Here are the climate-related sections of speeches by MPs during the Commons debate Energy BILL [ Lords ] (First sitting).
The Minister of State, Department of Energy and Climate Change (Andrea Leadsom)
The Department of Energy and Climate Change is making strong progress in implementing the recommendations of the Wood review. In particular, the principle of maximising economic recovery of offshore UK petroleum was established in the Infrastructure Act 2015. We also took a power in that Act to charge a levy to fund the OGA. As the hon. Gentleman knows, the OGA was initially established as an Executive agency but will become a Government company as a result of this Bill. Classification as a Government company will enable the OGA to have operational independence from Government and will provide a more suitable platform and the regulatory certainty that the industry requires to invest in exploration and production activity. It will also allow the OGA the necessary operational freedoms to recruit high-calibre individuals in a competitive employment market.
To be very clear, there are very well known precedents for Government companies, including the Prudential Regulation Authority, the Financial Conduct Authority and the Highways Agency. The Government-owned company is a private company under the Companies Act 2006, limited by shares, with the Secretary of State for Energy and Climate Change as the sole shareholder. The Secretary of State will appoint the chair and a non-executive director to the board. Of course as the hon. Gentleman knows, the OGA has a new independent chief executive who is already making strong progress. We absolutely support the establishment of the OGA in the terms in which it has been set up.
[Source]
Andrea Leadsom
The clause, which was added to the Bill by the Opposition in the other place, rewrites the OGA’s principal objective to maximise the economic recovery of UK petroleum, as originally introduced by the Government, in three significant ways. First, it removes the Wood review’s central premise to maximise the economic recovery of UK petroleum within part 1A of the Petroleum Act 1998, replacing it with an objective to maximise the economic return of UK petroleum. Secondly, it imposes on the OGA an obligation to retain oversight of the decommissioning of oil and gas infrastructure. Thirdly, it imposes an obligation on the OGA to secure oil and gas infrastructure for reuse for the transportation and storage of greenhouse gases.
The clause is unnecessary because the Government tabled substantive, meaningful amendments in the other place to reflect the OGA’s important functions in respect of decommissioning and CCS. Measures in the Bill will ensure that the OGA will have a strong role on decommissioning to ensure that costs are controlled, and that the reuse of assets, including for CCS development, is given full consideration before decommissioning is decided upon or takes place. The Government have also brought forward amendments to ensure that the OGA must have regard to the storage of carbon dioxide and how that may assist delivery against climate change targets when carrying out its functions. The Government have also made it clear that the petroleum-related information that the OGA will have powers to acquire includes that which is relevant to the storage of carbon dioxide.
Crucially, this approach is sensitive to the current economic landscape of the North sea. It strikes the right balance and does not dilute the OGA’s focus on maximising economic recovery. It is worth underlining to hon. Members that the Carbon Capture and Storage Association has strongly welcomed the Government’s amendments to ensure that the CCS industry is given due consideration and that it can access the information that it needs.
[Source]
Clive Lewis (Labour)
In light of the collapse of the oil price, the OGA is in some ways more like an insolvency practitioner that has come to extract the last bits of value from the UKCS and manage the process as effectively as possible, and that is the context of clause 8. It is clear that the OGA’s stewardship role is its critical function, with its regulatory role very much secondary to that. In fact, the OGA bears no resemblance at all to any other regulator, which is why we want to include carbon capture and storage as part of its principal objective. CCS is a crucial element of the long-term value that can be yielded from the UKCS.
The UK has the opportunity to become a leading global player in the CCS sector. We have abundant offshore CO 2 storage capacity in depleted oil and gas fields, and that is in combination with enhanced oil recovery and storage in deep saline rock formations beneath the North sea and the eastern Irish sea. Experts estimate that geological formations beneath the UK section of the North sea can store almost 80 billion tonnes of carbon dioxide, which is more than enough to meet the needs of UK CCS projects for the next century. That advantage is made even greater when coupled with the fact that many of the UK’s largest carbon emitters—power and industrial facilities—are already clustered together around major estuaries, such as at the Humber, Teesside and Merseyside, which are close to offshore storage capacity in the North sea and the eastern Irish sea. Many of those very energy-intensive industries have no long-term viability without CCS if the UK is to have a chance of reducing its greenhouse gas emissions.
[Source]
Andrea Leadsom
I will try to reassure the hon. Member for Norwich South about the OGA’s role in CCS. The OGA will be responsible for issuing carbon dioxide storage site licences and for approving carbon dioxide storage permit applications. We expect the OGA to have subsequent involvement in monitoring, review and possibly enforcement activities as set out in the regulations, which are transposed from the requirements in the EC directive on geological storage of CO 2 . The OGA is proactively considering the role of CCS in the technology and decommissioning strategies that it is developing. The Wood review acknowledged the potential benefit of CCS to the UK continental shelf and, as recommended, the OGA will work closely with DECC to examine the business case for using depleted reservoirs for carbon storage.
Under MER UK, CO 2 -enhanced oil recovery is being considered by the OGA as part of its wider enhanced oil recovery work. CO 2 -EOR could make a substantial contribution 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 that could 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 to foster innovation in EOR technologies.
