% over the same period. In addition to tracking, monitoring and reporting performance, the NSTA closely scrutinises operators’ applications for flaring consents, pushes back against requests to increase flaring, and has ordered operators to restrict production to stay within agreed limits. It has, where necessary, issued fines for breaches.

On marine spatial planning, the NSTA follows a precautionary approach and is acutely aware of the need for co-ordination and collaboration in what are increasingly crowded and sometimes very sensitive and precious waters. It is thus working closely with such organisations as the Crown Estate and the Marine Management Organisation in delivering the marine spatial prioritisation programme of the Department for Environment, Food and Rural Affairs.

In conclusion, the Bill and the amendments raise very important matters, but to tackle them properly, we need to adopt a long-term approach that transcends the four-to-five-year political cycle and that fully involves business.

[Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)]

I rise to support amendments 17 and 19, and to speak to my amendments 22 and 24 on energy efficiency tests and amendments 23 and 25 on the energy charter treaty.

Let me start with amendment 25. At the moment, the energy charter treaty, of which we are a member, is a failed international treaty. It binds us to any contract that we sign for oil, gas or any energy. Once it is signed, we cannot get out of it without paying the hope value of that contract. What I mean by the hope value is that a member does not pay the actual material value if it wants to stop that contract now; it has to pay all the potential value of that contract if the oilfield, for example, were fully exploited.

The treaty has cost other European countries billions and billions of pounds when they have tried to implement climate mitigation policies. It is dangerous, because the decisions are made not by British courts or by international courts with a British judge, but by secretive tribunals where the corporations get to appoint the people who make the deliberations. It is so outrageous that European Union members have agreed to withdraw en masse—they are currently negotiating on how to do so in a co-ordinated way—and to do side letters with each other to ensure they are not bound by the 25-year clause under which any extant licences that have been signed must continue to be honoured, even after withdrawal.

[The Minister for Energy Security and Net Zero (Graham Stuart)]

What has that got to do with this?

[Lloyd Russell-Moyle]

Because if we sign more licences while we are still part of the energy charter treaty, the Minister is binding the hands of future generations. If we withdrew from the energy charter treaty, as our allies and partners are trying to do, and then decided to award new licences, future Governments and generations could, without penalty, withdraw or reduce those licences. That very much relates to the Bill, because I am saying: “If you want to do this for short-term gain”—I do not believe the Government’s premise to start with—“at least allow future generations and Governments to come and fix your mess; do not bind their hands under international treaties.” I think that that is relevant to the awarding of new licences.

The fact that so many countries are fleeing the energy charter treaty means that this is the moment to negotiate with our partners to work out a new way forward. The British Government themselves accept that the energy charter treaty has failed. They have tried to make significant amendments to it to allow flexibility on climate change goals. It has not been possible to amend it, which is why European partners are trying to withdraw. This test would do two things. Not only would it avoid binding future generations, but it would put a rocket up the derrière of our Ministers and Departments to ensure that they fulfil the pledge of reform or withdrawal, which is a pledge that we have already made.

Let me address amendments 22 and 24 on the energy efficiency test for home heating. In reality, the biggest proportion of domestic energy is spent on home heating. Huge domestic bills will not be solved one iota by the Bill, as the Minister has admitted, because the product will be sold on the international market and the marginal price at which we buy it back will still be inflated. Our electricity market, which is linked to that marginal price, will continue to be inflated. The best and most efficient way to reduce energy bills and the demand and need for gas—the way that we all know needs to happen—is to ensure that our homes meet decent energy efficiency standards.

The amendments set out that the Government need to redouble their efforts to ensure energy efficiency before we commit to and invest in new licences for offshore drilling, and that we need a median rating of band B in energy performance. At the moment, C is seen as standard and D is common in private rentals. Privately let homes are the worst in the sector, and greater help is needed. We cannot continue to rely on Government programmes that do not touch the sides. We need a proper approach in which we go street by street with councils and local government, fully funded by central Government, with clawbacks in future years.

However, we cannot expect our citizens to pay a penny out of their pockets up front. Homeowners are already overstretched, with huge additional bills, in a mortgage market that has been destroyed by the Government. They cannot afford an extra cent, an extra penny, for home improvements. That all needs to be covered by the Government. My amendments would incentivise the Government to do that and to ensure that we have made every effort to reduce gas demand before we go ahead with the foolish endeavour of drilling more oil and gas, which will not reduce prices, will not stop fuel poverty in this country and will not deal with any of our long-lasting problems. It would be a sticking plaster that does not even stick.

I worked with the Opposition Front Benchers on amendment 17, which sets out the climate change test, so I am delighted that they have tabled it. A similar amendment has been tabled by my constituency neighbour, the hon. Member for Brighton, Pavilion (Caroline Lucas). It is important to say that we cannot meet our climate targets if we do not honour and respect the IPCC’s work and reports. We are on a hiding to nothing if we think that we can keep drilling and extracting more while meeting our energy targets.