MS 6: Unleashing British Energy

[William.Croft]

Mr. Speaker, 

I rise today, alongside our excellent Secretary of State for Energy, the Environment, and Climate Change to announce a series of policy changes the Government will be implementing immediately as a means to solve the root causes of the energy crisis. 

Now before the Leader of the Opposition and her lackeys lose their absolute minds, let me say this: my announcement today is one of two that the House should expect to receive from the Government. Later today, the Chancellor and I will speak to the House about the agreement we've reached with Ofgem and the major energy companies in order to avoid a disastrous increase to the price cap. I am confident the agreement we have reached there will provide greater confidence to consumers about their ability to afford energy bills, while also preventing damaging market interventions that will stifle investment and push off higher costs to the long term. Now, Mr. Speaker, I would like to share three key policy developments that the Government will be ordering to take immediate effect. 

First, I am announcing that the Government will be officially executing a policy of permitting "fast tracking," for oil and gas companies looking to engage in exploratory or drilling practices. In the immediate term, this will greenlight the six permits that were previously selected by the Government for fast tracking. In the long term, it will reduce the regulatory burden faced by companies seeking to earn permitting rights to begin either exploring for oil and gas, or drilling for these commodities. The regulators at the North Sea Transition Authority, the UK's main oil and gas regulator for the purposes of obtaining drilling rights, are directed to process all exploration and drilling requests on an expedited time frame and are encouraged to accept permits unless glaring issues pertaining to public safety exist. 

Second, I am formally announcing the end of the 2019 moratorium on fracking. The decision to end the practice of fracking was one rooted in baseless fear and climate paranoia, not in science and fact. Natural gas produced through the process of hydraulic fracking is cleaner to burn and safer to extract than comparative fuels, and requires far less space than wind turbines and solar panels. Existing permits that were frozen by the moratorium will be accepted immediately upon notice of this Ministerial Order, so long as community buy in has already been established. Moving forward, natural gas companies looking to extract fuel through hydraulic fracturing will be permitted to do so, and permitting requests will be expected in a similar manner as those previously mentioned relating to oil drilling. Where a fracking site exists near a community, the relevant company must receive the formal consent and legal permission from the community's local government in order to begin drilling. Companies will be required to enter into a profit-sharing agreement with local communities, in order to ensure that the residents of areas in which fracking occurs benefit from the extraction. 

Finally, I am announcing a major change to regulatory policy as it regards carbon pricing. With our departure from the European Union, politicians on both sides of aisle celebrating our newfound regulatory freedom when it comes to setting the price of carbon - an artificial pricing tool that results in higher costs which are always passed on to the consumer. Unfortunately, the political will on both sides of the aisle to actually make these changes never materialized. Today, that changes. Effectively immediately, I am ordering the UK ETS regulator to exercise their emergency Cost Containment Mechanism (CCM) authority to act to correct prices caused by market shocks. In effect, this decision will result in a reduction of the current UK ETS, which stands at an inappropriately and internationally high rate of £75–85 per tonne of CO2. This existing rate adds to the cost of living by artificially
inflating the price of gas for generation and industrial purposes, which is then pushed off on British families. The Regulator is ordered to reduce this price in a manner that is consistent with the far lower EU ETS. Experts at the IEA estimate that this regulatory reform will save the average household roughly £240 in annual energy costs. 

Today's announcement achieves two key goals of this Government, and of our Right Way Forward agenda. First, it immediately reduces energy prices by cutting through the red tape that exists because of persistently high UK ETS rates, that were inappropriately jacked up in order to meet net-zero goals at the expense of British workers. Second, it begins the process of rapidly increasing the supply of energy, which is the most important action any Government can take in order to meaningfully solve the energy crisis. Nations across the globe are acting to do the same, increasing drilling and extracting more energy in order to meet the growing demand. Britain, on the other hand, has thus far sat on our hands and neglected to tap into our reserves while our people suffer. As I said earlier this month, I refuse to be a Prime Minister who has access to the tools needed to solve this crisis but chooses not to use them. The British people deserve relief to skyrocketing energy bills, and they need it now. These policy changes will provide that relief both today and in the long term. 

Unlike the Opposition, who seek to provide one off cash injections that are designed to ignore the root of the problem, the Government I lead is taking bold and comprehensive action to address this crisis at its core. Under our leadership, regulators are being directed to slash costly red tape and producers are being given the greenlight to unleash the full power of British energy. We are a Government committed to less politicking and more action - and today's announcements make good on that promise. 

[Mary Temple]

 

Mr Speaker,

I never thought I would find myself in this position, but after that statement by the Prime Minister I find myself in agreement with his predecessor in our opposition to fracking. I do wonder if the Prime Minister considers his former boss to have lost his mind when the manifesto he put forward at the last election placed a moratorium on all fracking. There’s not much I agree with this Conservative Government but the moratorium on fracking was the right decision to protect our environment and countryside, but like any sensible idea from a Conservative – it never lasts long.

It is rather interesting to hear this new Prime Minister stand at that despatch box and decry the manifesto that he was elected on as something that is rooted baseless fear and climate paranoia. Is that what he told his constituents? I wonder if the Prime Minister will welcome hydraulic fracturing to his constituency, although it matters what his constituents think of course. Will the Prime Minister be a vocal proponent for drilling in Rugby, or will the Prime Minister’s seat be spared that fate? Well, we all know what Conservative Associations can be like. If he doesn’t, I’m certain his backbenchers will soon find out what it is like to really upset their constituents.

