Offshore Petroleum Licensing Bill

Dave Doogan Excerpts

2nd reading
Monday 22nd January 2024 Commons Chamber

[Dave Doogan (Angus) (SNP)]

The Scottish National party declines to give this Bill a Second Reading—[Interruption.] Would the Minister for Energy Security and Net Zero, the right hon. Member for Beverley and Holderness (Graham Stuart), like to intervene already? I would be happy to take it. This Bill is as unnecessary—much like the chuntering from a sedentary position—as it is unwelcome. The Prime Minister, no less, claimed that these measures would reduce energy bills, but of course that is untrue, and the Secretary of State was well advised to distance herself from that fantasy. It is claimed that the Bill will assist with the UK’s energy security, but of course it will do no such thing, given the combined effects of an international energy market and the vagaries of the UK’s refining capacity, which is increasingly and substantially incompatible with oil extracted from the North sea basin. The Government seek to gaslight us with claims that there are strict tests to be met in order to issue any new licences, when in fact these Potemkin tests will inevitably be met for each and every licence application in the future, should the Bill pass.

The Bill will not provide an evidence-based assessment of all licences on a case-by-case basis, and as a matter of actual fact, 27 new licences were granted in 2023 alone in the absence of any legislation of this nature and a licensing round has been held by the North Sea Transition Authority every year and a half since 2016. This proposed legislation will, in effect, undermine the NSTA by placing a statutory obligation on it to hold new licensing rounds every year, rather than as and when it deems them necessary in its professional capacity, as is currently the case. Moreover, the NSTA board unanimously agreed that the legislation requiring annual licensing rounds is unnecessary, but the Government are advancing it as a means to guarantee unfettered access to continued hydrocarbon extraction. That is not what we need.

The Bill’s proponents would have us believe that having more licences will deliver lower energy bills, but it will achieve no such thing. We all recognise that oil and gas will continue to be an essential part of our energy mix and, as the right hon. Member for Reading West (Sir Alok Sharma) said, we use oil and gas—certainly oil—for more than combustible uses, so we will need a measured and qualified licensing regime to accommodate an ongoing reliance on oil and gas as a source of energy and much else, but that is not what the Bill proposes.

The thing that is pushing up the price of household and commercial energy is not a lack of licensing but the price of gas on the international market that consumers are forced to pay not just for heating but for electricity, given the bizarre pricing structure and how the UK is set up to favour gas. That energy pricing disaster is compounded by this Government’s failure to invest properly in alternatives such as large-scale, long-duration storage solutions, which would dial a considerable amount of gas out of the system and dial down prices, too.

Fourteen years of Tory mismanagement of our energy security have seen barely sufficient investment going into renewable generation to meet the demands of the climate emergency, and practically no investment going into the network to transmit this new energy. That means consumers are denied access to large swathes of cheap, green, renewable energy because of a lack of grid capacity. Renewable energy, once switched off, to compensate for a 1960s network, is substituted by gas. I appreciate that the Government are improving and investing in capital infrastructure, but it is 14 years too late.

The Bill will not deliver energy security. Indeed, the former chief executive of BP, Lord Browne, said that the Government’s decision to expand North sea drilling is

“not going to make any difference”

to Britain’s energy security, and the former head of the NSTA, Andy Samuel, said in 2022 that the introduction of new licences will make a difference only “around the edges”.

What we need from the Government is a bold plan to further accelerate the electrification from renewables of our domestic energy market. What we are presented with is a backward-looking cash grab for Scotland’s hydrocarbons, which comes at the cost of a just transition. Scotland will lose out by having our energy policy dictated by a remote, luddite Westminster Government who are relentlessly focused on the rear-view mirror, rather than on the future and job security.

[Lloyd Russell-Moyle]

The hon. Gentleman is talking about energy policy being directed by other people. Does he share my concern about our continued membership of the energy charter treaty, which means that any deals signed now will have to be fully remunerated on their potential hope value, not their actual value, even if they are phased out or cancelled by a sovereign Britain or by a sovereign Scotland? I am neutral on the latter issue. Does the hon. Gentleman not think that, like our European partners, we should withdraw from the energy charter treaty to allow ourselves true energy independence?

[Dave Doogan]

I agree entirely with the hon. Gentleman’s ambitions on the energy charter treaty. It is about time that the Government got off the fence on the issue and made a decision.

On job security, let us be clear that this Government care for oil and gas workers in Scotland every bit as much as they cared for the miners and the manufacturing workers in Scotland who were put to the sword in the 1980s, every bit as much as they care for our service personnel living in squalor, every bit as much as they care about the Post Office staff thrown into the privatisation mincer, and every bit as much as they care for junior doctors in England.

