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Lord Pearson of Rannoch: My Lords, surely the noble Lord has mixed his metaphor. Surely the tide is Europe. King Canute eventually had to withdraw. Surely that is the position which this country is up against. We are Canute and we are up against the tide.
Lord Lucas: My Lords, my noble friend is right. We are Canute. We are the King who realises that he cannot withstand the tide and must take the necessary action of retreating up the beach to deal with it. The courtiers are our friends in Europe who are trying to assure us that Canute has only to tell the tide to turn and it will do so.
Perhaps I may give the noble Lord, Lord Barber of Tewkesbury, a little comfort on one question. He mentioned reports that the proposed cut in arable area payment is about to be aborted. Cutting aid is not easy, but I am confident that when the Agriculture Council returns to the subject later this month Ministers will recognise the logic of the Commission's proposal. I hope that I do not have to swallow those words in a month's time.
We fully agree with the Committee that there are considerable advantages at home and in the World Trade Organisation for mapping out the required changes early. As the committee's report neatly and correctly notes, it is unfair to expect the central and eastern European countries to move towards a CAP which is effectively a moving target. As the noble Lord, Lord Brain, said, they are also faced with a block on inward investment and domestic entrepreneurship as a result of that uncertainty. We also feel that the Community will strengthen its hand in the next round of WTO negotiations on agriculture if it has a clear vision of its future market-led agricultural policy.
There are great benefits to the course which we are advocating, but there are of course potential disbenefits too. Taken by themselves, and if implemented too quickly, such reforms would be likely to result in unduly rapid changes in the countryside and a risk in some areas of a declining rural population. That would not be acceptable to us, let alone to our partners in Europe. A reformed CAP is therefore likely to require a period of transition, perhaps with some temporary financial assistance to help farmers to adjust to the new situation. It will certainly require a greater emphasis on social and environmental schemes.
I should like to make a number of points about such schemes. First, we are already familiar with them and within their limitations they appear to work well enough. As the committee says, a good measure of subsidiarity is required. Such schemes have to fit closely the needs and cultures of the particular communities that are to benefit from them. That point was highlighted by
There may be some scope for a change of name as the common agricultural policy moves in that direction. The noble Lord, Lord Beaumont of Whitley, might prefer it to be the "Common Holistic Environmental and Agricultural Policy"--or CHEAP, which I do not think that it would be. Others might prefer it to become the "Common Agricultural Rural Policy", which would enable my noble friend Lord Pearson of Rannoch to "carp" at it. I am sure that the Liberal Democrat Party would like to go further and make it the "Common Rural and Agricultural Policy", but I shall leave that matter to the Liberal Democrats.
Progress has been painfully slow and late and may well continue to be that. There is a great deal to be done. The noble Lords, Lord Gallacher and Lord Carter, mentioned the agrimonetary review and EMU as having an effect in that area. We shall need to be steadfast in our determination to press the case for reform. We shall need to listen carefully and sympathetically to the ambitions which our European partners have for the CAP. We shall need to present proposals which are well researched, logical and lucidly expressed. In other words, we shall need to follow the example set by Sub-Committee D.
Lord Middleton: My Lords, I thank noble Lords who have participated in this debate. I am touched by the kind words that have been said. I am grateful to my noble friend Lord Lucas for his kind words and for the manner in which the Government received our report. After listening to my noble friend, I am confident that the UK Government will continue to give the lead among member states in the drive towards the enlargement of the European Union and the reform of the CAP, which is a prerequisite.
I believe that the Commission is thinking along the right lines. Manifestly, it is anxious about the response from the Council of Ministers to any proposals which are radical enough to be effective. In that endeavour Mr. Fischler and his staff will need all the help that they can get. I commend the report to the House.
The noble Lord said: My Lords, perhaps I may start by saying that I am sorry to learn that the Minister responsible for energy matters is indisposed. I wish the noble and learned Lord, Lord Fraser of Carmyllie, a speedy recovery and welcome the noble Baroness, Lady Miller of Hendon, in his place.
The inquiry which was originally set up just over a year ago proved to be particularly timely. There have been significant changes affecting the exploitation of our oil and gas reserves around the United Kingdom since the subject was considered by the Select Committee on Energy in another place in 1991. In May 1995, a couple of months before our call for evidence was issued, the Department of Trade and Industry circulated for comment a consultative document entitled Abandonment of Offshore Installations and Pipelines under the Petroleum Act 1987. That was shortly followed by the highly publicised Greenpeace campaign against the sinking of the "Brent Spar", a floating oil tank and never a fixed installation, in the deep waters of the Rockall Trough off north-west Scotland. Our inquiry was not a post-mortem into the "Brent Spar" episode, although inevitably there were useful lessons to be drawn from the difficulties which arose.
Before I comment on our findings and recommendations, I should like to put on record my heartfelt gratitude to all members of the committee who gave me and our clerk, Mr. Vaughan, such marvellous encouragement and backing. We were very fortunate to have the experience and knowledge of our two co-opted members, the noble Lords, Lord Lewis of Newnham and Lord Tombs, and of our specialist adviser, Sir Anthony Laughton, Fellow of the Royal Society and a world renowned oceanographic consultant. Dr. Bradshaw, the committee's special assistant, also made a most valuable contribution. Both Mr. Vaughan and I were on our maiden run as committee clerk and chairman. I am most
Our thanks are of course due to the many witnesses who responded both verbally and in writing to our calls for evidence. Some committee members visited the "Beryl Alpha" platform owned by Mobil North Sea Limited. We were most ably looked after by our hosts, who included the Beryl area manager, Mr. Neil Duffin, and Mr. Andrew Sneddon, their senior staff environmental engineer. We are most grateful for all the trouble taken to make this very well organised visit so worth while and informative.
As an aside, "Beryl Alpha" is a 90-minute helicopter ride from Aberdeen. It stands in 120 metres of water and weighs in excess of 520,000 tonnes. It is far from being the largest North Sea structure. It is mainly fabricated in concrete and when decommissioned will almost certainly have to be left permanently in place, apart from the topsides which will be lifted off and brought to shore for disposal.
