Net-zero Emissions Target: Fossil Fuel Extraction Projects

Lord Callanan Excerpts

Wednesday 3rd November 2021 Lords Chamber

[Baroness Sheehan]

To ask Her Majesty’s Government what consideration they give to the net zero carbon emissions target set by the Climate Change Act 2008 (2050 Target Amendment) Order 2019 when determining whether to approve new fossil fuel extraction projects.

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

My Lords, as outlined in the Net Zero Strategy, we are driving down our reliance on fossil fuels and have committed to reducing UK greenhouse gas emissions by 78% by 2035. Oil and gas will play a smaller but important role in meeting future UK energy demand, as agreed by the Climate Change Committee. Fossil fuel projects are subject to robust scrutiny from our regulators before receiving consent, including on environmental grounds.

[Baroness Sheehan (LD)]

My Lords, the recent report by the International Energy Agency, which was in fact commissioned and welcomed by the COP 26 president, Alok Sharma, said that to stay within the 1.5 degree limit there can be no new fossil fuel projects. However, Friends of the Earth tells us that there are at least 40 UK fossil fuel projects in the pipeline, the combined annual emissions of which would be almost three times that of the entire UK currently. Given our ambition for COP 26 to keep 1.5 alive, does the Minister agree with the IEA’s director that:

“If governments are serious about the climate crisis, there can be no new investments in oil, gas and coal”?

[Lord Callanan (Con)]

The problem with the noble Baroness’s argument is that we currently get three-quarters of our energy from oil and gas. It is a declining percentage as we decarbonise, but we currently get three-quarters of our energy in that way. Would the Liberal Democrats prefer that energy to come from Saudi Arabia or Russia, or from British workers paying British taxes in the UK, paying contributions to the UK Exchequer? That is the choice that faces us.

[Baroness Blackstone (Ind Lab)]

My Lords, we have pledged to reduce methane by 30% by 2030, along with 103 other countries. Have the Government carried out an assessment of whether that is possible while they simultaneously allow new fossil fuel extraction projects to go ahead, and, if they have not, will the Minister commit to doing that as a due diligence exercise?

[Lord Callanan (Con)]

Of course we keep all these matters under review, and it is important that we meet our target. We are on a projection for net zero in 2050; we have a legal obligation to do that. Oil and gas projects will play a small and declining role as the years proceed, but in the short term we will need new projects.

[Lord Fox (LD)]

In reply to my noble friend, the Minister set up a false dichotomy. I will answer his question: we do not want the oil to come from Surrey. However, Surrey County Council has granted permission to drill oil wells as part of the Horse Hill development. If these are developed, they will put 10 million tonnes of CO₂ into the atmosphere. So will the Minister use his influence with his Conservative colleagues who run the council and get them to step back from this development—and, if he fails, will he ask his colleague to call this development in?

[Lord Callanan (Con)]

It is strange; I thought the Liberal Democrats were in favour of local planning control—obviously not in these particular cases. As the noble Lord is aware, that application is subject to an application in the Court of Appeal at the moment, and therefore I cannot comment on it.

[Baroness Hayman (CB)]

My Lords, I declare my interests as set out in the register. The Prime Minister said in the Statement we will discuss later:

“This is the moment when we must turn words into action.”


Is it not also the moment when we need to adopt a consistent and transparent stance on all new fossil fuel projects? Would the Minister agree that the Government would be aided in this if they adopted the recommendation of the Climate Change Committee to have a net-zero test against all new policies and over all new departments?

[Lord Callanan (Con)]

The noble Baroness makes an important point. We are indeed following the advice of the Climate Change Committee, which has accepted the need for oil and gas as we proceed to net zero. I remind the noble Baroness that we have the fastest decarbonisation rate of any G7 country. So we are proceeding on the path to decarbonisation, but is unrealistic to expect that we can just turn off the oil and gas supplies tomorrow.

[Lord Grantchester (Lab)]

The Energy Charter Treaty is allowing major fossil fuel investors to challenge the right of Governments to take the action required to reach net zero. During COP 26 this week, does the Minister consider that the UK should be leading the urgency to decarbonise the Energy Charter Treaty and remove the investor protections it provides in relation to fossil fuels?

[Lord Callanan (Con)]

The UK is indeed engaged in the process to modernise the Energy Charter Treaty to ensure that it is aligned with our climate objective and advances UK and global energy transition. So, through our COP 26 presidency we are working closely with global leaders to meet the goals of the Paris Agreement, including supporting the accelerated phase-out of coal and the wider decarbonisation of the energy sector.

