Offshore Gas Rigs

Lord Callanan Excerpts

Thursday 11th March 2021 Lords Chamber

[Lord Teverson]

To ask Her Majesty’s Government what plans they have to prohibit the flaring of gas on offshore gas rigs within the United Kingdom’s exclusive economic zone.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)]

My Lords, as set out in our recently published energy White Paper, the UK has committed to the World Bank’s “Zero Routine Flaring by 2030” initiative. We are working with regulators towards eliminating routine flaring as soon as possible in advance of this date. Furthermore, we are working with the sector to transform the UK continental shelf into a net-zero basin by 2050.

[Lord Teverson (LD)]

My Lords, I welcome the intent, but could we please have a timetable for this? The Netherlands, Denmark and Norway not only signed up to that initiative but actually practise it at the moment. At the moment, we are the dirty man of the North Sea; when will that end?

[Lord Callanan (Con)]

Of course, the circumstances and timescale of those other countries are, depending on their operations, different from ours. However, I assure the noble Lord that we will continue to work with the industry, through the North Sea transition deal, and regulators, drawing on their range of powers to drive down this practice as soon as possible.

[Lord Kirkhope of Harrogate (Con) [V]]

We have already been reminded today of the United Kingdom’s hosting of COP 26 later this year, so will my noble friend join me in congratulating and further encouraging the engineers and academics, part-funded by Innovate UK, who have designed a new geo-engine that can neutralise sour gas from oil rigs and produce clean electrical energy as a by-product. Is this not a better approach than immediate prohibition?

[Lord Callanan (Con)]

My noble friend makes some very good points, and we are open to processes that can drive down emissions from offshore operations. As I know my noble friend is aware, sour gas contains significant amounts of hydrogen sulphide and would need, of course, to meet the Gas Safety (Management) Regulations before it could be used to supply industrial and domestic consumers.

[Lord Browne of Ladyton (Lab) [V]]

My Lords, flaring produces 1% of total UK annual CO₂ emissions, and venting produces 1% of annual methane emissions. Worryingly, Oil & Gas UK reports that, in 2019, the number of oil and gas leaks in the North Sea rose to 130, including 48 significant and three major releases, one of which was 900% greater than the release that caused the Piper Alpha disaster. Why on earth do we allow flaring in such circumstances, when, for both climate change and safety reasons, a ban on flaring and venting must surely be a priority?

[Lord Callanan (Con)]

The Health and Safety Executive will continue to hold operators to account to investigate any gas leaks, given that this is, as the noble Lord says, a significant safety concern. The industry actively works to reduce any opportunity for a leak where possible, and there is an ongoing initiative between the industry and regulators to reduce the number of hydrocarbon releases in the offshore sector.

[Baroness Walmsley (LD) [V]]

My Lords, I declare that a family member works in the oil and gas industry. The Oil and Gas Authority’s policy on flaring is to ensure that the flare and vent volume requested for permission is at a level where it is “technically and economically justified”. Why is the word “environment” not included in this policy?

[Lord Callanan (Con)]

The environment is clearly very important in this matter; I agree with the noble Baroness about that. However, our revised Oil and Gas Authority strategy came into force last month and features a range of net-zero obligations for the oil and gas industry.

[Lord Randall of Uxbridge (Con) [V]]

My Lords, I declare my interest as a council member of the RSPB. Although I fear that this is probably not in my noble friend’s remit, have Her Majesty’s Government undertaken any research into the effect of flaring gas from offshore gas rigs on wildlife, particularly birds?

[Lord Callanan (Con)]

The noble Lord is right that that is not in my remit, but I am happy to tell him that my department has not undertaken any research in this area because, to date, there is no known evidence of significant impacts identified. Some species of birds migrating across the North Sea may become attracted to offshore light sources. To this extent, the 2015 OSPAR convention developed guidelines to reduce the impact of offshore installations on birds in the OSPAR maritime area.

[Lord Grantchester (Lab)]

Besides the philosophical objections for the Government, what are the difficulties for introducing a Norway-type zero-flare policy? Could the Government bring flaring into the emissions trading scheme and make it subject to carbon taxation?

[Lord Callanan (Con)]

There are significant practical and operational difficulties, which the noble Lord alludes to. However, I am happy to tell him that flaring intensity decreased by 22% in 2020 from 2019 levels, as production facilities cut the overall volume to 33 billion cubic feet.

[Lord German (LD)]

Despite what the noble Lord just said, the portion of flaring due to what I would loosely call economic reasons has been rising over the last three years—that portion is economic. Given that Norway has now found ways of reinjecting this waste back in, and that there are other solutions as well, what are the Government fearful of in trying to tackle this rising problem?

[Lord Callanan (Con)]

The data that I have just quoted shows that it actually fell last year. However, the noble Lord makes a good point; we should try to reuse these gases as much as possible. A number of companies are working on solutions, such as generating electricity on platforms et cetera. However, there are significant practical difficulties.

[Lord Moynihan (Con)]

My Lords, I declare my interests as set out in the register. Does my noble friend the Minister accept that, given the excellent work being undertaken on net zero by the OGA, it is certainly conceivable that the UK can meet the zero routine flaring goal by 2030? If so, given that environmental and sustainability technology is increasingly being deployed in the gas industry, gas should and must remain an important part of the energy mix as we progress through energy transition?

[Lord Callanan (Con)]

Absolutely—my noble friend makes some very good points. Oil and gas are expected to remain a vital part of the UK’s energy mix as we move towards net zero, and maximising the economic recovery of oil and gas need not be in conflict with the transition to net zero—a point that my noble friend understands well.

[Baroness McIntosh of Pickering (Con) [V]]

While I welcome that a target has been set, can my noble friend reassure us that the essential flaring and venting for operational and safety reasons will be allowed to continue? How can this be accommodated within a net-zero approach?

[Lord Callanan (Con)]

I have set out that, where it continues for operational reasons, we want to reduce it as much as possible, and we are committed to the World Bank initiative to eliminate it completely by 2030.

[Baroness Altmann (Con)]

My Lords, with UK oil rigs being the most polluting in Europe and North Sea oil producing 21 kilograms of CO₂ per barrel, compared with 8 kilograms for Norway, could my noble friend tell the House what further measures the Government might consider introducing to ensure that oil companies phase out this flaring much faster than planned—and well before 2030?

[Lord Callanan (Con)]

Transforming the UK continental shelf into a net zero basin will be achieved through a combination of energy efficiency, electrification from alternative, decarbonised energy, and the use of carbon-capture technology. There are a range of policies that we can bring into play to try and bring these practices to an end.

[Baroness Gardner of Parkes (Con) [V]]

My Lords, given the vast amounts of carbon dioxide emitted directly into the air due to gas flaring, can the Minister set out how, as part of the Government’s green industrial revolution, we can capture this carbon and put it to good use, while removing these harmful emissions from the atmosphere?

[Lord Callanan (Con)]

We do encourage companies to capture as much of it as possible and, as the noble Baroness said, put it to good use on the platforms or pipe it to shore and use it, where possible, in domestic gas transmissions. The Government’s 10-point plan for a green industrial revolution, announced in 2020, stated our ambition to capture 10 megatonnes of carbon dioxide a year by 2030—the equivalent of 4 million cars worth. Where possible, we can use it; if not, we can store it safely underground.

[The Lord Speaker (Lord Fowler)]

My Lords, all supplementary questions have been asked. We now move, therefore, to the fourth Oral Question.