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"The Secretary of State must set out his proposals for consultation within six months of the passage of this Act",
and that the whole thing has to be in place within 12 months. I do not know where "may" fits into that, as the Secretary of State is being told to do it within 12 months. It is unlikely that during those 12 months we would have acquired sufficient knowledge to have a standard. We could end up with a standard-my right hon. Friend the Member for Edinburgh, East (Dr. Strang) gave this away-that was very flexible. I would want a gold standard, not something that could be repeatedly raised and lowered like the tide according to where the science was at any given time.
Dr. Strang: That was not my intention. Obviously, we would have a whole year to work it out and, with all the advice that the Government put in, make a judgment. Let me add in passing that this is essentially about supporting coal, and we should not lose sight of the fact that a coal power station, for every gigawatt hour it produces, emits twice as much CO2 as a gas-fired power station.
Colin Challen: I entirely accept the urgency of this. I want an EPS to be in place at some point in the not-too- distant future. New clause 8 would allow for that and, as the Minister has said, existing legislation permits it. We will have this standard when we better understand the technology, legalities, disposal, transport and all the rest of it, and I do not think that that can be established in 12 months.
Martin Horwood: This is hopelessly unambitious. The Norwegian projects at Sleipner and Snøhvit have been injecting 1.7 million tonnes of CO2 a year since 1996. Many of these technologies are very well established, so we do not need to wait for a great deal longer before setting the standards.
Colin Challen: In that case, what has been amiss? Why does every country not have this standard right now, fully implemented, with 100 per cent. or 90 per cent. capture? The hon. Gentleman is talking about a different process, as I understand it. These might be emissions that are pumped back down to help to get oil out, or whatever-I do not know the exact circumstances. There are plenty of pointers to show that this technology may well work, and we are allowing up to 2020 or 2025 to see that it does. I am sure that by that time we will be able to get these standards in place.
I regret that I am unable to join my hon. Friend the Member for Nottingham, South in the Lobby. I support the EPS approach, but the time is not quite right to establish something that then will not become our flexible friend. The danger of setting the standard too low, as I suspect that it would be if we introduced it early, is that
one would effectively give a permit to pollute further down the line when we found that the technology could go beyond the standard. At this stage, we have to accept new clause 8 and hope that through that mechanism we will get the progress that we want.
Mr. Binley: This has been a fascinating debate about whether we should have performance standards, and there is much at stake for this country and for my children and grandchildren. It is a pity that we have not spent more time talking about that, because in many respects their future well-being depends on the matter. We ought to put it into perspective a bit.
I have been working for a clean coal sector within our energy provision for quite a long time, and I have been disappointed by the progress in the House since I have been here. I must say, however, that the pace of progress has increased remarkably since the current Secretary of State has been in his position, and I am delighted that that is the case. I was disappointed that the CCS competition was not worked out in quite the efficient way I had hoped. To be fair, the Minister of State has admitted that, which I welcome. I also welcome the fact that the next three of the promised four projects in Britain's CCS programme will be undertaken under different criteria. There is an important learning curve, and we have grabbed it and taken it on board.
I shall briefly mention the technology involved. There are already more than 70 projects in existence throughout the world, and carbon storage has been well handled by BP in the middle of the Algerian desert for 13 years. Anyone who goes down to Sunbury to look at its centre where CCS is controlled and researched will be amazed by the progress that has been made, how much monitoring is undertaken and how safe the process is. I am worried for my grandchildren, not about leaks of carbon dioxide but that the power stations will cease to produce the energy that we need in this country. My right hon. Friend the Member for Wokingham (Mr. Redwood) said that too, although we come to different conclusions.
New clause 8 is particularly important. I am disappointed that the Minister decided to go for a three-year reporting term. I would prefer an annual report, not least because energy provision will be the most crucial and worrying area of activity, and one of the most doubtful, for our well-being and that of our children and grandchildren. The development of CCS in the next 10 years will be absolutely vital for the well-being of this country, which is why I would have hoped that we could return to it every year. There are many questions that we need to keep track of and find answers to.
The pace has picked up enormously, and in my view it will continue to do so. We will be hanging on the back of global development in CCS in the next 10 years, and we need to be as well informed as we possibly can be. That is why I urge the Minister, even at this late stage, to rethink the timing of reporting. I believe that we need an annual report.
I need to question the Minister also on the content of the report. I notice that subsection (2)(a) of new clause 8 states that the purpose of the report is an assessment of
"whether carbon capture and storage technology in generation of electricity on a commercial scale"
has been successfully demonstrated. "On a commercial scale" means that all three elements of CCS must have been demonstrated-taking the carbon from the generation
station, transporting it to the aquifer and shoving it down the aquifer. It also requires getting the coal in the first place, so we need to keep track of many issues with regard to CCS on a commercial scale. I ask the Minister whether a number of them will be included in what I hope will be the annual report to the House.