The scale of development of the North Sea's oil and gas reserves is now massive. There are approximately 440 rigs in the entire North Sea, half of which lie in the UK sector. Many of these lie in the relatively shallow waters of the southern North Sea, and modern floating cranes and barges are man enough to lift and remove these shallow sea structures to shore for dismantling when they have been made redundant. The problems we face lie with the 50 or so massive deep water installations in the hostile environment of the northern North Sea, together with the large amount of pipelines (around 10,000 kilometres in the UK sector alone) and the oil and mud pile cuttings which are a necessary concomitant of oil drilling.
Our report describes the various types of structure and the ways in which they could be dealt with on decommissioning. As noble Lords will have noted, there is much in our report which has been welcomed and supported by the Government in their formal response. They will have been able to take account of our recommendations in their guidance notes for oil and gas installations following the consultation process they initiated some 18 moths ago. I hope that in her response to the debate the Minister will be able to bring us up to date with this document.
One of our principal recommendations, after careful thought and discussion, was that it would not be right to rule out of consideration the possibility of sea disposal of a structure. Would it not be perverse to rule out sea disposal before considering any of the factors for an installation which has been in the sea for half a century or more? Indeed, some of the very heavy gravity structures like "Beryl Alpha", which rely on their massive weight and grouting to the seabed to hold them steady during their working lives, will never be removed.
The arguments we heard for and against disposal at sea and our conclusions are fully set out in our report, so I shall not rehearse them now in detail. The key point is that, whatever option is selected, it should be based on an open and transparent selection of the best practicable
Some witnesses suggested that the case-by-case approach would not take account of any cumulative effects of the decommissioning process. However, because there is such a variety of rigs and installations, and because decommissioning operations for large structures in the difficult waters of the North Sea are still in their infancy, we recommended that the case-by-case approach proposed in the IMO guidelines of 1989 and the Government's own draft guidelines should be maintained. Perhaps for the avoidance of doubt the phrase "case-by-case" should, I submit, not exclude considering the cumulative effects of disposal operations.
We further recommended that the Government should seek to restore international agreement and extend international guidelines to cover pipelines and wastes arising from drilling operations based on a BPEO approach. Without international consensus it would be very difficult for the oil and gas industry to make long-term plans or to estimate the costs of decommissioning--clearly not a satisfactory prospect for them. I shall be interested to learn what progress has been made in this important area.
Let me now turn to two points where the committee and the Government do not appear to be quite of the same mind. The first concerns the committee's recommendation that for any deep sea disposals planned in the future the Government should define the criteria for an ecologically acceptable area in the UK waters within which, subject to BPEO analysis, they will allow the sinking of installations. We believe that the expense of identifying several different sites and the difficulties for government (and hence the operators) of getting widespread public and international acceptance of a number of sites point towards trying to find and select a single suitable one. Moreover, the ongoing cost of the necessary monitoring of disposals would be greater if more than one site were to be used.
In their response the Government acknowledge the possibility of reusing a selected site, but then argue that it would not be sensible now to define one ecologically acceptable area for the disposal of installations and rule out the possibility that other sites could be more suitable in a particular case. In the light of the Natural Environment Research Council's report commissioned by the Government and chaired by Professor John Shepherd, I hope that the Government will think again about their attitude to our recommendation. The Shepherd group found that:
My second point refers to the Government's rejection of our recommendation that in situ remains of an installation should be marked by a light or buoy. I acknowledge the Government's point that the function of a buoy is to mark a hazard to navigation and that submerged remains of decommissioned structures will be marked on charts. However, our recommendation came from evidence which we received from the Scottish Fishermen's Federation. It pointed out that there is a real hazard to its members who may be capsized if their nets are snagged in underwater remains, even those at the legally allowed 55 metres or more below sea level. I hope that the purest argument about the navigational purpose of a buoy will not be allowed to override the fishermen's real concerns about hazards to their safety.
Finally, although we did not go so far as to make it a formal recommendation, I wish to draw the attention of the House to the problem of long-term liability for remains. When we asked Mr. Eggar, the then energy Minister, about that he stated in evidence that after consultation with the oil industry the Government had come to the conclusion that the liability should be left with the industry. Of course, one can understand government being uneasy about taking that on, but I believe that there is a real issue here which must be gripped some time in the future.
It is not too soon, as we start to see rigs being decommissioned and face the prospect of some of these structures remaining in situ for perhaps hundreds of years, to be giving the matter more active thought. Nor should we overlook the 10,000 kilometres of pipelines lying on the seabed and the large piles of drill cuttings and other wastes. Those could become sources of longterm pollution, perhaps ever more troublesome than the abandoned structures themselves.
Today's industry is financially sound and strong, but will its successors in title be equally well founded? Ultimately the risks inherent in abandoned facilities may affect the health and safety of human lives. Government will not be able to avoid shouldering some responsibility for safeguarding international safety at sea. Requiring today's owners to pay government a sufficient sum to insure against a potential liability some time in the future would seem to be a prudent course of action.
In commending the report to the House, I wish to conclude by underlining our support for the concept of the best practicable environmental option when considering and approving the choice for disposal of installations. Your Lordships should remember the importance of the key word "practicable" in this
At the end of the day there will be a measure of human judgment in that decision. Risks, where they are quantifiable, can and should be measured, but some cannot and those with the greatest experience and scientific and engineering knowledge of the structures and their hostile environment are those whose advice should be given greatest weight by Ministers who have to approve and, if necessary, defend their decisions in public. I beg to move.
Lord Campbell of Croy: My Lords, I wish to thank the noble and gallant Lord, Lord Craig, for his clear and comprehensive introduction of the report and its main conclusions. I shall make some observations which I hope will be helpful because, in general, I agree with what is in the report.
Offshore oil and gas still form a comparatively new industry for the United Kingdom. The oil was first discovered only 26 years ago in 1970 and the first oil was extracted from the seabed only 21 years ago in 1975. I venture to make my modest contribution to the debate because I was closely involved in those early days; I was Secretary of State for Scotland from 1970 to 1974 when oil was discovered in the North Sea. The Department of Energy was not created until 1974. Later I served in a non-executive capacity with a major oil company which has been the operator of one of the largest fields in the North Sea. I retired some time ago but I still follow offshore activity with close interest.
The structures which pose the difficult problems are the platforms. At times they are referred to as "rigs" but that can be confusing. Drilling rigs used for exploration are mobile and move around in their work. They are not rooted to the seabed when their working lives come to an end. The top sides of platforms, consisting of the operating and living quarters supported above the surface, should be removable when no longer needed without great difficulty. However, the jackets, which in the North Sea are mostly steel structures but a few are of concrete, are another matter. Some in the deeper water are gigantic and their eventual fate will need very careful consideration.