[Baroness Fox of Buckley (Non-Afl)]

My Lords, in view of the importance of allowing the UK steel industry to survive and even thrive, and the obvious and immediate need for steel to manufacture those wind turbines we hear so much about, can the Minister explain the delay in opening the Cumbria coal mine? Is it sensible to allow all new fossil fuel extraction projects to be demonised and indiscriminately written off to fulfil net zero, when other urgent priorities, such as the imminent energy crisis, mean that the Government should be more pragmatic and look at all energy options, including shale gas?

[Lord Callanan (Con)]

The noble Baroness makes some valid points. The steel industry is integral to building the infrastructure, such as offshore wind farms, that we need to tackle climate change. While there has been a decline in coal mining in the UK for some time, there is a global market for coking coal. This reduction in the mining of coal in the UK will have no impact on UK steel production. I would remind the noble Baroness that we published the UK’s first ever industrial decarbonisation strategy, which will help in this area.

[Baroness Boycott (CB)]

My Lords, yesterday the Prime Minister said that the threat was huge. It has been very humbling to listen to some of the testimonies from countries such as Bangladesh, the Maldives and the Seychelles. I want to reinforce the point made by the noble Baroness, Lady Sheehan. Why do we have 40 licences out there? Are they going to be reviewed, and will this topic be discussed in Parliament? Will the Minister comment on what the Prime Minister said at 1.09 pm today to the Member for Brighton Pavilion, who was asking about this general issue? He said:

“I will say nothing about the Cambo oil field.”


This does not fill us with confidence, especially coming on the back of his strong and wise words in Glasgow.

[Lord Callanan (Con)]

The Cambo oil field is, of course, the subject of a licensing application at the moment. This is not a new development. The original consents were issued in 2001 and 2004 by the previous Labour Government. We are waiting for the Offshore Petroleum Regulator to take a decision, and then the Oil and Gas Authority will take a further decision. But I return to my previous point. We still import large amounts of oil and gas. It makes no sense to not produce it domestically if we can and then import it from Russia or Saudi Arabia. We need to decline our usage over time, and we are doing that. But in the transition, we do need oil and gas.

[Baroness Bryan of Partick (Lab)]

My Lords, may I continue to explore the issue of the Cambo oil field? I hope that the Minister can help clear up any confusion. The Secretary of State for Scotland has said:

“100% we should open the Cambo oil field.”


The president of COP 26 has refused to be drawn on the issue. The Government have both denied and confirmed that the Business Secretary has the power to give the go-ahead or to stop it. Boris Johnson has told us that we are at one minute to midnight in combating climate change. Can the Minister confirm that proceeding with the Cambo field would be incompatible with the UK’s climate goals? If he cannot do that, can he explain how it will be compatible?

[Lord Callanan (Con)]

It is indeed compatible with our climate change goals. The proposed development of the Cambo oil field, located to the west of Shetland, is covered by licences originally awarded in 2001 and 2004 by the noble Baroness’s Government, and no decision has yet been made. Proposals for the development of oil and gas fields under existing licences—such as Cambo—are subject to extensive scrutiny by the regulators. That scrutiny includes a full environmental impact assessment and a public consultation. No final decision has yet been made.

[Baroness Jones of Moulsecoomb (GP)]

Our own dear Prime Minister, when asked about the coal mine in Cumbria, said that he was not in favour but that it was not his decision; it was for due process. Does our Prime Minister not understand how democracy and government work? He could amend the National Planning Policy Framework to ban new coal. Will the Minister take this idea to the Prime Minister so that we can stop at least one more fossil fuel extraction process?

[Lord Callanan (Con)]

I am of course delighted to hear that the Prime Minister is dear to the noble Baroness. But, as I think she is aware, no decision has yet been taken on the proposed Cumbrian coal mine. The public inquiry began on 7 September. The formal part of the inquiry has now concluded. The planning inspector will write up his report by the end of the year and submit it to the Secretary of State for Levelling Up, Housing and Communities. It is now part of a quasi-judicial process, so the noble Baroness will understand that I cannot commit the Government to any action.

[The Deputy Speaker (Lord Faulkner of Worcester) (Lab)]

My Lords, that concludes Oral Questions for today.