Mr. Dave Anderson (Blaydon): Let me start where my hon. Friend the Member for Southampton, Test (Dr. Whitehead) left off, and let me say that I welcome the report. The hon. Member for South Suffolk (Mr. Yeo) was quite right to be critical of the delay in the report. It is not just his Committee that has been affected; as the chairman of the all-party group on coalfield communities and as co-chair, along with the hon. Member for Northampton, South (Mr. Binley), of the all-party group on clean coal, I have been very concerned about the delays in the report. For both all-party groups, this is not just a theoretical matter-it is real life. The APG on clean coal deals not only with the industry but with people who will, hopefully, take the process forward. As for the coalfield communities, a lot of the work that results from that process will be work that people in those communities will get involved in. Over the past year, the setting up of the Department of Energy and Climate Change has been a key feature, and it has moved things rapidly forward. We must welcome the work done by the Secretary of State, and by the Minister who is with us today.
The reality is that we live in a world where people demand not only more and more clean energy, but more and more energy. It is a very tough circle to square, but we must do it. I am talking about not just us in this country, but people across the world. At present, 81 per cent. of the energy that is produced across the world is directly provided by fossil fuels. The truth is that coal is not going to go away; it will continue to be used across the world and, more than likely-in fact, certainly-in this country. If we consider the sobering fact that a 1,000 MW coal plant generates something in the region of 6 million tonnes of carbon dioxide a year and will probably last for about 40 years, we can see the size of the problem.
As for resolving the problem, the Minister spoke about some of the avenues that are available. Nuclear energy is a possibility, as is the development of additional renewables. He missed out the key option, however, but I know that that is not because he does not believe in it. The key option is making what we do-in our homes, as regards transport and so on-more efficient. Key to that is the work being done in North-East England on the development of electric cars, of which the Department of Energy and Climate Change and the Department for Business, Innovation and Skills are very supportive. We cannot ignore the fact that fossil fuels will be needed and, to some extent, they should be welcomed in this country, but only if we get CCS right. My hon. Friend the Member for Southampton, Test, talked about the unabated nature of power plants; we cannot accept anything other than the full abatement of power plants going forward. We really need to know what we are talking about.
The reality, as is mentioned quite often, is that different parts of the CCS jigsaw are already in place. Earlier this week, a group of us visited BP in Sunbury, and we were given some really strong examples of where BP is working, across the world, to store carbon dioxide. A million tonnes a year are being stored in Salah, Algeria. The Sleipner field in the North sea off Norway has been successful. BP is piping carbon dioxide 200 miles overland from North Dakota and storing it underground in Westbury in Canada. There are also successful projects in Germany and other parts of the world. The Carbon Capture and Storage Association says that there are 50 sites in the world that are successfully storing carbon dioxide, so things are up and running as regards one part of the circle.
One of the things that is missing, which we do not talk about and which is never mentioned in the CCS debate, is the "T" word - the transport or transmission of the waste product. We have to get the carbon dioxide emissions from the power plant to where they are to be stored. Earlier this week, the Energy and Climate Change Committee said that that was one area that was not covered fully in the national policy statement. I believe that the matter will come back from the Select Committee for the Minister to consider.
If we are really serious about ensuring that the process is accurate and supported, we should seriously consider putting transmission of carbon into a national policy statement, so that it clearly forms part and parcel of the planning regime. There is no doubt about it: we might successfully go through local planning procedures; use the national policy statements so that the Independent Planning Commission can come to a view on whether a power plant should be built in a particular area; and tick all the boxes, but we must apply the same rigour to the transmission system. We need closer scrutiny of how it is being transmitted, whether it goes directly out to sea, goes underground through pipes, or is transported into ships and taken further out. I hope that we look seriously at the issue when we and the Minister come back to it following a report from the Energy and Climate Change Committee.
Another issue raised by the Select Committee is the potential problems to do with the phrase "carbon capture readiness" in the national policy statement. There is a real fear within the industry that its ability to build any plants-apart from the demonstration plants-will be restricted. That will lead to a situation where we will have the four demonstration plants working successfully within the next 10 years or so, but no others will have been built. Only when the demonstration plants are proven to work successfully, people will say, "Now we will start building."
