Carbon Capture and Storage

Neil Parish Excerpts

Thursday 19th October 2017 Westminster Hall

[Mr Simon Clarke (Middlesbrough South and East Cleveland) (Con)]

I beg to move,

That this House has considered carbon capture and storage.

I thank the Backbench Business Committee, chaired by the hon. Member for Gateshead (Ian Mearns), for granting this debate, and the sponsors who helped to secure it, particularly my hon. Friend the Member for Waveney (Peter Aldous) and the hon. Member for Redcar (Anna Turley), whose support is deeply appreciated. I also thank the team at the Energy and Climate Intelligence Unit for their help and Sarah Tennison at the Teesside Collective for her excellent advice. I congratulate the Minister on the production of the clean growth strategy and I support its core message that there does not have to be a trade-off between green energy and economic growth.

As the Minister noted in her announcement to the House last week, since 1990 the United Kingdom has simultaneously grown its economy by almost 70% and reduced its emissions by more than 40%. I also welcome the commitment that the UK will continue to be a world leader in creating clean technologies, jobs and businesses.

Chiefly, I am delighted with the new resolution to demonstrate international leadership in carbon capture, usage and storage. The benefits of carbon capture and storage are multiple. CCS will be essential in ensuring that the UK meets its legally-binding target to reduce carbon emissions by a minimum of 80% on 1990 levels by 2050 in a cost-effective manner. That was the conclusion of the Energy and Climate Change Committee, which warned that without CCS the UK

“will not remain on the least cost path to our statutory decarbonisation”.

That has been echoed by other leading authorities. The Intergovernmental Panel on Climate Change estimates that without CCS, the cost of meeting global climate change targets could increase by 138%. Similarly, the Committee on Climate Change believes that

“carbon capture and storage…has the potential to almost halve the cost of meeting the UK’s 2050 target.”

It warns that the additional costs of inaction on CCS for UK consumers could be £1 billion to £2 billion a year in the 2020s, rising to £4 billion to £5 billion a year in the 2040s.

The economic benefits of CCS stretch far beyond the cost-effective attainment of our carbon budgets. According to the House of Commons Library, CCS could create 60,000 jobs in the UK, not to mention the greater number of jobs that could be saved by avoiding the decline or closure of carbon-intensive industries, for which it will quickly become progressively less viable to remain in operation in the UK as levies on carbon emissions increase. Those industries emit carbon dioxide as an intrinsic part of their production methods, so regardless of how much we decarbonise our power supply, they will continue to be huge emitters. As the North East of England Process Industry Cluster, which represents the chemical industry in the north-east, warns,

“on current trends and policies, industrial emissions reduction will only be met through the closure of industry.”

That would be a totally avoidable catastrophe and we need to do everything in our power to prevent it, and that means developing CCS.

The International Energy Agency estimates that there will be a global CCUS market worth over £100 billion. With even a modest share of that market, UK gross value added could increase to between £5 billion and £9 billion per year by 2030. The wider economic benefits and opportunities presented by CCS are huge, whether in the form of increased domestic manufacturing activity, a more positive balance of trade, or the possibility that UK carbon storage sites could generate income by storing emissions from other countries.

When it comes to the location for CCS, hon. Members will be unsurprised to learn that I think there is a natural choice: Teesside. That judgment is not born of the bias of someone who was born and grew up there, and is very proud to represent it, but based on a number of unique advantages that our area has to recommend it as a prime site for CCS development.

First, Teesside is home to nearly 60% of the UK’s energy intensive industry. Regional emissions per person are almost three times the UK average. Fully rolled out, CCS on Teesside would therefore have a substantial impact on overall UK emission reductions.

Secondly, Teesside has one of the highest concentrations of industry in the UK. That includes the specific and unique mix of companies that comprise the Teesside Collective. That group has come together with the excellent Tees Valley combined authority to drive the case for CCS investment in the area. The group includes Sembcorp Utilities, the area’s leading energy supplier; SABIC, one of the world’s largest makers of chemicals, fertilisers and plastics, whose Teesside operations alone emit 1.25 million tonnes of CO₂ every year; Lotte Chemical UK, which manufactures the plastic needed for soft drinks bottles; BOC, which produces more than half the UK’s hydrogen; and CF Fertilisers, the UK’s largest ammonia fertiliser plant.