[Alexander Stafford]

On my previous intervention, I refer the House to my declaration in the Register of Members’ Financial Interests on my Falkland Islands trip paid for by the Falkland Islands Government.

The hon. Gentleman talks about the miners. In Rother Valley we were hit hard by the closure of the mines, which is why we need a transition. Keeping the new licences going will make the transition slightly longer and keep more people in work. Surely it is a good thing to diminish the negative impact that net zero will sometimes have on certain people.

[Dave Doogan]

The premise of the hon. Gentleman’s intervention is that by delaying things, and maximising oil and gas production, we somehow maintain this link. We could just as easily deliver the same thing by accelerating the delivery of renewable energy and the infrastructure to transmit it to where it is needed. That would have the added benefit of introducing lower bills for consumers and industry, and making sure that we are not reliant on petrostates from far away with questionable regimes. I am looking through the right end of the telescope, whereas the hon. Gentleman and his Government are looking through the wrong end.

In short, the Tories could not give a flying fig for any worker on these islands—as long as their share price remains healthy, to hang with the rest of us. If the question is “How do we protect and transition oil and gas jobs into renewable energy production?”, the answer is definitely not to overstimulate unlimited offshore petroleum licensing. According to industry data, 441,000 jobs were supported by the oil and gas sector in 2013, but that number has already fallen to 215,000—so we are talking about 200,000 fewer jobs in 2022. The Government have issued approximately 400 new drilling licences, in five separate licensing rounds, in that period. The claim that there is a direct and proportionate relationship between the amount of licences issued and the amount of jobs sustained is entirely spurious.

[Douglas Ross]

Can the hon. Gentleman explain to the House and, importantly, his constituents in Angus, many of whom are employed in the industry, what the Scottish National party’s current position is on the issuing of new oil and gas licences? At the moment, does it support them? Or is there is a presumption against them?

--- Later in debate ---

[Dave Doogan]

What is important is the understanding that we will be reliant on oil and gas. This Government are creating a false dichotomy between having unlimited new licences and having an oil and gas sector in Scottish waters and within the UK; the two things are not related in the fashion that they are setting out. The hon. Gentleman should be asking why the UK Government will not match the Scottish Government’s ambition for the just transition and our half a billion-pounds of investment, but I will get on to that in a second.

[Douglas Ross]

rose—

[Dave Doogan]

Is the hon. Gentleman asking whether I am giving way?

[Douglas Ross]

For clarity—

[Dave Doogan]

No, I am not.

Where is the guaranteed ringfencing of revenues from North sea oil and gas production to develop more renewable energy and accelerate the just transition? Accelerating the just transition—not unduly sustaining legacy energy production—will make the difference and deliver real jobs with sustainability, in terms of both the carbon outputs and how those jobs will last into the future. Where is that support?

The Government have claimed that the circa £50 billion in tax revenue over the next five years “could” be used to support the shift to cleaner forms of energy—we are used to jam tomorrow from this Government—but any other form of fiscal revenue could be used to support the future development of renewables. The vacuous observation that the Government have made is so unconnected to reality, unconditioned and unqualified as to be meaningless.

It would have been an uncharacteristically elegant solution for this Government to have ringfenced future oil and gas revenue for the green transition, to marry the endowment of the legacy hydrocarbon industry to the priming of the pump of opportunities of the next renewable industry, but this Government are at least consistent in their ability to disappoint.

To the casualty of the climate from this Bill, which is an inevitable consequence of this course of action, we can add the pace of delivery for the new net zero economy opportunities in Scotland. When oil and gas opportunities go to a plateau of exhaustion in Scotland, as everyone knows they will, what will be left in the cupboard to support communities such as those in Banff and Buchan, Angus, West Aberdeenshire and Kincardine, and elsewhere in the north-east of Scotland? Why are the revenues from the historical exploitation of oil and gas not going into accelerating renewable opportunities and making sure that we deliver jobs for the future?

As I said in response to the intervention by the hon. Member for Moray (Douglas Ross), the Scottish Government have invested £500 million into the green transition for Scotland—[Interruption.] Well, unlike anything to do with this Bill, that funding is allocated and is there to be invested. I will tell you why, Mr Deputy Speaker, this Government are nervous of that figure: because if the UK were to match Scotland’s ambition in the just transition, it would be £5 billion across the UK, but we see no such commitment, vision or climate ambition. What we see is a Tory Prime Minister who cannot effectively lead his party, let alone the UK state or an energy transition, seeking to divide people on the climate, and rolling back on climate action commitments and signals given to industry on electric vehicles and boiler replacements, while over-exploiting Scotland’s legacy hydrocarbons and dragging his feet on carbon capture, usage and storage, especially Acorn.

