The
Committee consisted of the following
Members:
Chair:
Mr
Gary Streeter
†
Anderson,
Mr David (Blaydon)
(Lab)
†
Baker,
Steve (Wycombe)
(Con)
†
Birtwistle,
Gordon (Burnley)
(LD)
Doran,
Mr Frank (Aberdeen North)
(Lab)
†
Glindon,
Mrs Mary (North Tyneside)
(Lab)
†
Harris,
Rebecca (Castle Point)
(Con)
†
Hendry,
Charles (Minister of State, Department of Energy and Climate
Change)
†
Irranca-Davies,
Huw (Ogmore)
(Lab)
Jackson,
Glenda (Hampstead and Kilburn)
(Lab)
†
Menzies,
Mark (Fylde) (Con)
†
Newton,
Sarah (Truro and Falmouth)
(Con)
Sharma,
Mr Virendra (Ealing, Southall)
(Lab)
Smith,
Nick (Blaenau Gwent)
(Lab)
†
Tomlinson,
Justin (North Swindon)
(Con)
†
Vara,
Mr Shailesh (North West Cambridgeshire)
(Con)
†
Walker,
Mr Robin (Worcester)
(Con)
†
Weir,
Mr Mike (Angus)
(SNP)
†
Williams,
Roger (Brecon and Radnorshire)
(LD)
Mark Oxborough, Committee
Clerk
† attended the
Committee
Fifth
Delegated Legislation
Committee
Tuesday 1
March
2011
[Mr
Gary Streeter
in the
Chair]
Draft
Offshore Petroleum Activities (Oil Pollution Prevention and Control)
(Amendment) Regulations
2011.
4.30
pm
The
Minister of State, Department of Energy and Climate Change
(Charles Hendry):
I beg to move,
That the
Committee has considered the draft Offshore Petroleum Activities (Oil
Pollution Prevention and Control) (Amendment) Regulations
2011.
The
Chair:
With this it will be convenient to discuss the
draft Offshore Chemicals (Amendment) Regulations
2011.
Charles
Hendry:
It is a pleasure to serve under your chairmanship,
Mr Streeter.
As the
Committee will recall, the draft regulations were to be debated on 17
November 2010, but they had to be withdrawn and the debate postponed
when it became apparent, while updating the guidance to be published
alongside them, that some types of pipelines were not adequately
covered. The draft regulations have been revised to include a new
definition of “offshore installation” that now
encompasses all pipelines.
From the
documents already available, the Committee will have seen the
background to the original regulations—the Offshore Chemicals
Regulations 2002 and the Offshore Petroleum Activities (Oil Pollution
Prevention and Control) Regulations 2005—so I shall repeat only
the salient points about why we are debating the two sets of amending
regulations. I shall refer to the Offshore Chemicals (Amendment)
Regulations 2011 as the 2011 chemicals regulations, and the Offshore
Petroleum Activities (Oil Pollution Prevention and Control) (Amendment)
Regulations 2011 as the 2011 oil regulations.
There are not
many significant points to make because, as Committee members will
doubtless have concluded, notwithstanding the revised definition of
“offshore installation”, only one major change is
required, and that relates solely to the 2002 chemicals regulations,
which currently apply only to the use and discharge of chemicals as
part of day-to-day operational activities relating to oil and gas
exploration, production and decommissioning. That framework mirrors the
international commitment implemented by the regulations, made under the
OSPAR convention, whereby operational uses and discharges must be the
subject of an application and assessment; if approved, they will be
allowed to occur in accordance with the terms set out in a
permit.
When bringing
the 2002 chemicals regulations into force, it was considered that they
provided powers relevant to all emissions of offshore chemicals.
However, those regulations do not cover unintentional events, such as
spills or leaks of chemicals, because they cannot be
regarded as operational use or discharge, which was the main thrust of
the regulations; thus any spills or leaks cannot be subject to
enforcement action. That conclusion became apparent through discussions
with an operator about what action should be taken in the event of an
escape of chemicals. That discussion revealed the deficiency that
enforcement action could not be taken in relation to such
leaks.
The purpose
of the 2011 chemicals regulations is to extend the scope of the 2002
chemicals regulations by creating a new distinction between a discharge
and a “release”. In simple terms, a discharge will be an
intentional emission of an offshore chemical—essentially one
that is planned or deliberate. Such an emission will be lawful if it is
made in accordance with the terms and conditions of a permit and, as a
result, does not pose a threat to the marine environment. Any other
emission of offshore chemicals will be treated as a release, and will
be unlawful. This will ensure that all unauthorised emissions are
liable to enforcement action, including possible prosecution, which
creates a new
offence.