Of course we will need to talk about sites following the decision on the three projects that we hope to make progress on-a decision that we hope the Minister will make by the end of this year. As an aside, I was delighted to learn that she expects to make a decision quickly on the competition for the initial experiment and the first station. I hope that happens within weeks rather than months and I look forward to it.
Will the report include the concept of clusters, which is vital to this country and its people, who will want to know where the jobs and the power stations will be, and how we are going to plan such things in the years to come? There is also the issue of a pipeline network. The size of the pipeline is crucial. If we have a relatively small pipeline and a cluster thereafter, we might be unable to progress with further stations because the pipeline cannot take the carbon. That would clearly be crazy, so we need to think about the size of the pipeline and how the pipeline network will service the transportation of the carbon that we extract from the coal.
We need a real understanding of how we are going to shove the carbon down into the aquifers. There is no doubt that we are immensely well blessed with aquifers in the North sea, because we can not only create a global trade in storage, which will enhance Britain's income, but enhance the production of oil and gas. It is estimated that if we do that properly, we can get an extra 15 per cent. more oil out of the North sea, which is a prize worth grabbing when we are being told from certain quarters that our production will peak by 2015. We need to understand aquifers.
Longannet is talking with Shell about stuffing the carbon down into the aquifers, but we need more information, and to track the situation. In Sunbury, BP has worked on tracking the carbon using satellites, which is a most remarkable technology. Technology to work out the dispersal of the CO2 underground in the aquifer, which is important, is also in place. We are behind not on technology but on putting the stuff together on a commercial scale of, say, 800 MW. That is what we are testing for-the technology is already there. Will the report also be about aquifers and the potential for Britain to sell aquifer space to other producers of CO2? That business is growing quickly and dramatically throughout the world.
Mr. Willis: I am listening carefully to the hon. Gentleman. The Minister was right to say that the Bill tries to put three technologies together, which has not been done elsewhere, which we accept. However, in reality, the end bit-storage in aquifers in the North sea and elsewhere-is not in the gift of the Government but of oil and gas companies, which still own them. Does he share my concern that many aquifers will disappear quickly, because they will collapse, and that unless the Government, through the reporting mechanism, which is important, state how we are going to maintain them in the short term as well as the long term, we will lose an opportunity to be world leaders in storage as well as outcome?
4.45 pm
Mr. Binley: I fully appreciate the hon. Gentleman's knowledge in this field and his support for this project. We worked together in Committee, when that knowledge was very well displayed.
It is reckoned that about half the wells that are currently usable will have closed by 2015 unless we do something. That is an important date, because the issue is not only the ability to shove the stuff down the wells, but keeping it there. If wells are not maintained, they deteriorate very quickly, and once they are capped they become useless. We need to take that into account, and I wonder whether the report will do so.
I wish to stray a little on to the issue of coal communities, because the provision of coal is an important matter. British coal is a massive resource that we need to tap. We have 300 years or so of energy beneath our feet, which means energy security in sizeable abundance. I hope that the coal community aspect is a consideration for the Minister in terms of the report.
We should not forget the potential investment opportunities in an export industry that could retrofit some of the 20,000 coal-fired power stations that are capable of it. What a fantastic market that could be, if we could sell a product to those power stations worldwide. We know that a new coal-fired power station is opened every week in China at present, so there is massive potential, but we have to be in the market now. That is why we need investment, and I hope that the Minister will be able to tell us that that particular area of activity will be covered in the report.
I welcome the Government's approach to this issue. I believe that there is a general consensus across the House that we are proceeding to attempt to exploit a carbon-free resource that lies in abundance beneath our feet. If we do that successfully, quickly and properly, my children and my grandchildren will thank us. If all I ever do in this House is play a small part in that process, I will consider my time here successful. I congratulate the Minister on the Bill and I wish it Godspeed. I look forward to working with whoever is concerned with this issue in the years to come.
Paddy Tipping: I am with the right hon. Member for Wokingham (Mr. Redwood) on this. Like him, I want to see British coal burned cleanly. There are those who oppose the coal industry internationally, but I know that fossil fuels will be burned into the future. I am also with the hon. Member for Northampton, South (Mr. Binley), because he spelled out all the things we need to do to ensure that CCS works properly. We need to get demonstration plants up and running in this country very quickly.
I am aware of your strictures on time, Mr. Deputy Speaker, and I wish to speak from a local point of view. I represent a coalfield area, in which deep coal is still mined-and there is very little of that happening in this country now. Our miners are the most efficient in Europe. What stands in the way of progress in the future is not economics, but the environment. The big challenge ahead of us is to ensure that we can burn coal more quickly. If we can do that, the coalfield in Nottinghamshire will survive into the future.
I am delighted that the Secretary of State met representatives from Welbeck colliery last weekend, because although the colliery is mothballed at the moment, it
could reopen. It faces the task faced by the whole energy sector-that of attracting investment. The colliery needs an investment of £200 million and that money is not available on the market at the moment, because it is deemed too risky.
