Energy and Climate Change and Environment, Food and Rural Affairs

I think that both things are true. We have made immense progress, not least under this Government, but there is still so much more that needs to be done. I want to focus on energy supply and security, putting the issues in a global context but focusing to some extent on Europe and particularly on our own country, the United Kingdom. There are serious matters to consider. When I stopped being energy Minister a year ago, the Prime Minister asked me to be his representative on energy security. I delivered my report to him in August; it was published by DECC and entitled "Energy Security: A national challenge in a changing world". If my words are of any interest and people want to know more, they will find it in that report. The key issue is that, post recession, the global grab—the global demand—for energy will surely be maintained. We speak at a peculiar time. According to the International Energy Agency's new report, "World Energy Outlook 2009", this is an almost—I think I use the word properly—unique year, because global demand for energy will go down, as will carbon emissions. When we come out of recession—I hope that we are doing so—this huge increase in demand for energy will be maintained. That is happening at a time when, historically, we are moving away from relative self-sufficiency in terms of indigenous energy in the UK towards a significant amount of import dependency, obviously for oil but also for gas. That involves serious issues as regards energy supply and security. I use the word "security" because this takes on a further resonance of national security. I remember the former Prime Minister Tony Blair, when the Langeled pipeline from Norway was opened—thank goodness we have it—saying that in this century, energy security could become as important to a nation's security as the conventional defence forces. That is at least an interesting point to consider. We have the benefit of the International Energy Agency, which has painted two scenarios of how global demand will increase. I will not go into too much detail, but they are closely related to Copenhagen. One is a reference scenario, if the energy efficiency and other policies that we have already agreed are implemented. The other is called the "450 scenario", because it sets out a world in which collective action is taken to limit long-term concentrations of greenhouse gases in the atmosphere to 450 parts per million of CO2 equivalent. Many of today's useful contributions have been about the importance of securing that agreement. In the reference scenario, into which are built a lot of actions that Governments in Europe have promised and need to take, the assumption is that between 2007 and 2030, global energy demand will increase by 40 per cent. In the far more ambitious 450 scenario—maybe I could call it the Copenhagen scenario—that goes down to 20 per cent. That is still a huge increase, but only half the increase in the reference scenario. People can make their own judgments about what percentage increase is likely to take place in practice. Although there is much excitement, controversy and debate, not least in the House, about the contribution of new renewable technologies and the fairly new technology of nuclear, that global demand will be met in the main not by wind turbines and nuclear power stations, although they will start to make a greater contribution, but by fossil fuels—coal, gas and oil. They account for three quarters of the increase in demand in the reference scenario, and in the 450 scenario they still account for two thirds of the increase, even though coal is less important. As we know—this is part of the politics of Copenhagen—most of the extra demand will come from emerging and developing countries. We should be pleased that demand is fairly flat in OECD countries such as our own, even though it goes up and down in different countries. We are beginning to find out how to have economic growth without a correlation with energy demand. The challenge for our country is surely to reduce our demand for energy but move back to economic growth after the recession. According to the latest edition of the IEA's "World Energy Outlook", published just a couple of weeks ago, 93 per cent. of the increase in global demand to 2030 will come from non-OECD countries, driven largely by China and India. We all know the data that can be related to that situation, but just to give an illustration, the number of vehicles in China was some 23 million in 2005. By 2030, it will grow tenfold to 230 million. Why do I talk about the national security energy challenge? First, let us look at Europe. The EU already depends largely on imports, and that dependency will only grow in magnitude. By 2030, it will be getting some 90 per cent. of its oil, more than 80 per cent. of its gas and 50 per cent. of its coal from outside the Union. Parts of Europe, of course, already depend heavily on Russia, and we know some of the difficulties that that can bring about. Sadly, I would guess that the geopolitics of energy and security will become more important for Europe as the years, and possibly the next few decades, roll by. Let us look at Great Britain. To generalise, we have been blessed with self-sufficiency. In the pre-industrial era, people used wood and twigs—what would now be called biomass—to cook their food and keep warm by their fires. We then had the development of coal, which fuelled our industrial revolution and our industrial and economic development. After coal, we discovered oil and gas in our backyard, in the North sea on the wider UK continental shelf. What will happen in the next 10 or 20 years? The North sea oil and gas resources are in decline, although there are still plenty of resources out there, and it is still a major British industry. Many younger, smaller entrepreneurial companies are coming into the North sea, as some of the big boys move on to Brazil and elsewhere. The licensing round is always very active and resources remain to be exploited—for example, West of Shetland—and that augurs well. However, oil and gas production is in decline by 6 to 8 per cent. a year.