Oil
spills and leaks are already covered by the 2005 oil regulations, and
the concept of release is being introduced also in the 2011 oil
regulations solely for the sake of regulatory conformity, given the
similarity of purpose between the two regimes for controlling emissions
of chemicals and oils. Powers to take enforcement action, including, if
necessary, bringing a prosecution, have always been available to my
Department for oil spills and leaks. Such powers are contained in the
Prevention of Oil Pollution Act 1971, but they were superseded by the
2005 oil regulations in relation to offshore installations.
The Committee
may be assured that my Department has to be notified of spills of
chemicals and oil. Fortunately, in the UK, they have generally been
minor. Between 2005 and 2009, there was an average of 157 notifications
a year of chemical spills, involving an average total of 735 tonnes of
chemicals, none of which, I hasten to add, posed an environmental
threat. For the purposes of offshore oil and gas activities, chemicals
are defined in their broadest sense, and include substances such as
brine.
From
2005 to 2009 an average of 283 oil spills were reported annually,
resulting in about 51 tonnes of oil being spilt at sea, of which 6
tonnes was crude oil, the remainder being diesel and hydraulic fluid.
Putting it into context, that equates to approximately two road petrol
tankers or 1.5% of the water contained in an Olympic size swimming
pool. I stress that none of the reports related to a loss of well
control, and no environmental impact was noted as a result of the
spills.
There
have already been prosecutions under both sets of original regulations
as a result of the notification process. In 2005, an operator was fined
£3,000 for an offence under the chemicals regulations, and in
2008, two operators were each fined £2,000 for a spill of crude
oil. There were three incidents under the chemicals regulations, which
may have been the subject of prosecution had the new power been
available.
As
they stand, the 2002 chemicals regulations do not allow for enforcement
action or prosecutions associated with unintentional events. That is
unique to the chemicals regulations; as I said, that omission does not
exist in the 2005 oil regulations. I therefore regard the amendment to
the 2002 chemicals regulations as essential. Although our focus should
remain on prevention through our
robust environmental assessment and inspection regime, I hope that the
Committee agrees that it is prudent to deal with spills or leaks of
chemicals and that a full range of options should be available to deal
effectively with the causes and any adverse environmental
impact.
In addition
to dealing with the unintentional release of chemicals, the enforcement
provisions of the existing chemicals and oil regulations have been
strengthened by the proposed 2011 chemicals regulations and 2011 oil
regulations to allow my inspectors to require preventive action to stop
spills from occurring in the first
instance.
A
number of minor amendments to the existing regulations are being
introduced by the 2011 chemicals regulations and 2011 oil regulations
to simplify the two regimes and to create more consistency, to make it
easier for offshore operators to understand and comply with the
regulatory requirements. Changes are made to both regimes to simplify
the process for renewing and varying permits or transferring them to a
new permit holder. The information-gathering powers have also been
strengthened by the respective 2011 regulations so that information can
be obtained from a wider range of persons and in relation to a wider
range of incidents capable of affecting the
environment.
The
draft amending regulations were consulted on between July and October
2009. Oil and Gas UK, the trade association that represents the oil and
gas industry, made a number of helpful comments. It agreed that the
main amendment was necessary and raised a few detailed points, but they
were satisfactorily resolved. None of those points required amendments
to the draft regulations, but they have been taken into consideration
in updates to the relevant guidance notes. We intend to publish the
revised guidance notes when the amending regulations come into
force.
As
I said, the amendment to the 2002 chemicals regulations creates a new
offence. However, that does not mean that there will be a significant
number of additional prosecutions. Indeed, it is expected that there
will be few, as both sets of regulations allow for various enforcement
actions to be taken before prosecution. I am sure that everyone hopes
that these new prosecution powers will never need to be used.
Nevertheless, I believe that extending the scope of the offences is
essential in order to give my Department strengthened enforcement and
pollution prevention measures. I therefore commend both sets of
amending regulations to the Committee.
4.39
pm
Huw
Irranca-Davies (Ogmore) (Lab):
Dydd gwyl Dewi hapus
bawb—a happy St David’s day to everyone.
