Energy Bill Debate: Peter Aldous calls for a tripartite approach to make the best of the remaining oil and gas reserves on the UK continental shelf

14th March 2016

Peter Aldous makes a last-ditch call to the Chancellor to include tax incentives in the Budget for the oil and gas industry. He says we need a tripartite approach with the Oil and Gas Authority, industry and the Treasury working together to make the best of the remaining oil and gas reserves on the UK continental shelf. 

Peter Aldous (Waveney) (Con): As we have heard, this Bill is predominantly about setting up the Oil and Gas Authority. We need to complete this task as a matter of urgency. The North sea oil and gas industry is facing significant challenges. There have been 75,000 job losses in the past 15 months and there is a risk that whole communities along the North sea coast could be very badly affected.

The United Kingdom continental shelf is now a mature basin, but the remaining reserves are significant and they are vital to the UK in many different respects. These resources are best managed through a new tripartite approach, with the Oil and Gas Authority, industry and the Treasury working together—the Oil and Gas Authority promoting the maximisation of economic recovery, industry working to deliver efficiencies, building on the good work that it has carried out since 2014, securing a 40% fall in operating costs, and the Treasury. This is a last minute plea to provide the low tax regime that will attract footloose global investment.

The UKCS has so much to offer in terms of promoting energy security in an uncertain world, facilitating the transition to a low-carbon economy and continuing to be the cornerstone of British industry. Perhaps we could have done this better over the past 50 years. To do so now it is essential that the OGA continuously promotes collaboration. That must be ingrained in its DNA. What is needed is not just collaboration between the OGA, industry and the Treasury; it is collaboration between operators, as evidenced by the partnership of Faroe, Petrofac and Eni working together, collaboration between operators and their service providers, building long-term partnerships and learning lessons from other sectors, such as aviation and the car industry, and collaboration with other sectors, in particular offshore wind. I urge the Chancellor to consider introducing measures on Wednesday that encourage such collaboration.

The North sea oil and gas industry has been the leading actor in the country’s post-war economy. In the past we have perhaps taken it for granted and perhaps at times not managed it prudently. If we had our time again, perhaps we would do it differently. It now needs us to act and work for it to ensure that it can move forward. We must not let it wither on the vine. We must grasp the opportunity tonight and the Chancellor must do so on Wednesday to give the industry every opportunity to survive and then thrive. We owe it to those working in the industry and the communities in which they live.

The final chapter of oil and gas exploration on the UKCS must not be a harsh, bleak winter. It must be an Indian summer. Let us pass this Bill tonight and get on with the task of securing that Indian summer.

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Peter holds regular surgeries at various locations in the constituency. Please call 01502 586568 to make an appointment.

 

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