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Earl Bathurst: My Lords, perhaps the noble Lord will allow me to intervene. At the time of "Brent Spar" a letter appeared in one of the newspapers written by a deep sea diver who knew about these matters. He said that where there is the wreck of a ship that has sunk, there are fish. If an oil rig such as "Brent Spar" or any other oil rig settled on the sea bed, there would be even more fish. That appears to relate to what the noble Lord opposite was saying and may well be right.

Lord Dubs: My Lords, I appreciate what the noble Earl says. Though the conditions in the North Sea are different and sporting fishermen may find it difficult to enter such deep waters, it may be worth pursuing in the way of marine research to see what the outcome could be. Incidentally, I was surprised on my visit to the United States to learn that exploration is not allowed offshore in Florida, California or Alaska. That is prevented every year by an addition to the Appropriations Bill that goes through Congress. It is odd that that should be the case when one considers the dependence of the United States on imported oil and the low prices that exist there. But that is one of the oddities that one discovers when looking at the situation in other countries.

Though the report is primarily concerned with the North Sea, looking at the situation globally it relates also to the Gulf of Mexico and offshore installations in the Far and Middle East. Perhaps therefore the lessons that we are learning today will have a bearing on how we tackle the environment and the environmental difficulties in other parts of the world. However, I shall confine myself to North Sea oil.

North Sea oil and gas are vitally important to our economic future. That is not the specific subject of the debate but perhaps I may make the comment in passing that I do not believe that over the past 17 years, as a country, we have derived the full economic advantage that we should. However, that is not necessarily a dispute with the oil companies but a dispute with the Conservative Government and the way that they have handled the situation.

In reading the report I was astonished at how many different government departments and agencies had some involvement with decommissioning. I counted 17 different government departments and agencies, quite apart from the interdepartmental Decommissioning Policy Review Committee. There is therefore much government interest in the subject. But whether 17 different departments and agencies are the best way of focusing attention on the matter I do not know. The

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Select Committee report recommended that the DTI should continue as the lead department and that seems to be sensible.

Other Members of the House drew attention to the differences between the northern, middle and southern sectors of the North Sea. For a long time it has been the policy that in the southern and central parts disposal should be on land because of the shallow waters and smaller rigs. The issue therefore concerns the 70 or so rigs that exist in the northern sector of the North Sea where conditions are more difficult and that is the main focus of our debate. Though they may be the minority of all the installations, I understand from the report that they cover nearly two-thirds of the weight of all the installations in the North Sea. In terms of disposal therefore they represent the larger part of the problem.

Perhaps I may mention in passing that a couple of weeks ago I had the chance to visit a floating rig (a floating platform)--Kerr-McGee's "Gryphon" rig in the North Sea. I was impressed by the concept of a ship acting as an extraction platform. It seemed to me to have many advantages in terms of decommissioning. When I put that to people from the oil company they said, "That is easy. When we want to decommission we simply sail the boat away to the North of England or wherever for disposal if it cannot be used at another site for extraction". I notice that other oil companies are beginning to look at that as a model for further work and that in itself is interesting. Whether it would be sustainable in the harsher climate in the West of Shetland, I do not know; but given the depth of water it may be one of the interesting options for the future in that area.

I looked with interest at the report and the costs of decommissioning. There are various estimates and they are very high. But we must bear in mind that a substantial part of the cost of decommissioning will be offset against taxes. Any savings in decommissioning will therefore be beneficial to the Exchequer and to the public purse.

I welcome the approach in the report to public consultation and openness and noted the various recommendations in relation to ensuring that the public should be better informed with regard to what is happening; that documentation should be made available; and that there should be adequate consultation allowing interested parties to make submissions about proposals for decommissioning. I suppose one could say, with the wisdom of hindsight, that had such an approach been in place earlier some of the controversy regarding "Brent Spar" might not have happened or, at any rate, would have been less heated. But where there is ignorance, emotions can run very high--on the basis of supposition rather than on fact. One of the lessons we have learnt, a point to which many noble Lords have referred, is that public opinion is important. We may not always agree with public opinion but in a democracy we ignore public opinion at our peril. One of the key conclusions is that we have to do our best to bring public opinion on board in terms of any of the approaches.

