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Energy Policy

Volume 468: debated on Tuesday 27 November 2007

Motion made, and Question proposed, That the sitting be now adjourned.—[Malcolm Wicks.]

I sought this debate with deep concern and in the knowledge that the United Kingdom will face an energy crisis unless action is taken soon. Energy is the lifeblood of the nation; it affects our business community, enterprise, domestic heating and, indeed, life itself. The old and the infirm, hospitals, rail travel, schools and everything that moves—the entire economy—can do nothing without energy. It is also a weapon of foreign policy, or can be used as such. The bottom line is that we need a continuous supply of this vital commodity and to maintain relative energy independence from other nations.

The UK desperately needs an energy policy. Despite the length of this summer’s energy White Paper—it runs to 342 pages—it dealt much more with what we need to do than with how to do it. It was largely mute on how investment from UK companies is to be stimulated and encouraged in order to build new power stations and energy infrastructure. It has been 10 years since I secured an Adjournment debate on the future of British coal reserves in the coal industry—this is not a new subject for me—and 15 years since I voted, with only three others, against my own Conservative Government’s pit closure programme and the then much-heralded dash for gas. I firmly believe that many of the economic issues that this nation faces will be guided and determined by our ability and capacity to provide households and businesses with the lowest priced energy possible. I do not resile from my decision to vote against my own Government.

Our over-dependence on expensive gas for the generation of electricity is placing more households in fuel poverty, which is when more than 10 per cent. of household income is spent on energy bills. That over-dependence on gas is also jeopardising the UK’s safety and security of energy supply, because more and more gas is being imported from Russia, the middle east and north Africa. We have seen already the effects of the new politics of energy. When Russia shut off the gas supply to Ukraine early last year, it caused a massive spike in gas prices by interrupting one of the main supplies into Europe. That over-dependence on gas should make us aware of the precarious situation that we need to avert quickly by taking the correct energy decisions now.

I am concerned also about the fact that the EU reform treaty, which the House will debate soon, contains a new energy chapter and essentially the same provisions as those in the original constitutional treaty. It also adds a new element to the policy—the interconnection of energy networks. As was the case under the original constitutional treaty, energy measures cannot affect a member state’s right to determine conditions for the exploitation of energy resources, its choice of energy resources or the structure of its energy supply. However, environmental measures—I am told that we will discuss the planning statement this afternoon—can affect such matters. Although such matters are governed by unanimity, the doctrine of the “occupied field” could severely inhibit the manner in which we can legislate. If the new energy chapter goes in, albeit unanimously, we would remain in a very difficult position should we seek to legislate on our own terms—something that I insist upon, because Parliament has to have sovereignty over its energy policy and legislation.

I thank the hon. Gentleman for his commitment to the coal industry. He mentioned our over-dependence on gas. As he will be aware, we are likely to experience an energy crisis between 2012 and 2015 because of the simultaneous closure of coal and nuclear stations. Some 40 per cent. of our electricity is provided by gas, and during that crisis, and before we bring on new nuclear stations, the Government are likely to accept section 36 applications for many more stations. By the end of 2015, therefore, we might well be even more dependent on gas. Does the hon. Gentleman therefore agree that the Government ought to take the line that a sufficient number of gas stations are now providing electricity and that no more gas stations should be brought on?

I agree with the hon. Gentleman, and that point will become clearer in the light of what I have to say. I pay tribute to his work as the chairman of the all-party group on coalfield communities, of which I have the honour of being vice-chairman. I believe strongly that his work and focus on such questions is of inestimable importance to the national interest.

It is clear now that the irresponsible claim, made in October 1992 as part of the justification for the coal closure announcement, that the country’s gas reserves were sufficient for around 55 years was wrong and misleading. That announcement was led by the then Minister with responsibility for such matters, the now Lord Heseltine. I vigorously opposed him and the then Government, who have a great deal to answer for on this matter. Among other things, they binned the former Energy Select Committee, which should be recalled in order to focus specifically on the questions being discussed today. I accept that energy has been enveloped by another Select Committee; however, we need a special focus on it.

British gas reserves are in decline and we now face increasing gas prices, coupled with increasing oil prices, which is having an upward impact on the price of electricity. We are at risk of putting all our energy eggs in the gas basket.

I am learning a lot from my hon. Friend. In the last year or so, gas prices have fallen because new import infrastructures have come on stream. I have spoken to people in the energy industry, and their outlook for the next three to five years is that there will be relatively low gas prices.

That is because of imports, but we must have regard to the impact of over-dependence on supplies from elsewhere. Part of the problem is the great insecurity and uncertainty over Russia, along with German control of the pipeline system, which was evidenced by the fact that Mr. Schröder’s first act after leaving the chancellorship of Germany was to take up the chairmanship of one of the most important divisions of Gazprom. If that does not tell us something, I do not know what does. We must also consider the insecurity and instability in the middle east. I recognise that my hon. Friend has a constituency interest in this matter and that we should welcome imports. However, that does not mitigate the fact that we are facing increasing gas prices over the medium and long term as well as a lack of supply security.

We must incentivise new clean coal and nuclear build. Only last month it was announced that one quarter of the country’s nuclear power stations are to be shut down because of safety issues. News of the shutdowns led to fears of possible power shortages and made electricity prices on the spot market spike by 17 per cent. As recently as 14 November, the national grid issued a flash warning that there might not be sufficient spare generating capacity to meet any unexpected surge in electricity demand the following day.

The days when Britain could rely on plentiful gas from the North sea are gone. Indeed, in recent years, Britain has fallen back on relying on coal generation of electricity to see it through. I represent a constituency in north Staffordshire, which was one of the jewels in the coal mining crown. Florence, Silverdale and Trentham collieries were big hitters, often beating their annual production targets. As I have already said, I vigorously opposed the closures of Silverdale and Trentham collieries, both of which had substantial reserves. I might add that I also challenged Arthur Scargill when he was doing an enormous amount of damage to our local industry in Staffordshire. I went on a platform, took the microphone away from him and told him to lay off my miners. In other words, I do not just choose my targets—I try to get the balance right across the board.

I was aware then, as I am now, that those pits represented a part of Britain’s future energy security. At the moment, we also have a very interesting situation developing in Kent. All I can say is that I sincerely hope that the planning paper being presented today will give us a real opportunity to make certain that the development of clean coal technology is given a fair opportunity and is not in any way diminished by the planning proposals that we shall hear about later today.

I would like to set out how I believe that coal can and should enjoy a renaissance in the energy sector. I am speaking not out of nostalgia, but in the light of the new technologies that allow us to reduce the fuel’s carbon emissions radically. The fact is that coal generates the cheapest electricity on the grid and allows us to use an indigenous energy asset that Britain enjoys in abundance. Furthermore, if the coal supply is properly calibrated, it would guarantee that in any international crisis, we would not be over-dependent on other countries if that crisis worsened. That idea is absolutely fundamental to my argument; we must not be over-reliant on other countries.

