Revised Draft Overarching National Policy Statement for Energy (EN-1)

Lord Oxburgh Excerpts

Tuesday 11th January 2011 Grand Committee

[Lord Oxburgh]

My Lords, I had not expected to speak today, but I should like to make a few comments in the gap on carbon capture and storage, in so far as it has been mentioned in a number of noble Lords’ speeches. I declare an interest as honorary president of the Carbon Capture and Storage Association. In a funny way, I wish we did not have to carry out carbon capture and storage, but as long as we are committed to providing energy to people in this country—an obligation similar to those of Governments and industries around the world—we have no choice, provided we believe that controlling CO₂ concentrations in the atmosphere is one of our priorities. I associate myself with the remarks of the noble Lord, Lord Giddens, and others on the urgency of doing something about this.

I will comment a little on the risk associated with CCS, to which the noble Lords, Lord Giddens and Lord Teverson, referred. I do not think that there is any serious technical risk associated with CCS technology; it has for more than a year been demonstrated and operated by the Chinese on a 100-megawatt plant north of Beijing, and they are implementing it at a 300-megawatt plant further south.

What is uncertain about carbon capture and storage is the longer-term cost. In terms of what we do in this country and in Europe in general, the problem, to which the noble Lord, Lord Teverson, was the first to refer, and others mentioned, is the infrastructure associated with CCS. The Minister will be familiar with the report of the expert group commissioned to look into this issue by his party shortly before the election—a group in which I have the honour to participate. One thing is absolutely clear: if we are serious about carbon capture and storage, the lead time needed for the infrastructure is enormous. Perhaps this is something that tends to be forgotten, or not fully recognised, by Governments and certainly by civil servants. We are talking here about heavy engineering. In terms of the capture technology, there is a lot of learning by doing. This does not happen simply because it appears in the report of the Committee on Climate Change or a government department. It is hard work. Frankly, the reason that we are not further ahead today is that progress at a governmental level, and in a public demonstration of government commitment, has been glacial. We must move ahead rapidly.

Although I commonly agree with the comments of the noble Lord, Lord Teverson, I hope the Minister does not follow his advice and refer to CO₂ as a pollutant. Let us bear in mind that life on earth would not be possible without the CO₂ in the atmosphere. We have to be a little careful about what we call a pollutant.

To pick up a final point made by several speakers, shale gas is a game-changer. It is still a somewhat uncertain game-changer. It has certainly ensured the complete decoupling of gas price from oil price. This began about four years ago with the full-scale development of LNG. We are moving into a period of relatively abundant gas. I will not say that it is cheap, but it is significantly cheaper than oil and unlikely to increase in price at the same rate as oil. I find it difficult to see why anyone would want to build a further coal-fired plant in this country, given the likely availability of gas in the short term. Gas will certainly need to have CCS applied to it. Shale gas is giving us a little time to catch our breath. It is not an answer but it will help us over the next few years.