It is a
pleasure to serve under your stewardship, Mr Streeter. In
respect of these regulations, the Minister and the Committee will
understand if I say that it seems like déjà vu all over
again—that it is groundhog day, rather than St David’s
day. The regulations are nevertheless very welcome. I recognise the
Minister’s great experience and personal background in this
sector. Although I cannot hope to compete with his detailed
knowledge, I hope that I can give the Committee some additional
insight.
First, it is
worth mentioning the background to the two sets of regulations, as it
will help us to understand the importance of the oil and gas industries
to the UK, and how important the highest standards of operation
are in preventing and controlling pollution. It would be fair to say
that the industry is feeling fairly pukka at the moment, not least
thanks to the 26th licensing round of applications in 2010, which
attracted the highest number of applications since the first round.
That indicates a high degree of confidence in the sector, which is
reflected in the quarterly business confidence index.
We saw a
massive increase in investment last year. That is relevant to our
debate because, for the first time in five years, investment has
increased to £6 billion. That is the result of the many new
approvals, including many in much more challenging environments, where
the prevention and control of pollution is commensurately more
difficult. That includes the west of Shetland, and the central and
northern areas of the North sea. That investment will increase in
coming years from £6 billion last year to £8 billion next
year—that is a 60% increase—and it could rise to more
than £40 billion over the next five years as ambitious plans to
exploit known reserves and new reserves come to fruition.
The industry
is feeling good about its prospects, and by and large that is good for
UK plc—and, of course, for the Treasury coffers. It will help
the Chancellor with his deficit reduction plans; there is something of
a fixation on that, but it will certainly help. Based on current
projections, by 2011, the industry could provide about a quarter of
total UK corporation tax receipts, employing about 500,000 both
directly and in the supply chain. That is no mean thing.
Our
colleagues who represent areas with significant employment and economic
interests in the oil and gas sector will be particularly pleased with
that performance and with future projections, as will others benefiting
from the industry’s investment. In the context of the
regulations, however, those areas will be equally interested in the
industry’s safety and pollution control record, and its future
expansion prospects. That is especially so given the stark
demonstration of the appalling inadequacies that caused the Gulf of
Mexico spill, which resulted in negative environmental, social and
economic costs across the entire region. Nor should we forget the
Macondo blowout, which cost 11 lives.
The Minister
regularly and rightly praises the UK industry for its high safety
standards, which are partly the result of the rigorous inspection
regime and of training and skills. That echoes the findings of the
recent investigation by the Select Committee on Energy and Climate
Change. As always, we are indebted to the members of that Committee for
their scrupulous work. In response to the Gulf spill, Oil and Gas UK,
together with the unions and the regulators, set up the oil spill
prevention and response advisory group—OSPRAG—which
reviewed the UK’s regulatory regime. It showed a high degree of
confidence in our regime. The European Commission, too, has commented
favourably on the UK framework. It is clear that we need, and must
demand, the highest standards, given the fine tolerances of deep-sea
drilling in the most demanding and the most marginal fields
of the North sea and west of Shetland. We cannot, and should not,
tolerate any managerial or operational ineptitude, or a lack of
preparedness for foreseeable eventualities.
In the
haunting and oft-repeated words of Donald Rumsfeld, but in a different
context, there are “known knowns”—things that we
know we know. For instance, there are known challenges and known
solutions to
operating in the offshore environment, such as our
established pollution control measures and responses. We also know that
there are “known unknowns”—some things that we
know we do not know. They include the additional but unknown
difficulties of operating in the most challenging hydrological and
meteorological conditions, let alone the geological conditions of
operating in the turbulence of deep-sea operations—and how we
control and respond to pollution events there.
I will
not ask the Minister to comment on Donald Rumsfeld’s
“unknown unknowns”—the risks that we do not even
know about—because that would be unreasonable, but there is
fourth consideration, the “unknown knowns”. They are the
risks that we do not know about, or which we intentionally refuse to
acknowledge that we do know about. I should like the Minister to
reassure the Committee about those unknown knowns—that there is
nothing hidden in the deepest recesses of official papers and briefing
that might cause the Committee to pause and reflect further on safety
and pollution control and prevention standards. I am sure that there
are not; otherwise they would have been brought to the attention of the
Energy and Climate Change Committee recently. However, it would be good
to hear from the Minister that there are no partial or nascent concerns
about the ability to respond to a deep-sea drilling pollution incident,
given that he has the benefit of full access to official information
and relevant discussions.