Can my hon. Friend give a sense of what he means by over-dependence? Is he arguing that we should make it the goal of British energy policy to be self-sufficient and energy-independent? I would argue that that is unrealistic. Alternatively, is he saying that we should achieve a better energy balance? If his argument is about achieving a better balance, what proportion of energy imports would constitute over-dependence?

It is almost impossible to arrive at a calculated formula that would give an answer to the latter question. However, I do favour the idea of a proper balance of policies; I am not suggesting that we should just have one policy. As I said earlier, energy is the lifeblood of the nation and we must have a safeguard, so that if we were put in a perilous situation, we would know that we were not in a hazardous position and that we would be able to maintain energy supplies across all the domestic fields that I listed earlier. Therefore, I am arguing for balance—I am not saying that our energy policy should be based exclusively on coal. However, if there were perilous circumstances, we need to know that we could rely on a proper and proportionate amount of coal to guarantee that we were not put in an unduly hazardous situation.

Coal still plays a very important part in electricity generation in Britain. In an average year, it produces more than 35 per cent. of the UK’s base load electricity. As I have already indicated, in recent winters, which have been quite mild, that figure has risen to as much as 50 per cent. Coal has many advantages. It is plentiful, indigenous and can be stockpiled; it is comparatively cheap, flexible and responsive to peaks and troughs in demand; and, unlike gas imports, it is not vulnerable to geopolitical risk. Only nuclear power can match those advantages. However, current coal-fired power stations were considered environmentally unacceptable because of their substantial carbon emissions—until new clean coal technologies emerged. The Government cannot avoid providing development and support for those new technologies if they genuinely wish to create a balanced energy portfolio.

The UK has the opportunity to be at the forefront in developing such technology. I welcome the Anglo-Chinese clean coal agreement, which was announced last week. I also welcome bringing in other kinds of imported opportunities for supply, which can lead to a better energy policy. At the same time, however, if the United Kingdom is to avoid an energy crisis, we must place clean coal at the heart of our future energy policy and stimulate investment in the development of our substantial reserves.

I have a particular interest in the carbon capture and sequestration project that the Government announced recently, because Longannet power station, the second largest coal-fired power station in Europe, is in my constituency. There are, however, a couple of concerns about the project: first, only one successful project has been proposed as part of the competition; and secondly, the Government have not been clear enough about what is required from the competition. Does the hon. Gentleman have any comments to make about that?

Yes, I do, and I have no doubt that the Minister will reply to and deal with that issue. The point is that we have reached a watershed, and the need to accelerate and incentivise clean coal technology is a matter of extreme national importance. It is no good saying, “We have got a balance because we are taking some interest in this”; it is a question of proportionality. There has to be clean coal, and there must be a proper system that takes account of the problem that the hon. Gentleman just mentioned. Having said that, however, I think we need more, not less, emphasis on this issue.

Could it not already be too late in the day to bring forward clean coal technology? The point has already been made powerfully that the crunch will come in the next 10 years, with the retiring of old coal-fired and nuclear power stations. In the absence of commercially viable clean coal technology that can help to bring on a new generation of coal-fired power stations, the industry will in the meantime introduce low-cost, low-risk solutions, meaning yet more gas-fired power stations.

I recognise where my hon. Friend is coming from, but I repeat what I have said already: we must have a proper balance. The emphasis on clean coal technology is disproportionately diminished, and I want this debate to generate some interest in that issue.

Estimates of coal are not made annually in the same way that they are for UK gas and oil reserves, but it is important that the House be made aware of some recent industry estimates. In 2006, the Coal Authority estimated that there were more than 600 million tonnes of coal in established and accessible UK reserves. Importantly, in British Coal’s 1992 annual report, it estimated that 190 billion tonnes of coal lay underneath the UK, of which 45 billion tonnes could be extracted using the then known techniques. Of course, a lot of progress has been made since. British Coal estimated that the pits then open—before the 1992 closures—had 1.1 billion tonnes in classified reserves that could be economically extracted.

To put those estimates in context, total UK coal output between 1853 and 2006 was only 22.7 billion tonnes. That gives us some sense of what is left now—even after the whole industrial revolution and two world wars. Some 22.7 billion tonnes has been used since 1853, and the estimate is that 190 billion tonnes of coal lies underneath the UK now. To make coal-fired power stations more efficient and less polluting, clean coal technology uses equipment such as super-critical boilers that can be retrofitted to Britain’s ongoing coal-fired stations.

However, the most exciting prospect is the so-called carbon capture and storage process, which the hon. Member for Dunfermline and West Fife (Willie Rennie) mentioned. That involves capturing carbon dioxide before it is released into the atmosphere, turning it into a liquid and storing it in old oil or gas fields under the sea. One positive by-product of injecting pressurised gas into such depleted fields could be the further extraction of oil reserves—a process known as enhanced oil recovery. The Treasury would be the obvious winner in such a process.

The main types of carbon capture technology are defined by whether the carbon is removed before or after the coal is burned—pre-combustion and post-combustion. There are pros and cons to both techniques. Post-combustion uses more energy than pre-combustion and the equipment is more considerable, requiring more land to be available at each power station, but pre-combustion is suitable only for new coal-fired power stations.

I was disappointed to note that, as I understand it, the Government have decided to back only post-combustion clean coal technology; no doubt the Minister can confirm that. It is important that incentives and overt Government support also be given to pre-combustion, which will allow us effectively to turn coal into gas and remove 90 per cent. of CO2 emissions for sequestration. Such clean coal stations, known as integrated gasification combined cycles, represent a near zero-emission coal solution for the UK, which is quite a prize. I firmly believe that there should be more encouragement from the Government for such projects, and I await the Minister’s comments on pre-combustion technologies.

While modernising existing stations is to be welcomed, we should also support brand new designs and therefore new build, which would allow us to use our coal well into the future. New power stations that gasify coal represent the only process that changes one form of energy—coal—into another, more flexible energy: hydrogen gas. As the Minister will know, hydrogen is becoming increasingly important in new technologies such as those possible in air travel and the motor car. Those technologies are important and we need to develop them. The benefits are clear. In addition to providing a clean, reliable and local source of power, the gas does not have to be fired to generate electricity, but can be injected into the gas network and thereby improve our gas supply position—I pay tribute to my hon. Friend the Member for Preseli Pembrokeshire Mr, Crabb) for his interest in gas—and our negotiating position with gas importers. The Minister and his Department must do more to encourage that process and those working to bring it about in the UK. Coal-rich countries such as the United States and Australia are streets ahead in their support for the technology.

Electricity generated from coal offers a number of strategic advantages for Britain. It ensures that sustainable and competitively priced electricity is available to UK customers; it offsets security risks and the costs of importing increasingly expensive gas from the middle east and Russia; and it has proven over many years its ability to meet rises in electricity demand, compared with the less predictable output from renewables. The Government have produced a statement on that in the past week or so. With new clean coal technology installed at new and existing powers stations, it can also help to foster a high-growth, low-carbon economy.

