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The second strand of thinking that generated Amendment No. 9 is that experience makes a vital contribution to safety. Mistakes, gaps in protocol and close calls are all revealed in the operation of these facilities. It is essential to ensure that all accidents can be lessons to make certain that future precautions are adequate. I think that we would all agree that it is impossible to foresee every problem before it rears its head. The most robust system of safety precautions will never be perfect, so a precautionary approach is favoured. It is therefore essential that the onus is placed on the operator to advise of accidents and near accidents. The technologies that we are talking about are, in some cases, in their infancy, especially those that detect leakages. We appreciate that operators will take safety extremely seriously, but they also have a duty to their shareholders to reduce, or to maintain, costs. We must be sure that cost reductions do not come at the expense of precautions.

When the amendment was debated in another place, a somewhat strange position emerged from the Government Benches. We quite understand that the specific provisions outlined in this clause as to the responsibilities of licence holders are not intended to be exhaustive but, during the debate in the other place, the Minister for Business said that operators would be obliged to report these things as a matter of course. He claimed that reporting leaks and accidents was,

Let us look at something that is specifically referred to: granting the Secretary of State explicit power to review the licence in subsection (3)(c). That seems to me equally, if not more, obvious, yet it is included. The Minister in another place gave assurances that provisions about accidents will be,

Why do the Government not think that this is the appropriate place in which to make such a provision?

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There is a dangerous tendency toward the suppression of important elements of legislation into delegated powers and guidance notes. With an issue as important as accidents and leakages, even if it is obvious, it is important to try to defy that gradual shift and have it planted firmly and clearly in the Bill. I beg to move.

Lord Teverson: This is an interesting and important amendment. It would amend subsection (3), which starts, “A licence may include”. As the noble Lord,

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Lord De Mauley, suggested, “may” is almost too easy in that sentence. A reporting structure must be included in the Bill, so this is a positive contribution to the debate. I shall be interested to hear the Government’s response on why compulsory reporting of such matters is not in the Bill.

As this is the first time that I have intervened since we moved on to carbon storage, and as I am probably not entering into the areas on which the noble Lord, Lord Jenkin, will speak, I shall ask the Government more generally about these measures. First, on where storage can be licensed, Clause 17 in Chapter 3 defines a “controlled place”. Licences can be granted only for controlled places, which are defined in two ways —as a,

Am I right to conclude from this that the Bill allows storage only offshore, below the sea? I am surprised that the clauses relate to temporary as well as permanent storage. It seems strange to me—although perhaps I do not understand the industry sufficiently—because there might often need to be temporary storage on land. I cannot see how the clause in any way allows for temporary storage to be licensed and therefore approved other than above or below the ocean or in the waters defined as an importation or storage zone.

Furthermore, have the various issues around international treaties been resolved by the British Government? I refer to the Ospar treaty and, I think, another treaty—maybe the Treaty of London—under which this is still seen as a pollutant, and storing and disposing of potentially environmentally dangerous or polluting products at or below sea is specifically prohibited. Have the Government resolved all those international treaty issues to allow carbon storage to take place, especially in areas such as the North Sea?

Lord Woolmer of Leeds: As I understand it, it is, in principle, possible to have carbon storage on the floor of the ocean, if it is deep enough. I also recall the Government saying that although that is technically the case, it is not their intention to do so, certainly in the early days. Is it possible to find areas within the 88-mile, or whatever, area away from our 12-mile limit where it would be technically possible to store carbon dioxide on the bed of the ocean at sufficient depth, or is that an interesting theoretical possibility that could not realistically apply within UK waters?

Lord Bach: The noble Lord, Lord De Mauley, has raised an important issue. I shall try to explain why we have drafted the provisions in Clause 20 as we have and set out why the amendment, which would include a provision about notification of accidents, near accidents or leakages relating to a carbon dioxide storage site, is unnecessary. The noble Lord could have chosen other examples to put in, but we would equally have argued that they were unnecessary because they are so obvious.