Beyond those
broad, but vital assurances, I have a number of other specific
questions. The Minister has explained briefly why the SI was laid, then
withdrawn and then laid again. I know that his Department is working
hell for leather on so many things at the moment, so it is not
surprising that the occasional item is overlooked, however regrettable
that is. However, can he assure us that no further features have been
overlooked in the revised SI before us? In short, can he assure us that
we will not have to come back here again, taking up the
Committee’s time? Secondly, what is the current state of play on
access between oil and gas and renewables, especially in terms of joint
or separate access to areas leased by the Crown Estate? Does that have
any bearing on our consideration of the measure before us? Is there any
increased risk? Has the Minister had any discussions with his officials
about the possibility of any increased risk as a result of shared
operations space? Has that been taken into account in the SI? Does it
cover those eventualities?
On a similar
but more immediate issue, we share the Minister’s ambitions to
make sure that smaller companies can gain access to
pipelines—those companies are often at the cutting edge in new
exploration and new fields. They should not face undue barriers because
of a series of monopolistic owners of infrastructure or pipeline. The
Energy and Climate Change Committee reported on this in July 2009, and
I think that we are on the way to resolving the general issues in the
Energy Bill currently in the other place. What will the SI do to ensure
that safety standards apply equally right across all operators, big and
small, new and established, including those that share
infrastructure?
What
assessment has the Minister made of the adequacy of the skills and
training base in the industry? He knows that organisations such as
OPITO have been
gearing up for the increased general training needs
of the UK oil and gas industry in the next few years, but, in the light
of the SI, what specific measures have been taken to increase awareness
of, and skills and training in, pollution control and prevention from
the chief executive right down to the individual operator on a platform
or pipeline?
The
Opposition welcome the fact that the regulations will come into force
on the very day after being laid, which, although unusual, is justified
in the explanatory memorandum in terms of the high level of awareness
of the proposed changes among those affected, to which the Minister has
referred, and the consultations involved. We are glad to see the
measures that the Minister will take to inform chemicals permit holders
and others. Because of that heightened awareness and extensive
consultation, is the Minister confident that he and his Department will
not face any challenges, legal or otherwise, on the SI from any legal
person who may be unaware of the proposed changes? He seems very
confident about that, and it would be good to put that on the record
categorically.
The
explanatory memorandum refers to a relatively small number of operators
in the sector. Will they be informed individually and promptly, rather
than just via a trade body or websites? Crucially, have those operators
been party to the same level of consultation on the revised SI that has
been laid today, as they had on the original measure? Are they up to
speed, and do they know the detail of the changes in the new SI? If so,
the Committee will be assured that everybody knows about it.
We welcome
the newly amended definition of “discharge” in the
chemical regulations, which, as the Minister said, now covers not just
operational releases but any intentional release of an offshore
chemical. We also welcome the new definition of
“release”, which now catches all other emissions. We hope
that they are a watertight set of definitions, just as we hope that it
is a watertight pipeline infrastructure. We note and approve of the
amendment to the Oil Regulations 2005 under the 2011 regulations to
mirror the effects in terms of discharge and the release of
oil.
In respect of
prosecutions, would the Minister confirm that he expects one or two
prosecutions a year? In the light of that, what would be a reasonable
defence from an operator? I am not asking him to double-guess the
independence of the judiciary, but it would be good to get on record
before the Committee his take on how rigorously the statute should be
enforced on individual operators. He spoke of a relatively small number
of discharges over the past few years, and I noted that he said they
roughly equated to 1.5 % of the contents of an Olympic-sized swimming
pool. I would not necessarily want 1.5% of such discharges in such a
swimming pool, but I understand what the Minister is trying to
get across.
That said,
penalties of £1,000 or £2,000 are, if you will excuse the
pun, a drop in the ocean. They are neither here nor there. Can the
Minister say whether higher penalties will be imposed? Will there be an
element of discretion in their exercise? Are the penalties unlimited?
Perhaps he could illuminate the Committee on that. Obviously, we do not
want the penalties to be crippling, and the biggest disincentive is the
fact that the regulations are on the statute book, but those penalties
must reflect the impact of serious discharges, given their cumulative
total, and the effect on the environment.
