Energy BILL [ Lords ] (Third sitting) - 28th January 2016

The Minister of State, Department of Energy and Climate Change (Andrea Leadsom)

I would, however, like to assure Committee members that, under MER UK—the maximising economic recovery UK strategy—the OGA is considering CO 2 enhanced oil recovery as part of wider EOR work. CO 2 EOR could make a substantial contribution, as the hon. Gentleman rightly pointed out, to lowering the cost of CCS projects, as well as benefiting North sea revenues and jobs. However, more analysis is needed on the timing of future CCS projects and how they might affect CO 2 EOR development, and on the viability of redeveloping abandoned fields as CO 2 EOR projects.

The OGA will collaborate with the CCS industry and foster innovation in EOR technologies. Specifically, it has already planned work on EOR, including on advancing the next tranche of EOR technologies and developing a framework for their economic implementation. It will also develop a CO 2 EOR strategy and a five-year plan during 2016.

[Source]

Philip Boswell

We have some concerns that such frequency of report by the Secretary of State might duplicate and, depending on the methodology used, conflict with the industry work already going on in the area. It might also create additional onerous data-reporting demands on the OGA. However, reliability, transparency and effective cost-management in this respect are critical. We would also expect wide consultation across the OGA, the Department of Energy and Climate Change and the industry to be undertaken.

[Source]

The Chair

‘(1) By June 2017 the Secretary of State shall develop a comprehensive strategy for the Department of Energy and Climate Change to incentivise the competitiveness of UK-registered companies in bidding for supply chain contracts associated with the decommissioning of oil and gas infrastructure (“the strategy”), which shall be reviewed annually thereafter.

[Source]

Andrea Leadsom

The new clause would require the Secretary of State to develop a strategy for the Department of Energy and Climate Change to incentivise the competitiveness of UK-registered companies in the decommissioning supply chain market. There is no doubt that UKCS operations are served by a world-class UK supply chain. The industry supports more than 350,000 jobs in the UK and produces a £35 billion annual turnover. As we have discussed, the inevitable consequence of a maturing basin is the ramping up of decommissioning activity in the North sea in the coming years.

I was delighted yesterday to be enrolled in a new ministerial group on oil and gas, chaired by the Secretary of State for Energy and Climate Change, which has been set up to reiterate the UK Government’s commitment to supporting the oil and gas industry and those who work in it. We met for the first time yesterday and agreed to produce a UK oil and gas workforce plan in the spring. This will focus on what steps the Government aim to take to support those who may lose their jobs in the oil and gas sector, and will set out how Government and industry can help the skilled workers, particularly in the supply chain, move into other sectors, including other energy-related infrastructure projects: the offshore wind sector and the new nuclear sector, for example. This builds on the significant work that the OGA is already doing in this area, bringing together industry, Government and trade bodies to develop and promote a strong decommissioning supply chain that can compete globally, while anchoring activities in the UK.

[Source]