The picture is revealed even for those with the largest blinkers. The hallmark of failure is stamped on this Tory Government, who will politicise anything, even the climate consensus, in a vain attempt to stem their electoral destruction. The Bill fails to outline a transition away from fossil fuels as per the agreed resolution at COP28, on which the ink is barely dry. The UK delegation signed up to that agreement in the full knowledge of this Bill’s impending passage. We all know that the UK has a questionable approach to its international obligations, but this is plain bad faith.

Finally, the Bill does not acknowledge the climate emergency. In fact, with this Bill the Tory Government are thumbing their noses at the climate challenge that we all face together and should address together. In the Bill, the Government seek to over-capitalise on legacy energy production rather than invest in the renewable energy jobs of the future. Much of that employment and enterprise will be in demand mitigation, with thermal insulation, equipment upgrades and new technologies. As a result of the ambition that drives the Bill and the warped thinking behind it, jobs, the economy, bill payers and the climate will suffer, so I urge Members to decline to give it a Second Reading.

--- Later in debate ---

[Dave Doogan]

I thank the hon. Gentleman for this opportunity to reiterate what I said previously. There is a fundamental understanding of the ongoing role of oil and gas in meeting our energy needs. Whether that is dealt with and satisfied through existing licences or future licences is a moot point, and I will tell him why: I have already demonstrated, in as simple terms as I can, that the implication that there is a direct and proportional link between job security and licences issued is spurious. I am aware of the point he is trying to make, but he is not making it well. I have told him what the situation is, and he can either like it or lump it.

[Douglas Ross]

I would just like an answer. I have tried twice, and that was as clear as mud. I think people looking at that answer will actually be unable to tell what the hon. Gentleman’s personal position is and what the SNP’s position is. That is really important. Maybe it is telling that only one SNP MP has turned up to a debate about the oil and gas sector—

[Dave Doogan]

Have you seen the weather?

[Douglas Ross]

I have seen the weather. I saw the weather when I left Inverness airport at 6.45 this morning. I know what the weather is like in Scotland, but it is important that when we are debating the oil and gas industry, which is crucial to Scotland and the United Kingdom, the SNP can find only one MP to turn up.

--- Later in debate ---

[Douglas Ross]

I absolutely agree with my hon. Friend. We have a base at Buckie harbour that is supporting a number of jobs and will continue to do so for decades to come—it is a small number of jobs at the moment, with opportunities to grow—but at the moment the vast majority of the workforce is employed in the oil and gas sector. I agree with him that they will go elsewhere, shifting their jobs and expertise to other countries, and another city will become Europe’s offshore energy capital. That would be devastating not just for our net zero ambitions and for Aberdeen, but for the economy of Scotland and the UK as a whole.

We have already heard in the debate that 90,000 Scottish workers are employed in North sea oil and gas. It has been for decades, and will continue to be for some time to come, one of the most important sectors in Scotland’s economy. Yet I believe that it is the position of the SNP—it would be if more SNP Members than just the hon. Member for Angus had turned up to state their case—to put those jobs on the scrapheap. The SNP wants to have a cliff edge in our oil and gas sector and exploration because it is in government with the Greens in the Scottish Parliament. It is supporting Green Ministers who want an immediate end to the extraction of fossil fuels from the north-east, and that is putting those 90,000 jobs, and the Scottish and UK economies, at risk. That is viewed extremely dimly in many parts of Scotland, particularly the north-east, which the hon. Member for Angus represents.

[Dave Doogan]

It is a bit rich listening to a Scottish Tory MP talk about the bountiful experience of North sea oil and gas for Scotland. If we had been independent in the ’70s, we would be embarrassingly well off compared with our neighbours elsewhere in these islands. The hon. Member says that we want to throw workers in the oil and gas industry in Scotland under a bus, and that we want to see a “cliff edge” where those jobs disappear. What is his evidence for that? We are investing in a just transition. Whereas he is trying to pursue an endurance of legacy opportunities for employment, we want to turbocharge new opportunities for jobs over 150 to 200 years.

[Douglas Ross]

My evidence is very clear; in fact, it is the hon. Gentleman’s own words. When he cannot even tell this House or his constituents about the SNP’s position on the presumption of new oil and gas licences, that is an answer in itself—not a moot point. The SNP clearly does not support it, and he cannot quite find the words to say it yet. That is the SNP position because it is in office with the Greens in Holyrood, and they are increasingly abandoning the north-east oil and gas sector and the jobs that rely on it. As I say, that is viewed extremely dimly not just in the north-east but right across Scotland.