Do the changes
in the SI reflect the expressed will of the Labour-led coalition in
Wales, or was the Minister asked to do more, or even less? It is good
to be discussing this on St. David’s day. It is only two days
before the referendum on the transfer of power to Wales, and even
though the Minister does not have a vote, will he support in spirit the
Yes for Wales campaign, alongside Nick Bourne, the leader of the
Conservative group in the National Assembly for Wales? It will be a
great boost to know that we have his support in spirit, as he makes
this SI fit for the devolution settlement.
Well done to
the Minister and his officials for laying the SI again, albeit slightly
delayed, and we hope for the last time in the foreseeable future. We
also hope that, given the Minister’s responses to my questions,
and his assurances, we will be able to offer him our strong support in
taking forward this important, but somewhat technical
SI.
The
Chairman:
We move from Wales to Scotland. Mr.
Mike Weir.
4.53
pm
Mr
Mike Weir (Angus) (SNP):
Thank you, Mr.
Streeter. I will not detain the Committee for long, but I have a couple
of queries about the regulations.
The oil and
gas industry is vital to my part of the world, but so is a clean marine
environment, because there are many competing uses for it ranging from
industry to fishing. The explanatory memorandum says:
“The
Oil Regulations 2005 currently define ‘offshore
installations’ to have the same meaning as it has in section 44
of the Petroleum Act
1998”
and
that no proposal is made to change that definition. Can the Minister
assure me about what that definition covers, because the marine
environment in the North sea is changing greatly? Where once we just
had oil and gas rigs, now large offshore wind farms are being
planned—three off the coast of my constituency alone, both
inshore and in deeper waters. Rather than extracting things from the
North sea, there are plans to put things into it through the carbon
capture and storage project that is being developed at Longannet in
Fife. That will use old aquifers and oil fields in the North sea for
storing carbon captured from the plants. Carbon dioxide is stored in
that manner, so it would seem to be a chemical that would fall under
the regulations. I would like some reassurance that the regulations
will cover those installations. Although such developments are moving
fast, it may be some years before a lot of them are operational, but if
they are not covered by the regulations, we will have to return to them
to offer protection to the marine environment from such
installations.
As the hon.
Member for Ogmore said, the regulations are due to come into force the
day after they are passed. I understand the reason for that, but can
the Minister assure us that sufficient discussions have been held with
the oil and gas companies, and that they all understand their
obligations from day one. Has any thought been given to discussing the
regulations with the wind farm operators and those responsible for the
new carbon capture and storage project, so that they also know about
their new
obligations?
4.56
pm
Charles
Hendry:
This has been a surprisingly wide-ranging debate
in relation to the rather narrow focus of the regulations.
The hon.
Member for Ogmore started off by referring to Groundhog day. I am not
sure what the official flower is for that day, but I am sure that there
will be one in collection boxes on the streets around the country. At
times, it seemed rather more like the film “Face/Off”, in
that people had the face I recognised, but there was a different person
behind it, because the hon. Gentleman gave a brilliant speech for a
Government Minister to say how well the industry had been doing over
the past year, the great improvements that had been achieved in 2010,
and how things are looking even more promising as a result of policies
that we are pursuing. I would very much like to agree with everything
that he said in that respect. It is a very encouraging time for the
North sea, we are seeing extremely high levels of interest, and the
extent to which new players want to come in and be an important part of
that future is extremely positive. As he said, this is a matter of our
direct national interest, not just in terms of our energy security,
because we have an obvious national interest in extracting as much oil
and gas from our own resources as we possibly can, but, as he rightly
pointed out, in terms of the impact on the Exchequer. I warmly welcome
his contribution, and I know that many others will be pleased to hear
what he said.
The hon.
Gentleman made his comments in the context of the Gulf of Mexico
incident last year. I know that there is no difference between us in
our belief that Britain has in place some of the toughest safety
regulations anywhere in the world. Norway and the UK would share that
view in terms of how the North sea is governed. The way in which the
European Commission has looked at our system and recognised it as the
gold standard to which the rest of the world should aspire is
encouraging. The presidential commission response to the Macondo
incident also referred to the safety measures that are in place for the
UK continental shelf and in the North sea more generally, and said that
the American system should respond to those measures.
Our system
developed post Piper Alpha, when we separated licensing from safety
regulation. As the Government Department responsible for licensing, we
are not involved in safety regulations. That is done independently
through the Health and Safety Executive, although we are responsible
for environmental matters. That change has put this country in a good
position.