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I am pleased that the Government supported the committee's recommendation that there should be an acceptable decommissioning plan at the design and placement phase covering disposal and removal. I understand that in the lifetime of a platform or rig technology may change and improve and so it may well be that one has to work out the best practical environmental option for decommissioning towards the end of the life of the structure. But it would be a good thing if every new structure had a decommissioning plan worked out which could be brought into being or a better one developed towards the end of the life of such a structure.

I am glad the Government have said that in future they will not approve any decommissioning proposal unless and until they are satisfied that all possible options for the re-use of infrastructure have been thoroughly investigated and shown to be impractical. I also note that the IMO guidelines suggest--perhaps they have more force than a suggestion--that on or after 1st January 1998,

    "no installation or structure should be emplaced on any continental shelf ... unless the design of the installation or structure is such that an entire removal upon abandonment or permanent disuse would be feasible."
When Mr. Eggar, the energy Minister at the time, appeared before the Select Committee he was not totally clear about the implications of the IMO guideline and seemed to be leaving his options open. Perhaps that was because Ministers always like to leave their options open or because he wanted to allow for the possibility of such a thing as a "rigs to reefs option" being applied in the North Sea. Perhaps we shall hear more when the Minister replies.

The important point is that the oil industry has undertaken to remove all structures from the sea unless the Government say otherwise. That policy has been accepted by all the oil companies. Nevertheless, we are still in a very controversial area. The noble Lord, Lord Dixon-Smith, described graphically what happened not so long ago in terms of public outcry about the proposal to sink "Brent Spar" in the Atlantic. He referred vividly to some of the action that took place in Germany where there were threats of violence against Shell petrol stations. Perhaps the effect of the report and the period for reflection will have calmed matters down but certainly the Select Committee has said that sea disposal should remain an option for thoroughly cleaned structures. That must be a sensible conclusion.

I notice that both Greenpeace and Friends of the Earth oppose any disposal at sea. My understanding is that Greenpeace is opposed in principle to anything which may have an adverse effect on the marine environment and therefore is against the disposal of anything in the seas and oceans. One must have sympathy with its concerns, but for obvious reasons I find it difficult to go along with such an absolute position.

It might well be, as the report indicates, that bringing a structure on-shore could cause more environmental damage than sinking it at sea and there might be health risks to any of the people involved in dismantling such a structure. For example, I understand that there is asbestos on some of these structures and that while

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asbestos in the water is inert, asbestos when dealt with on-shore might cause dangers, possibly unacceptable dangers, to persons dealing with it. Therefore, I would not take an absolute position on the matter.

I regret that Greenpeace has done so, although I think that public opinion will always be nervous about disposal in the sea unless we can inform the public much better than we have in the past. However, Greenpeace has argued in favour of a co-ordinated approach regarding on-shore decommissioning, claiming that it would be economic and therefore could be developed as a skill. It juxtaposes that with case-by-case policies advocated by the oil industry.

I do not think that they need be alternatives. It seems to me that case-by-case policies have quite a lot to commend them. But, given the widespread agreement that installations from the southern part of the North Sea will be disposed of or decommissioned on shore, a co-ordinated approach will inevitably be developed by the oil companies. Therefore I do not think this should be seen as an alternative to treating the more difficult decommissioning proposals on a case-by-case basis.

The Shell company has said that the decommissioning world will not be the same again following the "Brent Spar" episode. I know that it has had many bids for disposal in reply to its request and it is now considering some 29 to 30 bids on a long shortlist. Those will be considered against the original deep sea option which Shell still regards as the BPEO.

Can we learn anything from the "Piper Alpha" tragedy? Most of the structure is still in the water but the accommodation block has been recovered, which shows that technically it can be done. I understand that the DTI will continue monitoring to see whether it can pick up anything by way of environmental pollution coming from the rig. I hope it will continue monitoring because that will add to the information we have available.

The question of leaving concrete legs and bases has been adequately dealt with by other noble Lords. The view is that they can be left quite safely provided they do not damage fishermen's lines or commercial fishing lines. In the view of the fishing industry, partial stumps could be dangerous.

I suspect that, save in the most exceptional circumstances, the long-term future is that all rigs will be decommissioned on-shore. I say that taking into account the views of the oil companies, the experience of "Brent Spar", the IMO guidelines and public opinion and political pressure. I am not saying it should not happen; I am not saying it is impossible. I suspect that in the real world most installations will be decommissioned on-shore.

North Sea oil is bound to make an important contribution to our economic future. The report will help us better to understand the environmental impact of such developments and enable us better to cope with any environmental damage that may be caused. I warmly commend it to the House and to organisations outside.