The UK has an installed electricity generating capacity of 77 GW. However, much of it will come off stream in the next decade as older nuclear and coal stations are decommissioned. Unless capacity problems are addressed rapidly, the UK could face an estimated 33 GW electricity generation capacity shortage by 2016. That, in short, represents the energy crisis that I mentioned earlier. EDF Energy argues that that generation gap will be a direct result of paying off older coal and nuclear stations without swiftly replacing them with clean coal and new nuclear stations. As a consequence of such a development, we could become perilously over-dependent on gas.

If, as I strongly believe, clean coal and nuclear power are needed in the balance to fill the fast-approaching energy gap, and consequently reduce emissions while maintaining competitively priced electricity, streamlined planning procedures for such major infrastructure projects are essential. I await the planning reform statement this afternoon and the Planning Bill with much interest and anticipation.

Due to the running down of the domestic coal industry, there are only a handful of deep mines left, producing about 10 million tonnes of coal a year. Coupled with open-cast output, that takes the total output of British-mined coal to a mere 20 million tonnes a year. The market for coal in the United Kingdom, largely for the power stations, is about 60 million tonnes. The huge difference of about 40 million tonnes is taken up by unnecessary and expensive coal imports from countries such as Russia, Poland, Colombia and Australia. For the reasons that I am giving, a disproportionate amount of coal is imported.

As shipping costs soar, there is a consequent impact on the price of coal imports and the electricity that they generate. Imported coal is more expensive than British-mined coal. British coal is also free of the volatility associated with international coal prices and exchange rates. Imported coal puts more pressure on docks and transport infrastructure and contributes substantially to the UK’s balance of payments deficit. Also, the carbon footprint of importing coal is significantly more than that of producing coal locally and transporting it the short distance to local power stations. Port-to-power-station coal flows are significantly longer than the pit-to-power-station merry-go-round rail operations that still operate, but on a much smaller scale than in the past. That places extra pressure on our rail infrastructure. Imported coal is discharged at Immingham, Avonmouth, Clydeport, Medway, Liverpool, Hull and many other ports miles from the power stations that it must reach.

There are some encouraging developments on the mining scene. A healthy coal price has made some new prospects viable. The Hatfield colliery near Doncaster has reopened and plans to become a 2 million tonnes a year pit. Importantly, its owner, Powerfuel, intends to build an IGCC power station alongside the mine. However and as I have said, the Government have decided against supporting pre-combustion clean coal technology. In Wales, the Unity drift mine in the vale of Neath and the Aberpergwm mine have recently started production. They are the first deep mines to be opened there in 30 years and will supply the Aberthaw power station, which is to be retrofitted with clean coal technology. In recent years, Aberthaw has depended heavily on coal imports through Swansea. New mines are also planned in Scotland.

My hon. Friend is being generous in giving way. He should be aware that the Aberthaw project on the retrofitting of clean coal technology is not even a demonstrative project; it is being called a pilot project. It is a small, 1 MW facility to test the infrastructure to see whether it could ever be developed into a commercially viable and usable bit of kit. That returns me to my earlier point that we as a nation should have been moving towards clean coal technology a lot faster. I fear that, even if the Aberthaw project eventually proves viable, it will come too late in the day, by which time more and more gas power stations will have been built to plug the energy gap in the next 10 years that my hon. Friend has so eloquently identified.

I am grateful to my hon. Friend, and that is an extremely good point. We are in a catch-up position, but there is an opportunity to do that. I have optimism and hope that the Government will take these points on board.

Mining experts estimate that it would cost hundreds of millions of pounds to sink a new shaft and commence mining operations at a new site, but the Government must seek to support those who are considering new and expanded mining operations. Given the new clean coal technologies that I have highlighted and the energy capacity crunch that the UK will soon face, I believe firmly that we must maximise our indigenous reserves of coal. On that point, will the Minister address the guidance in minerals policy 3, which is a major hindrance to open-cast miners who wish to exploit the substantial coal reserves that lie close to the surface?

Does the hon. Gentleman accept that a combination of open-cast and deep mining is extremely important for the future? We could have the situation that we have had in Scotland for a number of years. Open-cast can lead to drift mines; that, in turn, means that investment in open-cast can be combined with investment in drift mines, which can take us underground.

I do accept that. Part of the usefulness of this debate is to demonstrate the need for balance in all directions, even within the coal industry. I was about to say that huge coal deposits can be extracted from open-cast mines, but MP3 is the problem. Will the Minister tell me whether mining operations in general will be covered in the Planning Bill? Why is he not prepared to issue a statement of need of at least 20 million tonnes of domestic coal output, as called for by the Government’s own coal forum?

The renewables obligation is the Government’s principal policy instrument to encourage the development of the renewable electricity sector. It is an indirect subsidy system drawing funds from consumer bills and passing them to renewable electricity generators. That currently amounts to £1 billion a year and will have totalled £32 billion by the end of the scheme. In light of the fact that renewable energies such as wind are intermittent and do not provide base load energy, would some of the substantial moneys that go to wind power, which is the major beneficiary, not be better spent on projects such as clean coal? This is a major issue in my constituency, as there are projects for wind turbines near Maer hills and Norton in Hales, which we shall vigorously oppose.

In a moment. The clear benefits of clean coal would be increased reliability of supply and cheaper electricity prices for the consumer. Before I give way to the hon. Gentleman, I should point out that it is well established that the idea of wind farm projects in the midlands area is very counter-productive.

The hon. Gentleman has joined a number of Conservative Back Benchers and councils in opposing wind power, but it has to be a vital part of our future energy mix. On what basis does he oppose wind farms?

Frankly, they just do not work and are over-subsidised. I have not come here to talk exclusively about wind and wind farms, but I can tell the hon. Gentleman that there is a great deal of opposition in my constituency to the non-productive use of such technologies, which are completely useless according to the evidence that we have received. I am talking specifically about the midlands; it is not for me to go into the broader picture in this debate, but I treat the whole issue of wind farms with a great deal of scepticism and I think that they are extremely damaging environmentally.

Clean coal should enjoy financial incentives equal to those enjoyed by the renewable energy sector, and nor should the subsidies that have gone to nuclear power be forgotten. Will the Minister address this specific point in his response?

I should like to give a brief but important example of how over-zealous support for renewables, particularly wind power, has led to increased carbon emissions. Denmark has the most intense concentration of wind generation in Europe. At peak output, its wind farms can account for nearly 64 per cent. of Danish peak power, but that rarely occurs. Last year, Danish carbon emissions rose as the Danish grid fell back on older, coal-fired power stations to plug the energy gap left by underperforming wind farms. Its power stations used 50 per cent. more coal than in 2005 to cover the failings of wind power, and its wind turbines generated a mere 22 per cent. of electricity, down from 29 per cent. in 2005. The increased demand for coal and the fact that it was burned in old, unmodified stations meant that Danish carbon emissions rose by 36 per cent. in 2006. My point is obvious, and I suspect that Danish investment in clean coal is imminent.

Investing in clean coal technology could allow us to enjoy consistent and competitively priced base load supply, with huge reductions in carbon emissions. Overzealous and irresponsible support for renewables, no matter how well-meaning, can and will lead to what is increasingly called “the Danish problem”. There are considerable financial incentives and support for renewable energy sources, but no such moneys exist to assist and promote ongoing indigenous mining projects, which are crucial if we are to retain and develop our coal reserves and have a clean coal generating sector that does not depend only on coal imports.

