Michael Shanks MP: speeches

Speeches

• 10 Feb 2025 · Rosebank and Jackdaw Oilfields · Hansard source

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  I thank my hon. Friend for the tone of his question. This industry has many thousands of extremely talented, skilled and experienced workers, whom I have had the great privilege of meeting over the past seven months in this role. We have to ensure that we build a resilient industry for many decades to come. Some of that will be the oil and gas that is already licensed and consented, and any other projects that come through the process, but it will also be about building the industry that comes next. It would be irresponsible of any Government to focus on one at the exclusion of the other. The reality is that the North sea is a super-mature basin. A transition is already under way, and it is incumbent on us—and on any responsible Government—to build the industry that comes next while continuing to support the oil and gas industry that we have today.

• 10 Feb 2025 · Rosebank and Jackdaw Oilfields · Hansard source

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  We are still digesting the detail of the judgment, but my understanding is that, as the right hon. Gentleman puts it, the Supreme Court made it clear that applications should take account of scope 3 emissions. In the process that we put in place, which I will not pre-empt, we will have to justify how the applications have met that requirement. It will then be for the North Sea Transition Authority to make a judgment and the Secretary of State, ultimately, to make a decision. If somebody wanted to take that judgment to a judicial review, they could be entitled to do so, but the right hon. Gentleman is quite right that the decision will be for the Government.

• 10 Feb 2025 · Rosebank and Jackdaw Oilfields · Hansard source

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  I do think that carbon capture is important. We were delighted to put forward the investment to get the track 1 projects over the line, and we are looking forward to seeing those develop. That was about giving investors confidence after a protracted period, under the previous Government, in which those projects fell by the wayside several times. We were determined to get them over the line, and I am delighted that we did. We remain supportive of the track 2 projects, particularly the Acorn cluster in Scotland, which may have an impact on areas such as Grangemouth in future. We want to see investment there as well. Such investments are incredibly important for building the jobs of the future. That is partly why the Government are determined to look at what comes next, and not just to support the oil and gas industry, as important as that is at the moment.

• 10 Feb 2025 · Rosebank and Jackdaw Oilfields · Hansard source

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  I will not be drawn on the applications in this case, but I agree with my hon. Friend’s broader point about the important leadership role for the UK in building the green industries of the future, and on climate change. At COP29, my right hon. Friend the Secretary of State for Energy Security and Net Zero communicated the importance of leadership on this most pressing issue, and of seeing it not as a future threat, but as a present reality. The UK has an important leadership role to play and, critically, can help deliver the industrial future that we need and the clean power of the future.

• 10 Feb 2025 · Rosebank and Jackdaw Oilfields · Hansard source

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  The Chair of the Select Committee makes an important point, which is that the failure to acknowledge that the transition is already under way is to bury your head in the sand and pretend that everything will carry on as it was. The reality is that in the past decade a third of the oil and gas workforce—70,000 workers, as my hon. Friend says—have already lost their jobs and the transition is under way. We are determined to ensure not only that the transition leads to a future in the North sea energy sector that, yes, involves oil and gas for many years to come, but that we build the industries of the future now so that there is no gap. The alternative is to do what the previous Government did, which was to pretend that the transition was not under way and then somehow deal with the shock that would come when North sea oil and gas inevitably declined to the point where workers’ jobs were not protected. We are determined to build what comes next and to protect good, well-paid jobs in the North sea for many decades to come.

• 10 Feb 2025 · Rosebank and Jackdaw Oilfields · Hansard source

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  My hon. Friend touches on some of the key questions that we asked in the consultation, which closed just a few weeks ago and to which we had a significant number of responses. The Supreme Court’s judgment requires us to look at some of the tests that he mentioned—particularly whether there are offsets or mitigations—and we will announce how we will put that into effect in due course. On the guidance that comes from the consultation, we have only just closed the consultation and are working as fast as possible on the results from that. However, applicants for consents will absolutely have to take account of the scope 3 emissions. It will be for them to outline in their applications how they intend to mitigate any impacts to achieve such consents.