The industry believes that the wording in the NPS makes it difficult for it to show to the IPC's satisfaction that a plant is viable. The truth is that, at this moment, the industry does not know whether a plant would be commercially or technically viable. I refer the Minister to the submissions put forward by the Scottish and Southern Energy group on that matter; again, that will be part and parcel of the Select Committee report.
One of the real benefits that will emerge from the CCS debate, and one of the reasons why we should go for CCS big time in this country, has to do with security of supply. The UK has huge reserves of coal. Since 1853, somewhere in the region of 23 billion tonnes of coal have been extracted from this country. It is a huge amount of coal, but it is less than 10 per cent. of the estimated total. The Coal Authority estimates that there are still 190 billion tonnes of coal beneath the UK. Clearly, much of that would not be accessible using traditional methods. Later on, I will discuss how it can be accessed.
One of my real concerns is what is happening in this country. In 2007, we were burning 43 million tonnes of imported coal, two thirds of the total. We were burning around 65 million tonnes, but 43 million tonnes of it came from abroad. Some 22 million tonnes of that came from Russia, at a cost of more than £2 billion. I raise the issue because Russian coal is cheap. Life is cheap in Russia. Seven people die for every million tonnes of coal mined in Ukraine. We would have to go back to the 1880s in this country to see death rates per million tonnes that high. In China, the rates are slightly better: only four people are killed for every million tonnes of coal mined. The official figures show that 6,000 people die in the coal mines every year in China, but most people accept that the official figures are a million miles away from the truth. The equivalent in this country was back in the 1920s.
As well as having a discussion about security of supply, this country should have a discussion about morality of supply. If we were talking about slave labour, children sewing footballs in Pakistan or sweat-shops, we would ban the relevant imports, but no one is talking about banning the import of coal from regimes that are politically unstable and that use methods that are out of this world.
There are a number of huge issues to be considered. There is the cost-versus-value debate. What is the value of a miner's life in China or Russia? The figures suggest that it is not very high. In a recent debate in the House, I asked the hon. Member for Wealden (Charles Hendry) what he thought about the implications of the run-down of the coal industry in this country. His response was that we have had 20 years of the cheapest energy in Europe. Yes we have, because we have been burning coal on the back of the fact that thousands of people are being killed. That is not a cost that we should be happy to pay. The fact is that cheap coal has come to this country because other people abroad are working in desperate and unsafe conditions, and they are dying unnecessarily.
I want to ask the Minister whether he can fill us in on what is happening to the demonstration projects. Four demonstration projects are being put forward. We are led to believe that the market does not think that it should pay for them. One of the arguments that is always used when public bodies are transferred to the private sector is that when they transfer out, the risk is transferred out, too. I imagine that the private sector does not want to take the risk at the moment, so it is asking us to bear it.
When the Minister replies, will he give us some idea of what he expects the public commitment to the promotion of the demonstration projects to be, and what he expects the contribution of private companies to be? It seems quite clear that the private companies have us over a barrel; we have no choice but to go ahead with the projects. However, it leaves a somewhat bitter taste in my mouth, having spent 20 years of my life working for the National Coal Board.
It is quite clear that we need to drive forward carbon capture and storage, but we also need to look at the benefits of other projects. One of the projects that is being promoted in the North-East, through Newcastle university, One NorthEast-the regional development agency-and the Association of North East Councils, is the development of underground coal gasification. There is huge potential in the North-East for UCG. It has already been established that, off the north-east coast, there is the equivalent of the annual world production of coal, which could be accessed if UCG proves to be successful.
On a number of occasions, I have had discussions with the Secretary of State for Energy and Climate Change on the issue, and I have asked questions on the Floor of the House, and the Secretary of State has told me that his Department is seriously considering supporting a strategic environmental assessment for the area off the north-east coast. This week, I spoke to Newcastle university to find out to what extent that assessment has happened. The university's response was that it had recent meetings with civil servants from the Department of Energy and Climate Change, but it has still not got the agreement to go ahead with the commissioning of a strategic environmental assessment. The Department has not said no, but quite clearly it has not said yes, and the longer it does not say yes, the longer there will be concerns about whether the assessment will happen.