The recent surge in coal prices has whetted the appetite of indigenous coal producers who wish further to develop reserves. Loan guarantees would rightly provide an alternative to direct subsidy and could reflect the Government’s strategic support in the national interest. The money could be used to access new reserves and to help develop existing reserves. Developing new coal faces underground can take years, and considerable finance is required. A facility for Government loans or loan agreements would resolve that issue and secure access to coal reserves that require large-scale, ongoing investment. Harworth colliery, in Nottinghamshire, has been mothballed because money cannot be found to access the 50 million tonnes of coal that could be mined there and sold to power stations literally on its doorstep in the Trent valley. Will the Minister address the issue of loan agreements as one concept for the financing of mining operations in the national energy interest?

The nature of a loan is that the money is returned to the lender—in this case, when the coal mined as a result of the loan has been sold to the generators. Coal is the world’s most abundant fossil fuel. According to the International Energy Agency, in the light of new clean coal technology the use of coal is set to grow, especially in the developing economies of China and India and in countries such as the United States and Australia. It is therefore imperative that we use this national asset, as so many other countries are doing. In doing so, we can demonstrate how it can be used in a balanced and environmentally responsible way by supporting the concept of clean coal technology with action, not just words.

It is imperative that the Government provide a lead on energy policy. The Minister might disagree, but many in the energy sector and in this House are not aware that a policy with set targets or ambitions to address these critical questions exists. I look forward to his responses to my points.

Order. The winding-up speeches will start at 10.30 am. I have no power to impose a time limit on speeches, but I would like to call everyone to speak, so I appeal to hon. Members to share the time out.

I congratulate the hon. Member for Stone (Mr. Cash) on securing the debate. He has proven once again that he speaks well on not only Europe; he has given good speeches on energy—on coal today—and on water in Africa in previous debates.

The UK has billions of tonnes of coal, which we might need to use one day. It would be foolish to write off that coal completely and have the dash for gas that has been described. As my hon. Friend the Member for Barnsley, West and Penistone (Mr. Clapham) said in an intervention, we might end up with a span of three years in which we have to go to gas and might therefore build new gas power stations that will not meet our need to reduce carbon dioxide emissions.

I firmly believe that we should all try to reduce our use of oil and gas. They are finite resources, and if we are serious about securing a clean, sustainable supply of energy for future generations, we must act now. I am particularly disappointed by the Government announcement that we will be into the new year before we hear what will happen with the energy Bill and the Government’s policy on it. It was supposed to be dealt with before Christmas, but it seems to be being put back and back. That time could be used to deal with this country’s needs. If we keep putting these matters back, we will certainly end up with a dash for gas.

Does the hon. Gentleman share my disappointment that the Peterhead project has been put back? Does he agree that it offers a tremendous opportunity and that the Government should stop dithering on it, so that it is delivered?

Yes, I am disappointed, but I am also disappointed by many things that are happening in Scotland on energy. Perhaps the hon. Gentleman could influence some of his colleagues north of the border to open their eyes and consider the wider possibilities of energy there and the needs of not only the Scottish people, but people in the UK and, possibly, beyond in places where we could sell that energy.

On having a wider influence in the energy market, does the hon. Gentleman welcome the Scottish Government’s initiative for a super grid in the North sea? That would help to link Norway and Scotland and do exactly what he is promoting—get energy that we produce into the wider market.

I accept what the hon. Gentleman says, but the caveat is that he assumes that the grid will give Scotland access to Norway. If we keep to our present energy policy, Scotland will be taking energy from Norway. That is why we quickly have to make a decision now and go forward.

There are huge opportunities for coal on the international market if we develop clean coal technology and carbon sequestration. It is estimated that the use of coal will rise by 32 per cent. by 2015 and by 59 per cent. by 2030. The International Energy Agency forecasts that coal will retain a quarter share of the world’s energy mix.

When we talk about coal, it is important to consider China. Coal is still the great fuel in China, where it is used in everything from power stations to the samovars for heating water on trains. The answer to China’s fuel needs is to go back to the past. China’s future fuel will still be coal.

Coal has a bad reputation: dirty, dangerous and highly polluting. The prospect of a coal-powered future may fill many with dread. China is already by far the world’s biggest producer and consumer of coal. Its 30,000-odd mines churned out more than 2 billion tonnes of the stuff last year. That is more than a third of all the coal produced in the world. The mines also cost the lives of 6,000 Chinese miners. Coal is the main reason why China is now second only to the US in the output of greenhouse gases and is soon to overtake the US.

Coal’s dirty reputation may be about to change, however. China has given the go-ahead for the construction of several huge new projects to turn dirty coal into clean gas. A company not far from my constituency, Babcock, is one of the leading lights in the technology. I hope that we do not allow another country to get ahead of us by taking the technology in which we were once the experts and cashing in on it in the future. It is important that we as a country get behind coal gasification. We have understood for years that it is one way to make money for this country.

With oil prices now more than $90 a barrel, it has finally become profitable to use coal again, but we have to build multi-billion-dollar plants to be able to use it and to reduce carbon dioxide emissions to the levels that will be acceptable in the future.

I am sure that the hon. Gentleman would agree that it would not be a terribly good idea if we went for gasification and it led to a forest of derricks. In other words, there is a way to draw gas without environmental disruption.

The hon. Gentleman is right, but that technology is still a long way down the road. Unfortunately, our needs are now and not in the future. We should never throw the baby out with the bath water. We must consider everything and exclude nothing.

According to the experts, the new mega-plants will take dirty, sulphur-rich coal and turn it into clean, sulphur-free gases, such as methane, which will be ready to be liquefied and put into the tanks of China’s millions of cars or burned it its power stations.

On energy policy, it is no surprise that I, as the chairman of the all-party group on nuclear energy, support a fully balanced energy policy. I am concerned that we may miss opportunities by delaying decisions to allow the private sector to build nuclear power plants. We may end up depending on gas for the vast majority of our energy sources. If China is on the road to investing in clean coal technology, why are we not? The Chinese have announced £10 billion of investment in renewable energy; therefore, why can we not do so?

Reducing the use of oil and gas is a sensible option. Any further delay will only increase our dependence on foreign gas. The hon. Gentleman identified in great detail the problems in respect of not just energy, but national security.

I hope that the Minister will indicate how the Government view the situation. I believe that China can be an example, not a threat. We must consider why it is investing money in new coal technologies, and why it has entered into a $20 billion agreement with a French company, Areva, to build six new power stations, while we dither and wonder what to do with our energy policy. It is important that we get the matter sorted out quickly.

I congratulate the hon. Member for Stone (Mr. Cash) on securing this important debate. I am still trying to visualise him telling off Heseltine and Scargill at the same time. I remember that during that difficult period one or two lone voices in the Conservative ranks argued for the coal industry in the long term, and I congratulate him on that. He has a long history in respect of the coal industry.