The core legislation in this country was the Petroleum Act 1987. Some of us took part in the debates in this House during the Bill's passage. At that time I was chairman of the Advisory Committee on Protection of the Sea, a non-governmental organisation with international membership. The principle enacted in that Act was that each redundant structure should be considered as a separate case, as recommended by the International Maritime Organisation. Later guidelines from the British Government have confirmed, elaborated and clarified procedures. Guidelines have also been formulated on water clearance to be left above partially removed installations. For reasons of safety and navigation, clearance of at least 55 metres of water
We should remember that oil provinces discovered offshore before those in the North Sea--for example, in the Gulf of Mexico and in Lake Maracaibo in Venezuela--were in relatively shallow waters. When their first platforms became redundant they could be removed completely without great difficulty. In contrast, the most productive fields in the North Sea were in much deeper water and the latest technology from American and international companies, and advances in that technology in the early 1970s, were required to build the giant platforms which were needed.
The fields now being developed west of Shetland are in even deeper water. Fixed platforms of even greater size to serve them are not practicable. Other sophisticated techniques are being devised; for example, special vessels on the surface controlling operations and the remote control of installations on the seabed. Those systems are less likely to raise serious problems on abandonment of the fields and that augurs well for the future. It is also consonant with the IMO's recommended standard that from 1998 onwards all new installations should be demonstrably removable when they are redundant.
The subject of decommissioning and disposal became front-page news last summer with a chapter of the unfinished saga of "Brent Spar". Unfortunately, the impression was given by the media, unintentionally, that that was an example and a precedent for the disposal of platforms. "Brent Spar" was referred to continually as a platform, which it is not; nor is it a rig; it is a storage buoy, floating and moored to the seabed. It does not contain drilling or other equipment for operating a field. Its purpose was to store oil for loading into visiting tankers.
Furthermore, there have been very few of those floating storage buoys on the British Continental Shelf. I believe that there has been only one other. However, platforms, of which there are about 150 on the British shelf, are standing on the seabed, many pile-driven into it, although some recent ones have a flexible tension-leg system. Their main functions are different and the storage of oil--the whole purpose of "Brent Spar"--is not one of them.
Another mistake made widely last year was in reporting that the "Brent Spar" was to be dumped in the North Sea. On hearing one such statement in a BBC broadcast I telephoned immediately to point out the error. An apology was made and I was told that the mistake would be corrected in future bulletins. I find it sad that in a maritime nation, which we are, the difference between sinking an object to a depth of a mile or so in the deep Atlantic Ocean, far from land, as was the plan, and discarding it in some 400 feet of water in the North Sea is not sharply apparent.
The saga is unfinished. "Brent Spar" is still lying in a fjord, the Norwegian Government having extended the period originally agreed to July 1997. Shell has received 30 outline plans for its disposal from 19 contractors and consortia. Those plans include both sinking in the deep ocean and dismantling on or beside land. The second option entails many additional health and safety factors.
As paragraphs 3.41 and 3.42 record, in decommissioning, attention must be given to drill cuttings, which are likely to include oil and chemicals. They are normally produced by drilling processes and collect in piles or layers at the feet of platforms. They could be sources of contamination if not neutralised. They could be stirred up and spread when the bases of platforms are being uprooted for removal.
I should like to make a few comments on the effects on sea fisheries. While platforms are in place, there are no-go zones around them, usually of a radius of 500 metres. Fishermen's organisations are greatly concerned about the effects of decommissioning on their fishing operations, not only from the stumps or abandoned lower sections of structures but also from the chemicals, oily cuttings and pipelines. I believe that the last two can be neutralised; for example, by removal or covering over. On structural remains left on the bottom and well below the surface there will inevitably be controversy, although they are likely to be authorised only in deep water.
I shall try to convey what I believe is the attitude of fishermen's organisations. The Scottish Fishermen's Federation, to which the noble and gallant Lord referred, represents about half the tonnage of all British fishermen and is certainly a very influential body which I believe normally takes sensible views.
It has been pointed out that the remains of a platform can form an artificial reef which can encourage the multiplication of fish. That has been effective in other parts of the world in shallow waters. However, I suggest that that is appropriate only in certain areas of our Continental Shelf.
The reason for that is that an important part of our fishing fleet--the boats that trawl for demersal fish on or near the seabed--would find the truncated structures to be additional obstacles. There are already wrecks of ships forming obstacles whose locations fishermen must know and take into account. Those fishermen would not welcome more obstacles on the seabed likely to damage their fishing gear on what had been productive fishing grounds in the past. In other words, avoiding obstruction to their normal fishing methods is as important to them as increasing the numbers of fish by creating artificial reefs.
I am speaking mainly of the larger boats--those which form the substantial core of our fishing fleet and make voyages of several days, often travelling far from their home ports. Those not engaged in the specialised pelagic fisheries of herring and mackerel are bringing to market the white fish which swim near the seabed; for example, cod, haddock, whiting and flat fish. Their fishing operations involve movement. Their engines propel them so that their trawls or seine nets are extended and pulled behind them. They are looking for
I have kept in touch with fishermens' organisations for many years on this and other subjects. Perhaps it is fitting for me to speak on these fishery considerations today. I established a body bringing together fishermen's organisations and the offshore oil industry and others expressly to examine jointly the swift course of developments in the North Sea when oil was first being discovered way back in the early 1970s and when I was the Secretary of State concerned. I believe that, with full consultation, acceptable solutions can be found to suit different parts of the sea and the seabed. That can be done within the policy of authorising decommissioning separately for each individual case, a policy which I continue to support.
Lord Gregson: My Lords, I too thank the noble and gallant Lord, Lord Craig of Radley, for his very able chairmanship of the sub-committee which produced this excellent report. I also thank the clerk to the committee for the determined way in which he kept us to the subject.
What intrigued me most about the inquiry was that when we started it, the proposed disposal of the "Brent Spar" was a recent event and the considerable antagonism associated with it was still in recent memory. As the inquiry proceeded, the calm and detailed examination in the committee room showed slowly but surely that the protagonists were not so far apart compared with the rhetoric which was generated at the time of the "Brent Spar" problem.