[Source]
Clive Lewis (Labour)
We support the clause because, instead of having a strategy whose primary goal is to maximise the quantity of petroleum profitably extracted from the North sea, we should have one that maximises the return on investment—investment in infrastructure, for example—in the North sea. If and when activity such as CCS can be carried on economically in the North sea, the OGA should be given the job of promoting that as well. The OGA’s powers to push the industry to collaborate are extensive and we applaud some of the points that the Minister made previously. However, it clearly makes sense for the OGA also to think about the wider uses and potential reuses of the infrastructure, information and skills that are there, which other industries could deploy on the UKCS later, and CCS is a clear example of that.
The clause would, first, simply ensure that the OGA keeps its eye firmly on CCS and builds into that policy. Secondly, it is clear that some of the biggest players on the UKCS are still making profits and paying out dividends—Royal Dutch Shell and Total certainly are. Fluctuations in the price of oil are normal, and it is likely that the price will go back up at some point, although it is not wise to make predictions as to when.
[Source]
Dr Whitehead
“ Environmental considerations and climate change
The need for the OGA to address environmental considerations and to facilitate the pursuance of section 1 of the Climate Change Act 2008 in relation to relevant activities.”
This amendment would require the OGA to have regard to environmental considerations and climate change when exercising its functions.
[Source]
Philip Boswell (Coatbridge, Chryston and Bellshill) (SNP)
While the environmental considerations of climate change are vital, of course, we do not feel that this is the forum to deal with them. It is the Government as a whole, and DECC in particular, who should be dealing with this and who carry the responsibility. As such, we will not pursue this.
[Source]
Andrea Leadsom
Amendment 8 seeks to require the OGA, when exercising its functions, to have regard to the need to address environmental considerations and to facilitate the pursuance of section 1 of the Climate Change Act 2008 in relation to relevant activities. The European offshore safety directive requires the separation of licensing and environmental functions, and to require the OGA to have regard to environmental considerations risks breaching the requirements of that directive.
Climate change is, of course, of great importance, but the OGA’s primary role and focus will be to deliver MER UK. It would not be right to impose obligations on the OGA relating to environmental considerations in respect of which it does not have expertise and is not required to have expertise. It is important that our climate change objectives and environmental regulations are furthered by the experts in the field. The expertise on climate change will remain with the Secretary of State for Energy and Climate Change. Likewise, environmental regulation in relation to offshore oil and gas will remain with the Secretary of State and, onshore, it will remain with the Environment Agency and with the Scottish Environment Protection Agency and Natural Resources Wales in the relevant jurisdictions in Great Britain.
It is right that, once established, the OGA will be bound by environmental law and therefore in the exercise of its functions it will by default have regard to environmental issues. It already has existing close working links with the environmental regulators and these will continue. However, I do not think it is right or necessary to impose on the OGA obligations to consider environmental considerations and climate change. Both of these are matters that would require a change in the core expertise of the OGA if it were to properly fulfil them. In addition, we can foresee circumstances where these obligations might conflict with the requirement on the OGA to maximise economic recovery. The objectives are not incompatible at policy level, in that we will need significant oil and gas in the transition to a low-carbon economy.
I am grateful to the hon. Member for Southampton, Test for reassuring the Committee that his party accepts that there is a future for the North sea basin and they do not wish to shut it down. I am sure that all hon. Members in the Aberdeen area will be delighted to hear that those 350,000 jobs would remain safe in Opposition hands and that it is not their intention to precipitately close down the North sea industry. Nevertheless, in particular circumstances each consideration in relation to the environment and climate change could point to a very different course of action if the Opposition amendments were made, creating a very difficult position for an arm’s length body to manage. That would be very unfortunate for the OGA, leaving it facing an impossible dilemma between two incompatible statutory obligations. I hope that Members are convinced that we already have enough powers to ensure that these important matters are given appropriate consideration.
Clause 10 also gives the Secretary of State the power to give the OGA directions on matters of public interest. The environment and climate change are clearly matters of public interest and the powers in the clause may be exercised if it proves necessary.
Indeed, consideration of reuse of infrastructure already plays an integral role in the decommissioning approval process, and amendments tabled by the Government in the other place would reinforce that requirement by creating a statutory basis for the alternatives to decommissioning that would have to be considered by industry, the Secretary of State and the OGA. When a decommissioning programme is submitted, the current process requires any person who wishes to decommission relevant infrastructure to demonstrate that the potential for reuse has been fully examined, as set out in Department of Energy and Climate Change guidance on decommissioning under the Petroleum Act 1998.
[Source]
Dr Whitehead
(ab) Are necessary to meet the terms of the Climate Change Act 2008 or European or international obligations on climate change”
This amendment would allow the Secretary of State to give direction to the OGA if the Secretary of State considers that these are necessary to inform the OGA’s role in developing and promoting carbon storage and/or to meet the terms of the Climate Change Act 2008 or any international obligation on climate change.
However, although the clause gives the Secretary of State fairly wide powers to provide directions to the OGA, it does not include the issues to which we adverted in the discussion on the previous clause, which is the question of what happens to the OGA’s role in developing and promoting carbon capture and storage, and how the OGA meets the terms of the Climate Change Act 2008.
“to meet the terms of the Climate Change Act”.
[Source]