Coal is a big issue. We should be considering what is in front of us and what we need to do to address the big problems that face this nation. I am the chairman of the all-party group on coalfield communities, having taken over from my hon. Friend the Member for Barnsley, West and Penistone (Mr. Clapham). The term that I think of every time that we talk about coal is “dirty coal”. “Clean coal” is often described as a contradiction in terms because coal is seen as dirty, inefficient and heavily polluting.

The environmental group Greenpeace has waged war against the possibility of any new coal-fired power station. Last week, it was already attacking the possibility of our going ahead, and it says that it will climb all over any such planning permission. It has done that before on many occasions and will, I imagine, continue to do so. It points out that the last new such power station was built in 1974, and that coal is the least environmentally friendly way of producing energy. Its website states:

“We don’t need more outdated, inefficient coal fired power plants. We need an energy system that can meet the demands of the 21st century”.

I agree with that, and that is what we are discussing in this debate.

I also agree that if the technology and efficiency of coal had been static since the last power station was built in 1974, we would not be having this debate. When we promote the coal industry, we are promoting not the technology used by previous or even existing plants, but the technology that we hope will be developed in the future. We are talking about the possibilities of new and dynamic technologies through which coal is crushed and washed to remove sulphur, through which it can be burnt in modern, efficient power stations and co-fired with biomass, and through which carbon is captured during production. Conventional coal production could release as much as 0.9 million tonnes of carbon dioxide each year in order to create 500 MW of electricity. That is nearly three times as much as gas—that point was made earlier—which is too much.

If that were the only way to burn coal, yes, coal would be a useless resource. However, with improved efficiency, CO2 emissions can be reduced from 0.9 million tonnes to just 0.69 million tonnes. Through combined biomass, they can be reduced to 0.6 million tonnes. Through carbon capture and storage, emissions from coal-fired power stations can be reduced by around 90 per cent. to less than 0.1 million tonnes of CO2, making coal cleaner than other traditional forms of energy production. We are promoting a modern, clean and efficient form of energy production.

There are three considerations when looking at our energy mix. Security of supply is one of the most important considerations for this country. The environmental impact is important, of course, as is the price that we have to pay to develop our strategy. All those issues are interlinked and must carry equal weight. So how does coal stack up against the three criteria? The UK has a large supply of cheap coal, and could be self-sufficient—and therefore secure—in it. We are certainly the envy of many of our European partners, of which only Germany and Poland produce more coal each year than the UK. That will change because Germany is moving toward zero coal production by 2010. That mistake is, I believe, based on the fact that it has agreements with Russia, about which I have great concerns.

One of my gravest concerns during debates and meetings about coal with Lord Heseltine was that at that time, Germany was receiving authorised Commission subsidies of £4 billion a year and we were receiving none, which created a complete imbalance in generation. When privatisation took place, the consequence was to reduce the critical mass to a point at which privatisation was scarcely able to get off the ground properly.

The hon. Gentleman makes a valid point and he covered the issue in detail in his speech. Indeed, I shall omit a substantial amount of my speech because I do not want to cover that ground again; I am also mindful that other Members want to speak.

Security of supply is important. According to the Government’s 2006 energy review, the UK has around 142 million tonnes of coal in identified surface and deep mines, and at present levels there will be 70 million tonnes left in 2020—a point clearly made by the hon. Member for Stone. The UK has 190 billion tonnes of coal, and we are the envy of most European countries. It is incumbent on us to deliver a strategy to develop clean coal technology.

The UK has a large supply of coal that could assist in providing a long-term solution. More importantly, it has a supply big enough to make public and commercial investment viable. So why did the UK become an importer of coal? Why is it still an importer of coal when coal has doubled in price since 2003? The reason is that the UK has one of the most liberalised energy markets in the world, and we take the price today without considering what we will do in future. It is disappointing that we continue to move the energy debate further away. The first and foremost issue for debate is security of supply, before we go into the details of one form of energy versus another. I do not want to go into those details, and I try to avoid the obvious disagreements that may develop regarding wind power, nuclear power and so on. There is room on the table for all processes, and we must remember to consider the next century going forward.

The UK was forced, in my opinion, to import coal, and the hon. Member for Stone referred to the carbon footprint that results from coal being transported to this country. The Government now have an opportunity. The increased price of gas and higher demand from the developing economies of India and China mean that we cannot rely on an everlasting supply of cheap, imported gas.

China, which is building two new coal-fired power stations a day, is probably the best example. It has 30,000 collieries—not 30,000 miners—but there is a price to pay, and what it is doing is completely wrong. There have been 6,000 deaths in the mining industry, which is an indication of how cheaply the Chinese value life. There are far better ways of extracting coal. One colliery has 10,000 miners, which is phenomenal.

By 2030, coal consumption will have increased by 230 per cent. from 2004 levels in China alone. That is the real world, and we must consider clean coal technology. We must not fail to develop it, and to buy into it when it has been developed elsewhere. Our problem is that China and India are the engine houses of the world, and America is beginning to expand its coal industry. They will determine the worldwide price of coal, so it is important for us to have self-determination.

The supply of oil and gas remains volatile, and Russia and Iran hold more than half the world’s gas supply. Oil is concentrated in a few countries, many of which are in the middle east. That leaves the UK vulnerable over the next decade and beyond. We must secure a supply of energy and start to realise that coal is a major part of our energy mix. The question is not, “Does Britain need coal?” The energy market is demanding the use of coal, so the questions is, “Would we be better off producing coal in Britain, rather than paying the market price for it?” Given that coal must be part of our long-term strategy, how can we make it more efficient and environmentally friendly?

In other words, the attraction of coal is supply and price, but environmentalism is an urgent issue. Everyone says that open-cast mining is terrible, but the same people are against windmills and other forward-looking technology. We must look at the bigger picture. If development is necessary, planning issues must be addressed and changes made. That also applies in Scotland, where the Scottish Parliament controls planning issues. If planning approaches in the UK can be relaxed to develop a strategy to secure energy supply, such development must also take place in Scotland.

I was delighted when the Prime Minister announced during his speech to the World Wildlife Fund on 19 November that the Government are launching a competition to build the world’s first commercial carbon capture storage coal project. It is hoped that that will demonstrate the possibility of CO2 capture, transport and storage. I confess that I was surprised but delighted that he also said:

“We will also consider whether, if we can show that carbon capture and storage is technologically and commercially viable, it should be made mandatory in some form for all new British fossil fuel plants.”

It is becoming clear that coal is again important to the UK energy mix. The increasing price and instability of imported fuels is leading the energy market to turn to coal, and the Government are finally making progress in dealing with coal’s environmental impact. The next stage of the process must be to look at how our coal reserves can be used. The UK has just eight working mines, none of which is in Scotland. If the Government are committed to a new generation of coal stations, working with carbon capture and storage, they will send a clear signal that investment in mining is commercially viable.

I turn to geothermal heating, which has not been referred to. I want to plug the fact that Midlothian is building 5,000 new houses with geothermal water from the Monktonhall workings. With a small investment, we could develop a strategy for the first geothermal heating project in the UK. The Prime Minister said that he wanted five new settlements throughout the UK and to make them environmentally friendly. I suggest that he choose Midlothian as a Scottish example, with its geothermal heating, because that is a good example of history helping the future of coal extraction.

