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Lord Sewel: We are not talking about establishing the sea boundaries of a sovereign state. That is an entirely separate and different exercise.

Lord Fraser of Carmyllie: If the noble Lord will give way, I should be grateful if from time to time he listened to the argument. I understand perfectly well that we are not discussing that. I had thought that for a moment he might listen to an argument while appreciating that we deal with matters which are extremely complicated. The provision may only run to some 25 lines in Schedule 5 to the Bill but it engages us in all manner of complicated matters which take us into international obligations, conventions and the like. I appreciate that. All I have asked--I should be grateful if he were not quite so peremptory when serious points are raised with him--is that he considers them in some detail.

Lord Sewel: I apologise if I gave the impression that I was peremptory. I was not being peremptory. I sought to make the point as quickly as I could that we are not involved in the exercise that would be necessary if we were setting up something like a separate sovereign state of Scotland. That is not what we are about. I know that the noble and learned Lord recognises that.

I am well aware of the discussions involved, and the difficulties of deciding on lines. What we have fallen back on--it is more a practical way rather than one that is necessarily driven by processes which would normally apply to international law--is the basis of

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Amendment No. 173ZA to Clause 29 which we debated on Tuesday. That establishes the building block of Scottish waters in relation to fisheries matters. We build from that because we have to go beyond that, for instance, to areas of the UK Continental Shelf which extend beyond fisheries limits, in particular to the west of Rockall. The details of those discussions still need to be agreed and clarified. But we shall be able to come back to the House on that.

I accept all the points the noble Lord made. I was not trying to be peremptory. I sought to make a distinction between what is almost a pragmatic decision which is required in the nature of the devolution exercise we are about now and a very separate type of approach which would be necessary if we were dealing with these matters in the context of a completely separate sovereign state.

On Question, amendment agreed to.

Lord Mackay of Ardbrecknish moved Amendment No. 198:

Page 73, leave out lines 24 and 25.

The noble Lord said: This is a probing amendment. I ask a simple question. I begin by quoting Section 2 in Schedule 5 to the Bill on oil and gas. Under Reservation, it states:

    "Oil and gas, including--

    (g) liquefaction of natural gas, and

    (h) the conveyance, shipping and supply of gas through pipes".

That seems perfectly sensible; I understand it and have no problem with it.

I then turn to the Exceptions from reservation and the manufacture of gas, and the reference to,

    "The conveyance, shipping and supply of gas other than through pipes".

I wonder why that distinction is being made. Leaving aside that I am not sure whether there is much manufacturing of gas currently, I refer to conveyancing. I presume that we are talking about cylinders and the like. I should have thought that if there is an argument in favour of reservation for pipelines, there is equally an argument in favour of conveyance, shipping and supply of gas, especially as liquefaction is being reserved. The two are related.

Having rightly decided to reserve the long list in subparagraphs (a) to (h) of items relative to oil and gas, including the two I read out, I cannot understand why the Government promptly make an exemption for the manufacture of gas and then for its conveyance, shipping and supply through pipes. Companies which do that do so on a United Kingdom basis. I cannot for the life of me see why it is exempted. The moment something is exempted, the possibility exists--I put it no higher than that--that there will be different rules and regulations in Scotland than in England and Wales. The Government having reserved everything else in oil and gas, quite wisely, I cannot understand why they have made these exemptions. I should be grateful for some kind of explanation, preferably one that we can all understand. I beg to move.

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10 p.m.

Lord Fraser of Carmyllie: I join my noble friend in asking some questions about these reservations. Subparagraph (g) relates to the liquefaction of natural gas. Does that mean that it does not extend to the liquefaction of petroleum gas? Do I understand that as regards subparagraph (h) the conveyance, shipping and supply of gas through pipes extends to a wider classification and categorisation of gas and might include the old fashioned town gas?

