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Debate between Sammy Wilson and David Mowat

Tuesday 10th June 2014 Commons Chamber

[David Mowat]

I thank my hon. Friend for his intervention. I accept that we need to do more to convince people that we need fracking; that is one of the reasons I am making a speech about it. It is a little bit about leadership—if we think something is the right answer, we go with it.

I do not want to say that there are no environmental issues associated with fracking, and of course it is important that we frack in the right areas; there will be some places where we should not frack and some places where we should. All that is true, but it is not a reason to turn our backs on this industry. The case that I am putting to my hon. Friend and to other Members is that the world is already fracking. This week, Germany gave the go-ahead for fracking; it had been reluctant to do that, but did so under pressure from its industry. We need to decide as a country how competitive we wish to be, but one of the vehicles of being competitive is cheap prices for energy and chemical feedstock, and fracking is one of the ways in which those cheap prices will be delivered.

There are three tenets of energy policy, the first of which is decarbonisation. Fracking—or gas, I should say—is an element of any decarbonisation strategy that we seriously wish to pursue. In this country, something like 50% of electricity comes from coal and oil. Replacing that coal and oil with gas is the single quickest and most effective way of reducing our carbon footprint. Indeed, of all the countries in the OECD, the one that reduced its carbon by the most in the last five years is the USA. It has done that because it has reduced its coal expenditure and usage, and instead used gas.

The UK—perhaps slightly counter-culturally—already has one of the lowest amounts of carbon per capita and per unit of GDP in the EU. A strategy based on replacing our coal with gas, and doing so more quickly, would lead to even more progress in that regard.

I have talked a little bit about cost, but it is self-evident that there is a correlation between GDP and energy usage. We cannot rebalance our economy on differentially high energy prices, particularly if we are rebalancing it towards manufacturing, and part of the solution is cheaper gas prices.

It has been said that our having unconventional shale gas in the UK does not necessarily reduce prices, and to an extent that is true. However, it is rather like saying we should not have exploited North sea gas or oil 30 years ago because there is a world market for North sea oil and we cannot guarantee that lower prices would—

[Sammy Wilson (East Antrim) (DUP)]

The hon. Gentleman is doing a very good job in answering the question that his colleague, the hon. Member for Shrewsbury and Atcham (Daniel Kawczynski), put about selling the whole idea of fracking. Does he agree not only that there are environmental benefits to fracking but that when one way to tackle fuel poverty, provide fuel security, make UK industry more competitive and even attract some industries that have gone overseas to come back again is to have our own supply of gas from the shale gas available to us?

[David Mowat]

I agree with the hon. Gentleman on all those points, and he made them succinctly and well. Fracking is not something that we can turn our backs on, and I am very pleased that it is in the Queen’s Speech. The point I was making was on the relative cost of energy. I have heard it said in this place that just because we produce shale gas, that will not necessarily reduce our gas prices by 60% or 70%, to the level they are in America. Of course, there is some truth in that; there is a worldwide market in gas, in the same way that there is in oil.

That said, the gas market is a little bit less mobile than the oil market. The European gas hub, which would be affected by gas prices, is smaller than the global market for crude oil. One of the reasons that we in this country cannot benefit from US gas in the way the US benefits from its gas is that the cost of the US sending it to us would probably double its price; it would still be cheaper, but it would be double the price that we would pay vis-à-vis the US. The summary of all this is that we need to get on with it.

The final point, which was mentioned by the hon. Member for East Antrim (Sammy Wilson), is that of security of supply. Whether we like it or not, North sea production is coming down. There may be many things that we can do, either with an independent Scotland or with Scotland within the United Kingdom, to keep that supply going for as long as possible, but gas production in particular is considerably down; it is now something like half what it was at its peak.

Although we in this country have not up till now had to use Russian gas—most of our imported gas has come from Norway—I think I saw a report last month saying that Gazprom and Centrica have signed their first deal, so there is an element in all this of security of supply vis-à-vis the geopolitics of Europe as well.