In giving evidence, Greenpeace accepted that concrete structures could be disposed of at sea since they in fact mimic the materials of the seabed but they need to be thoroughly decontaminated before disposal. As that concrete is half the mass of the rigs in the deeper waters, it makes a very large inroad into the problem of disposal. However, it thought that the remaining steel parts and steel rigs should be brought ashore and recycled for scrap.
Personally, I can see no ecological problem with disposing of steel in the deep sea since many billions of tonnes are already under the sea as a result of two world wars and many thousands of shipwrecks, with no apparent damaging effect. In fact, steel is protected in deep water because oxygen is excluded. A fine example of that is the images which were generated by Bob Ballard when he investigated the "Titanic" and several other vessels in the sea. In fact in many cases the structures were almost as good as when they were launched, probably better.
On the other hand, there is a growing shortage of steel scrap due to the changes in the manufacturing process of steel production--the so-called "minimill process" which is rapidly spreading throughout the developing world. Those minimills are fed entirely from scrap and avoid the costly and large-scale smelting of iron from iron ore. There is, therefore, a strong case for recycling the steel from the off-shore rigs. As the noble Lord, Lord Campbell, said, several of the shallow rigs have already been brought ashore and recycled.
Unfortunately I am highly suspicious of the £3,000 to £4,000 per tonne quoted by the off-shore operators for bringing scrap from these deep-water rigs ashore to be recycled, especially when one considers that a scheme is being proposed to salvage some of the many U-boats scuttled in deep waters after the Second World War, in order to recover the scrap for recycling.
I believe that much more work needs to be done to determine the feasibility of recycling steel from the deep water rigs. It is apparent to me that, given a reasonable degree of compromise, the problems of disposal of off-shore rigs can be solved. I believe that this report points the way.
The Earl of Selborne: My Lords, like the noble Lord, Lord Gregson, I was a member of the Select Committee which undertook the inquiry. I join the noble Lord in expressing gratitude to the noble and gallant Lord, Lord Craig of Radley, for the way in which he chaired the committee and especially for the way in which he introduced the report today. As my voice is rather suspect tonight, I can be very brief because the noble and gallant Lord has said really all that needs to be said.
I should like to return to a very fundamental issue and it is one which informs the whole debate as to how one disposes of installations, be they rigs, platforms or whatever. First, when we come to dispose of such installations, should we always take the best practicable environmental option (BPEO)? Secondly, if we determine that BPEO is appropriate, then how, on a case-by-case basis, do we set about determining what is BPEO?
The first and fundamental issue arises from society's legitimate right to say that some areas of the globe are no-go areas. Whatever the assessment of risk and the assessment of environmental damage of alternative actions, we may decide, despite the fact that this might be the best practical environmental option, that: "We, society, in our wisdom determine that you shall not dispose of rubbish or no longer-needed installations in those areas". I suppose, when thinking where such areas could conceivably exist, one might think in terms of those cultures which use such areas for burial or they could be areas where sacred graves are located. Although there may well be sensible reasons for burying
I suppose that it is therefore conceivable that society might determine that the bottom of the ocean--or, indeed, all oceans--should become such areas. Indeed, during the kind of fiasco surrounding the debate on the "Brent Spar" there were indeed just such proponents. Presumably such proponents said that on no account should we ever again dump our waste at sea. I assume that they would have taken a more extreme view than Greenpeace took in evidence to us. They would have said that even those concrete installations could no longer be dumped at sea.
Of course we see a movement in that direction, although it has to be admitted that it is nothing like as fundamental. In a few years' time we shall no longer be allowed to dump our sewage at sea. Some people will still believe that the best practical environmental option would be to do just that. Indeed, those who have read the report on soils of the Royal Commission on Environmental Pollution recognise the great damage that will be caused by critical loads unless we manage to take the metal out of sewage. Nevertheless, we have in that instance, and for reasons which I still find difficult to understand, taken the view that sewage can no longer be dumped at sea.
However, I do not believe that society is anywhere near ready yet to contemplate the dire consequences of saying that no waste of any kind should ever again be dumped at sea. The implications for the exploitation of the marine resource would be quite horrendous. It would follow from that that many of the exercises that man undertakes when securing his livelihood would simply become impossible. Therefore, I believe that it is reasonable to assume that this fundamental approach--although people are quite entitled to debate it--is not one that society is anywhere near to sanctioning. It is clearly right and correct, as the report recommends, and as Professor Shepherd's committee recommended, that BPEO should be determined.
Then we have the issue as to how precisely one determines what is BPEO. Everyone must recognise that the exercise undertaken by the owners of "Brent Spar" was a fairly poor example of the implementation of BPEO. I shall not go into that because our report was not about "Brent Spar" although, as the noble and gallant Lord, Lord Craig of Radley, reminded us, clearly it was bound to be influenced by that episode. The report by Professor Shepherd which was undertaken on behalf of the Natural Environment Research Council was specifically about the "Brent Spar". I believe that that report makes it quite clear in what respects BPEO was defective.
The clear essential to be undertaken by physical scientists, engineers, economists and lawyers and others who undertake BPEO is to agree first of all a methodology on risk assessment. Unless there is an agreed methodology, there will always be arguments about the basis upon which the assessment is to be made. Then, on the basis of that agreed methodology, one needs to undertake a full assessment of the
The only area where anyone could put a knife between our report and that of Professor Shepherd is in our wording of "case-by-case" as opposed to "cumulative". I believe that the noble and gallant Lord dealt with the matter quite clearly. There is nothing in undertaking a case-by-case appraisal which suggests that one cannot also bear in mind the cumulative effects. Indeed, the Government's response to our report makes that very clear. I believe that it is perfectly appropriate for the cumulative effects to be considered on a case-by-case basis.
What then for the future? Clearly, before any new installations are put into the North Sea or elsewhere, we expect a cradle to grave environmental appraisal to be essential. No doubt there will be far greater transparency, openness and a shared consensus on the methodology involved in the future. However, I suspect that there will still be a role for confrontation. After all, it is perfectly open for members of society--perhaps some people would call them extremists, whereas others would say that they were ahead of their time--to wish to change people's attitudes to the basic principles under which we normally operate and behave.
There will be some people who believe passionately that we have a duty not to dump our rubbish and especially not to do so at sea. I hope that I may declare that I do not count myself as one of those people. I believe that there are still very good reasons, not least when considering the impact on human health and safety and, indeed, the impact on the terrestrial environment, why we should allow the options still to remain. However, I accept that confrontation will remain with us if we wish to allow people to put forward their point of view that, one day, we should no longer be allowed to dump our waste at sea.