In the light
of evidence, we decided to increase the number of inspectors, and the
number of inspections that take place annually. We are now considering
the responses from the United States to see whether there is anything
more that can be done. We are absolutely clear that if there is more we
can do, we will not be complacent about acting in the national
interest.
I was even
more surprised when “the Minister” started quoting
favourably Donald Rumsfeld, which was not what I had expected to hear
from
a—
Huw
Irranca-Davies:
It was not meant to be
favourable.
Charles
Hendry:
Well, it seemed to be at the time. The hon.
Gentleman referred to “unknown knowns”, which even
Mr. Rumsfeld did not go into. Obviously, if there
are things that are unknown to me, I do not yet know
about them, but within the Department we have a clear policy that
Ministers will be made aware of relevant issues. There is absolutely
nothing that I have seen that would give me reason to believe that
issues are not being addressed properly through the regulations before
us.
The
regulations are specific, and make a small change to the previous
regulations, but it is right that we should implement them as quickly
as possible, having become aware of the discrepancy. I am grateful for
the support for their quick introduction from the hon. Gentleman and
the hon. Member for Angus.
The hon.
Member for Ogmore asked about shared access. That in itself will make
no difference because the companies involved in this area have a legal
responsibility to advise us of any leakage, be that deliberate or
inadvertent. Unlimited fines can be imposed on them for breaching the
rules and regulations. The fact that they may be sharing the space with
wind operators should make no difference whatever to their
responsibilities.
We
are looking at how to strike the right balance in the use of the seabed
by oil and gas companies and renewables companies, and changes are
being made through the Energy Bill, which is in the other place and
will be coming before this House shortly.
The hon.
Gentleman asked whether safety standards apply equally to large
organisations and small companies. They will absolutely apply to
everybody. As I said, there is a legal responsibility on any company to
inform us if there is a leak, no matter how small. We have the ability
to inspect at very short notice, so we can keep a close eye on what is
going on. There is also the ability to impose unlimited fines on
companies for breaching those rules. One should also remember that even
those companies that we consider small are multibillion-pound
companies. They may not be major international oil or gas companies,
but they are all very sizeable companies with significant regulatory
departments to make sure that they adhere to any regulations that are
in
place.
Huw
Irranca-Davies:
I thank the Minister not
only for his generosity in giving way but for his detailed answers.
Where there is a fault in a pipeline that has been leased by one
operator to another because it is redundant for the first
operator’s purposes, and an unintentional leak ensues, which
company is held responsible: the one with exploratory rights that is
actually pumping the oil, or the one that owns the pipeline? What has
been the experience of previous prosecutions in this
area?
Charles
Hendry:
My understanding is that it is the operator who is
using the pipeline infrastructure and installations who has the legal
liability. [Interruption.] In fact, the legal responsibility
rests with the pipeline operator, not the user of it. I apologise if I
was inadvertently in the process of misleading the Committee; I was
rescued just in
time.
The
hon. Gentleman asked about safety training. We should celebrate the
contribution that Britain makes in terms of global safety standards and
training. OPITO is internationally recognised. The international
offshore safety standards are those that are set in Britain. It is not
just OPITO, but other operators, some of them
charitable training organisers, who are at the peak of world performance
in terms of delivering high levels of safety training. I know that from
what I have seen going offshore and talking to the industry. The UK had
that before the Gulf of Mexico, but it has been enhanced even further
since. The principle of safety runs through everything that the
industry does. One of the most important points is that the
installation manager is in absolute control of what goes on. Even
though he may have his global chief executive on his rig on a
particular day, the installation manager is still the one who decides,
in an unchallengeable way, whether that rig operates or stops. That
single point of decision making has not always been evident elsewhere
in the world. That person has an absolute obligation to maintain
safety.
We
have also been looking at what more we can do to protect people who
blow the whistle because they are concerned about safety operations on
the installations on which they work. Partly in response to the Select
Committee, which highlighted this issue, we are seeing what more can be
done to ensure that people who feel it necessary to draw attention to
areas where safety is not as good as it should be can do so knowing
that they will not be personally affected by having expressed that
concern.