That integrated cluster is so important because the emissions from those facilities can be captured, mixed with emissions from a power station in the same area, and transported and stored together. Analysis by the Green Alliance found that this approach would reduce the cost per tonne of carbon captured by about two thirds, compared with the cost of doing it for a power station alone. The mixture of companies would also allow a test project to assess the cost of CCS when facing different levels of difficulty in the removal and extraction of carbon.

Thirdly, the cost of CCS would be further reduced by Teesside’s close proximity to North sea storage sites. A fortnight ago, I had a fascinating briefing from Professor Jon Gluyas and Simon Mathias of Durham University at Boulby potash mine in my constituency. The UK storage appraisal project, which concluded in 2013, identified some 600 storage locations on the UK continental shelf—enough to store our direct emissions for the next 130 years.

[Neil Parish (Tiverton and Honiton) (Con)]

My hon. Friend mentioned nitrogen fertiliser and the need to use carbon capture and storage to help create more fertiliser. At the moment we use a lot of natural gas to make this fertiliser. Therefore, it will be a win-win situation, because we will be reducing the amount of natural gas we use and using the carbon that is already being produced.

[Mr Clarke]

I agree with my hon. Friend that carbon utilisation is something we should look at. It is not necessarily the same as carbon capture and storage, but it is definitely a valuable mechanism to ensure we are not wasting carbon dioxide that we have to produce. Therefore I would certainly back that, as does the strategy.

Fourthly, Teesside is the prime location because developing industrial CCS would create an additional 1,200 jobs during its construction phase and help create and retain a further 5,900 jobs when in operation. That is vital in our area, where, as Opposition Members will attest, despite the huge progress that has been made, too many people are struggling to find secure and well-paid jobs. The Teesside workforce have the strong engineering skills required for CCS, largely as a result of long-standing expertise in the oil and gas, energy supply, and chemical and process sectors.

Finally, and perhaps most importantly, Teesside is ready to go. The Teesside Collective is ready to commence front-end engineering design—FEED—studies immediately and could be capturing and storing CO₂ in just six years. No further research or innovation is required. The Teesside Collective has already presented a cost-effective finance model to Government, which sets out an attractive business case for both Government and industry to invest in a demonstration phase.

Last week, the Minister told me that Teesside makes a very powerful case for the funding set out in the clean growth strategy, of which £100 million has been committed to support CCUS innovation and deployment in the UK. That is greatly welcomed. She said that pints would be available for myself and the hon. Member for Stockton North (Alex Cunningham), and I think she could be included in the round as well. However, can the Minister provide clarity as to what proportion of that investment will be spent on carbon capture and storage specifically, as opposed to carbon capture and utilisation, which was referred to by my hon. Friend the Member for Tiverton and Honiton (Neil Parish)? Although I can understand the rationale for investing in carbon utilisation, such as its relative ease of development and more direct economic gains, it does not allow us to store the same amount of carbon dioxide as carbon capture and storage, which I believe is the real prize.

In relation to CCS, specifically CCS on Teesside, I ask the Government to take three critical steps. First, just as the Government established the contracts for difference mechanism, which is the incentivised investment that led to the huge cost reductions we are witnessing in green energy, so too the Government need to come up with an incentive mechanism for industrial CCS. What would that look like in practice? There are two elements. We need a transportation and storage solution, and the Government need to state their intention to agree a financing mechanism. Stakeholders tell me that those are the two most important things they are asking for, without which there can be little practical progress on delivering CCS in the UK. The Teesside Collective very much hopes that such a model can be developed and agreed in 2018 and it has already done really impressive groundwork.

Secondly, please deliver FEED funding for a trial industrial CCS network on Teesside. The Teesside Collective has requested the relatively modest sum of £15 million to get a demonstration project under way and it hopes that that can be allocated in 2019. Government support for the deployment of such a strategic demonstration project will enable CCS to reduce costs significantly if and when it is built at commercial scale in the 2020s.

Thirdly, we need to establish the facts to show the rest of Government and the public why this matters so much. In its April 2017 report on CCS, the Public Accounts Committee stated:

“By the end of 2017, the Department should quantify and publish the impact across the whole economy of delays to getting CCS up and running, and of it not being established at all.”

Will the Minister inform us whether such analysis has been commissioned and, if so, when the Department will publish the results?

Those are my three asks, which I sincerely and deeply hope are deliverable. I have come into politics to try to help deliver many things: a stronger economy; a world that we can pass on to our children in better shape than we found it; and a change in people’s perceptions of Teesside and what it has to offer our country and our world. I am an unashamed evangelist for the latter, as are so many of the people who work there. Carbon capture and storage would allow us to deliver all those objectives. I urge the Minister, as I urge all colleagues: let us seize this opportunity, and seize it today.

