Energy Bill

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The Committee consisted of the following Members:

Chairmen: † Mr. David Amess, Mrs. Joan Humble

† Baron, Mr. John (Billericay) (Con)

† Binley, Mr. Brian (Northampton, South) (Con)

† Hendry, Charles (Wealden) (Con)

† Horwood, Martin (Cheltenham) (LD)

† Iddon, Dr. Brian (Bolton, South-East) (Lab)

† Ladyman, Dr. Stephen (South Thanet) (Lab)

Main, Anne (St. Albans) (Con)

† Owen, Albert (Ynys Môn) (Lab)

† Palmer, Dr. Nick (Broxtowe) (Lab)

† Reed, Mr. Jamie (Copeland) (Lab)

† Robertson, John (Glasgow, North-West) (Lab)

† Seabeck, Alison (Plymouth, Devonport) (Lab)

† Swire, Mr. Hugo (East Devon) (Con)

† Tipping, Paddy (Sherwood) (Lab)

† Webb, Steve (Northavon) (LD)

† Whitehead, Dr. Alan (Southampton, Test) (Lab)

† Wicks, Malcolm (Minister for Energy)

Chris Shaw, Committee Clerk

† attended the Committee

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Public Bill Committee

Thursday 21 February 2008

(Afternoon)

[Mr. David Amess in the Chair]

Energy Bill

Clause 3

Licences

Amendment proposed [this day]: No. 19, in clause 3, page 3, line 21, at end insert—

‘(4) (a) The Secretary of State shall consult with relevant environmental bodies, particularly in relation to marine plans, when granting licences.

(b) “environmental bodies” are defined as government departments and their agencies with particular responsibility for environmental issues.’.—[Steve Webb.]

1 pm

Question again proposed, That the amendment be made.

The Chairman: I remind the Committee that with this we are taking amendment No. 20, in clause 17, page 9, line 20, at end insert—

‘(4) (a) The Secretary of State shall consult with relevant environment bodies, particularly in relation to marine plans, when granting licences.

(b) “environmental bodies” are defined as government departments and their agencies with particular responsibility for environmental issues.’.

I understand that Mrs. Humble said that in view of the wide range of the debate on these amendments, she was not inclined to permit a debate on clause stand part. I do not intend to depart from her guidance—coward’s way out.

The Minister for Energy (Malcolm Wicks): Thank you, Mr. Amess. I welcome you to the Chair for the business part of our Committee. Before the Committee adjourned, I was saying that I appreciate the commendable intention behind the amendments but, because of the existing environmental protections that I outlined, I consider them unnecessary. In my view, these matters should be dealt with under existing environmental laws. Those can and will be amended as necessary to ensure that we continue to have a robust regime that ensures that relevant controls are in place.

In summary, any approvals granted for an offshore gas or carbon dioxide storage project will contain conditions, where necessary, to protect the environment. In granting any approvals, the Secretary of State will have had to consult the relevant environmental bodies. I should make it clear that in our role as the licensing authority for petroleum extraction, we have been considering such environmental issues for many years and have built up considerable expertise, which will be applied to the new regimes under the Bill.

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I hope that I have provided some reassurance to hon. Members that the environment is being, and will continue to be, adequately protected, which of course we are very keen to see. I therefore hope that the hon. Member for Northavon will withdraw the amendment.

A number of issues were raised about the marine environment, and understandably and usefully so, given policy developments in that area. The hon. Member for Northavon asked in particular about the interaction between this Bill and the proposed marine Bill. We have already had some dialogue on that matter involving my hon. Friend the Member for Sherwood as well. The marine Bill will not change the current licensing arrangements in respect of offshore methane gas storage, as those will remain with my Department.