Our country is at a crossroads. When we have the energy debate in the House, Members will have to make probably the most important decision that we will ever have to make, apart from on war. It will affect the survival of our country as a world economic power. I support what the hon. Member for Stone said, and I hope that the debate takes place sooner rather than later.

It gives me pleasure to make a concise contribution to this debate, following the thoughtful contribution from my hon. Friend the Member for Midlothian (Mr. Hamilton). The hon. Member for Stone (Mr. Cash) spoke with typical passion. I am glad to see the Minister in his place, but I am disappointed that he is not supported by a Whip. It will give me no pleasure to write a stern letter to the Chief Whip asking for an explanation.

The hon. Member for Stone said that we still have a share of the market, with 20 million tonnes of indigenous coal. It is interesting to look at what happened over the past year. When the Selby complex closed, coal was about £21 a tonne. That has almost tripled, and on the spot market in Rotterdam it is £100 a tonne. That has had an impact on some of the eight mines that my hon. Friend the Member for Midlothian mentioned. The dominant producer is still UK Coal, and a year ago the question was whether the generators would renegotiate the contracts with UK Coal. Those contracts were set in stone when prices were much lower. It is good news that, partly through the influence of the coal forum, both E.ON and EDF Energy have signed much improved contracts with UK Coal in the past couple of months. Kellingley, the one remaining mine in my constituency, which employs 700 men—it is the second biggest mine in the country—is still waiting for its contract with Drax to be renegotiated. Even so, with the prospect of the Beeston seam coming on stream, UK Coal is recruiting extra staff. There is also the prospect that the mine at Hatfield, which is just down the road, will be reopened shortly, with 300 jobs becoming available.

With that, my time is up, but I want to say just two final things on the point that my hon. Friend the Member for Midlothian made about safety. Surely to goodness, one thing that we in this country can do is export our good safety record. We should be doing more to pass on our expertise not only to China, but to places such as Ukraine, where there was recently a terrible number of deaths. Surely to goodness, the coal forum, and even the Department for International Development, can look at the expertise of the Mines Rescue Service and the safety culture of British mines.

I congratulate the hon. Member for Stone (Mr. Cash) on securing a debate on such an important subject, and it is always a pleasure to follow the hon. Member for Selby (Mr. Grogan), even though he was unfairly constrained by the clock.

Clearly, this is an important issue. I do not agree with everything that the hon. Member for Stone said in his opening remarks, but I do agree about the need to ensure that the UK’s energy supply is safe and secure. However, my emphasis would be rather more on the environmental need for action, particularly in the light of the fourth assessment report by the intergovernmental panel on climate change, which, if anything, shows that the science is becoming more worrying and the need for action more urgent. Fossil fuels meet 90 per cent. of UK energy needs, so we must tackle the contribution that such fuels make to our carbon emissions.

It is tempting to find the solution to energy supply problems in certain fossil fuels, given that oil and gas supplies will be exhausted at some point, while there is an abundance of coal worldwide and a relative abundance of it even in the UK. However, coal is undoubtedly dirty, with 30 per cent. of this country’s CO2 emissions and hundreds of millions of tonnes of carbon coming from electricity generation.

What should be our response? There are several priorities that we should put before the development of clean coal technologies—I shall return to them—but the first priority must be energy efficiency. There is huge potential for reducing the demand for energy at household level through things such as smart meters. In the housing sector, the Government are now finally going some way towards setting a target of zero carbon emissions for new-build houses. However, they have not so far addressed the urgent need to look at the existing housing stock, even though the majority of the houses that will exist in 2050 have already been built. More therefore needs to be done on that front.

The second strategy must be to promote this country’s renewable energy sector, which is fast expanding, but which is still far too small. It is shameful that we are so far down the European league table when we have such enormous potential. On the large scale, we have onshore wind, which the British Wind Energy Association reckons could supply 6,000 MW by 2010, with 3,500 turbines, or 50 per cent. more than was previously imagined was viable.

Contrary to what the hon. Member for Stone said, the Carbon Trust, whose work I trust, is clear that onshore wind is currently an economically viable technology and a perfectly reliable part of the energy mix, and we should expand it. Let me take this opportunity to congratulate the trust on its new partnership for renewables, under which it is seeking to release public sector land for renewable energy programmes. The project might well support an even greater increase in the use of onshore wind at no cost to local authorities, and that valuable initiative is exactly the kind of thing that we should promote.

May I point out to the hon. Gentleman that the Select Committee on Scottish Affairs took evidence from Scottish Power on this issue two years ago? The company was asked, “Would you be building wind turbines if there was no subsidy,” and it finally had to answer, “No, we would not be developing this strategy if there was no subsidy.” My point, of course, is that we must have subsidies before we can develop such a strategy.

It is a good point. The Carbon Trust’s analysis shows that, although many renewable technologies need support initially, they can become viable over time, and onshore wind and geothermal energy are now virtually completely commercially viable.

Offshore wind has even greater potential. The British Wind Energy Association reckons that offshore wind may produce 10,000 MW by 2017, and that could be increased if we exploit the full potential of the ambitious plans to put a gigantic wind farm in the North sea.

We have geothermal energy, and the hon. Member for Midlothian (Mr. Hamilton) suggested Midlothian as place where it might be developed, but there are plenty of others, including relatively hot, dry potential sites in south-west England. There are already commercially viable ground source heat pumps from companies such as Geothermal International. Gloucestershire’s new police headquarters is heated using a commercial ground source heat pump, as is the Chelsea building society’s new call centre in my constituency.

We have solar photovoltaic technology, which has rather been the Cinderella of the renewable energy sector because it is relatively expensive, but it still has great potential in terms of carbon reduction. If the cost issues can be dealt with, solar photovoltaics will have great potential, and such output is increasing by huge percentages each year.

We also have tidal flow technology, wave power, tidal barrages and lagoons. Liverpool bay could contribute 1,500 MW, and the Severn estuary could contribute 4,500 MW. All these things could combine to provide at least 10 per cent. of the UK’s energy capacity.

Providing that we can get over the challenge of ensuring that biofuels are absolutely sustainable by introducing a proper certification system as soon as possible, biofuels and biomass will also certainly have a major role to play.

On the large scale, therefore, we have a burgeoning variety of renewable energy sources. The hon. Member for Stone mentioned what he called the Danish problem: if we rely on one renewable energy source that turns out to be intermittent, we may encourage less energy-efficient, more carbon-inefficient technologies. However, that can be dealt with by having a diversity of supply, and I have discussed the issue with National Grid, which is confident that we can do well if we develop a variety of renewable sources. Household microgeneration and heat generation, as well as combined heat and power and community-based renewable sources, can add to that diversity.

The challenge is to reduce carbon emissions, in the Government’s terms, by 60 per cent. by 2050, although the Liberal Democrats would go even further and aim for 100 per cent. clean-technology generation by 2050. Unfortunately, that will require some transitional technologies, and the question is which ones. Obviously, one option is nuclear, but that is unpopular. According to a Parliamentary Office of Science and Technology survey, three quarters of respondents expressed a preference for renewable over nuclear. I think that nuclear is immoral.