Clause 20 allows licences to be granted on such terms and conditions as the licensing authority sees fit. The power will allow the authority to include case-specific requirements in relation to each carbon dioxide store. This clause provides a non-exhaustive

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list of examples of the sorts of conditions licences may contain, including: financial security provisions; the right to modify the licence; provisions about closure of the storage site; and provisions about the termination of the licence.

Notification obligations are not mentioned expressly in Clause 20(3) because the list of potential licence conditions in that clause is non-exhaustive. Trying to provide an exhaustive list would not be possible at this time, for reasons I will try to outline. Instead, Clause 20(3) aims to set out examples of some of the less obvious provisions that may be contained in licences. To a certain extent, it is a matter of opinion which are obvious and which are not, but in other circumstances it is obvious which are clear and which not.

There are two reasons why an exhaustive list of licence terms and conditions cannot be provided at present. First, there is only very limited practical experience worldwide of licensing the permanent storage of carbon dioxide, and the detailed arrangements will inevitably develop as experience grows. In the mean time, the relevant licence terms and conditions will need to be assessed on a case-by-case basis. Secondly, international legislative developments, which the noble Lord, Lord Teverson, asked about—for example, the EU proposal for a directive on the geological storage of carbon dioxide, which is currently under negotiation—mean that the licensing regime, including the applicable licence terms and conditions, will need to evolve and be adjusted with time. Therefore, because of the above flexibility that we require, we have restricted the list in Clause 20(3) to examples of the less obvious conditions that may be included in licences. We will also be consulting on our proposed licensing regimes in the near future.

We expect all licences to include as a matter of course—with the onus on the operator, too—provisions on monitoring, remediation, reporting, record-keeping and notification obligations. This is because these licence provisions will play a fundamental role in ensuring that the CO2 storage sites are run in a way that pays due care and attention to environmental and health and safety considerations.

I reassure the Committee, particularly the noble Lord, Lord De Mauley, that notification obligations will be included in every licence as a matter of course, due to the importance of keeping the regulatory authority informed of any leaks or other significant developments in relation to the storage site. Clause 23(1) specifies that it will be a criminal offence to fail to notify the regulatory authority as required by a licence, which necessarily implies that notification requirements will be included in a licence.

I was asked about the clause not allowing onshore storage of CO2. I am advised that the onshore storage of CO2 is not permitted because of the EU landfill directive. That is why the Bill focuses on offshore storage. The other elements of CCS—capture and transport—can be licensed under the existing regulatory framework, so the Bill does not have to deal with them.

Lord Redesdale: Although this will come up in a debate on a later amendment, deep underground

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depositories of carbon dioxide in saline aquifers next to power stations are presently prohibited, and an EU directive change would be required for that. Is that what the Minister is implying? Obviously I do not expect him to answer immediately, but perhaps he will do so at the end of his replies to other points.

Lord Bach: I am grateful to the noble Lord. I will come back to him.

On international treaties, Norway has already ratified the amendment to the Ospar Convention, to which the noble Lord refers, to enable the UK to store CO2 in the near future. Contracting starts soon, and there has to be notification for it to come into force. The London protocol has also been amended so that carbon dioxide can be stored on the seabed.

My noble friend Lord Woolmer asked why CO2 is stored on the seabed and not under it and whether such opportunities exist in the UK. Again, under Ospar, the international agreement, this would not be permissible because it prohibits storage in the water column itself.

The noble Lord, Lord De Mauley, asked why the power in subsection (3)(c) was not blindingly obvious. This and other provisions are not obvious because they may affect the rights and expectations of licence holders in one way or another. This includes the power to require financial security or to modify a licence. Another group of not obvious provisions include provisions that are specific to CO2 storage.

In answer to the question of the noble Lord, Lord Teverson, the Bill states that interim measures prior to the permanent disposal of carbon will also require a licence. What situation is that intended to cover? While unlikely, we are not ruling out the possibility that it may be necessary to temporarily store CO2 offshore in one location before transferring it if, for example, an operator has a portfolio of sites that are in close proximity. As to the question of the noble Lord, Lord Redesdale, about details in relation to onshore siting, the best thing that I can do is write to him with a more exact position than I have been able to describe up to now.

