The UK Government has been warned a rush to early decommissioning in the North Sea could result in “tragedy” for the future development of carbon capture and storage (CCS) technology.
Ministers were also urged yesterday to draw up comprehensive strategies in both areas to provide clarity to investors.
And MPs made a final plea – on the eve of tomorrow’s Budget – for further measures to support the oil and gas industry.
The interventions came during the Commons debate on the Energy Bill, which – once law – will formally establish the new regulator, the Oil and Gas Authority.
Leading the charge, Aberdeen South MP Callum McCaig repeated his criticism of the 11th-hour decision to axe the competition for £1billion development funding for CCS.
Plans to build a ground-breaking plant at Peterhead came to a halt following the blow, announced to the Stock Exchange in November.
Mr McCaig, the SNP’s energy spokesman at Westminster, said the pulling of the plug as Energy Secretary Amber Rudd headed to Paris for the climate change talks was perhaps the “most grave” of the government’s policy changes.
He branded the Tories’ handling of the project “abysmal” and “all over the shop”, insisting something needed to be salvaged from the ashes.
Mr McCaig added: “One minute they are for it, the next they are against it.”
As a result, greater clarity over the technology’s future was now required, he added, calling for an “unequivocal” statement and strategy.
Northern isles MP Alistair Carmichael also condemned the government’s management of the situation, accusing it of acting in an “irrational manner”.
He added: “Inevitably we will end up playing catch-up and importing the expertise that could have been generated here.”
And he asked who would now believe the government – given its record on CCS – if it came forward with another competition in the future.
Turning to decommissioning, Mr McCaig urged the Conservatives to put in place a strategy for incentivising the competitiveness of UK-registered companies in contracts.
He said the process was one of the “sad realities” of the North Sea and that he hoped it would happen “some time in the future”.
But he urged the government to steal a march and get a strategy in place to make the most of the opportunity it presented longer-term.
He added: “It strikes me and my party that we need to ensure the greatest possible benefit comes to these shores as possible.
“The east coast of this island is ripe with opportunities in terms of ports and the like that would be champing at the bit quite frankly to see work come ashore.”
Mr Carmichael said in order for there to be a strategy, there had to first be survival and protection against a rush to early decommissioning.
As well as being bad for the economy, he said it would be “tragic” if the current infrastructure which could be used to store carbon was lost in the process.
Energy Minister Andrea Leadsom said her government believed CCS had the potential to play an important role in the long term, but pointed to the currently high costs.
She also insisted her party was committed to supporting the industry come forward with innovative ideas and highlighted the more than £220million invested in CCS since 2011.
Responding to Mr McCaig’s call for a strategy – defeated by 268 votes to 229 – she said the government would set out its approach to CCS by the end of this year.
He did not push his call for a decommissioning-related strategy to a vote.
The Bill, which began its passage in the Lords, was last night expected to pass the Commons.
But it is likely to ping-pong between the two Houses due to strong opposition in the Lords to the government’s plans to close the renewables subsidy for onshore wind a year early, from next month.
In October, a Labour amendment deleting the policy was carried there, but it was reintroduced by the government when the bill came to the Commons.