Annual Energy Statement
Debate between Chris Huhne and Gareth Thomas
Chris Huhne
My hon. Friend will know that the forecasts that we are making for 2020 crucially depend, in terms of their impact on household bills, on what one thinks will happen to the price of oil and gas. If one thinks that it will basically be the same as today, there is a modest increase in the cost of policies compared with the alternative; if one takes the International Energy Agency’s view of a $100 price for a barrel of oil, for example, one sees that our policies are reducing the cost of electricity to households. However, it is absolutely crucial to ensure not only that the policy framework delivers overall lower costs but that poor households, in particular, will not bear the brunt. That is why we are looking at social price support and why, as I said to the hon. Member for Manchester Central (Tony Lloyd), it is absolutely crucial to target our energy efficiency measures on fuel-poor households so that we can deal with the cause, not merely with the symptoms.
Mr Gareth Thomas (Harrow West) (Lab/Co-op)
I was grateful to hear the Secretary of State’s reconfirmation of the doubling of inspections of offshore oil and gas rigs. However, given that we have just seen testimony from the United States about Transocean oil rig managers ordering that a general alarm on the Gulf of Mexico oil rig that exploded be disabled, is it not time for the Secretary of State or the energy Minister to summon the Health and Safety Executive and Transocean to give further assurances about the safety of the 10 Transocean oil rigs that operate in UK waters?
Chris Huhne
The hon. Gentleman raises an important point that we are very aware of and have been devoting a lot of attention to in the Department. We had our own problems in this country with Piper Alpha at the end of the 1980s. In response to that, substantial changes were made in the regulatory regime which meant that there were no conflicts of interest of the sort that have existed in the American regime, and the US Administration are taking on board some of those lessons. We have tightened up the regime, which we want to be as effective as possible, and we will learn the lessons as they come out from the various inquiries into what happened with Deepwater Horizon. I assure the hon. Gentleman that we will also be in close discussions with our Norwegian counterparts; we are already doing so at an official level. Last week in the US, at the clean energy ministerial meeting, I had some interesting discussions with my Norwegian counterpart on learning the best lessons from what has gone on in the Gulf of Mexico to ensure that we have an absolutely state-of-the-art regulatory regime, as I assure the hon. Gentleman we will.
Gulf of Mexico Oil Spill
Debate between Chris Huhne and Gareth Thomas
Chris Huhne
I thank my hon. Friend for that acute and well directed question. There is an issue about the extent of outsourcing, which has certainly gone on apace in the oil and gas industry; for example, in subcontracting to companies such as Transocean. That may be one of the lessons that comes out of the inquiry. However, there is another side to the issue: the oil majors can argue that the level of expertise of a company such as Transocean may be higher than their own, precisely because it is operating so many rigs and contracting to so many oil majors. That will clearly be an issue for the investigation. All the big oil companies will be much more aware of the potential reputational damage that can be inflicted by an environmental disaster of this kind. I think that they will take that on board, and I hope that it will provide an additional incentive to make sure that corporate governance, including its ethical dimension, is strengthened.
Mr Gareth Thomas (Harrow West) (Lab/Co-op)
I welcome the Secretary of State’s response to my hon. Friend the Member for Aberdeen North (Mr Doran). I draw his attention to a helpful written answer from the Minister of State, Department of Energy and Climate Change, the hon. Member for Wealden (Charles Hendry), on 7 June, in which he revealed that there are some 10 Transocean rigs registered and operating in UK waters. Two are registered in the Marshall Islands, two in Panama, three in Liberia and two in Vanuatu. Given the obvious public concern about where they are registered, has the Secretary of State considered ordering an immediate review of the safety of those rigs, and if not, why not?
Chris Huhne
I thank the hon. Gentleman for that question. That is precisely why, when we conducted the urgent review of our regime, we thought it appropriate to increase immediately the number of environmental inspectors who can go on to rigs and ensure that the rules and regulations that are set on safety, including environmental safety, are properly applied. That is exactly what we have done. Frankly, much of the world’s shipping is registered in what often seem to be exotic jurisdictions, but the key point surely has to be that anybody operating in UK waters, whatever the basis of the registration, should operate to UK standards and must be properly inspected, and we will not take any risks. That inspection is under way, and there is an increase in the pace of inspection as I speak.