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Lord Jenkin of Roding: I was extremely surprised—maybe I misheard or misunderstood him—when the noble Lord said that EU law precluded storage of carbon dioxide onshore. I cannot believe that that is right; I see that certain heads are nodding. That sounds patently absurd, because there are perfectly good saline aquifers in this country that would hold sequestrated carbon dioxide in perpetuity. I see absolutely no reason why Brussels should insist that we cannot do that. I hope that the noble Lord will take on board—as the noble Lord, Lord Redesdale, suggested—that this whole business needs to be firmly and swiftly revisited.

Lord Teverson: I remember playing a part in the landfill directives many years ago. This is part of the law of unintended consequences, because carbon capture and storage had probably never been thought of. I hope that the Government are pursuing amendment of that directive, which clearly is not meant to apply to this kind of storage.



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Will the Minister clarify whether the Ospar Convention and the Treaty of London conventions have been concluded? I was not clear from his remarks whether those had now been tied up, done, ticked and finished, which would mean that we move on with the landfill directive and being able to implement the Bill once it receives Royal Assent.

Lord Oxburgh: I intervene to clarify one or two issues. I declare an interest as president of the Carbon Capture and Storage Association. First, to comment on the question by the noble Lord, Lord Woolmer, the possibility of storage of CO2 on the deep sea floor has been recently floated by respectable international scientists, simply because they were concerned at the slow pace of the proceedings with the rest of the sequestration proposals, such as saline aquifers and appropriate traps under the sea.

It only becomes practicable to store CO2 on the ocean floor at considerable depth. It becomes denser than sea water at depths of about 3,000 metres, so you must have that sort of depth before you can put in CO2 and it will sink to the bottom. The proposal is that it would pool. However, that is clearly precluded by the present law of the sea. It would require a really significant change in international opinion for that to happen. We have none of those depths within the UK jurisdiction, so it is not really relevant to our problem.

In terms of land storage, which the noble Lord, Lord Teverson, raised, the reason why not much attention has been given to that in the UK so far is that it is pretty expensive by comparison with disposing under the North Sea. All the attention so far has been directed at the North Sea where, in a number of cases, there is a possibility of secondary oil recovery to reduce costs. I simply do not know what the licensing procedure would be for storing CO2 in repositories on land in saline aquifers in the UK. I do not know whether the Minister knows that.

Lord Bach: I am extremely grateful to the noble Lord whose comments, which displayed his obvious expertise, certainly educated me and perhaps other Members of the Committee. I hope that I can add to them.

I am advised that onshore storage is not permitted because of the current EU landfill directive but that negotiations are under way with a view to introducing a change in the policy by 2009. Under the new directive it may well become possible to store CO2 on land. I was right in what I originally said to the noble Lord, Lord Redesdale, but he was right to wonder why that was the case. It looks as if the EU may be catching us up. We are one of the countries proposing an alteration to the existing directive to allow a more flexible response.

The noble Lord, Lord Teverson, rightly pressed me on the extent to which Ospar and the London protocol have been agreed. The London protocol is completed but Ospar needs to be ratified by seven contracting states. Norway has already done so and we shall do so shortly. I am delighted to say that the helpful lesson that we have just had from the noble Lord in relation to storage on the open sea comprises exactly what I had to say, although not in the same words. I have tried to explain what we are trying to do. Including all

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the obvious measures in subsection (3) would not be nearly as useful as including some of those things which may become necessary because of the very nature of the CO2 storage that is in the process of being developed.

Lord De Mauley: I thank the noble Lords, Lord Teverson and Lord Woolmer, for their contributions and the important questions that they raised in this context. I also thank my noble friend Lord Jenkin for highlighting a rather important point about onshore storage. I particularly thank the noble Lord, Lord Oxburgh, for his extremely interesting intervention. I could hardly have hoped that we would have got into such interesting and important areas with such a seemingly innocuous amendment. I thank the Minister for his response, which I shall consider closely. I could hardly expect him to have conceded a second opposition amendment so soon after the previous one. He has, however, used the same argument as his honourable friend in the other place. I was not entirely convinced by his explanation about why, for example, granting the Secretary of State explicit power to review a licence is not sufficiently obvious also not to need inclusion. I am sure that we will want to return to this point on Report. In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 20 agreed to.

