Oil and Gas

Gareth Snell Excerpts

Tuesday 24th March 2026 Commons Chamber

[Martin McCluskey]

We have been importers of gas since 2004, and the Conservatives will know—because they presided over the period of decline—that it has been declining for some time.

Recent events in the middle east are yet another reminder of the need to speed up the transition and protect British people from price shocks. Thanks to our mission to make the UK a clean energy superpower, we have already seen £90 billion of investment announced for clean British energy, but we are now determined to go even further and faster in pursuit of national energy security.

[Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)]

I accept the Minister’s point about having more home-grown energy, and renewables can be good for insulating ourselves from economic shocks, but he will know that great swathes of our industrial base are gas dependent, not least the ceramics industry. What message does he send to them? The current price per therm is twice what it was three weeks ago. Those business are renewing their contracts. This is going to kill industry in certain parts of our foundational sector that we need to meet our mission, so what is the Government’s message to those industries?

[Martin McCluskey]

My hon. Friend is a real advocate for the industries in his constituency. The Minister for Industry is looking in detail at this and coming forward with proposals for industry to take us through this moment, as we deal with the situation in the middle east.

We are bringing forward the next renewables auction months after our most successful auction ever secured enough power for the equivalent of 16 million homes. Just today, we set out plans to make plug-in solar available in supermarkets so that more people can put a panel on their balcony or outdoor space and begin saving energy. We are also ensuring that heat pumps and solar panels will be standard in new-build homes.

The energy profits levy has been mentioned by a number of hon. Members across the House. Since its introduction in 2022, the levy has raised around £12 billion. As I said earlier, this revenue supports vital public services. As the Chancellor noted at the recent spring forecast, the energy profits levy will be replaced by the new oil and gas price mechanism in 2030, or sooner if average oil and gas prices over six months fall below the thresholds of the energy security investment mechanism. The Chancellor recognises industry’s calls for the EPL to be replaced by the mechanism, and wants to work with industry to provide certainty on the future fiscal regime while taxing the windfall profits of energy companies.

--- Later in debate ---

[Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)]

I will start with the things that we all agree on. I think that across the House, we all acknowledge that the international energy prices we face in this country are too high. As the Minister is on record as saying, there is a rollercoaster effect when it comes to the price of gas. Today, it is 149p per therm; it was 120p per therm in February 2025, and it was 38p per therm in February 2021. We have to acknowledge the fact that oil and gas prices are going up around the world, particularly gas prices, and the impact can be felt not just in the jobs that the hon. Member for Gordon and Buchan (Harriet Cross) rightly spoke about, but in jobs in those industries that are gas-dependent.

The thing that I find difficult to stomach is when we talk about energy in the round, as if there is only one type of energy and everything will eventually run off it. Energy is a diverse group of ways of powering things. It can be electrical or nuclear, but in most of our foundational industries, it is gas. We acknowledge that gas will be here for a very long time—we will have to use it to power the kilns that make the bricks to build the houses we want to build. We will need gas to power the furnaces in the foundries that make the metal and steel for our defence development and manufacturing. If we want to make paper, glass, cement or lime in this country, we need gas. So many parts of the economic powerhouse that is the United Kingdom are dependent on gas, and while I agree with my Labour colleagues that we should move at pace to transition to electricity where that is possible, there are sectors in this country where that transition simply is not possible.

[Laurence Turner (Birmingham Northfield) (Lab)]

My hon. Friend is making an outstanding case. Does he also agree that gas is an important feed stock in a number of critical industries, such as the production of ammonia, which is essential in the agricultural sector?

[Gareth Snell]

Absolutely. If we want to make fertiliser or other industrial gases in this country, we need natural gas to power those processes. There is no other way—the chemistry simply does not exist to create the gases we need without using natural gas. As such, although I absolutely support transitioning towards net zero and towards electricity, we have to recognise that great swathes of our industries simply cannot do so, and if they can, they do not have the capital to make the research and development investments that are necessary. We cannot yet fire a kiln with hydrogen in this country. We cannot get a stable supply of electricity to kilns in this country, not least because in the places where those factories are, such as Stoke-on-Trent, the grid capacity to do the hook-up simply does not exist and will not exist for generations to come.

When we talk about the transition towards net zero and more electrical generation, what are we going to say to the places that cannot do it? When we say, “It’s all going to be done through renewable energy”, what message do we send to workers in Stoke-on-Trent and in Denby in Derbyshire whose sector simply cannot transition away from gas? I want there to be more renewable energy. I want that technology to exist, but it is not there yet, and every time we forget that, we are talking about writing off jobs and livelihoods in the places that need them most.

[Graham Stuart]

Will the hon. Gentleman give way?

[Gareth Snell]

Very briefly.

[Graham Stuart]

Does the hon. Gentleman agree that we also need to see the hydrogen storage and transport model issued by the Government as quickly as possible?

[Gareth Snell]

Hydrogen has to be part of the future mix. Some very interesting tests are being done in Germany, where hydrogen is being mixed with gas to power some kilns and energy-intensive processes. That technology is very expensive, though, and most companies in the UK cannot afford it—only a handful can—so, yes, we need that investment strategy.

[Lizzi Collinge]

Will my hon. Friend give way?

[Gareth Snell]

Very, very briefly.

[Lizzi Collinge]

My hon. Friend is making some really good points. There are certain industries that do need gas, so does he agree that we need to shepherd that limited resource carefully, and that the transition in other areas of energy will support us to keep that gas and oil where we cannot replace it?

[Gareth Snell]

We can shepherd, yes, but the Government have to get to grips with how much we pay for importing that gas. That is where we are dependent on international markets. For electricity generation, the Government enter into contracts for difference, which are very lucrative for suppliers. Why are we not looking at such contracts for gas production? At a point when we expect there to be a transition away from gas—and therefore demand for production and the price of gas will fall away—why are we not saying that there will be some kind of Government-backed contract for difference for suppliers, so that those energy-intensive industries that require gas can get a stable price point for generations to come and we can protect jobs?

I am sure that when the Minister responds, he will turn to the tab in his file about the British industrial competitiveness scheme and the supercharger. I just want to reiterate—because it seems like no one in Government is listening—that those schemes do not apply to gas-intensive industries. As the Chancellor said today, and as Ministers have said from the Dispatch Box in the past, they are for electricity-intensive industries. If we are going to support energy-intensive industries in this country, it cannot be through those schemes alone.