Energy Bill

Lord Kerr of Kinlochard Excerpts

Tuesday 16th July 2013 Grand Committee

[Lord Dixon-Smith]

My Lords, I will not take very long. I do not have the remotest idea what the Minister is going to say. Whether or not she finds what I say encouraging remains to be seen.

I have a concern about the amendment. I find it very difficult to believe that there has not been an increasing awareness of this problem over the past 15 or 20 years—indeed, almost a crescendo, rising nowadays to virtually a scream—on just this subject. It has been there all the time. Now we are talking about putting in another body that would be publishing its advice in public and so on. In the end, though, only one thing will matter and that is decision. No one has suggested anything that will take the decision away from the relevant Ministers. They have to face that fact.

If this were happening in the commercial world, a good many people in this field would have lost their jobs long ago. Unfortunately, that does not happen to Ministers. Still, that is what is going to have to happen. In the end, the Ministers in the department will have to make their minds up.

I have almost got to the point where I do not care what they decide so long as they decide something. If they make a wrong decision you can do something about it, but the one thing you can never do anything about is no decision at all—it is impossible—and that is what we have been forced to live with for a very long time.

[Lord Kerr of Kinlochard]

As I was so impressed by the speech of the noble Lord, Lord Oxburgh, on this issue at Second Reading, I feel emboldened to speak to his amendment even though I did not hear how he introduced it and I apologise for having come late. As an ex-Permanent Secretary, I strongly disagree with the advice just offered. My watchword was from Hilaire Belloc, who wrote:

“Decisive action in the hour of need

Denotes the hero but does not succeed”.

It is often a very good idea to take no decision, particularly if you think your Minister is about to take a silly decision.

I support the noble Lord, Lord Oxburgh, in his definition of the problem, as in his Second Reading speech. The inability to take the long view and the discontinuities between energy policy, environmental policy and policy on public expenditure and investment in infrastructure are such that these have come together to make a very real problem. I think that some sort of advisory board might be part of the answer. However, I cannot support the wording of the amendment put forward here because it has limited it. It talks of advice in implementing government policy objectives for energy. You have to go wider than that and you have to allow your advisers to advise you on what policy should be. If they are limited to advising purely on the execution of the policy that the Ministers have already announced, you are still stuck in the short term.

As an ex-Permanent Secretary, I also find it very odd that the amendment should state that although the board shall consist of,

“expert members appointed for their experience in or knowledge of the energy industries”,

the “relevant Permanent Secretary” shall be “in attendance”. What is he supposed to do? If the Permanent Secretary disagrees with his Minister, one of his prime jobs is to disagree with his Minister. He should do that in private. He cannot speak in public against the then policy of the Government. So he is in attendance, spending days sitting there listening to these guys. He cannot speak because the minutes will be published—he could not speak against the views of his Minister anyway. This is neither flesh nor fowl. I fear there is a danger that it might turn into a red herring. If we need independent advice, it should be independent. We do not want the presence of the Permanent Secretary and we do not want the remit of the board limited to advice on the execution of policy. We want it to tell us what policy should be.

I would put a long-term element into this as well, by putting five or 10 years somewhere in there, so that it is clear that the board is looking over the horizon. This would ease its relationship with government, because it would be clear that the timescale was not limited by the period of the then present Parliament. Therefore, I support the intention of the noble Lord, Lord Oxburgh, as he has correctly identified a very important problem, but I cannot support the wording of his amendment.

--- Later in debate ---

[Lord Deben]

The Committee on Climate Change has made it clear that CCS is an essential part of the matters that we have to address if we are to meet our statutory responsibilities. I doubt if anyone on any side of the House would not agree with that, and I thought it generous of the noble Baroness, Lady Worthington, to say what she said about the past history of CCS.

That has been a pretty universal thing; we have not got it right. It is very difficult to get right, and I would not blame the Government for the difficulties. However, we have to solve those difficulties, and this amendment is a most useful way of making it that much more certain for the industry. If we want to use the resources that may be at our disposal—fracked gas, for example—we have to have CCS to meet our 2050 demands.

In a sense, that is less important to the British picture than to the world picture. The biggest contribution that we could make to the world picture is in the development of CCS because that would break through in a series of countries—the mechanism by which we can have the energy we need as well as protecting ourselves against dangerous climate change.

I hope my noble friend the Minister will understand that for us this is a central area, and if the Government are not able to agree to this perhaps they will come forward with some alternative mechanism to make sure that the ends put forward here will be met. I am sure that she will want to know that this issue has been widely tweeted, because it is seen as so important by so many different people across the field. It is very important that we give a proper response to the noble Baroness’s request.

[Lord Kerr of Kinlochard]

It is comforting to know that the tweets are flowing. The trouble is that CCS has not yet been made to work. I support this amendment. I supported the efforts of the previous Government and the present Government, in partnership with the private sector, to make CCS work. I supported the £1 billion that was on offer from both Governments. I supported the EU competition, which added yet more prizes that no one has managed to win. I was involved with two companies that tried very hard. No one anywhere in the world has yet made CCS work economically.

I understand the point made by the noble Lord, Lord Deben, but I think it is important not to make this a central part of the answer when we do not yet know if we can make it work. We have to find other ways of achieving the objectives that the noble Lord, Lord Deben, has concerns about. Let us hope that this is made to work, and if these amendments increase the chances that it does, then fine. I am certainly not against the amendments and I think it is the answer. In fact, it has been the answer that people have seen coming for a long time, at least 10 to 15 years. I fear that it is still 10 to 15 years away, but by all means let us go on trying.

[Lord Jenkin of Roding]

I say this with some hesitation and with great respect to the noble Lord who has just spoken. It is not right to say that there is no place in the world where CCS is working. A couple of years ago, some of us paid a visit to the BP research centre at Sunbury, where we were given a very interesting demonstration of their plant in Algeria. BP is extracting gas from very widespread gas deposits, stretching over perhaps 20 to 25 miles in various pockets. There is a substantial refining operation that includes CCS, and the resultant CO₂ that is extracted is then pumped straight back into the gas reservoirs from which the gas has been extracted. The gas supplied for the market is then piped to the coast and goes across the Mediterranean. The noble Lord, Lord Kerr, will perhaps be able to explain his gestures. It is a single plant, I accept that, but it has been made to work and it is economic for the company that operates that gas field in Algeria.

BP also made the point that there are CCS plants in the Far East. One does not know what the circumstances are, commercial or otherwise, but there is a lot of work going on internationally on this. I started by being sceptical about the Government’s competition and the £1 billion that they have put up. I have become persuaded that, although it has taken an incredibly long time to get underway, they now have two very firm takers that are going to develop CCS. I think therefore that the noble Lord’s guess of 15 years may be unduly pessimistic.

I absolutely agree with my noble friend Lord Deben that CCS must be an essential part of our armoury if we are going to get anywhere near our 2050 target. Anything that can encourage this must be right, and for that reason I, too, support this amendment.