Clauses 21 to 26 agreed to.

Clause 27 [Inspectors]:

[Amendment No. 10 not moved.]

Clause 27 agreed to.

Clause 28 agreed to.

Clause 29 [Requirement for public register]:

Lord De Mauley moved Amendment No. 11:

The noble Lord said: This group relates to the disclosure of commercially sensitive information. Amendments Nos. 11 and 12 simply change the wording of Clause 29(2)(b) to strengthen the protection of commercial interests. We propose to do that by removing the unreasonable degree test. We do not want to place the Secretary of State in the position of deciding at what point interference into commercial interest is unreasonable. The change in wording is slight, but we on this side feel that to have the subsection state that the information should not unduly prejudice them is a sufficient condition for protection.

Amendment No. 13 would have a more substantive impact than perhaps Amendments Nos. 11 and 12. It would change the period of confidentiality of commercially sensitive information otherwise due to be included in the public register. As it stands, the Bill would exclude from the register for four years information that,

Projects of the nature that we are considering are typically very long term. Four years seems to us to be an inadequate protection. We appreciate that access to

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environmental information can be important to achieving sustainable development because it fosters a public role in decision-making in a transparent and helpful fashion.

However, that obviously must be balanced with the fact that some information is crucial to business competitiveness and to national security. The Minister in the other place noted that the period of confidentiality could be extended at the Secretary of State’s discretion following an application by the person who might be affected. But that, we believe, is inadequate. We support a flexible system, but that flexibility should be rooted in something that already provides adequate protection and can be adjusted when necessary. Four years does not seem to us to provide the adequate base position upon which changes or extensions might be granted. Commercial confidence depends on the knowledge that a participant’s interest can be protected and an extension, purely at the whim of the Secretary of State, might not be appropriate.

The Minister in the other place outlined the safeguard; that is, the Government’s,

That seems to me to be a matter open to debate. Regardless of this Government’s reputation for reasonableness on these matters, it is important to note that this is legislation for future Governments of whatever colour. To depend on a future Secretary of State to be reasonable does not seem the best course of action when the stakes are this high. A lack of commercial confidence could wreck these projects and protecting the information that needs to be protected is part of the foundation of this confidence.

I understand that the timeframe of this clause comes from the Food and Environment Protection Act, but does the Minister not think that, given the very long-term nature of many of these projects, the four-year period should be reconsidered? What consultation has occurred with respect to this time period? Does the Minister not see that there are substantial differences in the use of the time period governing the Food and Environment Protection Act and this Bill? A letter sent by the Government to my honourable friend Charles Hendry in the other place outlined the process to some extent, but they admit that the decision is up to the Minister. Is there anywhere to which these bodies will be able to appeal if their application for an extended period is denied by a Minister?

While the decision as to what is an adequate period is a subjective judgment, and we have suggested 10 years, we on these Benches feel strongly that the mechanisms regarding confidentiality need to be seriously reviewed and rethought. I beg to move.

Lord Bach: I am grateful to the noble Lord for moving his amendment and speaking to the others. In keeping with the principle of public access to information on environmental matters, Clause 29 requires the Secretary of State to maintain a public register of specified information related to carbon dioxide storage licences. It replicates existing arrangements under Part 2 of the Food and Environment Protection Act 1985. Access to environmental information is required by international,

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EU and national legislation. Moreover, and importantly, the public’s right to be informed about certain environmental matters has long been seen by the Government as essential for achieving sustainable development because an informed public can play a more active role in effective decision-making. The information to be included in a public register will be set out in regulations, but is likely to be very similar to the types of information already made available under Part 2 of FEPA. As is the case with that Act, suitable protections will be put in place to exclude from the register commercially sensitive information and information that prejudices national security interests.

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