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Oil and Gas Sector

Volume 705: debated on Wednesday 15 December 2021

My ministerial colleagues and I regularly discuss oil and gas with fellow Government Ministers and stakeholders. The oil and gas industry is hugely important to north-east Scotland, and most recently the Under-Secretary of State for Scotland, my noble Friend Lord Offord attended the North Sea Transition Forum, alongside the Minister for Energy, Clean Growth and Climate Change, regulators, and representatives from the oil and gas industry.

I thank my right hon. Friend for that answer. In the transition period to our net-zero future, we will still need oil and gas for domestic use. What role does the Secretary of State see for UK domestic production to meet that need, because the Scottish economy is well poised to deliver it?

My hon. Friend is right: we will continue to need oil and gas as we transition to net zero. Developing our own supplies reduces reliance on imports that are produced to less rigorous environmental standards. It will also protect jobs in our oil and gas sector during our transition. Comments by the Scottish Government on this have been, by turn, disgraceful and depressing. As Sir Ian Wood, one of the most respected authorities in the industry said, those Scottish Government Ministers are creating an “adverse investment environment”, to which I would add only this: careless talk costs livelihoods.

Is the Secretary of State aware of the evidence given to the Scottish Parliament’s Net Zero, Energy and Transport Committee by Professor Stuart Haszeldine, who said that there was no advantage to the Acorn project having been given reserve bidder status, as that merely means “a lot of meetings”, and requires companies to

“run on the spot with very little or no funding”?

Is the professor wrong in his assessment, and if so, would the right hon. Gentleman be good enough to tell us why?

Acorn is the reserve for this round, and we would like it to be expedited in the next wave. We have met many of the stakeholders involved in the project, and they have agreed that if we can accelerate it to 2023, they can improve the bid and the Government can include it in the next wave. That is very much our focus.

Does my right hon. Friend agree that the complete abandonment of north-east oil and gas workers by the First Minister of Scotland is an absolute disgrace? She did not call for an end just to Cambo; it was to all further exploration in the North sea. Will the Secretary of State confirm that this Government stand full square behind the industry and workers in the north-east, unlike the Scottish Government?

I would add that the remark of the First Minister’s Minister, the Green party MSP, who said that only “hard-right extremists” want to explore oil, was also disgraceful. Even when we get to 2050, we will need oil for 20% of our power, and we will need gas for 15%, and for producing blue hydrogen. We will need that oil not just for power, but for important things such as the petrochemicals industry and for making instruments for the NHS. It is ridiculous to think that we can just turn off the taps and not destroy our economy.

This is not just about what we extract from the North sea; it is also about what we put back in. That is why the Acorn project is fundamental. The Secretary of State mentioned Sir Ian Wood and his views on the oil and gas sector, but he will also be cognisant of Sir Ian Wood’s views about his Government’s decision to turn their back on Acorn. Will the Secretary of State finally admit to regretting the decision of his colleagues?

I have discussed this matter with Sir Ian Wood, and I do not think the hon. Gentleman reflects his views fairly. Sir Ian Wood understands and agrees with us that the bid can be improved. To be clear, the difference between Acorn and Humberside, Teesside and Merseyside, was that Humberside, Teesside and Merseyside have a huge hinterland of industrial carbon. Acorn was bringing the carbon from all parts of the UK and/or Europe to make the bid work. We are working on how to get more industrial carbon into the project, to make it more viable and to expedite it for 2023.