Committee (2nd Day)

Part of Energy Bill [HL] – in the House of Lords at 4:45 pm on 9th September 2015.

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Photo of Lord Howell of Guildford Lord Howell of Guildford Conservative 4:45 pm, 9th September 2015

My Lords, I take it that the noble Lord, Lord Oxburgh, is referring to the very interesting paper put forward by Professor Stuart

Haszeldine and his colleagues about the financing and development of CCS. The noble Lord, Lord Oxburgh, is himself always at the forefront of new thinking and developments in this important area, and this is certainly a very interesting set of thoughts. Basically, the idea in the paper, as I understand it, is to spread the costs of further CCS development away from falling exclusively on the already burdened consumer and also to spread them through time. The argument is that, as we get to the end of the 2020s and into the 2030s, the real crunch and crisis over CO2 will come and that the burning of coal particularly is going to become absolutely decisive in shaping future influence on climate change.

Furthermore, the noble Lord, Lord Oxburgh, is absolutely right about the centrality that he gives to the whole carbon capture and storage task. When one considers that 2,117 new coal plants are now being planned or built around the world, one begins to realise the enormity of the task to somehow ensure either that they are diverted or that the coal plants operate in ways that reduce carbon emissions. Carbon capture and storage clearly is the most satisfactory technical answer to that, although there are problems of cost, but there are of course much cleaner ways of burning coal, which both the Chinese and the Poles are urging, using very advanced technology built on the conventional platform but also supercritical boilers and other devices to ensure that much more energy emerges from a tonne of coal. That way, by definition, you get more energy or electricity out of a coal-fired station but save on the amount of emissions that would otherwise result. So there are other techniques as well, which are obviously decisive.

Most coal stations will be built in India, Indonesia and Turkey—mostly in Asia, although some in Europe. The whole attempt effectively to keep global warming to a 2 degrees centigrade rise will stand or fall on what happens to that vast number of new coal stations and the huge commitment to increased coal burn. It is the official policy of the Government of India that there must be a doubling of coal production and a very substantial increase in coal burning there, because the primary aim is the reduction of poverty and economic development. Unfortunately, given the economics of the present and near future, coal is much the cheapest way to produce the essential cheap power that developing nations of that size and with those challenges must have.

This is the problem. The noble Lord, Lord Oxburgh, and the noble Baroness, Lady Worthington, are absolutely right to call our attention to this, but the question left in my mind is how relevant it is to the extraction of oil and gas in the North Sea. If we are to carry forward experiments effectively, we need to develop the storage techniques that go hand-in-hand with carbon capture and storage. That is very important and there is a lot of work to be done on that.

I will strike a slightly diversionary note from what has been said in the debate so far. The aim here is maximum economic recovery. The aim is to cope with an industry which is shrinking very rapidly. On the front page of the Times this morning I read that 65,000 jobs are about to go in the industry. The industry is under very great pressure. As I understand it, our aim in the Bill and that of the OGA is to ensure that gas and oil are extracted economically, commercially and successfully in these shrinking conditions. We know that gas is considerably lower carbon when burnt than coal, so if we are trying to sequester our coal carbon emissions or move from coal to gas, it is more gas we want, not less. Everything needs to be done—as I understand the OGA is trying to do—to encourage the extraction at economic prices of gas from the North Sea that can then be burnt, thereby saving considerable carbon emissions. We need to copy the American example, where there has been a huge reduction in carbon emissions—at least on the production side; consumption is another story, of course—because they have switched from coal to gas as a result not of government policy but of the shale revolution.

I leave with a question mark over the amendment as to whether it really applies as directly as some have suggested to the North Sea offshore operations. It is clearly vital that something is done to halt the massive increase in coal burn lying ahead. I think that 46% of the entire world’s electricity comes from coal, and that is probably rising, not falling. That is decisive, but whether at this stage the additional obligations in the Bill should be placed on this particular industry, which is struggling in desperately difficult conditions in both a geographic and an economic and commercial sense, I am not so sure. I end my comments with this question, although it may be that this is not quite the right place to think about this vital issue.