7.58 p.m.

Baroness Miller of Hendon: My Lords, perhaps I

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may begin by apologising on behalf of my noble and learned friend Lord Fraser of Carmyllie who is unable to be here today. I know that he would have enjoyed replying to this most stimulating and interesting debate but, regrettably, as the noble and gallant Lord, Lord Craig of Radley, told us, he is indisposed and returned from hospital only yesterday. I know I speak for the whole House in wishing him a speedy recovery--and certainly no one hopes more than I do that he will soon return to the Dispatch Box.

In their response to the committee the Government have formally welcomed the report which is the subject of our debate today. We wish to take the opportunity of expressing our gratitude to the noble and gallant Lord, Lord Craig of Radley, and his colleagues for producing such a valuable and comprehensive document. Indeed, if anyone comes to me asking me where they can learn about the subject of decommissioning offshore installations, a subject on which I myself have been compelled to take a crash course in the past few days, I can tell them from personal experience that they can do no better than to look at the committee's excellent report.

The decommissioning of offshore installations on the United Kingdom Continental Shelf is not a new area of activity. The legislation which provides the statutory framework for considering decommissioning decisions received Royal Assent in 1987. Since then, under the terms of the Petroleum Act 1987 the Government have approved 12 decommissioning programmes. But the events surrounding the frustrated disposal of the "Brent Spar" oil storage and loading buoy during 1995 have brought the subject of decommissioning into sharp focus.

The Select Committee intended its report to be a contribution to the on-going debate in the aftermath of the "Brent Spar" affair. As the noble and gallant Lord, Lord Craig of Radley, told us, although the report is not in any sense an inquiry into the "Brent Spar", it nevertheless highlights lessons which can be learned.

We entirely accept that in the future the public should be in no doubt about the basis upon which decisions have been taken. As my noble friend Lord Soulsby said, Shell shares that view, as it has indicated in the past few days.

Decisions will continue to be taken on the basis of the best practicable environmental option--the BPEO. That process, which was originated by the Royal Commission on Environmental Pollution, is crucial to the way decisions are made.

The BPEO procedure ensures that the best available relevant factual information is identified. All possible solutions are reviewed. The comparative assessment takes account of technical feasibility, health and safety, environmental factors, including cumulative effects, economic factors and the interests of other users of the sea.

My noble friend Lord Selborne spoke in some detail about the BPEO. I know that he will be pleased to note that we continue to believe that that approach is the one

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most likely to achieve sensible and balanced conclusions reflecting the particular issues raised by each decommissioning proposal.

My noble friend Lord Dixon-Smith said that public acceptability should be part of the BPEO. It is not part of the BPEO, but it is not ignored. Ministers must take a view on the public acceptability of any particular decommissioning programme. The final decision takes account of all the relevant factors and is taken in a transparent manner. I know that the noble Lord, Lord Haskel, will be pleased to hear that.

That is what we mean by a scientific approach. It is the cornerstone of all we do on decommissioning. It was the basis of our decision not only on "Brent Spar" but on all the other decommissioning proposals which have been made to us. We are grateful that the committee has endorsed the approach. It has recommended that the Government's guidelines should state explicitly that the BPEO procedure must be followed in decommissioning operations.

Last year, my right honourable friend Tim Eggar, then Minister for Industry and Energy, asked Professor John Krebs, Chief Executive of the Natural Environment Research Council, to establish a group of scientists and engineers with the task of examining the scientific evidence. Their job was to look at the potential environmental impacts of the disposal of large offshore structures, using the "Brent Spar" as an example.

That group of very distinguished experts, chaired by Professor John Shepherd of the Southampton Oceanography Centre, published its report on 22nd May 1996. The group has attempted to set the environmental impacts of the deep-sea disposal of decommissioned installations in context, mostly by comparison with natural and man-made analogues. We agree that it is a useful aid to understanding.

Its view is that the global impacts on the environment and on human health of the deep-sea disposal of a structure such as the "Brent Spar" would be very small--roughly equivalent to the impacts associated with the wreck in the deep ocean of a ship of 30,000 to 50,000 tonnes with its tanks pumped out.

It also concludes that the available evidence indicates that the environmental impacts of the deep-sea disposal of a structure such as the "Brent Spar" are not large enough to be a crucial factor in the selection of the best disposal options or for that option to be excluded from consideration.