Mr. Willis: I totally support the idea that we should incentivise our coal industry, provided that we have the technology to clean up the carbon. I think that the whole House-by and large-agrees with that, but does the hon. Gentleman agree that there is a cruel deception in this issue? Much of our coalfield closed down because the foreign owners of our power stations could buy coal from Australia, Poland or Indonesia more cheaply than they could get it out of the mines in Nottinghamshire. What comfort has the hon. Gentleman had from the Minister that somehow British coal will be subsidised to enable the generators to use it?
Paddy Tipping: I do not think that there will be a subsidy on coal. It is clear that coal costs have been driven down, and will continue to be driven down into the future. Ultimately, that is clearly an issue about security of supply, which is the point made by the right hon. Member for Wokingham. In the future, all sources of energy will be in demand internationally, and we need to secure our base through British coal.
I want Welbeck colliery reopened, and reopened quickly. It would cost £200 million. Discussions are taking place with the European Investment Bank, which likes the project, but there are hurdles to be overcome, and the hurdle that it cannot jump at the moment is that which the EIB wants it to jump: coal from Welbeck should be burned cleanly. The issue for miners in Nottinghamshire, UK Coal and the Government is how we get there. After much discussion, the consensus is that very quickly we have to get a demonstration plant up and running in Nottinghamshire or Yorkshire where that coal can go to. The demonstration model, backed by the levy in the Bill, is the way to do that.
Like the hon. Member for Wealden (Charles Hendry), I spend a lot of time talking to energy providers, and it is clear to me that they are dependent on the new mechanism. It is also clear that they are most concerned about the introduction of an EPS. It is interesting that in this discussion no one has been clear about what the levels in the EPS are to be. People say, "It's going to happen within a year. We can define it within a year", but CCS will not be up and running within a year. Let us be absolutely clear about this: it will be five years, at least, before we know how to put that technology together.
Like the hon. Member for Northampton, South, I know that we can put the technology together, but I am not clear about the future costs. The perception is that the cost of burning coal, with CCS on top of it, will be 10 per cent. greater than for present conventional mechanisms. We need to get the experience and to demonstrate not just the one project, but the four that have been mentioned. It is clear, therefore, that we have to make progress quickly, and I am delighted with the acceleration that has taken place within the new ministerial team, on this issue, at the new Department.
Martin Horwood:
Obviously, as we have discussed at length, there is no existing large-scale CCS on a coal-fired power-generating station, but there is a wealth of experience on the cost of this technology, because, as various
Members have said, it has been around for a long time. The IEA greenhouse gas project has a wealth of data on the economics of CCS. It ranges from that which is commercial now-for instance, where there is advanced oil recovery, where storage is right next to the plant and on particular types of recovery-right through to that which is quite expensive, very distant from the aquifer and so on. That experience and those data are already readily available.
Paddy Tipping: I take that point, and I am delighted that the hon. Gentleman has acknowledged at last that there is no large demonstration coal plant anywhere in the world-it has taken us all afternoon to get there, but finally he has admitted it.
Martin Horwood: That is not what I said. There already are demonstration projects, including Schwarze Pumpe and another one in China, but there is not one on a commercial scale for an existing power station.
Mr. Deputy Speaker: Order. May I say that the amount of time left is diminishing? Perhaps the hon. Member for Cheltenham (Martin Horwood) could ration himself a little more.
Paddy Tipping: I will check the hon. Gentleman's words on the record, but for now I am delighted that he has accepted that there is no commercial plant dependent on coal anywhere in the world.
We have to demonstrate that we can achieve that here, and the way to do that is through the mechanisms that my hon. Friend the Minister spelled out at the beginning of this debate. We have taken the trick: we have got the way forward, but we need to back it. It is no good talking about trying to define an EPS into the future, because we do not have the knowledge to do it now. Let me tell my hon. Friends that this debate is not between vertebrates and invertebrates; it is between those of us who are progressive and reformist, and those who are absolutist. The history is clear: in the end, reformists always win the day. And let me say this to my hon. Friend the Minister: please go forward quickly.
Mr. Weir: I am pleased to follow the hon. Member for Sherwood (Paddy Tipping). I agreed with much of what he said, but I will be supporting the EPS. I do not consider myself to be a vertebrate or whatever-I am a very cautious person-but we need to pin things down.
In introducing this debate the Minister talked about the need to decarbonise the energy supply. I do not think that anybody in the House would disagree with that. I agree entirely that we have got to get CCS to work. Coal and gas are important to our current energy supply and are likely to remain so for the foreseeable future, so CCS is vital. Indeed, I am pleased to see that there will be a change, with gas perhaps being allowed later. However, if we are to persuade people of the need to pay for CCS, we will have to show results.
Much has been said about investment today. The CBI has sent me-and, I am sure, every other Member-its paper on investment, which says:
"An EPS could deter investment in CCS which would have an adverse impact on energy security",
"Introducing an EPS risks the unintended consequence of diverting investment away from UK clean coal, and towards CCS projects in countries where the risk profile is lower."
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