Offshore Petroleum Licensing Bill

Neale Hanvey Excerpts

Committee of the whole House
Tuesday 20th February 2024 Commons Chamber

[Caroline Lucas]

The hon. Member makes a characteristically wise and useful point. That figure of 67% is startling and deeply worrying.

Thirdly, I support amendments 22 and 24, tabled by the hon. Member for Brighton, Kemptown (Lloyd Russell-Moyle)—I hope I can call him an hon. Friend—setting out a home energy efficiency test. As we all know by now, that is the most effective way of delivering real energy security for households that are struggling so much to pay their bills.

Fourthly, I support amendments 23 and 25, again tabled by the hon. Member for Brighton, Kemptown, requiring the UK to have made arrangements to withdraw from the energy charter treaty before new licences can be awarded. It is totally unacceptable that the Government are mandating annual licensing rounds without having withdrawn from a treaty that allows companies to sue for lost profits. The Government previously committed to reviewing the UK’s membership of the ECT, including consideration of withdrawal from the treaty if proposed modernisation reforms were not agreed at November’s energy charter conference. As I understand it, those proposals were not even discussed at the conference, so may I ask the Minister, when he sums up, to say what is holding up their withdrawing from that treaty, given that they acknowledge that

“there is now no clear route for modernisation to progress.”

Finally, last week it was reported that British Gas profits soared tenfold last year following the changes Ofgem had made to the price cap. In the same week Government figures showed that almost 9 million households—well over a third—spent more than 10% of their income after housing costs on domestic energy bills, and it was also revealed that not a single new proposal for public onshore wind was made in England last year despite the Government’s policy changes. Those three examples are all from just one single week; this week and next week there will be more, and together they demonstrate the utter failure of this Government to make decisions that would benefit people and planet and to unleash our abundant renewables, massively upscale energy efficiency installations and work to get us off expensive and volatile gas altogether. Instead, each week we see yet more evidence that this tired and divisive Government are prioritising increasingly desperate attempts to save their own skin over measures that would improve all our lives by ensuring that everyone has a warm and comfortable home to live in, communities have been supported to make the most of the green transition and our one precious and infinitely fragile planet is finally restored.

[Neale Hanvey (Kirkcaldy and Cowdenbeath) (Alba)]

I rise to speak to amendment 15 tabled on behalf of the Alba party.

The choice we face is not between shutting down North sea oil and gas and carrying on regardless but how to make its continued exploitation compatible with the environmental challenges and to acknowledge the role that oil can and will play in a sustainable future for the planet. I do not disagree with the four broad objectives of the UK Government proposals, and amendment 15 would strengthen those ambitions on energy independence, safeguarding domestic energy supplies, energy security, reducing higher emission imports, protecting domestic oil and gas industry jobs and working towards our net zero target in a pragmatic, proportionate and realistic way. But I am not convinced that the Bill—and certainly Government policy as it is currently being delivered—will meet those ambitions.

If the provisions are to be truly applied to all parts of the UK as the Government state, then Scotland, the source of oil and gas and whose waters contain the lion’s share of carbon storage sites, cannot be left out of the action. Depleting Scotland’s industrial capacity has increasingly been the direction of travel from this Government in recent years and this strategy will not strengthen the Union as they claim they wish to do. They should be aware that eroding our industry and jobs will further drive up support for independence. They should also be aware that 74% of the Scottish population support domestic oil and gas exploitation and 54% of the Scottish public support new licences being granted for that purpose. Our amendment is without question helpful to all those ambitions, and indeed others, and should be supported by all sides. Its proposals are pragmatic, realistic, responsible and, most importantly, fair.

The infrastructure in Scotland is already in place to meet these objectives. In the north-east we have St Fergus and the Acorn project, in my Kirkcaldy and Cowdenbeath constituency we have at Mossmoran one of Europe’s four cracker plants alongside an LNG plant operated by Exxon and Shell, and at Grangemouth we have one of the UK’s current oil refineries. I reference the points made by the hon. Member for Banff and Buchan (David Duguid) with regard to the environmental impact of exporting oil and gas abroad, which should dissuade the Government from even considering closing the refinery at Grangemouth. All those operations have interconnecting pipelines that are bi-directional, so the infrastructure is all there and it is completely feasible to transport carbon from Grangemouth and Mossmorran north to St Fergus for offshore storage.

From my discussions with the operators in my constituency, I know their carbon reduction teams have been willing and ready to look at the opportunities since I was elected. Exxon has recently made a multi-million-pound investment in Mossmorran, securing its future. That is particularly relevant to some earlier comments on amendment 12 with regard to flaring. That was a persistent problem at Mossmorran where we had an elevated flare that caused light, noise, vibration and pollution, not to mention the environmental impact of the flaring. That investment has reduced flaring significantly, and all plants should seriously consider that to reduce the impact on the communities and the environment around them. That investment from Exxon is well in excess of the modest amount that is required to keep Grangemouth going; it is a multimillion-pound investment and significantly more than what is required to keep the refinery operating at Grangemouth.

--- Later in debate ---

[David Duguid]

I am reluctant to intervene, because the hon. Gentleman is making some interesting points, many of which I agree with, but I have a burning question. He makes a point about the amount of storage we have around the UK, which is equivalent to more than we have produced out of the North sea, and we must take advantage of that. In his amendment, he refers to licensing conditions for specific fields been tied to having a net zero effect through carbon capture and storage. He has already explained that carbon capture and storage is typically taken from flue gas from the likes of Mossmorran in his constituency, or Peterhead power station in mine, so how does he make that link between offshore exploration licences and the resultant carbon capture, which will be way down the production line?

[Neale Hanvey]

The hon. Gentleman makes an important point. Many of the operators are serious about exploiting the resource not just in Scottish or UK waters but in other countries, and other countries can leverage those types of concessions when they grant licences. The UK Government can therefore make no serious argument that they cannot do that.

One of the refrains we heard during the Brexit debate was about the reclaiming of national sovereignty. It was one of the reasons for Brexit. One of the most limiting factors for job creation in renewables was that contracts for difference and European rules prevented conditionality from being applied to the granting of oil, renewables and other licences. If the UK now has that sovereignty, why not use it to ensure that the communities that are part of the supply line get some form of benefit out of the process? One of the most obvious benefits is to reduce at source, through a levy on any licence, the carbon footprint of the exploitation of that resource. That would seem a reasonable expectation, and certainly we feel it is essential in granting any future licences.

Amendment 15 would create a requirement for a specific field commitment of a net zero carbon footprint, as we have just discussed. That would be achieved mainly through connection to the carbon capture network. The prize is to be a world leader in research and development, with an economy built on renewable energy, of which Scotland has an absolute abundance. The UK Government’s dither and delay on Acorn has gone on for far too long. It is time for Scots Members on the Government Benches and their Government colleagues to back a secure future for Scotland’s North sea oil and gas sector and to back this amendment.