Lord Nathan: My Lords, I add my thanks to the noble and gallant Lord, Lord Craig, who chaired the sub-committee. He kept us all in order which is not easy in a committee containing so many varied talents. It was easy to branch out into interesting but irrelevant matters. However, our chairman, with his charm and firmness, brought us back to the main purpose of the inquiry. The report, its form and its relevance to the matters under consideration, owe much to his excellent chairmanship.
I was interested to hear what the noble Earl, Lord Selborne, just said about dumping waste at sea. Many years ago I was chairman of the sub-committee of the European Communities Committee which studied the
Many years ago, as a member of the Royal Commission on Environmental Pollution, while undertaking a study of marine oil pollution I visited the Forties Field and the oil rigs. I, and I believe also my colleagues, were greatly impressed by the absence of pollution from operations and the abundance of fish sheltering there. In the course of this present inquiry, we discussed the importance and difficulty of dealing with drill cuttings. That raised for me new concerns. We were advised that cutting piles was likely to be the major source of hydrocarbon release from decommissioning operations. Apparently over time natural processes form a relatively inert top layer or cap over cutting piles. Therefore the process of removing, dismantling or toppling the main structure might break the cap and release hydrocarbons and other chemicals. Indeed, even the removal of the jacket above the pile might cause changes in currents and result in such releases. If the structure is removed, piles of some 100 feet in height will not only be a peril to fishermen and gear, but will result in extensive pollution if they are disturbed by fishing operations.
These are not issues which arose--and they could not arise--in connection with "Brent Spar" about which there was so much publicity. I believe there is little public knowledge about those matters yet they are clearly of the first importance in the whole subject of decommissioning, not least because the process of the removal could be held up until problems of dealing with drill cuttings have been resolved. We have made recommendations about research. In their response the Government have stated that they have commissioned research into the subject. That stemmed from an international meeting in 1995. I should be interested to hear the Minister tell us what progress has been made in the research which has been commissioned, and when it is expected that an outcome of the research will be available. I should also be interested to hear whether the Government are pressing for an early reply. For the reasons I have mentioned, I believe these are matters of great importance.
I turn for a moment to current licensing arrangements, on which we took certain evidence. We were told by many witnesses that "cradle to grave" design procedures were now well established. The Minister, Tim Eggar, told us,
As has been said, the International Maritime Organisation guidelines require that after 1st January 1998 no structure should be installed unless the design and construction are such that entire removal upon abandonment or permanent disuse would be feasible. That guideline falls far short of requiring any particular course of action to be taken, or indeed any action at all. Yet public expectation in the light of that guideline must be that the structure will be removed. The comment of the Minister which I have quoted reinforces that assumption.
It might be thought that the precise steps to be taken at the end of the structure's life would be prescribed in the original licence to install; but in further evidence the Minister seemed to feel that this was inappropriate as the long timescales indicated the need for flexibility as to the steps to be taken. Accordingly, determination of what is to happen about decommissioning would only be decided when this was to take place. I accept that this is a dilemma; but it seems to me that there would be much advantage in incorporating into the original licence full programmes for decommissioning which would be subject to public debate, according to BPEO as indicated by the noble Earl, Lord Selborne, and based upon the then known factors. There should be liberty for either the company or the Government, subject again to public debate, to consider proposals for amendment or radical change if circumstances at the relevant time were substantially different.
For all the good intentions of the companies and the Government, public confidence in each is at a low ebb particularly in relation to assessment of risk. It is risk which lies at the root of the need to decommission in an acceptable manner. A recent report issued by POST (the Parliamentary Office of Science and Technology) quotes University of East Anglia research which indicates that few people trust advice on environmental risks given either by government (the figure is 7.6 per cent.) or companies (the figure is 12.8 per cent.). Therefore I believe that public acceptance of further exploration and production can only be envisaged if there is public involvement as to decommissioning. Promises by government and companies will be of little use. The positive response of the Government to the report is encouraging but there remains much to be done. I very much hope that the Minister will say what the Government will do--and I wish this most of all--and when.
Lord Dixon-Smith: My Lords, I add my thanks to the chairman of the committee which produced this report. The noble and gallant Lord not only kept us in order but he also--this has not yet been commented upon--worked us to a strict timescale as he was under pressure to complete the report with limited time available in which to do so. It was hard work to keep us all in order. I also wish to place on record my thanks for the co-operation of the oil industry at large in this inquiry. The industry was most helpful to us all.
When I look outside this building I see a river that is lined with stone, concrete, brick and reinforced concrete from here almost down to its mouth. I can think of endless coastal towns protected by reinforced concrete sea walls. None of that causes any particular problems in the environmental field. Yet suddenly last summer a proposal to drop a large reinforced concrete structure into the deep ocean became a matter of high public controversy. One has to ask how this can be. How could what was thought to be a fairly straightforward, non-controversial matter suddenly expand into a major row? Fifteen months later, "Brent Spar" is still moored in a Norwegian fjord and time is running out. Of course that is a slight over-simplification of the story. Not least of the important issues in the report is how we handle matters in the future so that that kind of problem does not arise again. "Brent Spar" may not be a platform, but it is a precedent. It is a forerunner of 20, 30 or 40 years during which similar situations can arise.
For me, an important aspect of the report is not simply the environmental issue of how to dispose of those platforms. It is how to set about avoiding such controversies in the future; it is about public information and public knowledge; it is about bringing together the different approach which comes from commercial interest and public interest. In that instance the problems were exacerbated by an unfortunate inaccuracy in a statement by Greenpeace which was inevitably played up by some of the less responsible elements of the media. However, by the time that crisis arose it was too late to try to counter the argument with the real facts because public attitudes, which were conditioned by apathy initially, had not been prepared in any way. We have already heard mention of the suspicion of the public about government statements. In cases like the "Brent Spar" it is necessary to apply what I call a slow process of education. In that instance the real damage is to Greenpeace's future credibility; but that is a separate issue.
We need to be aware of the international aspect of environmental matters and green politics. In the final analysis what brought "Brent Spar" back to that Norwegian fjord was not the activity and action in this country but the consumer action in Germany and, more importantly, the rising tide of violence occurring there. We need to be aware that we are not discussing simply a national problem in all these issues but an international problem, and one with which we have to deal.