I hope that the provisions in the Queen’s Speech to make it easier to exploit shale are proceeded with. What the legislation is really saying is that someone’s property rights do not necessarily extend to stopping people drilling a mile under their house or land. That seems to me as logical as saying that someone’s property rights do not extend to preventing aeroplanes from flying over their land. I believe that that was an issue in the USA at one time, and it had to be legislated away in much the same way as we are legislating here for fracking.

Climate Change Act

Debate between Sammy Wilson and David Mowat

Tuesday 10th September 2013 Westminster Hall

[David Mowat]

That is a different matter, namely adaption. I have a lot of sympathy with that point, particularly given the world’s record in failing to get people to agree to act over the last decade or so. However, as my right hon. Friend the Member for Hitchin and Harpenden (Mr Lilley) said, the science is clear: greenhouse gases and water vapour increase temperature, and other things do too. What we do not know, and what the whole debate in science is about, is the weight of those factors.

There are people, who are probably cleverer than anybody in this room, wrestling with that issue, and I do not intend to get into it, other than to say a couple of things. It is probably true that the temperature has not risen for the last 10 or 12 years. Does that, in itself, undermine the thrust of the science and the models? It does not. There will always be a probability of such things, given the noise in the data. However, the Minister or the Opposition Front-Bench speaker might like to tell us how many years of no warming we must have before we seriously question the models. At the very least, the fact that we have had so many years of small amounts of warming tends, under Bayesian probability theory, to take us to the lower end of the forecasts.

As I say, I accept the science. We have seen the Stern report, warts and all, and the costs involved. Parliament put in place the Climate Change Act and the 80% reduction to try to keep the temperature rise to 2° C by 2100, and it was helped in that by five Budgets. There are some good things in the Act. First, it focuses on carbon, not renewables. EU legislation focuses almost entirely on renewables, which is why we are sucked into the false impression that countries such as Germany, which produces significantly more carbon per unit of GDP or per capita than us, are the good guys, who can burn coal and have renewables. Frankly, if a country wants to reduce carbon, it does not have renewables, it stops burning coal. So that is a good aspect of the Climate Change Act. The Act is also clear and hard to fudge. It is also inflexible, which is a strength and a weakness.

The issues I have with the Act are threefold. First, it is, broadly speaking, uncosted. Secondly, it is inflexible, and I will return to that in the light of some of the facts, which are changing. Thirdly, and most importantly—I disagree with the hon. Member for Brent North (Barry Gardiner) on this—it is, broadly speaking, unilateral: nobody else has put in place anything as stringent, and if I am wrong, I look forward to the Minister telling me so at the end.

On the Act being uncosted, it may well be right for the world to address the issue of climate change, but that does cause fuel poverty. That might be a price worth paying, although that case has not been made very much, and the Government might pursue it a little more. Of course, carbon leakage also means, at the margin, that we are losing jobs in some industries—particularly heavy industries in the north—because they rely heavily on power. It always strikes me as a little odd, at a time when we are trying to rebalance the economy, that we are putting manufacturing at a potential disadvantage, although that has not wholly happened yet, and we will see how things pan out.

[Sammy Wilson]

Does the hon. Gentleman accept that it is not just jobs in manufacturing that are being lost? For example, it is estimated that a medium-sized data processing company will pay £500,000 in tax under the carbon reduction commitment—a tax, of course, that the Government now keep, rather than recycling.

[David Mowat]

I do accept that, and that cost of £500,000 translates into jobs lost.

The real problem is that the Act is unilateral. It has been said that Britain produces 1.5% of the world’s emissions, which is about the amount China’s emissions increased by last year. The Act was predicated on the assumption that we would take a world leadership position in all this stuff and that the world would follow us. However, it increasingly appears that the world does not wish to follow us, and we are seeing that in a number of ways; there are words and there are actions. The Minister mentioned Germany, and I alluded earlier to its decision to abandon nuclear power, build dirty coal stations at great pace and to refuse to use carbon capture and storage technology, despite the fact that its carbon emissions are higher than ours.

Even more significant, however, is the fact that the EU has recently voted to abandon its emissions trading scheme.