The
hon. Gentleman asked whether I can be completely confident that there
is no likelihood of a legal challenge. I take the view in politics that
one should be wary of being completely confident. We have taken every
feasible step to ensure that this is watertight. That is why we took
the measure back and reintroduced it today, to make sure that we could
respond as effectively as possible to something of which we had become
aware. There has been full consultation. We have written to all the
companies involved—as I said, they are large players, even if
they are not the biggest players in the world—and they actively
engage with representative organisations, and we have involved them in
the process, too.
The hon.
Gentleman asked how many prosecutions I expected. I hope that there are
none at all—that should be the aspiration—and I would not
consider one or two a year as good as it ought to be. We hope that by
tightening the standards we achieve a position in which there are no
prosecutions. He asked what would be an appropriate defence in court.
The grounds are very narrow, and would arise only if the company could
not reasonably prevent the emission, or it was done as a matter of
urgency to secure personal safety. I hope that he will understand why
it would not be appropriate to set out a raft of conditions, because in
every court case people would be popping up, saying, “The
Minister indicated this,” which would impede the independence of
the judiciary in dealing with the matter. As I have said, unlimited
fines can be imposed, and historically, that situation has applied in
the United Kingdom.
The hon.
Gentleman asked about the situation in Wales. The measures that we are
enhancing today apply from 3 miles offshore with regard to Wales.
Within that 3-mile distance, it is a matter for the Welsh Assembly
Government to decide whether it wishes to put in place similar
measures. By definition, however, most of the work we are looking at
will be further out at sea, and as he suggested, often in deeper
waters.
The hon.
Member for Angus, who speaks with great authority on these matters,
asked about the 2008 regulations. Regulations evolve, and in the Energy
Bill, which is
going through the other place, we are looking at the nature of
regulations and whether they need to be changed to take account of
carbon capture and storage, and reverse flows through pipelines, to
ensure that different challenges presented by that new activity are
addressed. This is not entirely without precedent, because we have used
enhanced oil recovery mechanisms in UK waters in the past, and reverse
flows have been taken into account in some of those measures. However,
the process is constantly re-evaluated, to make sure that, as new
processes and procedures come into play, the regulations are up to
speed to deal with that.
Mr
Weir:
I understand what the Minister is saying, but I am
slightly concerned, because CCS requires long-term storage underground.
What is the definition of “installation” for a CCS field?
The installation—where it goes in in the sea—is
obvious—but what about leakage from the storage cavern
itself?
Charles
Hendry:
The regulations apply to gas unloading and
storage, and to carbon dioxide storage activities, so we are taking
account of that. Whatever the nature of a pipeline for some sort of
installation—it does not matter whether it is an installation
primarily established for extraction or, in future, for pumping in
below the seabed—it will be affected by the regulations. If new
activities are developed that would require a tightening of those
regulation to make them more specific, the hon. Gentleman can be
reassured that safety is paramount in our consideration, and we would
not hesitate to act further if it became evident that those activities
required new regulations.
The hon.
Gentleman also asked about our discussions with the oil and gas
companies. Oil and Gas UK is the primary representative body for most
of the companies involved, and we have actively engaged with it to
ensure that we take account of its concerns. As I said, that has not
resulted in any change to the regulations themselves,
but we have adapted the guidance notes to ensure that those concerns are
taken fully into account. One final point is that carbon dioxide
storage permits will apply to the storage complex, which includes the
reservoir and not just the infrastructure. I hope that that provides
even greater reassurance.
Huw
Irranca-Davies:
May I pick up a point made by the hon.
Member for Angus? While I accept that the Minister has had extensive
dialogue, right up to this late hour, with the oil and gas industry,
has he had similar conversations with those involved in potential
carbon capture projects? Are they aware of the implications of the
measure, and the need rigorously to apply it to their operations, as
they will need to factor that into their economic and financial
models?
Charles
Hendry:
The changes with regard to CO2 and CCS
were made in a change to the order last year. Before that was done,
there was detailed consultation with the industry. As we have seen,
relatively few key players are involved in that sector, and they were
fully aware of the changes, which are fully in force. I hope that that
deals with the issues that have been raised, and that we can approve
the proposed regulatory changes.
Question
put and agreed to.
Resolved,
That the
Committee has considered the draft Offshore Petroleum Activities (Oil
Pollution Prevention and Control) (Amendment) Regulations
2011.
Draft Offshore
Chemicals (Amendment) Regulations
2011
Resolved
,
That
the Committee has considered the draft Offshore Chemicals (Amendment)
Regulations 2011.—(
Charles
Hendry.)
5.11
pm
Committee
rose.