As I mentioned, my Department has a large, dedicated offshore environment and decommissioning unit, which includes a specific inspectorate. The unit regulates the offshore oil and gas and renewables industries, in the context of sustainable development, with a raft of legislation for the protection of the environment. Specifically, that unit liaises closely, where necessary, with the Marine Fisheries Agency, although that body is not a statutory consultee. However, as my hon. Friend the Member for Sherwood outlined, the marine Bill has not yet been published and certain matters have still to be decided. He made sensible and practical points about time scales.

The hon. Member for Northavon asked whether offshore gas storage would be subject to the requirements of the strategic environmental assessment process. I can assure him that that has been scoped into the next strategic environmental assessment, which is due to commence this year.

Several hon. Members raised issues relating to the Crown Estate. The hon. Member for Wealden asked whether the Crown Estate had any role in statutory nuisance issues. To the extent that statutory and common nuisance apply to CO2 storage activities offshore, either the operator or the Crown Estate could be liable. That would depend on the specific circumstances in which the nuisance occurred. It would be up to the Crown Estate to indemnify itself against any potential liability in the lease or authorisation that it would grant to the operators.

The hon. Member for Northampton, South asked whether the need for a Crown Estate lease and a licence from the Department for Business, Enterprise and Regulatory Reform would place an undue burden on developers. We do not believe that to be the case: the creation of a new tailor-made licensing regime has been welcomed by the industry. The system that we are putting in place is analogous to the onshore area where a developer would need to seek agreement with the landowner for the site development, as well as consents under the Town and Country Planning Act 1990. That is the right approach.

My hon. Friend the Member for Southampton, Test expressed concerns about the Crown Estate’s position to insist on unreasonable lease terms. The Crown Estate is under a statutory obligation not to exploit its monopoly position under the Crown Estate Act 1961. The Crown Estate has extensive experience of administering offshore rights, and it is working effectively in relation to offshore renewable energy zones.

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My hon. Friend the Member for Glasgow, North-West sought an assurance that the licensing process would not result in unnecessary delays. We will be consulting industry on the application process to ensure that it is as smooth as possible. However, we mentioned earlier in our debate that environmental considerations will need to be taken into account to ensure that we comply with environmental legislation before issuing licences.

I feel that, both this morning and this afternoon, we have had a reasonable dialogue on the subject. In view of my reassurances, I wonder whether the hon. Member for Northavon, who initiated an important and significant debate, would nevertheless—

Albert Owen (Ynys Môn) (Lab): I was a little late arriving and I wonder whether the Minister has had the opportunity to look into the question of whether the Welsh Assembly Government will be a statutory consultee or whether it will be able to make its own legislation.

Malcolm Wicks: I apologise to my hon. Friend for not covering that point. Would he be happy for me to cover it later or, if necessary, in writing? I can see the importance of the matter.

Charles Hendry (Wealden) (Con): I asked the Minister who would be responsible for assessing the geological safety of the proposed storage areas and who would carry out subsequent assessments. I wonder whether he has had a chance to consider the matter and whether this would be an appropriate moment to respond to those questions.

Malcolm Wicks: I remember the hon. Gentleman raising those matters, and I apologise for not covering the point. Again, I shall respond either later or in writing. Of course, it is vital territory. Our inspectorate will receive training to cope with the new technologies. Technical assistance will always be available to undertake monitoring, but I shall be able to say more about that in due course.

I was about to ask the hon. Member for Northavon whether, in the light of my assurances, he might consider withdrawing his useful amendment.

Steve Webb (Northavon) (LD): The Minister never fails to charm me. He gave a helpful and constructive response, but one or two issues remain outstanding, some of which were raised by other hon. Members. For instance, the hon. Member for Southampton, Test raised the issue of Crown Estate; the Minister’s reply seemed to be that they are basically good guys and it has not been a problem so far—I paraphrase only slightly. There is a lack of accountability under the clause, and I am not wholly reassured on the point.