The best practical environmental option--it is a system which I support--in the case of "Brent Spar" was not known in detail to the public. The facts were not secret but they were unrevealed and had not been drawn to the public's attention so that again it was possible to play on public fears and to produce an unreasonable reaction. Indeed, one factor that arises is that public acceptability has to be considered as part of the best practical environmental option. The other lesson that we have to learn--it is not exclusively in this field that we have to learn it--is to trust the public with accurate facts and information. If we are not prepared to do so, we have to accept that this kind of crisis will
Another important aspect of the report is the need for the developing co-operation that already exists as regards future pipelines. We are discussing clearing platforms and the seabed. That is perfectly reasonable. However, those pipelines have a very different life and future from platforms. Platforms are established to deal initially with specific fields. As drilling technology develops, so the capacity of those fields develops. The platforms will continue in production for rather longer than was initially envisaged when they were built. Pipelines were built and installed to serve those platforms. But once they are installed they can then serve other fields which are developed subsequently.
The pattern of development has been to develop first the large fields which will stand the high investment required. That includes investment in the pipelines. However, on the back of that development smaller fields which are otherwise uneconomic to develop will be brought on-stream. We need to have particular regard to the fact that economic circumstances may well change over time. Small fields and small pockets of oil under the sea which are uneconomic at present are likely to become economic at some point in the future. If in our keenness to clear structures away we clear pipelines out of the way, we shall almost certainly guarantee that there will be no access to many of those small fields which are uneconomic at present. If the pipelines are preserved, much of the infrastructure necessary to make it possible to develop those fields will already be in place. We need a different approach on the issue of pipelines from the pure issue of disposal of rigs.
I shall revert to "Brent Spar" to this extent. This crisis and--if the noble and gallant chairman will forgive my saying so--this report arose out of the controversy that was generated by public ignorance; and that is where I wish to conclude. The best practical environmental option must include public acceptability. But public acceptability and public opinion are valid only if the public are well and accurately informed. Whatever else we do, we must take care to ensure that that takes place in future.
Lord Haskel: My Lords, perhaps I may add my compliments to the noble and gallant Lord, Lord Craig, on this study. As he told us, this is the first report that he has led as chairman and I must say that it was a delight to work under his leadership. Like the noble Lord, Lord Dixon-Smith, it is also to his credit that this is one of the quickest reports that the committee has ever produced. The noble and gallant Lord, Lord Craig, has given noble Lords the background to the report, and so there is no need for me to cover that ground again.
However, it will be interesting to look at some of the events that have happened since. Some time has passed since we reported in February and, as other noble Lords have said, in May an expert group from the National Environmental Research Council also reported on the decommissioning of "Brent Spar". It confirmed many of
I agree with the noble Earl, Lord Selborne, and the noble Lord, Lord Dixon-Smith, that one of the most important recommendations in our report concerns the consultation procedures in our paragraphs 4.10 to 4.13. In those paragraphs we are anxious that the best practical environmental option procedure should be open and transparent. Other noble Lords have made that point and so did the NERC report. We emphasise that the assessments should be open to peer review and that each case should be judged on its individual merits. Any proposed decommissioning should be announced in advance, and submissions from interested parties should be welcomed. It is important that the consultation should not simply be a public relations exercise; it should be capable of altering the identified best practical environmental option.
What was our reason for this? Our reason was the belief that the row over the disposal of the "Brent Spar" was partly caused by the secrecy surrounding the way the BPEO decision was taken. I agree with the noble Lord, Lord Dixon-Smith, that the secrecy was interpreted by the public as not taking their concerns into account. Unfortunately, the DTI added to the aura of secrecy by considering its discussions with Shell as "commercial in confidence". In reality, it was largely a matter of risk assessment. The DTI approved of sea disposal as the BPEO and then compounded the public's suspicion by attacking Shell for changing its mind at the last minute. I seem to remember government Ministers referring to Shell's directors as "wimps" for changing their minds.
The Government must realise that an important part of a BPEO decision is public acceptability, because people do not just automatically believe the Government any more. Politicians are losing out to consumers, as the noble Lord, Lord Dixon-Smith, told us. Shell understood this and, perhaps a little late, acted accordingly. The Government did not and were suitably made to look incompetent.
A further reason for openness is contained in the recent report by the consultants, Wood Mackenzie. They point out that the taxpayer will carry much of the cost of disposal and decommissioning by virtue of tax allowances. Wood Mackenzie estimate that in some fields this could amount to as much as 70 per cent. of the abandonment expenses. The noble and gallant Lord, Lord Craig, told us about the number of installations to be decommissioned, so the amounts of money involved are huge. Wood Mackenzie estimate that total decommissioning could cost about £8.7 billion. At a time when government tax revenues are seriously below estimate, this is an important consideration.
There are many ingenious ideas as to how "Brent Spar" can be brought onshore into a dry dock or floated in a horizontal position to ease dismantling. One suggestion is that it should be cleaned up and, with the installation of a wind-powered generator, turned into a desalination plant to produce fresh water. On 1st November, there is to be the first of several conferences where 30 of these ideas will be discussed.
However, an interesting development could extend the life of the rigs. Companies are emerging which specialise in extending the productive life of mature oil fields. These firms have lower operating costs than the large oil companies and can operate profitably on lower volumes. That has an impact on depletion and tax, but extending the life of the offshore fields allows more time to develop new and cheaper ways of dealing with the platforms.
The point I wish to make is that by such openness, not only has there been more understanding of the issues involved, but also the possibilities of the best practical environmental option have been widened from only considering contamination of air, land and sea to possible alternative use, recycling of the installations or extending their working life.
As other noble Lords have said, there is a large element of judgment in the concept of the BPEO. Opening the process to public discussion and scrutiny should ensure rigorous and rational consideration of the facts. It will help in the disputes between industrial companies and the environmental lobbies because ultimately a solution has to be found. This openness should assist the Government in regulating matters.
As we progress and discover new ways of extracting fuel, there will always be new risks to ourselves and to the environment. We need to be open about this trade-off between risk and progress. I agree with the noble Earl, Lord Selborne, that nowadays for technical progress to succeed it needs the confidence of the public. I hope that this debate will help to reinforce that.
