Oral Answers to Questions

Tommy Sheppard Excerpts

Tuesday 21st May 2024 Commons Chamber

[Justin Tomlinson]

My hon. Friend has always championed his local constituents to ensure that they get value for money. We must explore all potential options, local or national, to find the best way to deliver energy security and lower bills in future.

[Tommy Sheppard (Edinburgh East) (SNP)]

10. What assessment she has made of the adequacy of financial support for district heating network consumers.

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Andrew Bowie)]

The evaluation of our energy support schemes will conclude in summer 2025. To ensure their bills were fair, supported heat network customers received an average of £1,200 via the energy discount scheme, which closed last month.

[Tommy Sheppard]

That is rather disappointing. I have more than 100 constituents in the Greendykes area of Edinburgh who get their heating and hot water from a communal district heating scheme. The Government have refused to offer them price protection, saying instead that this should be regulated by the business regulation scheme, but that ended on 31 March, leaving those people with no protection at all and facing increases of up to 500% in their energy bills. My constituents want to know: why did the Government wait until the business scheme finished before considering alternative protection for these domestic customers? Why take a year to get them protected and what compensation are the Government going to offer in the meantime?

[Andrew Bowie]

I hear the passion with which the hon. Gentleman stands up for his constituents, and rightly so, given the circumstances that they find themselves in. We are introducing regulations with Ofgem powers to investigate and intervene where prices for consumers appear to be unfair, and to ensure that all heat network consumers receive a high-quality service from their providers. I am happy to meet him to discuss this in greater detail.

Rosebank Oilfield: Environmental Impacts

Tommy Sheppard Excerpts

Wednesday 28th June 2023 Westminster Hall

[Caroline Lucas]

To reinforce what the hon. Member said, we know that the president of COP28 is going to be somebody who absolutely comes from that background, so it is not just a question of domestic collusion with oil companies. The big climate meeting happening later this year will be presided over by a president who we know is absolutely involved in the oil industry. We need to get fossil fuels out of politics once and for all.

Rosebank will not improve energy security, because 90% of its reserves are oil, not gas. Like the vast majority of oil from the North sea, it will be put in tankers and exported overseas, because it is not suitable for UK refineries. Let us be really clear: there is no argument around energy security in favour of Rosebank.

Secondly, Rosebank will not bring down our energy bills, because it does not belong to us. Any oil and gas that is sold back to the UK will be sold at global prices. As the then Secretary of State, the right hon. Member for Spelthorne (Kwasi Kwarteng), said in February last year:

“Additional UK production won’t materially affect the wholesale market price.”

Thirdly, Rosebank will not deliver long-term job security. Equinor claims that Rosebank will deliver 1,600 jobs, but the real number is less than a third of that, with the rest being short-term, temporary jobs just during construction. There are far more jobs, as we know, in a green energy future. What we need is a proper, just transition, hand in hand with the unions, for those workers and communities, to enable them to reap the benefits and rewards of those decent green jobs.

Fourthly, Rosebank will not be better for our planet than imports. Stopping Rosebank does not mean that we will import more oil. Let me say it again: the vast majority of oil from Rosebank will be exported. Even if Rosebank’s oil did reach UK refineries, the development plans submitted show that it is likely to be more polluting than the oil and gas produced in Norway, our largest import partner. More oil production means more oil consumption, less oil production means less oil consumption—it is basic economics. What will bring down imports is reducing fossil fuel dependence across our energy system.

As if all that were not evidence enough, Rosebank is also disastrous for our marine environment. As the Minister will know, the pipeline required to transport Rosebank’s tiny gas reserves would cut through the Faroe-Shetland sponge belt marine protected area, a precious and fragile ecosystem that is home to myriad species. How can the Government possibly reconcile this development with their commitment to protect 30% of land and sea by 2030, especially in the context of Equinor’s assessment of potential damage to coral gardens having been questioned by the regulator? The development would lay infrastructure through a vital ocean habitat, and an oil spill from Rosebank would be potentially catastrophic. The UK already has the most fossil fuel developments in nature-protected sites in the whole world. Let us not add yet another.

