Energy Bill

Written evidence submitted by the Carbon Capture and Storage Association (EB 02)

Energy Bill:

CCSA comments ahead of Second Reading in the House of Commons

This briefing paper sets out the views of the Carbon Capture and Storage Association (CCSA) in relation to the Energy Bill and its implications for Carbon Capture and Storage (CCS).

What is the CCSA?

The CCSA brings together a wide range of specialist companies across the spectrum of CCS technology, as well as a variety of support services to the energy sector. The CCSA exists to represent the interests of its members in promoting the business of CCS in the UK, Europe and internationally, and to assist policy developments towards a long-term regulatory framework for CCS as a means of abating carbon dioxide (CO2) emissions.

CCS and the OGA: Background

The Principal Objective of the Oil and Gas Authority (OGA) is to maximise economic recovery of petroleum from the UK Continental Shelf (UKCS). To enable it to fulfil this objective Government is transferring a range of powers and relevant functions from the Secretary of State to the OGA under the Energy Bill. This is set to include transferring responsibility for CO2 storage licensing to the OGA and ensuring that it has regard to the suite of UK CO2 storage regulation, even in instances when CCS activities will not contribute towards the fulfilment of the Principal Objective.

Although the OGA is set to take ownership of CO2 storage licensing, responsibility for CCS policy and strategy is expected remain with the DECC Office for CCS (OCCS). Whilst the CCSA doesn’t believe that the OGA should be accountable for CCS policy, it believes the OGA should be obliged to undertake certain steps in support of CCS policy development. In particular, the OGA would be well-placed to utilise its skills and resources, access to data and overview of the UKCS to work with DECC and others (e.g. the National Infrastructure Commission (NIC)) to develop a strategic approach to CCS infrastructure deployment (CO2 pipelines and stores).

Embedding CCS into the functions of the OGA would not only support broader Government objectives around decarbonisation and minimising costs to consumers but could also lead to additional oil recovery and create new economic opportunities for the UK, including maximising the value of geological assets, utilising offshore skills and expertise and helping to retain jobs in energy intensive industries and the oil and gas industry.

Progress of the Energy Bill thus far and discussions relating to CCS

When the Energy Bill was introduced into the House of Lords it contained very little mention of CCS. During its debate, however, Peers agreed that there needed to be a greater focus on CCS given the strong synergies between maximising economic recovery (MER), reuse of infrastructure, decommissioning of petroleum infrastructure and the future management of the North Sea. A wide range of amendments on CCS were tabled, led by Baroness Worthington, Lord Oxburgh and Lord Teverson. The CCSA called for 4 amendments around enabling the OGA to access to data (‘petroleum related information’) for purposes other than the Principal Objective and ensuring the OGA had a clear regard to the development of CCS.

Following the debate, Government agreed that CCS needed to be more fully incorporated into the Bill and Lord Bourne personally undertook to ensure that this was achieved. The Minister undertook a series of bilateral meetings with interested Peers and officials began to engage meaningfully with the CCSA. Lord Bourne also committed to consulting the CCS industry in relation to the OGA sector strategies on Decommissioning and Technology.

Government introduced a number of amendments [1] relating to CCS, particularly including:

· Amendment 12, which ensured that the OGA must have regard for the storage of carbon dioxide and how that may assist delivery against climate change targets;

· Amendment 34, which broadened the definition "petroleum related information" and samples to include information relevant to CO2 storage;

· Amendment 35, which included CO2 storage licence holders alongside other offshore licensees.

The CCSA strongly welcomed these amendments.

In addition, given concerns around the longer-term funding model for CCS in the UK the CCSA supported an additional amendment, which would have required the Secretary of State to come forward with a CCS Strategy by June 2017. The amendment (number 72 in the Marshalled List of amendments tabled on Report) was submitted by Lord Oxburgh, Lord Teverson and Baroness Worthington.

CCSA recommendations ahead of Second Reading and Committee Stage

In order for the Bill to adequately incorporate CCS and enable the OGA to play an appropriate supporting function on CCS development, the CCSA makes the following recommendations:

1. Retain Government amendments relating to CCS to ensure that CCS is given due consideration by the OGA and that it has the appropriate powers to support CCS development in the UKCS, particularly enabling CCS parties to access petroleum related data and samples to accelerate the development of CO2 storage sites.

2. Call on the Secretary of State to articulate a Government Strategy on CCS. This will be particularly important given the recent Government decision to withdraw £1 billion of funding for the CCS Commercialisation Programme. The CCSA has suggested minor changes to the original amendment tabled by Lord Oxburgh, Lord Teverson and Baroness Worthington to require the Secretary of State to set the new Strategy by September 2016 and to explicitly require consultation with the National Infrastructure Commission. Timely development of a new Strategy will be critical to ensuring that lessons are learnt from the CCS Competition projects and to keep CCS deployment as an option for the UK in the 2020s.


The CCSA’s suggested amendment would read:

"Carbon capture and storage strategy

(1)       It is the duty of the Secretary of State to-

(a) develop, promote and implement a comprehensive national   strategy for carbon capture and storage (CCS) to deliver the   emissions reductions required to meet the fifth, and subsequent,   carbon budgets at the scale and pace required;

(b) develop that strategy in consultation with HM Treasury, the   Department for Business, Innovation and Skills, the National Infrastructure Commission, the Oil and Gas   Authority and other relevant stakeholders including the CCS   industry; and

(c) have that strategy in place by September 2016 and report to Parliament on  
the progress of its implementation every three years thereafter.

(2)       The strategy provided for by subsection (1) shall, amongst other things,  
include-

(a) the development of infrastructure for carbon dioxide transport and   storage;

(b) a funding strategy for implementation including provision of   market signals sufficient to build confidence for private investment   in the CCS industry;

(c) priorities for such action in the immediate future as may be   necessary to allow the orderly and timely development and   deployment of CCS after 2020;

(d) promotion of cost-effective innovation in CCS; and

(e) clarification of the responsibilities of government departments with  
respect to the implementation of the strategy."

January 2015


[1] Included in the Marshalled List of Amendments tabled on Report

 

Prepared 21st January 2016