South-west Growth Charter

Neil Parish Excerpts

Tuesday 22nd November 2016 Westminster Hall

[Mr Streeter]

I probably won’t. I have never agreed with a single word the right hon. Gentleman has said.

The south-west growth charter calls for a new partnership between the south-west and central Government to achieve the goals agreed at the summit, which was attended by more than 200 people, more than 40 businesses, the CBI, the region’s two local enterprise partnerships, academic institutions and 14 local authorities from across the region. The summit was addressed by the Secretary of State for Communities and Local Government, who made an excellent speech that I know the Minister will replicate today. The Minister is a champion for progress, growth and prosperity. Indeed, he oozes them from every pore.

Despite our many successes and the beauty of our region, the south-west has not known the investment and prosperity of other parts of the United Kingdom in recent times—it falls below even the European Union average. What is more, the region has not always made itself heard with a clear, unified voice at Westminster, but we are open for business. We are looking for growth, and we want to build on the success of the northern powerhouse and the midlands engine. Today, we are setting out a positive vision for the south-west region.

The summit and the wider “Back the South West” campaign have shown a clear, unified business voice outlining a vision for the economic future of Cornwall, Devon and Somerset. The campaign has captured imaginations across our region and is a positive initiative from business, with strong support from local media. I always find that quoting local newspapers is a good way of getting in the local newspapers, and the front page of the Western Morning News on 3 October 2016 said:

“Clean beaches, sparkling seas and fresh air. The South West has it all. But while the natural beauty of the region is incomparable, its economy too often lags behind…given the tools, the South West can really fly”.

That is what this debate is all about.

A key part of the “Back the South West” campaign has been about creating a south-west narrative and speaking passionately at national level about why the south-west region is a wonderful place to live, work and do business. We are all immensely proud of our region, but we face challenges, particularly in light of the forthcoming Brexit. The local enterprise partnerships in our region are already showing how well they can work together to address those challenges and take opportunities.

Infrastructure investment needs and connectivity improvements were the overriding themes of the summit. To paraphrase a politician from years ago, we want to talk about three key things today: infrastructure, infrastructure, infrastructure. I remember going to India a few years ago with some Indian businesspeople, and they talked about the creativity of their people and all the resources and energy in that fabulous country. After the monsoons, they showed me roads that had been swept away and told me, “This is what holds us back in India. It is the infrastructure that we simply can’t manage to put in place.” I could say exactly the same thing about our region. All the creativity, the energy and the skills are there, but we need the infrastructure to get the job done.

We are all aware of the historical challenges in the south-west in relation to traditional infrastructure. For most of us, the key issue is the vital rail links to London and the rest of the country.

[Neil Parish (Tiverton and Honiton) (Con)]

I am delighted that my hon. Friend has secured this debate. We can do much more on the second rail link between Waterloo and Exeter to increase the number of trains and to add more loops so that we can get many more trains through to Exeter and further down into the west country. I would like a junction connecting the rail link to the trams at Seaton.

[Mr Streeter]

My hon. Friend is a powerful advocate for his region, and I know he speaks to the Government. I am sure he knows that, by sheer coincidence, the Peninsula Rail Task Force’s 20-year plan will be launched at 11 o’clock this morning. The plan will spell out the improvement we seek to our rail infrastructure, and it will include the measures he mentions to equip our region for the 21st century.

Road and air transport are critical too, but it is not only about traditional infrastructure; it is also about wider connectivity. Big strides have been taken as part of the Government’s push to increase digital connectivity, but more needs to be done. As Bill Martin, the editor of the Western Morning News, has said, the south-west is known as

“the region where every telephone conversation ends with the word ‘hello’.”

Digital connectivity is more important than ever in this 21st-century world, so making a success of the digitally enabled economy is critical, particularly for our region where peripherality is our challenge and connectivity is the solution. Now that people can do anything from anywhere and now that we have excellent universities in our region, connecting ourselves will continue to make us the most attractive and wonderful place to live, work and raise a family.

--- Later in debate ---

[Mr Streeter]

We are delighted to work with anyone, and we are always delighted to welcome tourists from Northern Ireland who come to enjoy our wonderful south-west.

