This post originally appeared in BusinessGreen
Yet another Energy Bill is trundling through the House of Commons and this time I’m leading for the Opposition on the Committee Stage. That’s not the big news: it is just that, unlike previous energy bills in which I have taken part as a committee member, this time I appear to have to do most of the talking. The Bill, in part, gives legislative substance to the Government’s decision to row back on the ending of the Renewables Obligation for onshore wind (and pretty much flatten onshore wind in England in the process) but it is largely about oil, gas and the North Sea.
There’s some quite uncontroversial stuff: setting up an agency to get the best out of the later stages of the North Sea’s oil and gas industry and enhancing co-operation between companies in the use of infrastructure for exploitation of marginal fields.
It is also looking at decommissioning, which in a mature basin such as the North Sea with an estimated 80 per cent of reserves already used, is something of an industry in its own right. This is perhaps not surprising, with now over 4,000 wells to be plugged, almost 300 fixed platforms to remove and over 20,000 km of pipelines to deal with there is a £35bn industry in development. But the danger with decommissioning is that, if it proceeds without care and strategic oversight, not only might infrastructure that can assist small new fields (which is mostly what the North Sea will consist of in coming years) come off stream, it will also squash what looks to be a substantial new long term industry for a depleted North Sea. Namely the ‘storage’ end of the Carbon Capture and Storage process.
Whilst CCS has suffered a grievous setback with the cancellation by the government of investment in two UK pilot projects, we all know that it has to develop in the UK and Europe rapidly over the next 30 years if we are to get anywhere near to achieving decarbonisation targets both in energy generation and energy-intensive industrial processes.
The likely effect of the end of the CCS pilot projects will be that we will be using imported technology to establish UK CCS, rather than using British developments and supply chains; but that’s another matter. CCS, I am sure, will be coming on stream in the UK. Uniquely in Europe, we have the perfect repository for UK-sequestered carbon and indeed, a repository that, with the exhaustion of the more mature fields, can transition to putting carbon back into the ground not just for the UK, but with capacity to do so for much of the rest of Europe. In fact, there will be a future for the North Sea as the site of a major industry long after most or all of the oil and gas has been lifted out.
But if we have in the meantime speedily capped wells and removed from the North Sea the very infrastructure that can facilitate this potentially huge industry, we might end up looking… well, just a little short-sighted when we come to working out what to do with all the carbon we are capturing.
That’s why I’ve being trying to get attached to the Bill at least a watching brief for the new Oil and Gas Authority on what the implications of unplanned decommissioning will be for future CCS activity. And by the way, we also moved a new clause into the Bill which would commit the government to introducing a proper strategy for CCS development over the next 20 years. CCS is certainly not dead in the Department of Energy and Climate Change (DECC), but its continuing activity after the sudden end of the two CCS pilots amounts to a few small grants for research and development, some roundtables on future prospects and, as I have been told, the assurance that new gas-fired power stations are to be ‘CCS ready’.
It is not anywhere near the coordinated strategy that we need over the next few years, and certainly not a route that even starts to encompass the real structural work we need to do – such as regulating decommissioning properly against possible reuse of facilities – to make a clear route to widespread CCS possible. The Bill continues: and let’s hope that it emerges at least with a firm nod in the direction of CCS development. Right now I’m not completely optimistic about that prospect.