Peter Aldous acknowledges amendments put forward for Offshore Petroleum Licensing Bill designed to reduce flaring and venting of methane by new offshore installations, but takes the view that these issues are better negotiated by the independent North Sea Transition Authority (NSTA) which has a good record on delivering net zero, works with the industry and is not impeded by the four-to-five-year political cycle.
Peter Aldous (Waveney) (Con)
As I mentioned on Second Reading, the Bill is of particular interest to me because the oil and gas industry has played a significant role as a major employer in the Waveney and Lowestoft area for nearly 60 years. Moreover, the offshore wind industry and other low-carbon energy technologies, such as nuclear and hydrogen, will provide exciting local job-creating opportunities for generations to come. Dame Rosie, I also chair the British offshore oil and gas industry all-party parliamentary group.
2.00pm
As I mentioned in the debate on 22 January, there are sound reasons to support the Bill in its current form, as a great deal has happened geopolitically in the past two to three years. However, as we have heard today, some say that the Bill is unnecessary because licensing rounds have in any case been held on a broadly annual basis, up to the 32nd licensing round that opened in 2019. I am also mindful that, given the enormous amount of private sector investment that we need to leverage in so as to secure the transition and deliver our net zero targets, there is a need for both consistency of message and the avoidance of political meddling.
In the previous debate, I highlighted that one of the Conservative Government’s most notable achievements in recent years was the creation in 2016 of the Oil and Gas Authority, which now operates as the North Sea Transition Authority and which has correctly acknowledged that the delivery of net zero is its core mission. I also expressed the worry that the Bill undermines the independence of the NSTA. It is through this prism, Dame Rosie, that I consider these amendments, many of which are well reasoned and well intentioned.
The NSTA’s work on delivering net zero derives, as we have heard, from the North sea transition deal, which was an agreement between the UK Government and the oil and gas industry facilitated by the NSTA. This should be the forum through which the amendments before us today are negotiated. By pursuing this partnership approach, we shall retain the confidence of an industry, which, as I have mentioned previously, is globally footloose and which we need to deliver net zero and to secure the enormous job opportunities that are potentially available.
Last month, the East of England Energy Group published its five core principles for energy in the east of England. It also set out what is needed from Government so that it can deliver its vision. Its requirements included a stable fiscal policy, so as to boost investor confidence and project progression, and stable and predictable regulations and policy mechanisms that foster investor confidence and support energy security and the UK’s progress on meeting its decarbonisation targets. It is against those parameters that we should judge the amendments. I would add that the Opposition’s green prosperity plan has alarmed industry and places at risk the inward investment that is so badly needed. However, that is a debate for another day.
On Second Reading, I suggested that we should consider a more ambitious climate compatibility checkpoint and bring forward a ban on routine venting and flaring. Those are sensible ambitions, as I have said, but they do need to be worked up in conjunction and partnership with the NSTA and industry, and not imposed on them. On amendment 12 and new clause 2, it should be added that the NSTA has a good track record with regard to both venting and flaring and marine spatial planning.
David Duguid
My hon. Friend mentioned the role of the NSTA in the facilitation and delivery of the North sea transition deal, which, as he said, was negotiated between industry and the UK Government. Does he agree that what he is advocating is precisely the purpose of the North sea transition deal—to facilitate the delivery of energy transition to net zero?
Peter Aldous
My hon. Friend is quite right: the North sea transition deal is the foundation stone on which we should be building, involving industry, involving the NSTA and giving industry the confidence to make the significant investment that we need.
The North sea transition deal includes the target to cut greenhouse gases and emissions by 10% by 2025 and by 25% by 2027. The NSTA wants to halve emissions by 2030. It is also committed to all new developments having no routine flaring and venting, with zero routine flaring across all North sea platforms, whether new or existing, by 2030 at the latest. Good progress is being made. Although figures are not yet available for 2023, emissions were reduced by 23% between 2018 and 2022, while flaring has been reduced by 50% over the same period. In addition to tracking, monitoring and reporting performance, the NSTA closely scrutinises operators’ applications for flaring consents, pushes back against requests to increase flaring, and has ordered operators to restrict production to stay within agreed limits. It has, where necessary, issued fines for breaches.
On marine spatial planning, the NSTA follows a precautionary approach and is acutely aware of the need for co-ordination and collaboration in what are increasingly crowded and sometimes very sensitive and precious waters. It is thus working closely with such organisations as the Crown Estate and the Marine Management Organisation in delivering the marine spatial prioritisation programme of the Department for Environment, Food and Rural Affairs.
In conclusion, the Bill and the amendments raise very important matters, but to tackle them properly, we need to adopt a long-term approach that transcends the four-to-five-year political cycle and that fully involves business.