17:50 Caroline Lucas (Brighton, Pavilion) (Green)

There is, however, much more in question than just that one individual decision and the Government’s current push for more deep-water drilling risks undermining their pledge to be “the greenest Government ever”. I therefore ask the Minister to cover the following questions. First, how was the decision to approve the exploration drill at Lagavulin made? Secondly, why was the decision announced during a parliamentary recess, just a couple of weeks after the September sitting and 10 days before the House was due to return on l1 October? Thirdly, why was the decision taken before either the official US Government report on the Deepwater Horizon tragedy or the Select Committee on Energy and Climate Change’s examination of UK deep-water drilling have reported? Fourthly, on what does he base his conviction that the UK’s regulatory and inspection regime is robust enough to avoid another disaster on the scale of Deepwater Horizon? I hope that the Minister will also address the wider points of what the current push for deep-water oil exploration says for the Government’s commitment to be the greenest ever and how the opening up of new oilfields in the North sea will benefit efforts to increase energy efficiency as well as energy generation from renewable sources.

In written evidence to the Energy and Climate Change Committee submitted in September, and repeated to me in a letter of 15 October, the Department said that

What about the claim that the UK has a good record of drilling? What the Government describe as the industry’s strong track record in the North sea has in fact been built up in far friendlier waters than those found off the west of Shetland. The Department of Energy and Climate Change’s information shows that of the 315 wells that have been drilled in deep water anywhere on the UK continental shelf, only three have ever been drilled in more than 1,500 metres of water, as Lagavulin will be. There are only three wells in operation to the west of Shetland, two of which are in about 500 metres of water and the other in only 150 metres. Despite the fact that the previous Government’s 2007 energy White Paper stated that the west of Shetland is a particularly challenging location in which reserves remain largely untapped, the current Government are reassured by safety records that are, frankly, of little relevance. Even the safety record on current wells should be examined in more detail. The Government seem satisfied, as proof of safety, that there have been “only” two major disasters—Piper Alpha and Ocean Odyssey—both in 1988.

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18:00 Caroline Lucas

DECC’s written evidence to the Energy and Climate Change Committee states that in the first six months of 2010 it carried out inspections on 35 of the 282 operational oil and gas installations on the UK continental shelf. DECC inspected only one deep-water drilling rig in 2009-10, and as of September this year only one such inspection was planned for 2010-11.

What else could the Government do with that £12 billion subsidy of one of the most dangerous and risky types of drilling we could imagine? First, they could end the subsidy and invest the money in energy efficiency and renewable energy technologies, which could fund a significant step in the transition to the low-carbon economy that the Government say they want. Importantly, there are far more jobs in that greener economy than in oil and gas. I understand colleagues’ concerns about potential job losses if a moratorium goes ahead, and we need Government support to ensure that does not happen, but offshore oil and gas each provide only about 265 jobs per terawatt-hour of energy produced. In comparison, the same unit of energy from renewables, such as wind power, creates between 1,000 and 2,000 jobs per terawatt-hour.

Indeed, detailed analysis shows that investing in renewable energy could almost double the UK’s total energy generation over 20 years and create at least 425,000 jobs, so that money should go into green energy. Half the £12 billion that is saved could be used to fund the green investment bank fully. There are great hopes for the bank’s proper capitalisation, but the Government have so far committed only £1 billion to it. Estimates suggest that we need between £4 billion and £6 billion to make the bank a success, so I call on the Government to put some of that £12 billion into it.

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18:09 The Minister of State, Department of Energy and Climate Change (Charles Hendry)

It is right to put this debate in context. We have all been profoundly concerned about the terrible accident at Deepwater Horizon earlier this year. It was a very serious and tragic event. Eleven people died and there have been huge consequences for the gulf of Mexico and those who make their living there. As new developments focus increasingly on more challenging prospects, including deep water, the situation presents Governments, regulators and the industry with a real challenge, which they must address. That has been recognised by the Energy and Climate Change Committee, which is conducting an inquiry into the matter with great thoroughness.

I want to clarify two things. First, I want to make very clear my motive for securing this debate: it is indeed to try to secure a moratorium on any new oil licensing, including the Lagavulin prospect, until the result of the judicial review and until we find out what happened at Deepwater Horizon. The Minister is correct: over time, of course, I would like to see a transition away from fossil fuels and towards green energy. However, I am not suggesting that we do that via a moratorium now; I am suggesting that the particular risks off Shetland are such that we should be acting.

Our regulatory system has been developed to meet the evolving challenges faced by the industry. Following the Piper Alpha disaster, safety regulation was brought under the Health and Safety Executive umbrella, to get the benefit of its expertise in regulating major hazards. The Department of Energy and Climate Change, of course, plays a vital role in overseeing the environmental performance of the offshore industry.

We believe that there is an imperative national interest in ensuring that we get the best of the resources available. The reality is that for all the ambitions the hon. Lady may have—we want to decarbonise this country as well—by 2020, and well beyond, we will still be dependent on a significant amount of oil and gas. We can either find those resources within our national waters or import them. About 17% of our remaining reserves in the United Kingdom lie in deepwater areas west of Shetland. About 3.5 billion barrels of oil of the remaining 20 billion or so on the entire UK continental shelf are in that area. We think it is a matter of great national importance that we should be maximising the economic recovery of those resources, and there is a great deal more that needs to be done in this entirely legitimate and proper activity. That is why we were pleased recently to offer 144 new licences in the 26th round. That shows the continuing confidence of the industry in the UK continental shelf and provides a strong basis for continuing exploration and development activity. We will encourage industry to continue to invest in exploration, development and production while maintaining high standards of management and minimising environmental impacts.

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