 House of Commons |
Session 2007 - 08 Publications on the internet General Committee Debates Energy Bill |
Energy Bill |
The Committee consisted of the following Members:Chris Shaw, Committee
Clerk
† attended the
Committee
Public Bill CommitteeThursday 21 February 2008(Morning)[Mrs.
Joan Humble in the
Chair]
Energy Bill9
am
The
Chairman:
Before we begin, I have a few preliminary
announcements. Members may, if they wish, remove their jackets. Please
would all Members who have mobile phones or pagers ensure they are
switched off or turned to silent mode. There is both a money resolution
and a Ways and Means resolution in connection with the Bill. Copies are
available in the room.
We are now back to the more
familiar territory of clause-by-clause scrutiny. There are no
amendments to clause 1, so we go straight to stand part
debate.
Clause 1Exploitation
of areas outside the territorial sea for gas importation and
storage
Question
proposed, That the clause stand part of the
Bill.
The
Minister for Energy (Malcolm Wicks):
Good morning. It is
good to get into the Committee stage proper, although the evidence
sessions are an interesting innovation. It is a great pleasure to serve
under your Chairmanship, Mrs.
Humble.
Let
me introduce clause 1. Under part V of the United Nations convention on
the law of the sea, coastal states can claim certain rights within an
area known as the exclusive economic zone, which extends from the edge
of the 12 nautical mile limit to the territorial sea for a further
distance of 188 nautical miles. Article 56(1) of the UN convention
provides that these rights include, among other things, the exploration
and exploitation of the sea bed and its subsoil and the waters above
it. It also provides jurisdiction for the establishment and use of
installations and structures in the area. The UK has previously claimed
a number of rights under article 56(1), such as rights to the offshore
generation of electricity, under the Energy Act 2004, but has not yet
claimed rights in relation to unloading and storing gas.
The clause
makes provision to claim those rights by providing for the ownership to
be vested in the Crown within areas designated as gas importation
storage zones by means of an Order in Council. Subsection 2 sets out
the activities to which those rights relate—namely, the
unloading of gas to installations or pipelines, storing gas whether or
not it will be recovered and exploring for suitable sites for unloading
or storing gas.
I
draw hon. Members’ attention to the fact that the clause covers
both the storage of combustible gases, such as methane and butane, and
the storage of non-combustible gases, such as carbon dioxide.
Without this provision, it would not be possible to
implement the licensing regimes set out in chapters 2 and 3 of this
part of the
Bill.
Mr.
Hugo Swire (East Devon) (Con): Will the Minister confirm
that nothing in the Bill will affect existing foreshore-right owners,
where the foreshore is not vested in the
Crown?
Malcolm
Wicks:
If other hon. Members are going to speak to the
clause, I may have the opportunity to give the hon. Gentleman a
definitive answer to that question in due course. I hope that that is
acceptable to him. My instinct is that the Bill will not do so; but if
my instinct is wrong, perhaps I will return to the
question.
Charles
Hendry (Wealden) (Con): I join the Minister in welcoming
you, Mrs. Humble, as our Chairman, and I thank the Minister
for the way that we went through the evidence sessions. It is the first
time I have gone through an evidence-taking session. They have been
extremely useful; they have given industry and others a very good
opportunity to tell us what they think, and that has helped us work
more effectively together as a Committee.
My understanding of these
Committees was that the Government would normally stuff them with
placemen, who would simply vote with everything that the Government
wanted, but what is very encouraging is that it is actually a Committee
full of Members who understand energy, who care passionately about
different aspects of it, and that is very good in terms of the issues
that we need to
debate.
Another thing
that came out of those sessions was a sense that many of the things
that we have concerns about are not included in the Bill, such as smart
meters, feed-in tariffs and the role of Ofgem. I hope that the Minister
will give us an opportunity—particularly in the light of
today’s news on British Gas—to have wider debates about
fuel poverty and social tariffs, because they are clearly matters of
great concern to people.
