Carbon Capture and Storage

Peter Aldous Excerpts

Thursday 19th October 2017 Westminster Hall

[Peter Aldous (Waveney) (Con)]

It is a pleasure to serve under your chairmanship, Sir David. I congratulate my hon. Friend the Member for Middlesbrough South and East Cleveland (Mr Clarke) on securing this debate. His timing is spot on, given the publication last week of the clean growth strategy.

We last held a debate in this Chamber on carbon capture and storage on 24 January. From my perspective, the outcome of that debate was disappointing, but nine months on, I believe that we are in a much better place. A framework is beginning to emerge within which carbon capture and storage in the UK can become a major industry, and we are learning lessons from the aborted second CCS competition.

I believe that the Government are studying closely the proposals in the noble Lord Oxburgh’s report of September 2016. I was on his advisory committee, which heard the evidence, drafted and approved the report, and I believe that it is a good blueprint for the future. We see carbon capture and storage as fitting in well with the 10 pillars of the Government’s industrial strategy; it ticks all the boxes. Finally, the publication last week of the clean growth strategy provides the much-needed road map that business is looking for in order to invest time and money in carbon capture and storage.

Invariably in debates such as this, Back-Bench MPs have an ask of the Government, which we look to the Minister to take on board and respond to. However, from my own perspective, with the publication of the clean growth strategy last week, the Government have, to a large degree, shot my fox. I shall briefly set out the case for CCS and why it is so important that it is at the heart of the UK’s industrial strategy.

The UK has legally binding commitments, set out in the Climate Change Act 2008, to reduce carbon emissions by a minimum of 80% from 1990 levels by 2050. As the Intergovernmental Panel on Climate Change and the Committee on Climate Change have both pointed out, if we do not deploy CCS, it will be very difficult to meet that target cost-effectively.

The UK has a unique selling point that means we should be at the vanguard of the CCS movement. It is the thing that most colleagues in this room have in common, in that our constituencies adjoin it: the North sea. I believe that your seat also adjoins it, Sir David. In the North sea and the UK continental shelf, the UK has its own large, safe and secure offshore CO₂ storage vessel, in the rocks deep beneath UK territorial waters. It provides us with the least-cost form of storage on an industrial scale. Over the past 50 years, as a result of the development of the North sea oil and gas industry, the UK has acquired enormous expertise and experience that can be harnessed to deliver CCS.

[Ross Thomson (Aberdeen South) (Con)]

Will my hon. Friend join me in acknowledging and welcoming that the University of Aberdeen has world-leading experts at the forefront of research into carbon capture and utilisation? It is reflected in the fact that Aberdeen was the only UK university whose entry into the Carbon XPRIZE was accepted. It is developing technology to help create a solution to the damage that CO₂ can cause, such as using what is left as materials for furniture and so on. Does he welcome and acknowledge that?

[Peter Aldous]

Yes, I do. I am happy to acknowledge it. We have enormous, significant expertise across the UK. I am sure that all of us in this Chamber can highlight institutions in or near our constituencies that can and should put us at the vanguard of the low-carbon economy and its global development over the next few years.

As I was saying, the UK has acquired enormous expertise and experience in the oil and gas sector, which can be used to deliver CCS, create jobs and—most importantly for the Government—generate revenue for the Exchequer. However, as the hon. Member for Redcar (Anna Turley) highlighted, time is of the essence. We need to get on with it. As a result of the lower oil prices that have prevailed for the past three years, the North sea is going through a period of transition and restructuring. We must move quickly to use assets that otherwise might be prematurely decommissioned.

As we have heard, CCS has an important role to play in delivering growth across the whole UK and in bringing jobs to coastal communities, which in recent years have faced particular challenges with the decline of traditional industries. There are areas where clusters of energy-intensive industries are based—such as Scotland and the north-east on Teesside, as the hon. Member for Redcar highlighted—which could benefit significantly from CCS. That might not be the exact situation in my own constituency, but we have businesses in East Anglia that are part of the North sea supply chain, whether in oil and gas or in the emerging offshore wind sector, and that would benefit from the development of CCS.

The industrial strategy highlights the importance to the UK of cultivating world-leading sectors and being global pioneers in industries in which we have an advantage. CCS is one of those industries. We have the resources and the skills. It is an industry in which we can not only secure inward investment but, in due course, create significant export opportunities, building on the expertise that my hon. Friend the Member for Aberdeen South (Ross Thomson) mentioned a minute ago.

On the resources and skills required for CCS, Norway is a country with which we have a great deal in common.

[Mr Simon Clarke]

On that point, we have had disappointing news from Norway this week. I spoke to the Teesside Collective to discuss what was going on there. It is important to put it on record that although the Norwegians have retreated somewhat in the scope of their ambition for when things will happen, they have not pulled out of CCS altogether. Effectively, they have found themselves in a minority Government situation—we can perhaps empathise—and that has made certain investment decisions rather harder to achieve, so they are looking to make them on more of a case-by-case basis. That is why the news has come out of Norway in the way that it has.

[Peter Aldous]

I am grateful to my hon. Friend for that intervention. I talked this morning to representatives of Statoil, who emphasised that they are proceeding with CCS and that the situation is, dare I say, a fact of life with minority Governments.

We have a great deal in common with Norway. The Norwegians are also taking forward CCS, and they are slightly ahead of us. However, I emphasise that it is not a question of CCS taking place either in the United Kingdom or in Norway; it should be in both. We need to collaborate between our two countries to ensure that that takes place on the best possible terms and at the lowest possible price.

On that point, cost is the elephant in the room. CCS has foundered on this particular rock in the past, and I am sure that there are some who say that it will do so again. However, I do not believe that that will be the case. The Oxburgh report showed that in the right circumstances, CCS can be delivered at £85 per megawatt-hour. It is also important to highlight what has happened in the offshore wind sector. Costs have decreased in the past three years from around £140 per megawatt-hour to just under £60. That has been achieved by the Government providing the framework for the delivery, and by the industry getting on with the job and building, rather than just talking.

With the clean growth strategy, the Government have provided a framework for CCS to develop. I look forward to more details from the Minister about the road map for turning this exciting vision into a practical reality. Doing so will not only make the world more resilient to climate change, but transform places and—most importantly —people’s lives.