Returning back to the Prime Minister’s broken promise, well his broken manifesto, which clearly states that no new fracking would be approved unless the science shows categorically that it can be done safely. No science has been presented, no new evidence, no new statistics that demonstrates the categoric safety of fracking beyond a shadow of a doubt. That is because there is none, Mr Speaker. He and I both know that the science is not there and this is a decision the Prime Minister is taking to suit his political ideology over the needs and safety of all of our constituents.

Fracking does not bring down the costs of energy prices, because it is unstable and based on British Geological Society own reports show that the levels of shale gas could be much lower than expected. And even Cuadrilla admits that the average production of a well would require the UK to have over 20,000 wells to deliver what they claim. That’s a lot of community buy in the Prime Minister is going to need.  Fracking will be harmful to our natural environment and will not deliver the energy security that the Government believes it will.

Nor will this new fast tracking of oil and gas exploration licenses. Because, Mr Speaker, there is no oil field that will instantly start producing oil tomorrow for use, quite the opposite actually. It will take years for new exploration to start producing oil, so what are we supposed to do until then? Continue to depend on foreign energy because the Government has spectacularly failed to act in their 12 years of governing. And even when this new, fast tracked licenses start to deliver oil there will be no real benefit for Britain because the moment that license is issued the oil they discover belongs to them to sell as they wish. And sell to the foreign market they will.

These license-holders are multinational, private equity firms or state-backed oil firms owned by other governments – well atleast the Tories are happy for some governments to profit of our oil, it just won’t be the British government. There is no legal requirement for these firms to sell to the domestic UK market, and the oil predominantly found in the North Sea oil fields is not even oil that we use in UK refineries.

In October 2021, when this country was entering the energy crisis there was extraordinarily high levels of oil and gas exports – in fact in October 2021 exports were the highest for a decade. So, claims that unleashing UK oil and gas will deliver energy security for the UK is a redherring at best – what this Government will be ensuring is that Oil and Gas giants will continue to make record profits after giving them a £7 billion loan.

Even if the government were to suddenly change their tune and start a state-backed oil firm there would be no long term results. Let’s look at one example, Abigail Gas field. Thai gas field is located to the East of Scotland - it will cost millions to develop and to access the gas but will only produce enough gas to mett UK demand for 36 hours. That’s 36 hours total. Let’s look at another example, Rosenbank oil field to the west of Shetland, it is believed that this oil field has over 300 barrels of oil - that sounds great - but the license holder for this oil field is Equinor. The Norweigan oil and gas giant which is back by the Noreweigan government. So it is Norway that will profit from this oil not the UK. 

Mr Speaker, these are just two examples of existing licenses and the reserves of oil and gas in the North Sea is dwindling with every new license issued. And new drilling will not lead to greater prosperity or energy security for the UK - just more profit for oil and gas giants. That’s who the Government is supporting with this plan, not the British people.

What I am also surprised with is this Government’s flagrant disregard of the international commitments it made at COP26 which is clear in the need to transition away from fossil fuels and to move towards greater renewable energy sources. COP26 was not something that was forced onto this Conservative Government but it was something they actually negotiated and led. It seems the Conservative tendency of reneging on international agreements hasn’t ended with the change of leadership, however I did expect a little more time to have passed before they completely forgot they were ones who brokered it.

And it is quite galling to see the Government weaken the emission trading scheme, watering it down so polluters can pollute even more and pollute even cheaper. This plan from the Government is the Prime Minister standing with his arms wide open ready for polluters and oil and gas companies to jump right on in. And why should we be surprised? That is exactly what they bought with their 3 month decision to not increase fuel prices.

Britain is addicted to gas and like any addict we can’t see that our supply is running out and it is killing us. And the Government is acting like a dealer forcing more and more oil and gas into our country that we are nowhere near kicking the habit. It is time that this country take serious steps to ensure our energy security for the long term, energy that is produced in the UK for the benefit of the UK. Green, renewable energy that lasts, nuclear, wind, solar, wave - we have the expertise and technology ready to go but this Government will not invest in it. 

They would rather ingratiate themselves to oil barons instead of delivering for British people with the energy that they want and need. Our country needs a government that will deliver energy security and independence that is sustainable and credible, frankly Mr Speaker this Government is neither of those things. Labour will make those right calls, Labour will invest in our country’s real energy security, Labour will protect our natural resources from wanton destruction. It’s time for this tired, tory government to go.

[Steve]

Mr Speaker

The honourable member for Hove has already given an excellent summary of our opposition to this statement.

The Prime Minister announced in his statement that he would issue more credits under the Emissions Trading Scheme. The reality of this policy is that he is handing out more licenses to pollute. A significant amount of that does not go on energy - it goes on big industry or aviation - which will have almost no impact on most struggling families. Why did the Prime Minister not, as Labour has suggested, introduce a "Green Dividend" worth on average over £200 per family - which would ensure that the UK continued to meet its carbon budgets while returning the proceeds of the ETS to hardworking families and to the economy?

Does he have any comment on what impact that the ETS changes will have on the UK's ability to meet its carbon budget?