There are also plenty of economic arguments against Rosebank, since the development would be staggeringly costly to the public purse. In the words of the UN Secretary-General, investing in new fossil fuel infrastructure is

“moral and economic madness”.

It is madness, because if the Secretary of State fails to stop this project going ahead, the British public will carry almost all the costs of developing Rosebank, while the Norwegian owner, Equinor, gets to pocket the profit. To be specific, Equinor would receive more than £3.75 billion in tax breaks, thanks to this Government’s subsidy regime. Will the Minister explain to me in what world it is acceptable to hand billions of public money to a climate-wrecking company that last year raked in record profits of almost £24 billion, let alone in the midst of a cost of living scandal when the NHS is on its knees, mortgage rates are going through the roof and parents cannot afford to feed their children?

[Tommy Sheppard (Edinburgh East) (SNP)]

The hon. Lady is making a compelling argument against licensing new extraction at Rosebank, and one that I agree with. Does it not seem common sense to most people that reliance on oil and gas will not be reduced by drilling for more of it? The ordinary folk of this country can see that. Why does she think the Government are engaged in this crass idiocy of arguing the opposite of common sense?

Would the hon. Lady also reflect on the differences in attitude between the Scottish Government—who have a more critical and hesitant view of new oil exploration in the North sea—and the current UK Government? Would it be better for the decision on the matter to be devolved to the Scottish Government to allow them to make a more considered decision?

[Caroline Lucas]

I broadly agree; I think it probably should be a devolved issue. I certainly think the Scottish Government are doing a much better job, with more progressive policies in the area of oil and gas. The hon. Gentleman would expect me to refer to the fact that there are Greens in coalition with the SNP in the Scottish Government, and I am pleased about the progress they have managed to make in this area.

I want to come to the position of His Majesty’s official Opposition. I am sad to see none of them here in a formal capacity, though I am delighted to see Back Benchers. While I welcome their commitment not to issue new licences if they were to become the next Government, let me be clear that the revelation that they would not revoke Rosebank’s licence is no less than a tacit endorsement of this climate catastrophe. I worry that the official Opposition, in refusing even to consider rescinding that licence, may as well have given the green light to the project.

I was shocked to hear hon. Members from the shadow Front Bench team saying that rescinding an existing licence sends exactly the wrong signal to investors all over the world. Frankly, that is absurd. It conflates projects that are already operating in the North sea with Rosebank, which is an entirely new development from which first oil is not expected until between 2026 and 2028. A final investment decision has not yet been taken, with developers saying that that will come shortly after approval. Investors are therefore still assessing whether to press ahead with Rosebank, so the official Opposition should have made it crystal clear to them that they should not press ahead with it.

While it would get more complicated to cancel Rosebank’s licence if this reckless Government approved it, that does not mean that it would be impossible. I urge Labour to leave no legal stone unturned and no avenue unexplored to overturn this disastrous decision. That could include, for example, passing new legislation strengthening climate and environmental requirements and thus allowing a licence to be reviewed or revoked, following the Dutch example of phasing out coal power.

The risk of potentially being required to pay costs once again reinforces the urgent need for the UK to withdraw from the energy charter treaty, which allows fossil fuel giants essentially to hold British taxpayers to ransom. Calls for that have so far fallen on deaf ears but have been bolstered by the Climate Change Committee today, which has said:

“There is a strong case for the UK to reconsider its membership”.

It was reported last week that Rosebank will be approved by the regulators in the next fortnight, after which the Secretary of State will have to decide whether to intervene or let it pass, giving the decision a de facto green light. Time is ticking for the Government to act. The only question is whether they will do the right thing for people and planet or commit a climate crime. The choice is clear, so I will conclude with a number of crucial questions for the Minister.