As you said, Mrs.
Humble, there are no amendments to these early clauses, but we wish to
have some questions answered before we give the go-ahead to individual
clauses. We certainly agree with the Minister that more needs to be
done to make those areas outside territorial waters available for gas
importation and storage.
Will the Minister tell us his
assessment of the long-term role of the Rough gas field storage
facility? Does he believe that it has a long life? Does he expect it to
be there for many years into the future, or is part of his
concern—and part of the reason for introducing these
provisions—a feeling that the Rough gas field will have reached
the end of its useful life before long? Will the Minister elaborate on
how the process of identifying such zones will work? Who will be
responsible for that and what process of consultation must be
undertaken before approval as an appropriate zone for such work? Can he
also provide some detail on the types of installation that such
exercises will involve, especially the above-water structure?
There has
been recent media coverage and some discussion during the evidence
sessions about the Ministry of Defence’s objections to some of
the offshore wind farms; not so much the actual objections—we
all understand
the need for radar and national security—but on the timing of
some of those objections. Clearly, if significant parts of the new
structures will be above sea level, the MOD might have concerns about
them. Perhaps this would be an appropriate moment for the Minister to
address those issues. These are simply a few points of clarification;
but, in general, we have no objection to the
clause.
Dr.
Brian Iddon (Bolton, South-East) (Lab): Does the Minister
feel that enough is known about the storage of carbon dioxide below the
sea in the cavities from which oil has been excavated? Will he support
future research by the organisations that are already involved, to
ensure that such carbon dioxide storage will be safe
indefinitely?
Steve
Webb (Northavon) (LD): Good morning, Mrs.
Humble. It is a pleasure to serve under your chairmanship.
What is very striking, having
observed the procedures on the Bill so far, is that most of the
attention has been focused on what is not in the Bill, rather than what
is. Obviously, we will look at the detail. However, the balance of
amendments tabled so far reflects the fact that we in the Committee are
not particularly exercised with most of the Bill, but we do feel that
it is a missed opportunity. I hope that there will be time during our
proceedings to discuss those issues, some of which were raised by the
hon. Member for Wealden.
Will the Minister give us
slightly more context to the clause and this part of the Bill? I
appreciate that clause 1 is very limited, but rather than repeat that
on each clause in this part of the Bill, may I refer the Minister to
the Department’s press notice that relates to those clauses? Is
says that
“The current offshore
regime for gas infrastructure projects is complex and a barrier to
investment.”
Will
the Minister expand on the measures in this part of the Bill, of which
this is obviously the first clause? What exactly is deemed complex
about the present regime by those who have to deal with it? How will
the changes in these clauses address those complexities?
Often, we find that complexity
is there for a reason. It may be possible to achieve the same objective
more simply, but often something has been specified in detail to
address a particular problem. How sure is the Minister that, by
simplifying the regulation, we will not allow things to happen that
were perhaps not meant to be allowed when the original regulations were
framed?
If the
Minister can give us more of an overview of this part of the
Bill—this is probably the right time to do so—it may
speed up our consideration of subsequent clauses. Certainly, on the
substance of the clause, I do not think that we have any substantive
objection.
Malcolm
Wicks:
I understand the concern expressed by the hon.
Member for Northavon about the need to set out the context. I hope that
the Committee will be patient with me, as I was going to set that out
when I introduced clause 2, which introduces a family of clauses that
hang together.
May I just
confirm to the hon. Member for East Devon that my instincts were right?
The Bill will not affect the territory that he was discussing; indeed,
the clause will only affect rights beyond the 12 miles of the
territorial sea.
The
Conservative spokesman asked me about Rough storage facility. I am
advised that that is a commercial matter. However, to be helpful, our
understanding is that Rough storage probably has quite a long life
ahead of it. The more strategic point however is that there is sense in
which the UK continental shelf, especially in the North sea, has been a
natural store of gas and, indeed, oil for the
UK.