I have heard all this before. Why does it have to be a contest between renewables and nuclear for the Liberal party? Why can we not have a debate in which the needs of the nation come first?

The needs of the nation will last for thousands of years in various forms. One of the most immoral things about nuclear power is that it bequeaths a dangerous legacy to generations so far into the future that we have no idea how they will be able to respond. Nuclear is not a clean technology; nor is it particularly secure, because it depends on an imported fuel—uranium. The first of the new generation of nuclear power stations will also be too late to help with much of the energy gap, because they are unlikely, on the most optimistic scenario, to generate power before 2017.

The transitional technology that I favour is clean coal, with carbon capture and storage. The storage problems are equivalent to those of nuclear, but clean coal has many advantages over nuclear. Gas and coal-fired power stations are more flexible than nuclear power stations, which is an advantage in terms of the reliability and flexibility of supply. Nuclear waste is also far more dangerous than CO2, which can be injected into oilfields and gas fields. Not only would our supply of energy be more secure, but we would probably have a competitive advantage, in that we have unique expertise in such technology from our experience in the North sea.

The Government have given out mixed signals. I agree with the criticism of the competition approach. It is very regrettable that the Peterhead project—which has been referred to, which could have been on line by 2010, extracting CO2 from natural gas and pumping it into the Miller oilfield and on which BP has already spent £50 million—effectively had the rug pulled from under it by the Government’s competition initiative. There has been a lot of criticism from Centrica, BP and others about that.

The Government have, however, made positive initiatives too, and I join the hon. Member for Stone in welcoming the near-zero carbon initiative. It is a positive step, but it is a shame in a sense that it will be developed with China, when we could have developed something entirely home grown at Peterhead. Nevertheless, where the Government take their foot off the brake and keep it on the accelerator, they will have our support on carbon capture and storage. The long-term vision is one of avoiding fossil fuels and dangerous waste altogether and of all our energy needs one day being met from renewable sources.

I welcome you to the Chair, Mr. Amess, and congratulate you on your remarkable and impressive impression of a Government Whip. I suspect that they are busy looking for CDs somewhere.

I congratulate my hon. Friend the Member for Stone (Mr. Cash), not just on his speech, but on securing the debate, which is timely. He stressed not only the technical issues, but how energy supply and price and the choices before us affect every one of our constituents. He showed his long-standing interest and the consistency of his beliefs about the matter. I, like other hon. Members, would love to have had 24-hour live television news coverage of his battles with the noble Lord Heseltine and Mr. Scargill. I think that, somewhere along the line during the debate, that has become a single battle, but I suspect that it was a little more complex than that.

My hon. Friend rightly referred to over-reliance on gas, particularly imported gas. As several hon. Members have mentioned, dependency on a single supply, and especially a foreign single supply, is an important issue, and I trust that the Minister will refer to it. My hon. Friend also set out well why clean coal technologies should be given a fair opportunity to develop, and why he believes that both pre-combustion and post-combustion technologies should be encouraged. He highlighted several other issues, particularly the potential importance of today’s announcement about the Government’s planning Bill. I hope that the Minister will be able to explain how the Bill will ease the development of new low-carbon energy opportunities. My hon. Friend concluded with remarks about non-productive wind; it was rather appropriate that the Liberal Democrat spokesman should intervene at that moment.

The hon. Member for Glasgow, North-West (John Robertson) expressed concern about how Ministers have delayed—indeed, dithered—on several issues, particularly the CCS project at Peterhead. I shall discuss that too. He made a useful contribution, particularly on international comparisons and China, with respect to not just technology, but safety issues. He concluded by saying that Ministers need to lead, and he asked why, when other Governments are proactive, ours cannot be. I hope that the Minister will answer that question.

We had an excellent contribution from the hon. Member for Midlothian (Mr. Hamilton), who looked forward to a range of different technologies that could help to develop the low-carbon power that we all need. He spoke authoritatively about the potential of carbon capture and storage, and he made a bid for geothermal power in his constituency. Perhaps I may add, as a born and bred Cornishman, that I trust that opportunities in the duchy will not be overlooked.

Lastly, the hon. Member for Selby (Mr. Grogan) made a short but knowledgeable contribution, particularly on safety, on which perhaps we might have had more discussion. It was a shame that the clock did not permit a longer contribution.

Any sensible energy policy should, as other hon. Members have mentioned, avoid relying exclusively on a single technology or on one source of fuel. Such reliance would expose us to needless risk, not least as the soaring demand for energy outstrips the ability of the oil and gas industries to keep up. What is needed instead is that strategy and policy should balance two strategic objectives: reducing carbon emissions from electricity generation and its supplies and, as the hon. Member for Midlothian stressed, putting security of supply clearly at the heart of any decision on the balance between different fuel sources and technologies. Those twin objectives are the best way to create the environment in which business can plan and invest for the long term. At the heart of the approach is the recognition that no single fuel is the answer. We need different fuels and technologies if we are to make a long-term change.

In May, the Government finally published their latest energy White Paper, setting out the direction in which policy would be developed. It included a range of issues: a possible framework for future nuclear power stations; changes to the renewables obligation; and a new cap-and-trade scheme for large businesses—important, particularly in the context of this debate. It also rather hesitantly set out ideas on such matters as energy efficiency, decentralised energy and smart metering.

Yet in the past two years—some would say in the past 10—there seems to have been little action. There have been plenty of reviews and consultations, and dozens of studies. We have had interdepartmental meetings, briefings and assertions by the previous and present Prime Ministers that we must change and aspire to improve, but we have had little action.

Sadly, time is not on our side. This country faces a looming energy gap, which has been predicted not for a couple of years, but for much of the past decade. Roughly a third of existing generating capacity will shut in the next 20 years. All our nuclear power stations, except Sizewell B, are scheduled for closure, and many older coal-fired power stations may be forced to close under EU regulation.

Briefly—or rather, I will not, because time is against me; I have only three minutes left. We want to make sure that the Minister has his chance.

Meanwhile, as all that closure takes place, our once healthy position as a net exporter of both oil and gas has changed. Three years ago, we became a net importer of gas and last year a net importer of oil—I think that that is the first time in my lifetime that that has happened.

What about coal? We have heard wide variation today—and previously—about the potential reserve of coal in this country. It is measured in capacity and in time. Some say that we have a 200-year potential reserve, and others say it is up to 600 years. However, that will of course depend on two things: the geological and engineering assessments of how much coal can be mined practically and economically, and the rate of production. In the past two years alone, there has been wide variation in production. In 2005, 20 million tonnes were mined; in 2006, 18 million tonnes were mined. In the first six months of this year, the figure was just 8.2 million tonnes, so there is a steady decline, as hon. Members will realise.

The decline in domestic production has ironically occurred at a time of rising imports. Last year, for example, they rose 33 per cent. on the previous year, to 42.7 million tonnes. A large proportion of that—nearly half—comes from one country: Russia. People have different views about the issue, but everyone will recognise that to be so dependent on one source creates enormous danger for the long-term security of this country’s energy.