The central point, about timing, was raised in exchanges between the hon. Member for Sherwood and the Minister. We do not have a marine Bill, and we do not know when we are likely to see a draft Bill. The critical point of the amendment is to deal with what in other circumstances might be called an interregnum. In other words, after the coming into force of this Bill, but before the coming into force of the marine Bill, who will do the work that the marine management organisation will be doing once it exists? It is that period about which we are particularly worried.

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Once we have a marine management organisation, even though the marine Bill will probably not give it a remit over the matters that we are debating—the Minister assured us that the Department undertakes such consultation routinely—and although we might try to amend the marine Bill to that effect, can we assume that the marine management organisation will be consulted? If the organisation is adding something to the process and is not just another tier of bureaucracy—if there is some added value—where are the safeguards and reassurances to come from until it exists if we do not amend the Bill to require the granting of licences to be subject to the kind of consultation that we are talking about?

The Minister said that various EU directives already protect the marine habitat. Presumably, however, the Government think that superimposing a marine management organisation would add something. However, until it comes into being something is missing, otherwise it would not need to be invented; I mean the strategic dimension. Before we adjourned this morning, I spoke about the worry of a gold rush or a scattergun approach being taken to applications for licences. Prior to there being a marine management organisation, where will the strategic spatial planning in the marine environment come from? When thinking about granting licences, there should be consultation on those key environmental factors.

Malcolm Wicks: Will the hon. Gentleman nevertheless recognise the points raised my hon. Friend the Member for Sherwood that we do not yet have a marine Act and Parliament has not yet judged it? When there is a marine Act, as I hope that there will be, my Department and the relevant agencies can begin to look at the practical specifics necessary. I have given a reassurance that we are going to work very closely with the new legislation, the Department for Environment, Food and Rural Affairs and the new marine management organisation. Meanwhile, I was trying to reassure the hon. Gentleman that we have environmental protections in place and that my Department is well versed in it, given the history since the 1960s of oil and gas exploration. I am reminded, and I may have mentioned earlier, that we are already covering these with the Marine and Fisheries Agency in advance of the creation of the MMO. We are, as ever, as joined up as we could possibly be.

Steve Webb: I am grateful for that intervention. I will not labour the point, but the concern that the hon. Member for Sherwood raises about the fact that we have a gap between the passing into law of this Bill and of the marine Bill reinforces our concern; it does not undermine it. The Minister is saying that we do not have a draft Bill, we do not have a Bill and we do not know what it is going to look like, but this regime will be in force until we have a marine Bill. Our concern is about what will be the regulatory regime between now and then. The Minister seems to be saying, quite interestingly, “it’s alright, it’s all covered”. We are going to have the marine Bill anyway, which is going to either not add value, in which case it is pointless, or it is going to add some value, which will not be present in the period up to the coming supporting marine Bill.

Malcolm Wicks: The hon. Gentleman will recognise that despite the wonderful Department behind me, I

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can only deal with what we have at present in terms of legislation. I have tried to reassure him that going forward we will make all the appropriate connections. I imagine that the hon. Gentleman might have been going on to ask me about the powers of the Welsh Assembly, following the question from the hon. Member for Ynys Môn. I would reassure the hon. Gentleman, if he asked me that question; although my Department’s licence will cover the 12 nautical miles of Welsh territorial waters, a licence will also be required from the Welsh Assembly under the Food and Environmental Protection Act 1985. That is the answer to an anticipated possible question, echoing the question from my hon. Friend.

Steve Webb: I am grateful. It is great to have questions answered that I have not even asked. It could set a precedent for the rest of our deliberations. In fact, we could just wait for all our questions to be answered. I take the point from the hon. Member for Ynys Môn that the our amendment does not cover the Welsh Assembly and it probably should have done; I accept that comment.

We are worried about the period up to the coming into force of the Bill that we do not yet have. We will take on the Minister’s assurances, because we believe that the energy considerations should not be subsidiary to the environmental considerations, which is what we are pointing out through the amendment. Having received those assurances, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 3 ordered to stand part of the Bill.

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Prepared 22 February 2008