Transition to Net Zero: North Sea Oil and Gas Industry

Cop26 – in the House of Commons on 19th January 2022.

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Photo of Andrea Leadsom Andrea Leadsom Conservative, South Northamptonshire

What assessment he has made of the potential role of the North Sea oil and gas industry in the transition to net zero in line with objectives agreed at COP26.

Photo of Greg Hands Greg Hands The Minister of State, Department for Business, Energy and Industrial Strategy

Through the North Sea transition deal, the oil and gas industry has committed to early targets for offshore production emissions reductions, with 10% reductions by 2025, 25% by 2027 and 50% by 2030, setting out the path to achieve a net zero basin by 2050.

Photo of Andrea Leadsom Andrea Leadsom Conservative, South Northamptonshire

I certainly will praise my right hon. and hon. Friends for their amazing work on renewable energy, and on the transition to net zero, but does my right hon. Friend agree that, although the net zero challenge is the greatest challenge of our generation, to keep energy bills down and to keep our energy security we must make best use of our oil and gas resources?

Photo of Greg Hands Greg Hands The Minister of State, Department for Business, Energy and Industrial Strategy

My right hon. Friend makes a very strong case. Obviously the answer lies with renewables, but it also makes no sense for us to increase imports of volatile-price fossil fuels, which come to us with higher embedded emissions. That is why we have the North Sea transition deal—not to close down the industry, but to work with the sector to make the transition to the net zero future that we all signed up to.

Photo of Olivia Blake Olivia Blake Shadow Minister (Climate Change and Net Zero)

In a recent written question, No. 98384, the Government were asked if they would explain how individual policies in the net zero strategy, including on North sea oil and gas, would reduce emissions. In a reply dated 14 January 2022, the Minister said that he would publish the information when

“decisions on the design of the associated individual policy intervention are sufficiently advanced”.

How is it possible that the Government published a net zero strategy without an understanding of what the individual policies will mean, and how can we therefore believe their promise that we are on course to meet crucial targets for 2030 and 2035?

Photo of Greg Hands Greg Hands The Minister of State, Department for Business, Energy and Industrial Strategy

Of course the Government are fully aware of these issues; there is no change in the Government’s position. We published the net zero strategy and we are seeing it come through. We are delivering on all of the aspects. My right hon. Friend the COP President just mentioned the climate change compatibility checkpoint. We are delivering on all of these things with haste.

Photo of David Duguid David Duguid Conservative, Banff and Buchan

I welcome my right hon. Friend’s response and the Government’s ongoing commitment to support the UK oil and gas sector in their role to drive forward the energy transition to net zero. Will my right hon. Friend join me in welcoming yesterday’s High Court ruling to throw out claims by certain environmental activists that UK Government support for the industry was unlawful?

Photo of Greg Hands Greg Hands The Minister of State, Department for Business, Energy and Industrial Strategy

I thank my hon. Friend for his question. We welcome yesterday’s judgment. I, probably like he, wonder whether the SNP and the Scottish Green Government in Edinburgh would share our welcome. There will be an ongoing need for oil and gas as we reduce demand amid the transition to lower carbon energy, which, in the end, is the solution. I know from my visit to his constituency just last month how important renewables are for delivery in his constituency of Banff and Buchan.