Energy and Climate Change and Environment, Food and Rural Affairs

I am sorry. Time is short. Setting the fiscal regime will be extremely important. The oil industry is very concerned about what may come out in the pre-Budget report. It urged Ministers to argue with their colleagues in the Treasury that we need a proper regime to ensure that we get the development of the area west of Shetland, where new thinking may well be necessary if development is to go ahead on a major scale. It became clear in the course of our report that there are serious concerns also about finance for the North sea, a point that I made in an intervention. The big companies will always get finance—it is not a problem for the likes of Shell or BP—but many of those working in the North sea are much smaller companies operating in smaller fields. Many of them are experiencing difficulty with finance, even from our state-run banks. We were told in the course of our investigation that of the major UK banks, only Lloyds HBOS, or whatever it now calls itself, operates in the North sea. It became clear that the bank was lending only to existing customers and was not prepared to lend to new entrants into the market. That is a serious barrier to exploiting the riches of the North sea. A further important point concerns the infrastructure. Much of it is ageing—it has been there a long time—and decommissioning is an issue. That may create a great deal of work, but there is also the problem of the use of that infrastructure if we are to make carbon capture and storage work. As well as getting it working in the coal stations onshore, we have to find a way of storing captured gas. The obvious place for storage is the depleted oil and gas fields and the aquifers under the North sea. To do that, we have to retain the existing structure to enable us to pump the gas out to the North sea. We must have a fiscal regime that allows the companies that are no longer using much of that structure for its original purpose to maintain it to ensure that it is available for carbon capture and storage. Again, I urge Ministers to make that important point to their Treasury colleagues. The Energy Bill includes much about carbon capture and storage, and Ministers have told us today that we are world leaders in it. I have talked many times in this House about the Peterhead project. It would have given us world leadership in CCS, but, because of this Government's typical dithering, we lost it, and it is no longer true to say that we are world leaders in CCS. Ministers talked about the potential to export it to developing countries, and that may well be true, but the Library has produced an interesting note on CCS. It considers what is happening in other countries and states that China has one of the world's few commercial CCS operations, at Huaneng Beijing co-generation power plant. China is, in fact, ahead of us in many ways, and, unless we move quickly and get CCS working, rather than exporting technology to developing countries, we may have to buy it in. We have heard a lot about people who complain about wind farms. My good friend, the hon. Member for Northampton, South (Mr. Binley), talked about that, and there are difficulties with many such sources, so we cannot assume that there will not be difficulties with CCS. A few months ago, I, along with other members of the all-party offshore oil and gas industry group, visited a CCS project run by Total in Pau, southern France. All over the surrounding countryside, there were large signs protesting against the development of CCS in that area, so that is something else to worry about and another reason to move fast, to get the work under way and to ensure that we have CCS. Only with that will we be able to develop our coal resources, create jobs by linking coal with existing North sea infrastructure and ensure that we have clean energy and do not need to rely on the disaster that is nuclear power.