I do not have the faintest idea whether these days anyone manufactures town gas in Scotland, but it seems to me that the provision would cover that if someone wished to revert to such a technique for manufacturing gas? What would be even more curious, as my noble friend has pointed out, is the exception from that of the manufacture of gas. But once manufactured and supplied through a pipe a different set of statutory regulations would apply.

Baroness Ramsay of Cartvale: Amendment No. 198 would extend the reservation of oil and gas to the manufacture of gas or its conveyance, shipping or supply by means other than pipelines. In the Government's view, that is unnecessary.

The intention behind the oil and gas reservation is to preserve a uniform regulatory regime for the exploitation of oil and gas reserves, and especially for the offshore oil and gas industry and pipelines. It would make no sense to break up, for example, the regulation of the integrated system of gas pipelines within Great Britain. Such considerations do not, however, apply either to the manufacture of gas or to the transport of gas other than in pipes--for example, the supply of camping gas in cylinders. The health and safety aspects of those activities are covered by other reservations on health, safety and transport. However, there is no need to reserve general control of the manufacture and conveyance of gas any more than there is for any other industrial process.

In answer to a point raised by the noble and learned Lord, Lord Fraser of Carmyllie, the liquefaction of natural gas is part of the process of conveyance. Petroleum gas is also natural gas. I hope that answers his point.

I hope that I have made the Government's position clearer for the noble Lord, Lord Mackay of Ardbrecknish. I hope therefore that he will be able to withdraw his amendment.

Lord Fraser of Carmyllie: I am grateful to the noble Baroness for explaining to me that natural gas also includes liquefaction of petroleum gas. Indeed, she might tell the Deputy Prime Minister and the Prime Minister that, because, as I understand it, they respectively use different gases for the cars that they now drive. However, I am happy to accept that definition.

However, I am still slightly troubled by the exceptions from the reservation. I am a happy camper who has travelled in the Lake District and bought some gas for my caravan. Am I to expect that it will have a

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potentially different make-up, a different set of safety regulations, a different sort of packaging and that it is to be stored in a different way on site? Am I to understand that when I trundle out with my caravan all the way up to Loch Lomond, or wherever it may be, I will perhaps find that a different set of regulations applies? If that is so, it seems to me to be absurd.

I thought that the Minister's opening point was an extremely good one. If the noble Baroness wishes to maintain a regime across the whole of the UK so far as concerns the conveyance, shipping and supply of gas through pipes--in other words, that there should be a uniform arrangement across the country--that seems to me to be an extremely good idea and one which I would warmly support. But I do find the exceptions from the reservation rather tricky to understand.

Lord Mackay of Ardbrecknish: Before the noble Baroness replies, it may be helpful if I pose a few questions. In that way, she will, with any luck, only have to return to the Dispatch Box once--at least, "with any luck" from her point of view. I notice that the noble Baroness said that the Government wished to preserve a uniform regulatory regime. If that is so, why do they not just accept my amendment?

If I understood the noble Baroness correctly, she said that all the health and safety matters and all transport matters would not be devolved; in any words, they will be reserved. Therefore, all those items will be covered by UK-wide regulations. So what does that leave? What does that actually mean in real terms for a Scottish parliament? What decisions will a Scottish executive have to make with regard to regulations governing, say,

    "the conveyance, shipping and supply of gas other than through pipes"?

There is more to this than just the case of the happy camper, which my noble and learned friend Lord Fraser suggested he might be. There is the simple fact that the same companies which provide gas for domestic consumers in Scotland not only transmit it through pipes but also do so by way of vehicles. Some outlying areas like parts of the Highlands, which I used to represent, actually get their natural gas by container vehicle. Presumably it is transmitted to the trucks in pipes and, then, when they get to Dunoon, Oban or Campbelltown; it is then, again, put into pipes. It seems to me to be illogical that that little gap in the middle should have regulations controlled by the Scottish parliament. That does not seem to me to make for a uniform regulatory regime. The noble Baroness gave us an explanation of the words, but we would be grateful for some examples of the kind of things that the Scottish parliament might do regarding the conveyance, shipping and supply of gas.

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