Will the Government review their approach to oil and gas licensing in the light of today’s guidance from the Climate Change Committee? If they do not, do they really want to send the signal that they think they know better than hundreds of scientists nationally and thousands globally? Will they finally scrap the investment allowance, which sees the taxpayer pay fossil fuel companies huge amounts of money to pump yet more filthy oil and gas? Will they withdraw from the energy charter treaty, following many other European countries including France and Italy? Crucially, will the Government stop the development of Rosebank, or are they content to be on the wrong side of history?

I hope that when the Minister responds, he will make reference to the Climate Change Committee’s report today. If he has not had time to read it all, I hope he will scroll back on this morning’s “Today” programme and listen to Lord Deben at 8.45 am, where he will hear his fellow Conservative colleague, former Minister and now chair of the independent Climate Change Committee say that there is reduced confidence that targets will be met, that just because past targets have been met there is no guarantee that future ones will be, that only 33% of measures necessary to achieve the targets are actually in place and that, in terms of future targets, the Government

“are in no state…to achieve those ends and it is…not true to say they will”.

Lord Deben also said that

“the Government is relying, for example, on technologies we don’t have. It is not doing the things which we have to do.”

I very much hope the Minister will reflect on those words, as well as my own, and tell us today that the Government will not go ahead with the reckless decision to give a green light to Rosebank.

--- Later in debate ---

[Graham Stuart]

I will make a little more progress, and then I will come back to the hon. Lady.

Reducing the decline in domestic production will not increase the use of fossil fuels in the UK. The hon. Lady’s economics seem rather upside down. It is demand that typically drives supply, rather than supply driving demand, although I recognise that there are movements in both directions. Increasing domestic production will avoid the need to substitute British gas with foreign liquified natural gas, which has much higher emission intensity. The effect of the proposal from the hon. Lady and His Majesty’s Opposition would not be that we consume less fossil fuel; it would be that we import more in tankers. There is not the option to have more Norwegian gas. Not producing our own gas would result in generating higher emissions directly. As well as that, to pick up on the economics of this, they say that the proposal will not affect price. There is a global price; it is a global market. Our oil is traded. It goes to refineries and comes back in the form of medicines, plastics and other things that are vital to our modern society. It is an international market and we are net importers. It is important to recognise that there are tens of billions of pounds coming into the Exchequer, especially at the moment with the energy profits levy tax rate at 75%.

We cannot make out that new projects would somehow cost the taxpayer, or be subsidised by the taxpayer. North sea production brings tens of billions of pounds into the UK Exchequer. It makes a material difference to our energy security because we produce it here at home. It also supports hundreds of thousands of jobs, which His Majesty’s Opposition and the Scottish National party have turned their faces against—and for what? Will there be an environmental gain? There will not be. It will not make a difference, by a single barrel of oil, to how much we consume. What it will do is lose hundreds of thousands of jobs, lose tens of billions of pounds for the Exchequer and lead to higher emissions. And it is worth the House recognising this killer point: it will remove the very supply chain that we need for the transition. The Climate Change Committee and every international body looking at this issue say that we need carbon capture, usage and storage, and we need hydrogen. Which companies, capabilities or engineering capacities are going to deliver those? It will be the jobs, people, balance sheets and skills that are vested in the traditional oil and gas companies, all of which are now involved in delivering the transition.

[Tommy Sheppard]

Will the Minister give way?

[Graham Stuart]

I will. Perhaps the hon. Gentleman can explain why Scottish nationalist policies will have a negative effect on the environment and cause the loss of hundreds of thousands of jobs in this country—for what?

[Tommy Sheppard]

With the greatest of respect, what the Minister says does not make sense. If most of the oil and gas coming out of Rosebank will be exported, how does not doing this lead to an increase in imports?

[Graham Stuart]

As I say, we are net importers in a global market. Oil and gas is processed in different places. It goes out and it comes back. As net importers, the alternative to using that gas here is that we will have more tankers coming in. As the hon. Gentleman knows, or certainly should, the upstream emissions attached to that are two and a half times higher than the emissions attached to gas, which Scottish workers are producing from British fields to the benefit of every taxpayer and the energy security of this nation.