The Government need to recognise that European funding has contributed greatly to digital infrastructure in the past, and that a home-grown solution must be provided for the future. We need 5G. Tourism has been a key part of the local economy for many years, but it has also meant a lot of low-paid jobs. We in the south-west have core strengths. We are home to world-class universities including Exeter, Plymouth and Falmouth, and to highly skilled workers. Our response has been for businesses, local leaders and academic institutions to create successful business clusters and networks, such as marine around Plymouth, environment around Exeter, and aerospace and defence around Newquay. The clusters have played a key part in the hundreds of thousands of growing businesses across the aerospace, marine, technology and creative industries, helping the region attract and retain talent. However, we need to do more, and we need the infrastructure to support that growth.

We in the south-west have proved that we are successful. Pennon Group, which has taken the lead on the excellent charter, is born of the south-west and headquartered there, and operates across the whole region, in Cornwall, Devon, Somerset and now Dorset. It is one of the UK’s largest listed companies. There are many other success stories, and no doubt some of my hon. Friends will mention them in a moment.

One of the Secretary of State’s key messages at the summit was about devolution. I will touch on that, and I think that one or two other Members might want to mention it as well. He made it clear that if the south-west wants an ambitious devolution deal, it must accept a directly elected Mayor. His argument was that in other countries in the G7, large regions, particularly around big cities, have a lot more power than we in Britain have traditionally given to regions. Too many decisions in Britain are still made in Westminster when they should be made at local level, but local power is often too fragmented. To make sensible decisions on transport, skills and infrastructure, he argued, we need much more joined-up thinking and a proper combined authority, with one elected person shouldering the accountability.

That has given our region food for thought, and discussions are ongoing, but it seems clear that if we want the devolution deal that the region needs and deserves, we must find a way to deliver a western super-Mayor, a strategic leader—[Laughter.] Do you see what I did there? I have been working on that all night. Perhaps it is time we came together to do so. It is what the business community wants. However, there will be different views, and the conversation is ongoing.

The charter that we will deliver to Downing Street later today is not about going cap in hand to the Government; it is about saying that we in the south-west can do an awful lot for ourselves, but we need infrastructure support. The charter supports the Government’s industrial strategy and sets out how the Government can work with the south-west to increase investment and opportunities for people of all ages.

In the charter, the business community outlines its commitments to the region: to collaborate for growth; to invest in a self-sustaining south-west; to invest in innovation, industry and infrastructure; to invest in productive people and retain talent within our region; to invest in our environment and share the benefits of growth. What do we want the Government to do? We want a new Government partnership with the south-west, a firm focus on south-west growth in the Government’s industrial strategy and a funding road map so that the south-west can move from funding reliance to more innovative funding solutions.

We want investment in digital connectivity: ultrafast south-west, a new partnership with the private sector to deliver ultrafast south-west 5G mobile, fibre and wireless broadband to 90% of the population by 2030. We want investment in energy connectivity—switching on to opportunity—to address transmission and distribution restrictions on regional growth, to be completed by 2025, and a renewed focus by Ofgem, National Grid and Western Power Distribution. Crucially, we want investment in transport connectivity to get business moving. We want Government to back the Peninsula Rail Task Force’s long-term plan for rail improvements, which will be outlined in the report published later today, and to re-affirm commitments to road improvement projects in the pipeline, including the A303, the A30, the A38 and, as my hon. Friend the Member for North Devon (Peter Heaton-Jones) would undoubtedly agree, the A358.

As Chris Loughlin, chief executive of Pennon, said at the south-west growth summit:

“We should be able to get our voice heard. We are, after all, a political battleground. Elections are won and lost on how the south-west votes.”

On that, we all agree.

The south-west charter will be delivered to Downing Street later today. The timing could not be better: it is the day before the autumn statement. The south-west has made a profound contribution to this country throughout our history, and we have some very successful businesses in the region. It is a charter for growth; more than that, it is a charter for aspiration and hope for all in the south-west, but particularly the younger generation. Tomorrow, we will look to the Chancellor to re-commit to the south-west. Leaving the EU creates uncertainty, but also opportunity. The south-west is ready to deliver in the new partnership with the Government, provided that we receive the right commitments. That is the challenge for the Minister in this debate. Hinkley Point C, the third runway at Heathrow and High Speed 2 will all have a positive impact on the south-west, but we need more, and we need more infrastructure commitments specifically for the south-west.