• 10 Feb 2025 · Rosebank and Jackdaw Oilfields · Hansard source

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  The Government’s priority is to deliver a fair, orderly and prosperous transition in the North sea that recognises the role that oil and gas will play in the coming decades. This transition will be in line with our climate and legal obligations. It will drive us towards our clean energy future of energy security, lower bills and good, long-term jobs. On 29 January, the Court of Session published its judgment on the Rosebank and Jackdaw oil and gas fields in the North sea. The judgment set out that the previous consents granted to Rosebank and Jackdaw were unlawful, as they failed to take into account the emissions from burning the fuel produced. As a result, if developers wish to proceed with these projects, they will need to reapply for consent, this time considering scope 3 emissions, as required by the Supreme Court judgment last year. Although the judgment itself is a matter for the courts, the Government have taken rapid action. In early January, we consulted on revised environmental guidance to take into account emissions from burning extracted oil and gas, to provide stability for industry. The consultation closed on 8 July, and we are working towards publishing the finalised guidance as soon as possible. Once the guidance is in place, the Government will resume making decisions with regard to the environmental impact assessments for offshore oil and gas developments. The Court confirmed that it is in the interests of good administration for the consultation and guidance to be completed properly. It would therefore be inappropriate for me to comment on the specifics of individual projects such as Rosebank and Jackdaw in Parliament or anywhere else, because doing so would prejudice future regulatory decision making should the respective developers decide to resubmit these projects for approval. More widely, this Government are determined to deliver the long-term jobs and investment and the clean energy future that this country needs to ensure that people working in the North sea, and those involved in the oil and gas industry across this country, have the long-term future they need.

• 10 Feb 2025 · Rosebank and Jackdaw Oilfields · Hansard source

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  I think the hon. Gentleman seeks to take me far beyond what I said at the beginning by asking me not just to give an opinion but to adjudicate on applications, right here in the House of Commons, before either company has applied. I think he knows fine well that I will not do that. We have put in place a robust process whereby the Supreme Court judgment will set out a clear pathway on exactly what companies must do in future applications. It is highly likely in this case that both companies involved in those projects will seek to apply again. They will do so and the Government will make a decision in due course. On the wider point about investment, the Government are doing everything to make this one of the most investable places in the world to come and do business—that is important. Our clean energy action plan, which he opposes, will deliver up to £40 billion of investment every single year in the industrial future of this country, and he should get behind it.

• 10 Feb 2025 · Rosebank and Jackdaw Oilfields · Hansard source

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  I will come to the hon. Gentleman’s question in a moment, but what he failed to mention was how we got to this position. The Court of Session clearly outlined in its judgment that the previous Secretary of State had made a decision that was unlawful, so once again this Labour Government are having to clear up a mess created by the previous Conservative Government. Unlike them, we will follow due process. As I outlined, we consulted on what the future of the consenting process would look like in light of the Supreme Court judgment. That is something he would have had to do if he were still in this job, because we had to respond to the Supreme Court judgment. If he is telling us now that, in government, he would have ignored the judgment of the Supreme Court, that is an interesting perspective to take. On the hon. Gentleman’s specific point, we were clear during the election that our position is: no new licences to explore new fields. The two projects are in existing licensed fields. The question for the courts to decide was the consent for those individual new projects, and that is the process that we will now take forward if those companies should wish to resubmit their applications. The broader question about the future of the North sea will be about not one or two individual projects but the reality that it is a declining basin and that the long-term future does not rest in oil and gas, as important as they will continue to be for many years to come. What we have sought to do as a Government is to kick-start what the economic future will look like beyond oil and gas, recognising that the North sea is a declining basin, recognising the importance of new technologies such as carbon capture and hydrogen and investing in measures such as the clean industry bonus that will deliver jobs in Aberdeen. There is only one party that is serious about working out what the transition looks like and what comes next to safeguard jobs in the hon. Gentleman’s constituency and across the north-east, and it is not the Conservative party.

