Carbon capture usage and storage has huge potential to play a vital future role in reducing emissions across a range of activities, but the technology has to be made more cost-effective to deploy at scale. That is why we have committed up to £100 million of public money in CCUS innovation in our clean growth strategy and why are working with the private sector and other Governments to drive up technological innovation and to drive down costs.
The clean growth strategy falls short of boosting the investment necessary to stimulate change in carbon capture and storage, and the industrial strategy Green Paper failed to mention it. In the light of the previous failure to deliver on Peterhead, what measures will the Minister announce to recover that investment?
The world has not yet decided to invest in traditional CCUS. There are 21 at-scale plants operating globally, of which 16 rely on enhanced oil recovery as a revenue stream. It is simply not cost-effective enough in its current form for us to commit large-scale investment. We have to get the costs down. We are now in a world where the private sector wants to invest, however, and I am sure we would both welcome developments such as Project Acorn, to which both the UK Government and the Scottish Government have committed funds.
The Minister does not like being reminded that the pulling of the £1 billion for the Peterhead project was a betrayal of the north-east of Scotland and the Scottish energy sector. She talks at the Dispatch Box about value for money, but the strike price of £92.50 at Hinkley is not value for money. When will the Government make real financial commitments to CCS in Scotland?
In the world I live in, £100 million is quite a substantial financial investment in CCUS. It is striking that the Scottish Government invested only £100,000 in Project Acorn, as opposed to our £1.3 million. The point remains that the technology is not cost-effective. Only six plants in the world are operating without additional revenue from enhanced oil recovery. We want Britain to be the technological leader and to develop cost-effective solutions. I hope that we can work together to achieve that aim.
I welcome the return to some consideration of CCS in the clean growth plan, after the Government’s dreadful mistake in cancelling the £1 billion UK CCS pilot plants in 2015. What discussions has the Minister had with her Norwegian counterparts on the prospects for UK-Norway collaboration on that country’s advanced plans for carbon sequestration in the North sea?
As the hon. Gentleman will know, Norway is currently a little bit unsure about the level of its own financial commitment. However, it has an excellent Energy Minister, with whom I have had multiple meetings and conversations. It seems strange to me that, having taken the hydrocarbons out of the North sea basin, we should not co-operate to put the carbon dioxide back, so there are frequent conversations. The hon. Gentleman will have seen the clean growth strategy, on which we would like very much to work with other countries—not just Norway, but the United States and Canada as well.
We have just heard about the broken promise to establish a world-leading carbon capture project at Peterhead. That is another betrayal of the North sea industry: £1 billion was never invested, and 600 jobs were never created. Is it not true that when it comes to the North sea, this Government are no good at anything except breaking promises?
Some might say that the Scottish National party is not very good at forecasting oil prices. As I have already said, no Governments have taken a very substantial bet in the past few years—I call it a bet because it is not cost-effective—but, as the hon. Gentleman will know, organisations such as the Oil and Gas Climate Initiative are asking us, “How can we work together in a public-private arrangement to deliver the best, most cost-effective solutions?” We need to create some technology that we can export, like the oil and gas services that have delivered such economic value in the North sea.
“An Oil and Gas Ambassador will be appointed to…promote” oil and gas
“around the world”.
However, the Under-Secretary of State for Business, Energy and Industrial Strategy, Richard Harrington, told the Press and Journal recently that it was a “good idea” but he was “not aware” of it. He said:
“It’s not crossed my desk”.
Whose desk did it cross? Or was it just another fantasy— a false promise from a “say anything, do nothing” Government”?
I can understand why there is not much solar installation in Scotland: it appears that the sun never shines north of the border.
I will take no lessons from the hon. Gentleman about support for the North sea, which is a vital industry. I cannot answer his point about the ambassador, but I shall be happy to discuss it with my colleagues.