Photo credit: David J Some rights reserved
MPs have given the energy secretary, Amber Rudd, until the first week in January to answer questions about the government’s withdrawal of funding for carbon capture and storage.
The technique, which traps carbon dioxide from coal and gas power plants, is regarded by some as essential for the viability of a UK fracking industry.
The energy and climate change select committee has sent Mrs Rudd a letter with five questions about the cancellation last month of a £1bn competition to develop CCS. They also quizzed her in person when she appeared before their committee last week.
The meeting almost slipped by unnoticed because it coincided with the parliamentary vote on fracking under national parks.
But the committee’s website now has a copy of the letter and transcript of the meeting.
Funding for the CCS competition had been part of the Conservative Party 2015 election manifesto.
2015 Conservative Party manifesto
But on 25th November, a government statement informed the stock market:
“the £1bn ring-fenced capital budget for the Carbon Capture and Storage Competition is no longer available”
The competition was to develop the UK’s first CCS power plant and it was cancelled just days before the start of the international climate change talks in Paris.
Letter
The letter to Mrs Rudd from the committee’s chair, Angus MacNeil, said:
“Given the repeated to commitment of this and the previous Government to CCS, my committee was both surprised and disappointed by this decision, a feeling that appears to be shared across industry, business, investors and academia.”
Mr MacNeil (SNP, Na h-Eileanan an Iar), pictured left, asked:
- Why was the competition cancelled?
- What else is the government doing to support CCS?
- What is the future of CCS if gas remains an important part of the UK energy mix?
- What consideration was given to the signal the cancellation gave to investors?
- What future plans are there for supporting or encouraging the development of CCS?
He asked for replies by Wednesday 6th January.
Cancellation “absurd”
On the day the letter was sent, Lord Chris Smith, the chair of the industry-funded Task Force on Shale Gas, described the cancellation of the competition as “absurd”. Speaking on the publication of the Task Force’s final report, he said:
“A serious development of CCS is in our opinion essential for the medium term viability of any significant shale gas industry.”
The day before, Professor Paul Younger, of University of Glasgow, who has supported fracking, said:
“I have always said that unconventional gas should only be considered an option provided we are making serious moves towards full-scale CCS.”
“Given the announcement my position is that the ethical platform for any perpetuation of fossil fuel use in the UK (or by others on our behalf) has been fatally undermined.”
Committee questioning
On Wednesday last week, the energy and climate change committee quizzed Mrs Rudd on:
- Timing of the cancellation
- Inconsistent signals from the government on carbon emissions
- A timeline for CCS
- Money lost from the cancellation
Timing
Mr MacNeil, asked the secretary of state about the short notice for the CCS industry of the cancellation and the fact that some key people found out about it only on Twitter. He said:
“Is five minutes’ notice and finding out on Twitter entirely proper do you think?”
Mrs Rudd replied
“The Chairman refers to a specific example. I don’t know who he is referring to or what the particular circumstances were, but I can certainly tell you, from our point of view as a Department, we were careful to call all the major parties as soon as we knew.”
Signals
Another committee member, Labour’s Matthew Pennycook (Greenwich and Woolwich), asked Mrs Rudd whether she thought the government was sending a “worrying incongruence of signals”. He said:
“You came to this Committee five months ago and said, I think quite rightly, you would remain absolutely committed to carbon capture and storage, and yet just a month or so ago the Chancellor said it was not value for money. Don’t you agree that this is sending out quite inconsistent and dangerous signals to industry about whether you are truly committed to that technology?”
Mrs Rudd replied:
“I think the situation with carbon capture and storage is that, in the long term, it will be necessary to deliver on ambition for a really low carbon future. That could be in the 50s, the 60s, the 70s, but to get to zero emissions by the end of the century we will need to have some form of carbon capture and storage. Now for the UK was not the right time to commit to £1 billion on carbon capture and storage but that does not mean that my Department is not going to continue its interest in the area.”
Labour’s Rushanara Ali (Bethnal Green and Bow) suggested that the Chancellor, George Osborne, was an obstacle to Mrs Rudd’s ambitions and was undermining her efforts.
Mrs Rudd refused to accept that and replied:
“The Chancellor and I are agreed that the ambition is secure, clean and affordable energy, and getting the right balance of that is something we work together on.”
Mr MacNeil suggested that the Treasury saw the investment in the competition as a cost, rather than a saving for the future.
Mrs Rudd replied:
“We all have to work with the Treasury. We all have to live within our means. This was a tight Spending Review, and carbon capture and storage was one that did not go forward. It is £1 billion that is being spent now on other matters.
I do not think that it is correct to characterise this Government as somehow divided in that matter, but the fact is it was a tight spending round, and carbon capture storage funds are not part of the future at the moment.”
Timeline
Alistair Carmichael (Lib Dem, Orkney and Shetland) asked whether there ever would be a right time for the Treasury.
Mrs Rudd replied:
“I think carbon capture and storage has to form a part of the long-term, low carbon ambition, not just for this country but internationally.”
Mr Carmichael:
“You want to deliver that as soon as possible?”
Mrs Rudd:
“Of course.”
Mr Carmichael:
“What is that in terms of timeline?”
Mrs Rudd:
“It is difficult to tell. I am ambitious for our low carbon future and for a result internationally, which is why I fought so hard for a global deal, but this is not something that the UK can do on its own.”
Money
Mr MacNeil said he’d heard figures of £300m-£400m had been lost in EU funding following the cancellation of the competition.
Mrs Rudd replied:
“The European Union were going to make a contribution. I don’t have to hand the exact sum but I do not think it is as large as the Chairman has suggested but I am happy to write to him about that. It was a significantly large amount from the UK taxpayers’ funds that were going to be required.”