In this context, the role of carbon capture and storage technology is vital. Here we come to the nub of the debate, on which I hope the Minister will make a full contribution. We have heard about the issues affecting CCS technology. Evidence suggests that that form of technology costs somewhere between $40 and $60 per tonne of CO2 . However, many references have been made to the expectation that that figure will reduce as the technologies develop. It would be useful if the Minister clarified the Government’s view of that. It is clear that whatever the figures are, the Government need to become far more proactive; that is not only my view, but that of other hon. Members in the Chamber.

For the past three years, Ministers have talked about the potential of CCS, yet for much of that time, little has happened. Indeed, it has taken Ministers so long to get their pilot scheme up and running that the one CCS scheme that was under way—at Peterhead—has been shut down. As I understand it, the Government are now pursuing post-combustion rather than pre-combustion technology for the CCS pilot. Will the Minister tell us the reasoning behind that, and will he tell us what representations the industry has made to him on the matter? Does he agree that the result of the delay could be that the nascent technology will move and be followed up abroad and become successful there?

This has been a timely and worthwhile debate. Not only have we talked about coal and coal technology—important though those things are—but we have put them in the context of the wider energy question. All hon. Members accept that there is a large and growing gap in our generation capacity, and that it is crucial for low-carbon generation to come on stream. Any Government strategy must address the gap, and it must do so by reducing carbon emissions while not exposing us to undue insecurity of supply. For much of the past two years, Ministers have produced paper but not a lot else. I hope that the Minister will today answer the questions asked by my hon. Friend the Member for Stone, and explain finally how the Government intend not to talk, but to act.

May I first of all apologise for my informal approach to the formalities at the beginning of the debate? If it means that I am never appointed a Government Whip, it will have achieved a purpose of sorts.

I congratulate the hon. Member for Stone (Mr. Cash) on securing the debate and, more importantly, on the interesting and thoughtful way in which he introduced the subject. In a way, there have been two debates: one about coal and clean technologies and another about wider energy policy. It is difficult to strike the balance, but I shall seek to reflect on both debates even if most of my remarks focus on coal and clean coal technology. I also acknowledge the important contributions made by other colleagues, not least those of my hon. Friends the Members for Glasgow, North-West (John Robertson), for Midlothian (Mr. Hamilton), and for Selby (Mr. Grogan) who played an important cameo role.

The significance of the issue is evidenced by the fact that we have three interrelated Bills to consider during this Session. The energy Bill itself will be introduced early next year—my hon. Friend the Member for Glasgow, North-West perhaps needs to be a little more patient to hear good news on that measure. The Climate Change Bill will put into statute the Government’s ambitions for emissions reductions, and the Planning Bill, to which the hon. Member for Stone referred. Essentially, that measure will be designed to streamline our planning system so that we do not have huge delays in putting in place infrastructure, including energy infrastructure, that is vital to the nation.

We must tackle two great challenges of the 21st century: first, climate change, on which the Prime Minister made an important speech only last week and, secondly, energy security. We are becoming more familiar with the science and the challenge of global warming, but we need to become more familiar with the related issue of energy security. I take absolutely the point made by the hon. Member for Stone on that. There is a huge global demand for energy, but the geopolitics of energy security become more difficult. We will need to import a great deal of our energy, but we therefore need to strike the best possible balance between the need to import and our need to develop home-grown energy resources. It is a pity that we do not have more time in which to pursue those issues.

The good news, however, is that the two challenges have a shared solution, which is for us to move as quickly as is reasonably possibly towards a successful low-carbon economy. The Government are committed to that, and I have mentioned the Climate Change Bill. We must become better on energy efficiency because, after all, the cheapest and cleanest form of energy is that which we do not use, and which we therefore do not need to generate or import. We need a robust carbon price—I noticed that the hon. Member for Stone did not dwell too long on the European emissions trading scheme—and that is significant. Pollution must carry a cost if we are to incentivise the economy to become low-carbon.

Does the Minister agree that a concrete step to create a more viable carbon price would be the introduction of feed-in tariffs for renewable energy?

That is one methodology and one mechanism. The Government have chosen a different if not entirely dissimilar route—namely, the renewables obligation. We are now reforming that because of its importance. It is significant that the Prime Minister committed the country to the EU’s target of having 20 per cent. of energy come from renewables by 2020 and we are negotiating Britain’s percentage of the reduction.

We have been accused of taking no action, but I will not apologise for the fact that the Government have been thoughtful about the matter and that we have looked at the evidence and, hence, unlike some parties, we are not all over the place on some of the critical issues facing the nation. We have had the energy review, a White Paper, and there will soon be an energy Bill. We gave the go-ahead only recently for the world’s largest off-shore wind farm, the London Array, and last week the go-ahead for the world’s largest biomass power station in Port Talbot. Both those things are significant and go alongside our feasibility study, the details of which we will announce soon, on the Severn barrage. I was also asked to comment on Cornwall. The wave hub project in Cornwall is significant—wave, marine and tidal energy is absolutely vital.

The International Energy Agency world energy outlook predicts that world coal use will rise by 73 per cent. by 2030; much of the growth will be in China. The UK’s remaining coal resources are a valuable national asset that we need to put to the best possible use, provided that the economic and environmental costs are acceptable. I note the honourable opposition of the hon. Member for Stone to the last Conservative Government’s savage and foolhardy assault on Britain’s coal mining industry, and the silence of the hon. Member for Hertford and Stortford (Mr. Prisk), the Opposition spokesman, on the issue. Our coal authority estimated that reserves at existing and potential sites amount to more than 2 billion tonnes. The Government have until recently supported the coal industry financially—there has been more than £200 million in state aid since 2000—but total UK output has continued to fall. Production in 2006 was 20 million tonnes, down 10 per cent. on 2005.

The principal customer for that coal is the electricity generating industry. Coal-fired generation supplies around a third of UK electricity and can rise to more than 50 per cent., often at very short notice, when demand peaks in winter. I am pleased that we have enabled generators and supply companies to get together usefully through the coal forum. My hon. Friend the Member for Selby acknowledged the importance of that. The forum is a useful vehicle and, incidentally, I hope that it will discuss the mines rescue service soon.

The Government are committed to carbon capture and storage. I do not mind the fact that we are the first Government to announce a major demonstration project. It is interesting how the debate has moved on—some are now asking why there should not be two demonstration projects. Such projects are expensive. The science and technology is relatively untried and no-one has put together a whole project featuring carbon capture, transportation and storage.

Of course not—if the hon. Gentleman looked at the clock, he would see why not.

Internationally, we are in a lead position on carbon capture and storage, which is a good place for Britain to be. If we are to square the circle between using fossil fuels in future, particularly coal, and climate change, carbon capture and storage is absolutely vital, and we are now in a good position. We need adequate regulation and we are working hard with the Norwegians in the North sea on CCS projects. It was no jest to the hon. Member for Stone when I talked about the emissions trading scheme. It is a vitally important European way in which to pay for CCS in future. This has been a significant debate and I again congratulate the hon. Gentleman on securing it, and on the thoughtful way in which he introduced the topic.