The key thing about the work being done in the North-East on UCG is that it is supported by business and, as I have said, by the RDA, which has done a tremendous job in the North-East, just as the Yorkshire Forward RDA has done in the Yorkshire area, particularly with its superb work around the Humber estuary. The Association of North East Councils is another key supporter of UCG, which could be a huge success. If we can prove that UCG works, it will allow us to access coal seams that we would never have been able to access through traditional mining methods. It would also be much less labour-intensive and much less costly than traditional deep coal mining.
The Minister referred to a meeting that he had with Jon Gluyas of Durham university. I just want to read out a few lines from a note that Jon sent me this morning about another potential energy source, namely the chance of extracting more oil from the oil wells in the North sea by pumping out the CO2:
"I come from the oil and gas sector, having been responsible for rehabilitating a number of old fields in the past decade and it is very clear that a significant opportunity exists to dramatically improve recovery from North Sea fields by using CO2 to enhance oil recovery. The prize could be in excess of 3 billion barrels over a 20 year period. This could consume every molecule of industrially produced CO2 from Scotland to Humberside in the same period"-
that is, if we combine UCG with CCS. He says that the project would also
"deliver an infrastructure and a skill base which would prepare us for true carbon storage, and prepare a workforce to export the technology to other parts of the globe."
He is very clear that we have the right person with us in the ship-that is, the Minister who is here today-as he says in closing:
"Last week David Kidney visited us in Durham. He has the full story."
I hope that when the Minister responds, he can give us that full story. I hope that he will say yes to conducting a strategic environmental assessment of the area off the north-east coast, and yes to giving us a chance to rediscover a coal industry in the North-East for the 21st century and beyond.
There is a positive story emerging from what is a huge challenge. There are big job opportunities across this country, particularly in areas of real need-areas that have been hit very hard in the past 25 years and that have never really kept pace with the rest of the country. The reality is that we can access huge amounts of our own resources, so that we are not reliant on unstable and immoral sources of energy. That could have a huge impact on the climate change issue, and it will negate the need for any more open-cast mining. There is huge potential for the export of technology and expertise, but that export will happen only if we get on with things.
I want to raise a final issue. We are all aware in this House of how close we are to a general election. The truth is that this debate is, to some extent, above party politics, because it is genuinely about the national interest, and even the international interest. So I will listen with great interest to what both Opposition spokespersons-the hon. Members for North Southwark and Bermondsey (Simon Hughes), and for Wealden-have to say today. I am very pleased with what I have heard from Conservatives about their conversion, once again, to coal; the reality is that they see coal as a resource that we should use much more, and they think that we need to put the matter right.
I am also happy that the hon. Member for North Southwark and Bermondsey, the Liberal Democrat spokesperson, is here today, because in discussions that we have had in the past about coal, I have always found his contributions to be both sensible and balanced.
However, I must say that that is in stark contrast to some of the discussions that I have had locally in the North-East with the Liberal Democrats. Their attitude is that anybody who says anything positive about coal is waving the bogey flag and is very much in favour of open-cast coal mining. I refer to a discussion that took place in my constituency about an open-cast site at Skons Park. For the benefit of Hansard, that is spelled Skons, not Scones, as the Liberal Democrat parliamentary candidate in Blaydon thought. Perhaps if he lived there, he would know that. However, he will have plenty of time to find out the correct spelling next year, when he can walk around doing nothing.
The reality is that carbon capture and storage is a very important subject and we need to get it right. It is potentially hugely important for this country, and the key thing is to get on with it.
3.57 p.m.
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Mr. Dave Anderson: The hon. Gentleman's answer may have related to gas, but the question was specifically about coal.
Charles Hendry: The question was not specifically about coal. The hon. Gentleman talked about the Conservative party devastating the coal industry and privatising the utilities and, more generally, about energy policy. Perhaps we were talking about different issues, in which case I hope this exchange has been useful in clarifying that.