Links to the letter and transcript of the meeting.
Categories: Politics
DRILL OR DROP? 
Peel conglomorate, owners of ” substantial land and water”unquote, and with many plans happily passed by North Yorks County Council, these past few years, including an architects design published for the remake of Kellingley Colliery, are already busy with their expectation that shale fracking will go ahead in 2017, which is the timetable all their initiatives are geared towards fulfilling.
They have so many subsidiaries across the globe, from Australian up into the northern hemisphere, it would seem they now run the North and have many plans for it over the coming years, regardless of what the government pretends to decide:
Their reports circulating 2013-and 14 are interesting to read as well as any searches into their activities globally…but here is the way they expect things to go, and for sure they have successfully completed phase one and two it would seem.
NORTHERN ECONOMIES TO SEE HUGE JOBS AND INVESTMENT BOOST FROM SHALE GAS SUPPLY HUB – READ THE FULL REPORT HERE
15 April 2015
Developing a supply hub in the Bowland Shale could see Northern economies benefit from a £30 billion boost, according to an independent report published today. The development of a supply chain to support the industry could also support 13,000 jobs – more than double the amount than without a supply hub.
The report, Shale Gas – Creating a Supply Hub for the Bowland Shale, is published by AMION Consulting and commissioned by Peel Gas & Oil. The report is being launched today (16th April) in Birmingham at Shale World – the UK’s biggest shale gas conference. The report extends the 2014 AMION study into the potential impact of shale gas development in the Ocean Gateway area to consider the potential supply chain benefits across the entire Bowland Shale area.
The figures are based on the development of 100 well pad sites in the Bowland Shale, covering the Midlands and North of England. It is estimated that developing the sector will generate a spend of around £30 billion up to 2048. The development of a co-located supply chain could see the Bowland Shale area retain twice the amount of this expenditure in the region than without a supply hub.
The report also identifies that the Bowland Shale, and in particular the Ocean Gateway area stretching from the port of Liverpool to Manchester, could become a UK and international ‘centre of excellence’.
Myles Kitcher, Peel Gas & Oil Managing Director, said:
“Creating a prosperous supply chain to service the Bowland Shale could be transformational in driving the Northern Powerhouse economies. From cementing services and steel supplies to water management and infrastructure, the opportunities are abundant.
“The findings of this report demonstrate the huge benefits that are on offer but we need to act quickly or we risk losing out to other countries who are already active in the sector. By clustering activities together we have the opportunity to create an international centre of excellence for the industry.”
Robert Hough, Chair of Liverpool City Region Local Enterprise Partnership (LEP), said:
“We welcome this report as it helps to highlight the potential significance of the Shale Gas industry for local businesses.
“It is, in fact, an area the LEP itself has been giving consideration to and indeed we are currently working with partners to evaluate the potential for the Liverpool City Region economy to benefit from shale development.”
Mark Whitworth, Peel Ports CEO, said:
“Opportunities to grow the economy of the North of England need to be embraced, and the new report by AMION Consulting has identified the positive impact that a supply hub in the Bowland Shale will have on job creation and investment to the area.
“Peel Ports has extensive experience of handing steel, aggregates and mechanical items as a terminal operator. With the strategic assets and infrastructure already in place in the region, we are best placed to support the development of a supply chain for the industry and help make the most of the Bowland Shale for the benefit of the North.”
The report highlights a delivery strategy for the creation of a supply hub, including attracting major suppliers to the hub area; building a pipeline to link well pad sites to energy intensive industries; and investment in research and skills development.
Part of the privately owned Peel Group, Peel Gas & Oil was recently launched to act as a strategic development partner for current and prospective onshore license holders. The Peel Group has a unique range of assets to provide critical port services; road rail and water networks and land and property within easy access of the identified regional licence areas.
http://www.peelgasandoil.co.uk/news/northerneconomiestoseehugejobsandinvestmentboostfromshalegas
Merry Christmas, Happy Solstice and thanks for all the blogging to keep us up to date Jane.
And your point is? How does the above commentary on Peel Holdings relate to the published article on Carbon Capture? Peel are into all sorts including wind farms. They are in business to make money. So are Banks Renewables (wind, coal new open cast coal, and rumour has it, shale gas). Carbon Capture is not essential for gas. Gas will be phased out eventually when we have the right renewables and storage, Until then we will need more gas. There is no technical reason why carbon capture should be tied to shale gas specifically. The problem with carbon capture is what to do with the CO2. It is extremely difficult and expensive to move it around in large volumes and inject it into sub surface reservoirs. The metallurgy required is high chrome and possibly nickel to resist corrosion. It may involve fracking in order to break down the formation so that the compressed CO2 can be injected in large volumes. This could lead to earthquakes and tectonic plate movement, tsunamis, contaminated water supplies and all the other doom and gloom scenarios you keep telling us will come with shale gas fracking…..
Correct that they’re applying pressure. How, exactly, does the government plan to fix the environment?
Sorry, I’m not as clever or informed as you all seem to be but from what little I know of this project I am pleased it has been cancelled. From the information I have it has only been tested in a very small way in Germany, so not a lot known about it. As has been stated their will still be CO2, admittedly at a lower rate. One of my main concerns was that the plan was to pipeline this waste across Yorkshire into the North Sea. Haven’t we already learnt that burying waste doesn’t work, it comes back to haunt us. I still think we should do all our investing in Solar, Wind and Wave energy and work on cheaper ways to store this safe energy. Another question I keep asking and can’t get an answer for is, If one of our main concerns is about possible gas shortages and having to relying on Foreign Sources, WHY are we still wasting it to make electricity? especially as electricity can be made safely and cheaply by other means?