• 10 Feb 2025 · Rosebank and Jackdaw Oilfields · Hansard source

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  My hon. Friend’s point about investor confidence is important. Investors lost all confidence in this country under the previous Government; not quite knowing who was going to be in No. 10 or No. 11 at any given moment certainly did not help investor confidence. We are building back that confidence, and have already seen tens of billions of pounds in investment since we came to power, and 70,000 new jobs. It matters that this country takes a leadership role on climate, because the transition that we want to deliver here is also being delivered right across the world. The country with the fastest transition to clean power last year was China. In some cases, Members of this Parliament are trying to row back on our net zero commitments. We are determined to double down on those commitments, because that is the best way to deliver stability and energy security, bring down bills and create the industrial future and jobs that this country needs.

• 10 Feb 2025 · Rosebank and Jackdaw Oilfields · Hansard source

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  The hon. Gentleman has rightly raised those questions with me on a number of occasions in different debates, and they are incredibly important. Indeed, in a Westminster Hall debate, he educated me on how many off-grid households there are in Northern Ireland—it is a surprisingly high number. The issue of where our oil and gas comes from is also relevant, because they are traded on an international market, and the prices that his constituents and others pay are based on what the fossil fuel market does across the world. Given all the geopolitical uncertainty, we want to get away from fossil fuels as fast as possible and on to renewables, and the hon. Gentleman’s constituents will benefit from that as well.

• 10 Feb 2025 · Rosebank and Jackdaw Oilfields · Hansard source

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  On 20 June last year, the Supreme Court ruled that regulators must consider the impact of burning extracted oil and gas in the environmental impact assessment for new projects. Of course, we were already in an election cycle by that point. I do not know what the previous Government would have done, but a Supreme Court judgment gave a very clear steer that regulators must consider that impact, so I find it very hard to believe that they would have continued to defend a case that the Supreme Court clearly stated could not continue. This Government took the view that it would be wrong to put more public money into the case, when the two applicants themselves accepted the judgment of the Supreme Court. If the Opposition are saying that they would have continued to pour public money into such a case, I would be very surprised—or perhaps disappointed, but not surprised.

• 10 Feb 2025 · Rosebank and Jackdaw Oilfields · Hansard source

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  On the right hon. Gentleman’s final point, we are moving as quickly as possible. Having built on what needed to be done about the scope 3 emissions, we introduced the consultation as quickly as possible. We sped up that consultation, and engaged with the industry to make sure that we still got a substantial number of responses. We now have those—it closed two weeks ago, I think—and we are considering them. We will issue information about the process as quickly as possible. I cannot give him an exact date, because we have to analyse the consultation responses; it would be pointless to seek consultation responses and not look at them. More broadly, the right hon. Gentleman is right to raise the question of Grangemouth. It is, of course, extremely disappointing that Petroineos has decided to cease refining there. For the benefit of the House, I will say that when I arrived in the Department seven months ago, the first thing in my in-tray was Grangemouth’s closure. Of course, that did not arrive in July with the Labour Government’s election—it had been known about for many, many years—but not a single plan had been put in place by the Conservative Government, or the SNP Government in Edinburgh. We moved as quickly as possible to invest in the future, and to give funding to Project Willow to make sure that there was a viable economic future for that site. I wish that I was in power five years ago to start that work, but the Opposition and the SNP failed to do anything about Grangemouth for at least 10 years in which we knew that its situation was precarious. The right hon. Gentleman will have to answer for that.

• 10 Feb 2025 · Rosebank and Jackdaw Oilfields · Hansard source

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  I am happy to provide clarification based on the advice that I have, which is that this is a matter for the applicants in the court case, who are entitled to appeal the judgment, should they wish to do so. If they wish to make a further application in this matter, my Department will be responsible for making that judgment, and I seek not to prejudice an application by giving an opinion one way or the other on these matters. I hope that that sits well with you, Mr Speaker.

