11:30 John Mc Nally (Falkirk) (SNP)

The sector recognises the need to decarbonise our economy and its responsibilities in supporting that transition. It is an international leader in supporting the low-carbon transition. Average emissions per unit of production on the United Kingdom continental shelf—its carbon intensity—have fallen year on year since 2013, with total emissions in decline from their peak in 2000. Firms are increasingly diversifying and using their existing skills to grasp opportunities emerging from the green economy, thereby providing sustainable employment. Often, infrastructure owners and operators in the oil and gas sector are already part of wider portfolios across a range of conventional and renewable energy sources. Contractors and supply chain companies with expertise in offshore operations and maintenance are also providing solutions across a range of energy industries, to diversify and replenish their order books.

Grangemouth has one of the country’s largest concentrations of energy-intensive industries in down- stream petrochemicals operations, and its development of a strategically located carbon capture and storage infrastructure in its industrial cluster may be essential to ensuring that those industries can compete in the low-carbon world that is coming in the future. I know that the Grangemouth site, INEOS and others are working with Imperial College as part of a wider collaboration to evaluate the feasibility of CCS for the UK. Does my hon. Friend agree that this developing technology would have been given a huge boost if the UK Government had not cancelled its CCS competition back in 2015, and that that decision demonstrated how they are failing the long-term interests of the industry?

Once again, my hon. Friend makes a good point about the need for long-term certainty of investment and policy. The CCS decision was an example of a shambolic state of affairs, given that many hundreds of millions of pounds had been invested for the future. That future was basically taken away from under investors’ feet, so I absolutely agree with him.

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11:54 David Duguid (Banff and Buchan) (Con)

MER is a strategy that can co-exist with a low-carbon agenda. As efficiencies improve, fossil fuels are burned more cleanly, CO2 can be captured, stored and used to help enhance oil recovery, and the full transition away from oil and gas may actually be extended while still meeting climate change targets.

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11:59 Jim Shannon (DUP)

I look to the Minister for advice on how we can and will secure the future of this industry, and on our ability to provide our own sustainable energy source for heating in this great nation of the United Kingdom of Great Britain and Northern Ireland.

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12:04 Bill Grant (Ayr, Carrick and Cumnock) (Con)

I read with interest a recent post note in the journal of the all-party group for energy studies, which considered decarbonising or reducing the carbon content of UK gas supplies as an option for reducing emissions from heating, potentially substituting natural gas with hydrogen or biomethane. I am pleased that such welcome research is continuing in that field. Indeed, some businesses in my constituency are already utilising biomethane, although not necessarily to the exclusion of natural gas.

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12:09 Alan Brown (Kilmarnock and Loudoun) (SNP)

With the publication of the Intergovernmental Panel on Climate Change report, we have to recognise the wider climate change issues and that the world is not on track to meet the temperature goals of the Paris agreement. The UK Government will have to take action in that regard, but that does not mean that we need to pull out of the North sea any time soon. Even if we did, we would then be reliant on imports.

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12:34 Dr Alan Whitehead (Southampton, Test) (Lab)

We have had an excellent debate, with informed contributions all round, and I congratulate the hon. Member for Falkirk (John Mc Nally) on securing it. As hon. Members have said, this is a very important debate because the Budget is so close and because there are wider issues relating to the role that the oil and gas industry will play in a substantially decarbonised future. There are a number of assumptions about how oil and gas will be used in the future. As hon. Members have said, the debate is taking place literally the day after the IPCC published its report on global warming and its effects, and discussion about that report is just beginning. That must be the context for our discussions about the future of oil and gas.

I commend the creation and operation of the Oil & Gas Authority and—hon. Members have mentioned it—“Vision 2035”, which the OGA is putting forward for the future of the industry. In that vision, it does not just talk about continuing business as usual, but looks at the much longer-term future, even beyond the point at which the very last reserves have been produced. One of the OGA’s missions is to create a sustainable energy service and technology centre long after the final economic reserves have been produced. We need to look not just at business as usual, but at a range of other things that the industry can start to develop, and is developing, as the North sea field becomes even more mature. Of course, one of the things it can do is develop decommissioning skills on a worldwide basis, so that we can ensure not just that the decommissioning in the North sea is done in the best possible way, but that those skills can be exported across the world.

We need to be mindful of the fact that, as I mentioned at the beginning of my contribution, the IPCC report on global warming and the future of the world has just come out. It is pertinent to our discussions today, because it underpins what kind of long-term future there is for oil and gas. I consider that the long-term future involves looking at how oil and gas can be used in a range of ways that are not entirely familiar to us today but will be essential for the sinews of British industry. Oil and gas will have a substantial role to play, for a very long time, in those areas of activity. I am thinking of chemical products for which oil is irreplaceable and of alternative vectors such as hydrogen, if the CCS implications of the formation of hydrogen can be managed. All those things imply that there is a substantial future for oil and gas from the North sea.

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12:45 The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Richard Harrington)

The focus of the debate is on the future. My hon. Friend the Member for Ayr, Carrick and Cumnock (Bill Grant) asked me to comment on the IPCC report, and our clean growth strategy is clear. We are focused on meeting our Paris agreement climate change targets, and we have asked the Committee on Climate Change for advice on our targets in the light of the new evidence.

Whatever happens, oil and gas will be part of the energy mix for decades to come. We know that we have to reduce demand to meet our climate targets, but this industry has a lot going for it. Gas can play an important role, and so can oil. My Department’s main interest will be to continue the security of the energy supply, which means that we have not seen the end of hydrocarbons.

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12:55 John Mc Nally

I thank the Minister for his kind and generous comments. All Members have been supportive of the debate. Many points were made about how vital this industry is to the economy in the transition to renewable and sustainable energy in the future. We are all agreed that we need a stable regime in place so that we are all aware of what will happen for the future of the industry. The points made about short-termism were excellent. We seem to have been practising short-termism for decade after decade, and that has to stop.

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