Licensed Oil and Gas Fields: Emissions

Lord Hunt of Kings Heath Excerpts

Tuesday 11th March 2025 Lords Chamber

[Baroness Jones of Moulsecoomb]

To ask His Majesty’s Government how they plan to assess the ‘scope 3 emissions’ of licensed oil and gas fields, and what impact they have on their emission reduction targets.

[The Minister of State, Department for Energy Security and Net Zero (Lord Hunt of Kings Heath) (Lab)]

My Lords, the Government have consulted on supplementary environmental guidance relating to emissions from burning extracted oil and gas. We are working towards publication of finalised guidance as soon as possible. Emissions produced by burning oil and gas are accounted for in our domestic targets for the sectors which use these fuels. Emissions are not accounted for in carbon budgets if this fuel is burned outside the United Kingdom.

[Baroness Jones of Moulsecoomb (GP)]

My Lords, I am sure the whole House will be with me in expressing concern about the collision in the North Sea and in sending hope to the rescue services, the sailors and, of course, all marine life.

I thank the Minister for his Answer. That was exactly what I was concerned about. Once the gas and oil are extracted, the total emissions should then be accounted for, on the assumption that it will all be burned, whether or not it is exported or moved somewhere else.

[Lord Hunt of Kings Heath (Lab)]

My Lords, first, I join the noble Baroness in expressing my sympathy to all concerned in the tragic events that have taken place in the North Sea. I also agree with her that we should pay tribute to the emergency services—and, of course, we are very concerned about the environmental impact.

I ought to explain to the House that scope 1 emissions are direct company emissions that occur from sources owned or controlled by the company. Scope 2 are indirect emissions resulting from generation of purchased energy, typically electricity, or purchased heat. Scope 3 are all indirect emissions not included in scope 2 that occur in the value chain of the reporting company and include downstream and upstream emissions—if noble Lords wished to know what those scopes were.

The point here is that we would be double-counting the emissions—or that is the risk—if we went down the route that the noble Baroness suggests. We had this consultation in the light of the Finch judgment, because we needed to revise the environmental impact assessment to take account of scope 3 emissions. We are carefully considering the consultation at the moment, and it would be premature for me to say anything more at this stage.

[Baroness Hayman (CB)]

My Lords, I declare my interest as chair of Peers for the Planet. Did the consultation involve—I do not think that it did—the issue of ending venting and flaring, which is not essential, from oil and gas fields in the North Sea? We know how damaging that is, and the Minister will recollect that during debates on the Energy Bill noble Lords across the House took a view that it was a dangerous practice that needed ending. What are the Government doing about ending it?

[Lord Hunt of Kings Heath (Lab)]

My Lords, I believe that the noble Baroness is right that venting and flaring are not covered in the EIA consultation, which is about scope 3, and I think they would come into scope 1. We are, of course, concerned about this and are considering the matter. My understanding is that the upstream oil and gas sector overall makes up to 3% of total net territorial greenhouse gas emissions. Of course, we are committed to meeting carbon budgets 4, 5 and 6, and we have just received advice from the Climate Change Committee in relation to carbon budget 7—all those things come into the mix as well—but I certainly take seriously the point that the noble Baroness raises.

[Earl Russell (LD)]

My Lords, given the Supreme Court decision and the new rules on oil and gas production being consulted on, what other measures and assessments of extra resources are the Government considering or undertaking to ensure that continued progress is made towards a just transition in the North Sea?

[Lord Hunt of Kings Heath (Lab)]

My Lords, the noble Earl is right. We issued a consultation paper last week in relation to the North Sea and the transition that takes place. There is a decline that has carried on for many years in North Sea production. On the other hand, the workers in the North Sea are very skilled, and there is no question that, as the number of workers in the oil and gas fields reduces, so there is a big demand to increase the workforce in offshore oil and gas. The consultation, our policy of a just transition and the jobs hubs that we have established are very much geared towards ensuring that we make use of very skilled people and find new employment for them.

[Lord Foulkes of Cumnock (Lab Co-op)]

My Lords, when the carbon capture and storage schemes were given the go-ahead recently, the one in Scotland was not among those that were given the go-ahead. When does the Minister expect further consideration of this?

[Lord Hunt of Kings Heath (Lab)]

My Lords, we are of course in discussions with His Majesty’s Treasury over the next spending review and it would be premature for me to comment on any of the detail. Clearly, carbon capture, usage and storage have a very important role to play in the future, and I have noted my noble friend’s elegant bid for investment in Scotland in that regard.

[Lord Offord of Garvel (Con)]

My Lords, the Government have repeatedly refused to clarify whether Jackdaw and Rosebank will be shut down under their policy of refusing to grant any new oil and gas licences. That is despite both licences being granted in 2022 and 2023 in recognition of their contribution to net zero and to our national energy security. Will the Minister please clarify that this is not another example of government policy being dictated by lawyers rather than by politicians? How does he expect the Chancellor to fulfil her growth agenda with the most expensive energy prices in the OECD?

[Lord Hunt of Kings Heath (Lab)]

My Lords, the best way to deal with energy prices is to move from being utterly reliant on international gas prices subject to the volatility that has arisen from the invasion of Ukraine by Putin. That is why we must move towards clean power as soon as we possibly can, to give ourselves energy security.

I cannot answer that question in relation to Rosebank and Jackdaw. The original consent decisions were subject to judicial review, which was paused pending the outcome of the Finch judgment. In the light of the Finch judgment, as I have said, we are consulting on new environmental impact assessments. When we have produced those, it will then be up to developers to make applications for consents according to the new guidelines we have produced. I cannot forecast the outcome of that process.

[Baroness Sheehan (LD)]

My Lords, who in government is responsible for collecting the data on spillages from the oil and gas industry operations in the UK? Scope 3 emissions take account primarily of greenhouse gas emissions, but they also take account of pollution. How do the Government deal with pollution, particularly in marine protected areas due to those spillages?

[Lord Hunt of Kings Heath (Lab)]

My Lords, in relation to the North Sea, the Offshore Petroleum Regulator for Environment and Decommissioning has an important role to play in the work that is undertaken on oil and gas. Of course, we have wider environmental law. Defra has a role to play. The Department for Transport—obviously, in relation to the tragic incident that has taken place—also has a role to play. On the point the noble Baroness raised, there has to be a cross-government approach to protecting biodiversity and the health of our seas. My department certainly plays its part in that.

[Lord Mackinlay of Richborough (Con)]

My Lords, I declare that I will become the director of the Global Warming Policy Foundation from next month. Have the Government assessed the amount of lost investment, lost jobs, lost tax revenue and lost balance of payments costs in the unwelcome approach that we take to new gas and oil in the UK? We are simply substituting supply with that of our foreign competitors, notably Norway, Qatar and the US. Into the future, that could be domestic.

[Lord Hunt of Kings Heath (Lab)]

My Lords, as an avid reader of the Daily Telegraph, I was of course well aware of the noble Lord’s appointment. I heartily congratulate him on it and welcome him to our debates on energy. However, he is wrong. The best way to proceed is the way we are doing, by ensuring that we grow home-produced, clean-power energy. This is the best way to grow the economy. As for investment in the North Sea, the very fact that we are producing a consultation on environmental impact assessment and last week produced our consultation in relation to our policy of issuing no more licences gives clarity to the industry in which investment can continue to take place.