Annual Energy Statement

Robert Smith Excerpts

Wednesday 23rd November 2011 Commons Chamber

[Chris Huhne]

I certainly did not want to imply that the right hon. Gentleman, who has considerable expertise in this area, was in any way slacking when he was an Energy Minister—although I think he might have had better support from his colleagues on certain occasions.

CCS is a key technology. The right hon. Gentleman is absolutely right to say that we are going to continue to be reliant on gas and other fossil fuels. If we move to unabated gas rather than coal, that in itself will save about half the carbon emissions. For the longer term however, CCS is essential if we are going to be able to use gas, especially if we find, as I hope we will, that we have considerable exploitable reserves of shale gas under Lancashire and elsewhere.

As I have said, Longannet was a disappointment—I made a statement to the House on that—but other projects are coming forward. Peterhead is nearer the reservoirs than Longannet, so the pipeline costs are likely to be lower, and less investment will be needed to upgrade the plant in line with the large combustion plant directive. All the parties who were involved in the Longannet negotiation are confident that we can deliver a commercial-scale CCS plant for within that £1 billion budget, and we intend to do so.

[Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)]

The Secretary of State highlighted the future role of gas in the economy, and producing our own gas is obviously the best option. To that end, will he stress to the European Union that its attempt to regulate the offshore oil and gas industry is in danger of creating regulatory confusion and more uncertainty, and that it would be far better to go down the directive route?

[Chris Huhne]

I am grateful to my hon. Friend for making that point. He is absolutely right. If we are going to introduce minimum standards for offshore oil and gas—the Commission has been kind enough to say they should be modelled on those for the UK continental shelf—that should be on the basis of a directive, so that we can use our own legal means to enforce the standards, rather than a regulation. A regulation that would apply directly in all the member states would be inappropriate because countries’ circumstances are inevitably different.