Lord Soulsby of Swaffham Prior: My Lords, I too add my congratulations to the noble and gallant Lord, Lord Craig of Radley, on chairing the investigation. I joined the sub-committee not at the beginning but when it was about a quarter of the way through. As with all such investigations, there is a massive amount of data to digest. I admire the noble and gallant Lord's ability to make everyone digest it in the most appropriate way.
It is only two decades since we started drilling and recovering oil and gas from the seabed in the North Sea, often on the Continental Shelf, mostly less than 50 metres down but sometimes in much deeper waters. At present, there are of the order of 440 steel and concrete installations, of which 219 are in the UK sector. We learnt from the UK Offshore Operators Association that there are sufficient reserves to sustain significant levels of production of oil and gas for at least a further 20 years.
However, eventually--as with all fossil fuels--the supply of oil and gas runs out. Then the installations must be decommissioned and possibly disposed of. I am sure that all Members of the House have the booklet of the UK Offshore Operators Association which states that some 50 fields will be decommissioned in the next 10 years at a cost of approximately £1.5 billion. This is at present, and will be a major engineering and environmental challenge, as the report of the Select Committee states. Indeed, the committee has been an opportune study to bring together the present objective information and opinions on that information about decommissioning, as well as the more subjective opinions of those concerned with environmental and health issues.
The report will serve as a landmark in providing the basis of action in each case of decommissioning to decide the best practical environmental option (BPEO), especially for installations in the North Sea where difficult problems pertain and where large and heavy units are in deep water--compared with the decommissioning of shallow water installations, as in the Gulf of Mexico, where to date some 900 installations have been decommissioned. The BPEO includes an economic component as well as technical feasibility and the effects on the environment.
I was particularly drawn to the environmental issues and to the comments in the various evidence on the effects of decommissioning on the marine biota. This has been the concern of environmental groups such as Greenpeace, Friends of the Earth and others. However, I believe that NERC, the environmental research council, in its evidence, set the minds of many, and certainly my mind, at rest as to the minimal impact that deep sea disposal would have on the marine biota at depths of 2,000 metres and below where deep sea disposal is planned.
A suggestion from the Joint Nature Conservation Committee is that if disposal at sea were indeed the best practical environmental option, one deep sea water site should be chosen instead of dumping rigs all over the place. In such a case there is an opportunity to investigate a site to be used. The present scientific evidence is that it would lead to little or no pollution. In any case a single site could be kept under surveillance and monitored over a period of years.
There are situations where the marine disposal of installations, appropriately cleaned up, is beneficial to the marine biota in the formation of the reefs. The concept of "rigs to reefs" has been frequently practised in the Gulf of Mexico to great advantage.
All those points were made and were well received by the Government, with the exceptions mentioned, and by environmental groups. An important outcome of the report, mentioned by the noble Earl, Lord Selborne, the noble Lord, Lord Dixon-Smith, and others, is the transparency that is necessary in the decommissioning process to determine the best practical environmental option.
I believe that that has had an effect on the "Brent Spar" situation. I am sure that noble Lords have received from Shell an invitation for 1st November to practise a transparent opinion as to what should happen to that rig. The "Brent Spar" rig has very much focused our interest on this issue. It may well be that when the history of deep sea oil rigs and their disposal is written, it will be the signal marker of the start of a process of doing more research, which needs to be done, on the disposal of rigs in a deep sea situation. It is important that there is transparency and that people of many opinions have the opportunity to express interest in this issue.
Lord Gisborough: My Lords, I am amazed at the fuss made about the prospect of toppling fully prepared rigs into the depths of the ocean. There must be thousands of ships littered over the sea bed, all ill-prepared for sinking, many in shallow water, sinking with hazardous cargoes, full oil tanks and often stuffed with ammunition. Certainly there is nothing to be happy about, but they do little damage to the environment and it puts into perspective the sinking of a fully prepared rig into very deep water well out of the way of any underwater activity.
There is, however, no technical reason why even structures in our deepest waters in the north of the North Sea need to be toppled. I base that view on public comments made by offshore heavy lift contractors that such structures can be lifted, removed and returned to land, even those made of concrete.
Structures in shallow water are already being brought to land. That is being done in accordance with International Maritime Organisation regulations that all structures in less than 75 metres of water and weighing less than 4,000 tonnes must not be toppled but must be decommissioned and returned to land. That relates predominantly to the structures in the shallow southern North Sea. For instance, platforms have already been successfully removed from the BHP Hamilton Esmond field and the Conoco Viking field, and the Shell Leman BK platform is currently being removed. Furthermore, Esso is currently removing the "Odin" platform, which I understand to be in some 80 metres of water.
We must weigh the consequences of toppling structures, with the remote possibility of damage to the environment, against the prospect of bringing the structures ashore for decommissioning and thereby creating employment opportunities and having the advantage of enabling materials to be refurbished and recycled and thus overall reducing the depletion of natural resources.
It is important for us to realise the opportunities available for decommissioning rigs in this country and the advantage to the British economy, as well as ensuring that our seas and oceans are not environmentally disadvantaged.
On the face of it, cost might be considered the vital issue here. Ignoring any environmental issues, it may seem less costly simply to topple the structures than to bring them ashore and dismantle and recycle them. The main cost of bringing structures ashore lies with the removal and lifting of the structure from the seabed. The cost of dismantling equates with the value of the surplus parts, such as scrap, generators and so on.
Yards are therefore able to stockpile rigs and have a reservoir of work with which to keep their labour force occupied. Dismantling is therefore a valuable industry both economically and for the creation of some 500 jobs in one yard, provided there is a reasonably steady flow of rigs. Because a reservoir of rigs can be held at very little cost, those jobs can be fairly permanent.
If the structures are returned to land, the UK economy will receive a cost benefit from the job creation aspects and the material recycling savings. I have seen figures indicating that over 99 per cent. of materials are recycled from the structures brought back to land. So there is a strong case to be made that there are overall cost benefits and savings in bringing the structures back to land. I am told that the potential tonnage of material exceeds 10 million tonnes and the market value of onshore disposal is in the region of £3 billion. Those figures conflict with other figures mentioned; but whatever the figures are, they are very big.