• 10 Feb 2025 · Rosebank and Jackdaw Oilfields · Hansard source

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  The whole House will have heard the hon. Gentleman repeat the point that the £8.3 billion investment in Great British Energy is not welcomed by the Conservative party, but it will create jobs—including, I am sure, in his constituency—through supply chains. We never said that all the jobs would be in the head office. There will be an important head office in Aberdeen, in recognition of the skills there, but the investment made will create tens of thousands of jobs, which is important. In the past 10 years, a third of jobs in this industry have already been lost. Either we accept that a transition is under way, and we put in place a plan and processes to build the industry of the future, or we bury our head in the sand and continue to see thousands more jobs go. I am determined not to do that.

• 10 Feb 2025 · Rosebank and Jackdaw Oilfields · Hansard source

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  The reason we are in this situation is that the Court ruled that the previous Government made an unlawful decision by not taking into account the judgment of the Supreme Court. That is not me saying that from a policy perspective; it is the Court saying that, and we are now moving as quickly as possible to put in place a process that gives confidence to industry and allows applications to come forward. We have said that oil and gas will continue to play an important role for many years to come. We will not revoke existing licences, and therefore it is open for applications for projects to come forward, which will be considered on their individual merits. However, the right hon. Gentleman and I will always disagree on the fundamental point that tackling climate change is in all our interests. Right around the world, we see the impact of not tackling climate change. It is a clear and present danger to our country and our national security, and we will tackle it.

• 10 Feb 2025 · Rosebank and Jackdaw Oilfields · Hansard source

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  In terms of the tone of the debate, the Government and the Opposition will of course disagree on many things—by the sounds of it, we increasingly disagree on the importance of tackling climate change and net zero—but generally we all want to see a transition in the North sea that is fair and prosperous, particularly for the workers in that industry, to ensure that they have confidence that they will have well-paid jobs to go into. I spend every day in this job taking that incredibly seriously, and whatever disagreements we might have across the Dispatch Box, I hope that is understood. We want to build a transition that recognises that it is already under way, that thousands of jobs have been lost and that it is our duty and responsibility as a Government to ensure that we put in place the industry and jobs that come next. That is what I will spend every day doing while I am privileged to have this job.

• 10 Feb 2025 · Rosebank and Jackdaw Oilfields · Hansard source

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  We have outlined in the seven months we have been in government our determination to deliver the energy security that this country has lacked in the past 14 years. The previous Government displayed a lack of preparedness not just for our energy security in future, but for the bills—higher than ever before—that all our constituents paid and that led to the cost of living crisis. That was because the Conservatives were happy to have us at the casino of fossil fuel prices. We are determined that that will not be our future and that we will no longer be in thrall to petrostates and dictators. Even though very little of our gas comes from those countries, we remain vulnerable to the prices set by international markets. We are determined that that will not happen, and we are building the clean power system that will take us away from it.

• 10 Feb 2025 · Rosebank and Jackdaw Oilfields · Hansard source

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  The Chancellor was very clear in her speech that there is no conflict between our net zero commitments and the industrialisation that we want to see. Economic growth projects such as the runway at Heathrow will be important but, as the Chancellor said, they will have to be in line with our climate obligations. Importantly, as my hon. Friend the Member for Na h-Eileanan an Iar (Torcuil Crichton) said, this is not an either/or. Oil and gas will continue to play an important role in our economy for many years to come, but we have to plan for what comes next and take cognisance of our legal and climate obligations.