It is not just about the autumn statement tomorrow; we are not going away. We will look to future budgets and the UK’s industrial strategy to position the south-west where it should be: not on the fringes, but at the centre of growth. Our two local enterprise partnerships are working hard together already, with valuable input from the business community, led by Pennon, to ensure that our proposals are developed. We need to add Government to that partnership.

To quote the Western Morning News for the third time—

[Neil Parish]

You should get quoted now.

[Mr Streeter]

It is a sure-fire thing. The Western Morning News said in its editorial last week:

“The government listens to those who speak loudly and logically and can make a good case. Too often, parts of the West Country have seemed to be pulling in different directions. Faced with petty rivalries, it has been easy for Ministers to dismiss the needs of our region and divert funds and support elsewhere.”

Not today. Here, the south-west is speaking with a united voice, led by the region’s business community and with far wider support from MPs and many in local government. There is clear momentum behind the campaign. I am delighted to throw my weight behind it, as are my colleagues from across Cornwall, Devon and Somerset, from both sides of this House. Together, we will raise south-west growth up the Government’s agenda and secure our region’s place in the new industrial strategy.

Several hon. Members rose—

--- Later in debate ---

[Jesse Norman]

I detect a slight faux indignation on the other side, and I am sorry about that. The industrial strategy of this country is a serious, long-term matter. It needs to be agreed in a bipartisan spirit. It needs to include the whole country, including the devolved Administrations and nations. It is not something to be decided and cut off. That, if I may say, is an expression of Blairite, Napoleonic Government. We are looking for a consensus and a stable basis for future development, which can be shared by all and can survive a change of Government—it is essentially long term in character.

An industrial strategy has been attempted at various points in our past in this country, not always with great success. In the 1940s and 1950s, we had models of industrialisation based on the armed forces and people in Whitehall yanking levers that steered the ship of state. We had the corporatism of the 1970s. I suspect that we are looking to something somewhat different. If hon. Members doubt the necessity, let me remind them of two things. First, those who say they do not have an industrial strategy almost invariably have one without knowing it. Secondly, no company or charitable organisation would dream of attempting to take money from investors or donors and use it over a period of time without having a strategy for how to do so. Nor should the Government.

[Neil Parish]

I am encouraged by that, but is part of the strategy broadband? When we talk about superfast and extra-superfast, can we make sure that the rural areas of this country are connected with some form of broadband?

[Jesse Norman]

As my hon. Friend understands, I am not the Minister for Culture, Media and Support. He also knows that when I was Chair of the Culture, Media and Sport Committee, I took an active interest in that issue, and we commissioned a very reputable report from a group of academics and industry experts, which found, among other things, that BT Openreach was under-investing in its network by hundreds of millions of pounds a year. It was accretive to investors and was not down to its cost of capital. I do not want to speculate on the reasons for that, but its effect has been massively to penalise people—particularly those in rural areas. I am sure my hon. Friend supports today’s announcement of a new fund to support other players in fibre through balance sheet-matched funding, which will enable fibre roll-out, particularly in rural and suburban areas, to proceed much faster than hitherto. That is a very welcome development.

Oral Answers to Questions

Neil Parish Excerpts

Tuesday 13th September 2016 Commons Chamber

[Mr Hurd]

The short answer is yes. As the Secretary of State has said, we are keen to harvest all opinions and ideas on how we meet the fundamental and exciting challenge of how to transition to a post-Brexit world in a way that works for British business.

[Neil Parish (Tiverton and Honiton) (Con)]

T1. If he will make a statement on his departmental responsibilities.

[The Secretary of State for Business, Energy and Industrial Strategy (Greg Clark)]

The Department for Business, Energy and Industrial Strategy was formed on 14 July, and it is my great honour to serve as its first Secretary of State. Over the summer, rapid progress has been made in joining up responsibilities for business, energy, climate change, science, innovation and consumer affairs and in creating a new focus on industrial strategy. This is a powerful Department, which is up to the task of promoting a competitive, low-carbon economy that works for everyone. As part of an excellent team of Ministers and officials, I will continue to work both locally and globally on the challenges ahead.

[Neil Parish]

The Swansea bay tidal lagoon, along with Cardiff bay, Newport bay and Bridgwater bay, has the potential to create huge energy, as those bays have the second highest rise and fall of tide in the world. How is the feasibility study going, and when will we get a result? We need long-term funding for a project that will provide 8% of our energy.

[Greg Clark]

My understanding is that the feasibility study is being undertaken. I have not received its final conclusions yet. At that point, I will look at it with the same interest as my hon. Friend.