North Sea Oil and Gas Industry

Debate between Richard Foord and Michael Shanks

Monday 27th October 2025 Commons Chamber

[Michael Shanks]

Let me just challenge the premise of that question once again. Petrofac’s UK arm has not gone under; it is working today as it did yesterday and the day before and the day before that, and as it will the day after. It is a successful, growing business, and we have a responsibility to talk up the industry to ensure that it has a viable, long-term future. In the next few days we will continue to work intensively with the company to make that happen, but we do have a responsibility not to undermine a successful business, which is what the UK arm of Petrofac is. The company that went into administration today is the topco of Petrofac, which has no employees.

[Richard Foord (Honiton and Sidmouth) (LD)]

The United Kingdom’s electricity price is set by gas 98% of the time. By contrast, the electricity price in the European Union is set by gas less than 40% of the time. If the electricity price in the UK were set by the price of clean energy more often, would the UK not be a more attractive destination for investment in energy generation? [Interruption.]

[Michael Shanks]

The hon. Gentleman is absolutely right, although I think I heard a “no” from the Opposition Front Bench in response to his question. The only way in which we can deliver long-term energy security is to get off the rollercoaster of fossil fuels. The future is in clean energy: we see that across Europe, where nuclear and renewables are driving down the cost of electricity, but also insulating countries from the price spikes that we have seen as a result of, for instance, Russia’s invasion of Ukraine. We are too exposed to gas at the moment, which is why our electricity prices are high, even though for much of the day our power is being generated by clean energy, which is considerably cheaper. Clean energy is the economic opportunity of the 21st century. It is how we deliver our energy security, how we tackle the climate crisis, and how we bring down bills for people now and in the long term.

Energy Grid Resilience

Debate between Richard Foord and Michael Shanks

Wednesday 30th April 2025 Commons Chamber

[Michael Shanks]

May I thank the hon. Gentleman, because that is a really important question and one that the Chancellor of the Duchy of Lancaster has been wrestling with? Under all Governments there are individual Departments that take a responsibility and there are Departments that lead on parts of this, and the covid inquiry has raised a number of questions about how some of these resilience questions are answered, so it is a really important point.

My Department has a number of civil servants with expertise in how the energy system works. I pay tribute to the team, who are often there out of hours when storms and other incidents occur. They do a remarkable job. The question about reporting, however, is important. Partly what the Government seek to do with our mission approach and with the Chancellor of the Duchy of Lancaster’s work is to bring together the whole of Government so that everyone who has a responsibility is at the table, feeding in their views. The hon. Gentleman makes an important point.

[Richard Foord (Honiton and Sidmouth) (LD)]

There are over 100 battery energy storage system—BESS—facilities operating in the UK, and another one is planned for Hawkchurch in East Devon. Residents there are very worried about fire risk. South Korea is a global leader in BESS, yet the safety issues are plain. There were 38 fire incidents linked to BESS in South Korea up to 2022. Will the Minister commit to reviewing the safety of BESS technology and exploring energy storage solutions that are less subject to fire risk?

[Michael Shanks]

I would first say that fire is a risk in a whole range of scenarios, and I do not think we should jump to the view that because there have been some incidents in one particular piece of infrastructure it is somehow inherent in the infrastructure. It is important to say that batteries will play a critical role in our future energy system, but we obviously take issues of safety very seriously and the hon. Gentleman is right to raise them. The Health and Safety Executive has a role in this and the planning system also has a role in considering some of the fire risks, but we will keep this under review, particularly as the number of battery schemes increases.

Gas Storage Levels

Debate between Richard Foord and Michael Shanks

Monday 13th January 2025 Commons Chamber

[Richard Foord (Honiton and Sidmouth) (LD)]

In 2022, following the full-scale invasion of Ukraine, we saw a huge Government subsidy for household energy bills and an extra £15 billion per year in additional support for households. I appreciate that gas is traded globally and that the gas price moves globally, but if storage had been greater in 2022, could any of that £15 billion have been saved for taxpayers?

[Michael Shanks]

That is a really interesting question that I asked myself when I came into this role. Logically, we might assume so, but we do not empty the gas storage and then wait to refill it; we refill it constantly. That topping up will be done at whatever the price in the market at the time. The main reason why we would have used the gas in storage is that there is such demand in the system that the price is likely to be higher anyway. The hon. Gentleman makes a really important point, but I do not think that gas storage would have been the issue. I reiterate the point I made at the beginning: part of the reason why we have less gas storage than other European countries is that we have a different mix of routes to get gas in, and far more reliable supply chains for it, so we do not need to store quite as much as our European neighbours.