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The Parliamentary Under-Secretary of State for Energy and Climate Change (Mr. David Kidney): ... I think that it was my hon. Friend the Member for Blaydon (Mr. Anderson) who mentioned enhanced oil recovery. Of course, carbon dioxide might be the injectant that would be readily available at a reasonable price to help with enhanced oil recovery. Again, in my discussions with the representatives of the Crown Estate, they were alert to that point. I would also just point out to Members that, under the world-leading regulatory regime that we have established as part of the Crown Estate, we conducted a consultation in the autumn of last year about the licensing system for carbon dioxide storage. In that consultation, we proposed that the licensees of existing oil and gas fields ought to have a limited window of opportunity when they could have first call on permits for their fields as stores for carbon dioxide.
That consultation has recently closed and I do not yet know how the market has responded. Furthermore, we certainly have not made a final decision. However, I just wanted to draw attention to that consultation to show that we are alert to the link between the two sectors and the importance of securing the assets that we have now as safe storage for the future.
I thank my hon. Friend for reminding me that energy efficiency comes first, before the trinity of fuel supplies that I mentioned to him. Of course, if we can avoid using energy in the first place, we will contribute both to fighting climate change and to our security of energy supply, and we will help those people who find it difficult to afford to pay their bills to reduce their bills. Also, for businesses it is a good thing to reduce their overheads if they can. So energy efficiency-every day-should come first, and I thank him for reminding me to say that.
My hon. Friend is right about the need for further work to be done on the transportation of carbon dioxide. However, as I said to everyone in my speech, the components of carbon capture and storage have each been tested and there is transportation today, just as there is storage today, that has been proved to be successful. It is putting all those components together that is the challenge for us.
I totally agree with my hon. Friend about the UK coal industry having a place today-with 6,000 jobs-and hopefully it will have a bright future because we make a success of carbon capture and storage. Furthermore, I certainly take to heart the point that he made about the cost of our use of coal in this country that is supplied from other parts of the world, in terms of the lives that are lost producing that coal for our benefit. As I say, I take that point to heart.
My hon. Friend asked me what would be the public contribution, as opposed to the private sector contribution, to the demonstration projects. I think that that is a good point for us to pause and consider, because we have established the regulatory regime and people can deliver carbon capture and storage on power stations in this country today, if they want to. But nobody wants to take the risk, in terms of spending only their own money on such projects.
Without doubt, the cost of each individual project would be enormous; it would cost billions of pounds to make a project a success. So we are talking about sharing the risk. In the first competition, we were directly proposing the use of taxpayers' money, but now we are up to the level of the four demonstration projects we are talking about a levy on everybody's electricity bill, to make a contribution from the public sector to the private sector, in order to make a success of those four demonstration projects. Of course, when we agree about who has got the demonstration projects and therefore who will enjoy the benefits of this money, I would want to ensure that the contracts are sufficient to guarantee that, if there are any rewards to be had at the other end of the process, the taxpayer is involved in enjoying those benefits, just as the private sector will be.
My hon. Friend also wanted me to concentrate on the underground gasification of coal. As he pointed out, that was a subject covered in my discussion at the Durham Energy Institute last week. Last year, when I visited the coal authority at Mansfield, I had the same discussion with the people there, because they will give the licences for the underground coal gasification projects. I certainly urge them to be flexible and supportive of a possible new technology that would advantageous. That is something I will continue to pursue, as he asks.
My hon. Friend also asked me a specific question about the need for a strategic environmental assessment for underground coal gasification. I am told that the discussions between officials, to which he referred, have led to the conclusion that there is no need for a strategic environmental assessment for an individual project. Perhaps that is good news for him. There is certainly no obstacle in relation to that.
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Mr. Tim Yeo (South Suffolk) (Con): I should like to mention underground coal gasification. I am careful to draw attention to my entry in the Register of Members' Financial Interests, because I may have an indirect commercial interest in this matter. The hon. Member for Blaydon (Mr. Anderson) made an important point about the way that underground coal gasification can open up the potential for using a lot more of our coal reserves than would otherwise be possible, and for achieving electricity generation at much lower emissions levels. I welcome what the Minister said, but my impression is that DECC is not as enthusiastic as he is. I hope that what he says is reflected in the work that his officials do, now and in future.
The full transcript may be read here.
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