The main onshore disposal yards are in the north east, which is why I am taking part in the debate. There is a large facility on the River Tees, in the north east of England, which can receive and successfully handle a significant proportion of the platforms that will need to be decommissioned, and there are other yards of rather less capacity. The Tees facility is large and well located for access from the sea and is in an area well away from
There is one serious competitor to the UK yards; namely, Rotterdam. There are also smaller yards in Norway and on the Tyne. With the desperate need for jobs in the north east, it is vital that the UK should aim to be a leader with the North Sea dismantling industry. There is therefore a strong argument against cluttering our seas and ocean beds with rotting structures and toward the option of maximising UK job creation and material recycling. I have no doubt that future generations would certainly support that view.
Lord Redesdale: My Lords, I too thank the noble and gallant Lord, Lord Craig of Radley, not least for on almost all occasions reminding us that this report is not just a synopsis of the events that took place regarding the "Brent Spar" but looks at the wider problem. It would be wrong to assume that the report was not prompted by the "Brent Spar" and the reactions to its disposal, but it has brought to light a much larger problem which will take many years to solve.
I hope the Minister will forgive me if I focus my contribution on the Government's response. On first reading the Government's response, I could not help but see it as an extremely positive and indeed generous document. However, I suspect that I am becoming quite cynical and I had to read it a second time. I was then struck by the fact that, although it is positive in nature, there are very few concrete plans and set financial commitments regarding future disposals of oil and gas sea installations.
I was heartened to see that the Government have accepted the idea that the best possible environmental option should apply to each individual rig. But I believe that there is an inherent danger associated with that; namely, the cost. As the noble Lord, Lord Dixon-Smith, pointed out, there must be as much information as possible made available about these installations and their disposal and I feel that only through open government will the public come to accept their disposal at sea. However, as anybody who has taken part in a planning inquiry--say, between a county council and a supermarket--will know, those with the most money will have the loudest voice.
I echo the sentiments of the noble Lord, Lord Gisborough. Coming myself from the North East, I feel that it would be wrong not to recognise the financial viability of bringing these structures to the North East to be scrapped. A very large industry will probably grow up in the North East and also in Norway to look at the options for disposing of the rigs. However, financial considerations should not be our only focus.
I was interested to note in the report that the differences between the options of disposal are not paltry. The difference between taking the cheapest and the most expensive option runs into billions of pounds. Indeed, on individual rigs the difference can run into hundreds of millions of pounds. It would be wrong to consider cost as the ruling factor.
I must admit that I entered the Select Committee feeling that dumping at sea was morally the wrong option. After noting the evidence that was given, I echo the view of the noble Earl, Lord Selborne, that dumping at sea should not be ruled out. In fact, in some cases that might be an environmentally sensible option.
But I also believe that it should be seen not as the first but rather as the last option. Financially it might be more expensive to bring many rigs to shore but their effect on the sea bed in the long term could be more detrimental. The changing nature of the financial position was pointed out by the noble Lord, Lord Gregson. The value of the scrap metal may change dramatically in the next few years. It would be ironic if, in the future within our lifetimes, we see salvage operations to recover oil rigs dumped in the deep sea undertaken because of the rigs' scrap metal worth.
Looking at the dumping option, I was surprised--this was brought about by the visit to Aberdeen--when the DTI indicated that its cradle-to-grave scenario in clearing the sea floor meant that it was looking at taking the structures off the sea floor and bringing them to the surface. That is where the guidelines stopped. It was a separate consideration from their next destination. That is perhaps the fundamental flaw which underlined a great deal of our discussion.
When looking at the scale of options, it is hardly surprising that many designs of oil rig are not considered worth shifting. But perhaps it is a measure of our arrogance that half a million and even one million tonne structures were put on the sea bed with, perhaps at most, a 30 to 40-year life span, which might in some cases be extended. It is quite possible that those concrete structures will be there for hundreds of years in the future if, as is quite likely, they are left without their topsides.
Another problem brought out by the report, which will be a legacy for the future long past the removal of the rigs themselves, was the matter of drill cuttings. Drill cuttings were not seen as a major problem when we started our inquiry. Indeed, I had no idea that they existed. The drill cuttings themselves are the detritus of the drilling process. Oil was pumped down into the wells to make sure that the drilling took place smoothly. The drill cuttings were then dumped over the side. It is interesting now to see some of the models of oil installations put on display by the oil companies with
I was surprised also, as I believe the noble Lord, Lord Nathan, pointed out in his speech, at how little research has been done into the drill cuttings themselves. A large amount of oil is trapped in the drill cuttings. There is of course an argument to say that it has not done a great deal of damage so far and therefore can be left; but it is also a fact that we are leaving on the sea bed a legacy for the future that may have serious environmental consequences over the long term.
I believe that the report gives a balanced viewpoint. The environment is dealt with adequately. There is obviously a compromise between the practical considerations, the economic viability in relation to moving structures, and the environmental considerations. However, the report points out that removing what has been placed on the sea bed over the past 30 years is a long-term consideration. It will be up to this Government and future governments to make sure that it is not an issue that is ignored.
Lord Dubs: My Lords, I too join in congratulating the Select Committee on producing an excellent report and the noble and gallant Lord, Lord Craig, on steering the committee to such an effective outcome. The report was good. It was clear and dealt with a difficult issue, though it was so effective that it made the issue seem less difficult than perhaps it is. The report will lead to more sensible, open and informed debate in the country--at least I hope it will. Though I was not a member of the committee, I learnt a great deal from reading the report and the supporting evidence.
I should also like to thank the many organisations that I approached for information, not to challenge the report but to update myself on what may have happened since it was published last February. Those organisations included individual oil companies--BP, Shell, Amoco and Kerr-Mcgee--the United Kingdom Offshore Operators Association and Greenpeace. They were all extremely helpful, as was the report of the Natural Environment Research Council published in April 1996 to which many noble Lords referred.
I should like to declare an interest in that I had the opportunity of visiting the United States this summer as a guest of the consortium of oil companies that operate in the North Sea. It gave me a chance to learn about the operation of oil companies in the United States and in particular a chance to look at the Gulf of Mexico where I visited one of the rigs. Of course, the situation in the Gulf is somewhat different--the waters are shallow, water extraction is easier bar the occasional hurricane, and the waters are less stormy.
I had the opportunity to discuss with people from the oil industry the "rigs to reefs" project, which is certainly popular with sporting fishermen in that it seems to be an effective way of enabling them to do their fishing and possibly--though this has not been proved--increase the actual amount of stock available. I do not know whether that would work in the North Sea; opinions differ on that. I should have thought that it would be worth doing a little more research to find out whether there is any potential for doing that in the different waters that exist in the North Sea.
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