• 10 Feb 2025 · Rosebank and Jackdaw Oilfields · Hansard source

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  I agree with my hon. Friend—

• 10 Feb 2025 · Rosebank and Jackdaw Oilfields · Hansard source

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  My hon. Friend is right to make the point that climate change is not a future threat but a present reality. This year alone there have been a number of examples around the world of that present reality already having a huge and devastating impact on people’s lives. On the balance that we want to strike, yes, the oil and gas industry is important to our economy and to our energy mix, but the long-term future requires us to move towards clean power. Even if gas is extracted from the North sea, it does not help with consumer bills in this country, because it is traded on an open market to the highest bidder and sold by private companies. This is not a nationalised industry—it is owned by private companies, and gas is extracted by private companies and sold by private companies—and consumers in this country do not benefit from their gas coming from abroad or from the North sea.

• 10 Feb 2025 · Rosebank and Jackdaw Oilfields · Hansard source

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  For the reason I outlined in previous answers, I will not comment specifically on these two projects. In answer to the hon. Lady’s broader point, any future applications for the North sea have to recognise the Supreme Court’s ruling that the end-use emissions, the scope 3 emissions, must be taken into account in any application. We are now working through the significant number of responses to our consultation at the start of this year, on how people who wish to apply for consent to extract hydrocarbons from the continental shelf can comply with the Supreme Court’s judgment. An environmental assessment will be absolutely necessary. That is not a decision we have made from a political point of view; it was required by the Supreme Court. We will follow the law of this land, as I would expect any Government to do, although apparently not a Conservative Government. We will put in place a robust system to ensure that any applications that come before us are judged fairly on their merits.

• 10 Feb 2025 · Rosebank and Jackdaw Oilfields · Hansard source

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  I give credit to the hon. Lady for the ingenious way she got that important question into the urgent question. She makes the good point that, as well as ensuring we have built the clean power system for the needs of the future, we want to reduce as much as possible the need for households to heat their homes by making them much warmer in the first place. We are doing that by improving the standard of homes through the work being done by the Under-Secretary of State for Energy Security and Net Zero, my hon. Friend the Member for Peckham (Miatta Fahnbulleh) on the warm homes plan. We know that some of the poorest people in our country live in substandard homes that are cold and that take far too much of their monthly budgets to heat. We are determined to do something about that, as well as working across the piece on energy-efficiency measures that reduce demand in the years ahead.

• 10 Feb 2025 · Rosebank and Jackdaw Oilfields · Hansard source

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  My hon. Friend outlines again the importance of tackling the climate crisis that is with us now. That is why the Government have been determined to move faster, through our clean power action plan and through the Department’s wider work to decarbonise across our economy. That is incredibly important and we do not have a moment to waste. A fair transition is key to ensuring that we move away from a carbon-based economy. We have already closed the last of our coal power stations, which was an important moment, and my visit to Ratcliffe on Soar was an important moment for me to recognise how a transition can be done well— [ Interruption. ] I hear the shadow Minister, the hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie), chuntering that that was done under a Conservative Government. It was an example of where the Conservative Government recognised that the coal industry was declining and that a transition was necessary, but he seems not to recognise that the same is true of the oil and gas industry, which is declining. If we do not start planning for that future now, we will leave those workers with nothing.

• 10 Feb 2025 · Rosebank and Jackdaw Oilfields · Hansard source

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  I am not sure whether the hon. Gentleman is one of the Scottish National party cohort seeking to move to our other Parliament, but the SNP’s position in Holyrood is the same as ours, which is that we must be cognisant of climate change obligations with regard to any new licences. Perhaps he has a different position from his colleagues in Holyrood—I am not sure—but the SNP recognises, rightly, as we do, that the future requires investment in oil and gas for many years to come, to which we are committed, and that investment must match our climate obligations. The transition that is now under way must have Government at its heart, supporting the jobs and industries that come in the future. If the hon. Gentleman supported some of the investment that we propose, such as at Great British Energy in Aberdeen, instead of deriding it at every single turn— [ Interruption. ] Mr Speaker, I have again united all the Members of Parliament from north-east Scotland who oppose investment in their own constituencies. If the hon. Gentleman supported that investment, maybe he would see the jobs of the future coming.