Malcolm
Wicks:
Let me just finish my paragraph—although it
could be a long paragraph, I do not know, depending on what the hon.
Gentleman is going to ask, and I cannot guess. As the UKCS starts to
decline and given the fierce international competition for energy
resources, many of us feel—I think that this will be shared in
the Committee—that we need more gas storage facilities, and the
market is indeed coming forward with proposals. I think I am at one
with the Conservative spokesman on the importance of
that—indeed, much of the Bill will enable it to be facilitated
by an appropriate regulatory
regime.
As for the
types of installation, above water, they will be injection platforms
and involve the recovery of stored gas—plus, of course,
liquefied natural gas platforms. Indeed, LNG is becoming an
increasingly important part of the global energy market. I think that I
have dealt with the issue of Rough.
My hon.
Friend the Member for Bolton, South-East talked about the behaviour of
CO2. This is a critical question. So far, globally, we have
relatively little experience of CO2 storage, although the
sheet is not blank; there is some experience. The example that I draw
comfort from—it is perhaps the one that has been best
researched—is the Sleipner gas field in Norwegian waters, where
CO2
has been successfully injected for something
like 10 years. It is carefully monitored, scientifically studied and
the advice is that, geologically, the CO2 is behaving as one
would expect, which in layman’s terms means that it is still
down there in a very safe
state.
I certainly
agree with my hon. Friend that, as we enter a century in which we
expect to see the development of the safe storage of
CO2—frankly, we need to see it—the scientific
issues are absolutely vital. That is one reason why we have established
a joint working relationship with our Norwegian friends. I discussed
this with the Norwegian Minister only a couple of weeks ago, and we
have an expert working group looking at all aspects of CO2.
My hon. Friend raises a very important
point.
One or two of
the other issues raised may be ones we can tackle in the course of the
morning. As our debates proceed, there are a number of pegs on which we
can have some informed discussion on some of these critical questions.
That might include the Liberal spokesman’s question about why is
the current regime so complex—we might be able to tease out
answers to that this morning.
Malcolm
Wicks:
I am sorry. I meant no discourtesy to the hon.
Gentleman, but I got so excited by the geological storage of
CO2 that I was guilty of a discourtesy. Let me give
way.
Mr.
Binley:
The Minister is very kind; I am most grateful. I
recognise that the whole question of the regulator and the relationship
with licensing will be dealt with later. However, I am concerned at
this early stage about storage in the North sea and its relationship to
the pre-combustion extraction of carbon and to the ability to obtain
more from the North sea.
I recognise
that I am slightly out of order, but one reason why I raise the issue
now is that the Minister will know that tests have been set in respect
of post-combustion. One proposal involved linking pre-combustion with
the extraction of oil. Will he at least comment on that and give me
some hope that other ways might be found to help people who want to
exploit that
facility?
9.15
am
Malcolm
Wicks:
The hon. Gentleman said that I was very kind to
give way. If I may say so, he was far too patient. He should have been
waving his Order Paper to remind me that I had promised to give
way.
The issue raised
goes slightly outside the clause, but let me say that what we are doing
this morning is, with the permission of the Committee, putting in place
a fit-for-purpose regulatory framework. That brings us back to the
Liberal Democrat question. The short answer is that we believe that, at
the moment our legislative cover, is not fit for purpose. We are
engaged in new territory relating to LNG and carbon capture and
storage—later clauses deal with CCS—and we need a
fit-for-purpose regulatory framework. That is the essence of the early
part of the Bill.
I
think that I can reassure the hon. Member for Northampton, South that
although there is an interesting debate about whether we have chosen
the right technology for our demonstration project of
post-combustion—my story there is about its applicability to
China, given the imperative of tackling global warming—this
framework would be fit for purpose for whatever technologies arise in
the future. These clauses are not part of the post-combustion scenario;
they are about a wider scenario.
Question put and agreed
to.
Clause 1
ordered to stand part of the
Bill.
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