That conclusion is rather similar to a somewhat broader one reached by Dr. Gordon Picken of the University of Aberdeen in evidence to the committee. Dr. Picken says (HL Paper 46-I, page 215, paragraph 14):

    "If decommissioning is carried out according to the existing International Maritime Organisation guidelines and international conventions, there would be no strong environmental imperatives, from an ecological point of view, that would highlight options that would be totally unacceptable. The environmental gradient is neither long nor strong. There is therefore no clear-cut need, on ecological environmental grounds, to carry out options which are technically demanding, risky or expensive, in order to reduce or eliminate potentially significant environmental impacts. They do not exist".

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We accept that this is a broad theoretical generalisation. A comparative assessment in each case will tell us whether it is right or not. The important point which we must never tire of making is that we are looking for sensible decisions which protect the environment. But those decisions must be advised by sound science.

The best practical environmental option provides an appropriate and well-tested vehicle. We must not make decisions solely on the basis of emotion.

The committee made important recommendations in relation to the restoration of international agreement. The Government agree that the re-establishment of international consensus is an important goal. We are working to achieving that. Perhaps I may take a few moments to relate where those international discussions now stand.

The OSPAR Convention is a regional convention for the protection of the marine environment in the north east Atlantic area, including the North Sea. At the meeting in June 1995 of the contracting parties of the OSPAR Commission, a majority of parties--but without the agreement of the UK and Norway--agreed upon a moratorium on the disposal at sea of decommissioned offshore installations pending preparation of a draft decision to ban the disposal of such installations for implementation by 1997.

Under the rules of procedure of OSPAR, the UK and Norway are not bound by that moratorium. It has no binding legal effect on those countries which voted against it. The resolution is a political gesture. It has no practical effect. Those countries which voted for it have in their waters relatively light installations in shallow water similar to those in the southern part of the UK sector of the North Sea. Such installations are required under international guidelines to be entirely removed. We have made it clear that the BPEO for such British installations is likely to be disposal on-shore.

The large concrete installations may need to remain in place. If that is shown to be the BPEO, and if there are safeguards for navigation, fisheries and the environment, it should be allowed.

The heavier steel installations in deep waters are those for which options other than disposal on land must be maintained. We are not saying that such installations will be disposed of at sea; but we are saying that it is not sensible to exclude the option from consideration. The BPEO will show the way.

However, international discussions have moved on since the summer of 1995. We have made progress in OSPAR to the extent that the other contracting parties have expressed a willingness to reach agreement on the basis of consensus. That is a welcome development.

An ad hoc working group on the disposal of offshore installations will be meeting early in December to seek a way forward. It will prepare a draft OSPAR decision for consideration by OSPAR Ministers at their meeting in June 1997.

In those discussions officials will continue to press our view that the environment is best served by the identification of the BPEO. If sea disposal is agreed to

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be the best course, a judgment based on scientific evidence will be taken as to whether any materials which remain after cleaning are hazardous.

The OSPAR Convention already provides a tough test. It requires that no permit shall be issued for sea disposal of an installation which contains substances which result in hazards to human health, harm to living resources and to marine ecosystems, damage to amenities or interference with other legitimate users of the sea.

In preparation for the discussions in the ad hoc working group, there are many studies under way to provide evidence against which decisions might be taken. We have already sent copies of the Select Committee's report to all those who will be participating in the discussions. We are sure that they will find it a very valuable source of information. We have also circulated copies of the Shepherd Report.

In addition a study is under-way to identify all removal and disposal options for each of the categories of installation on the UK Continental Shelf. The study will also advise us whether, within the framework of the BPEO concept, a generic removal and disposal option may be appropriate. What we have in mind is consideration of whether we might be able to establish a generic BPEO for any particular category of installation. To take two extreme examples, one might be able to say as a generalisation that concrete installations might remain in place, but that all light installations in shallow water might be entirely removed and disposed of onshore. As my noble friend Lord Campbell said, we agree that new technology, such as floating platforms which are being used west of Shetland will lead to fewer decommissioning problems.

If the generic approach was appropriate it might be possible to use it to reach agreement internationally. It would also be advantageous in practice if it were possible to compare a certain type of installation against its genotype and come to a reasonably swift conclusion that a particular course of action was the right one. However, part of the study is to identify for each category any factors which might make the generic option inapplicable in individual cases, so requiring them to be considered separately.

The London Convention is the global dumping convention. At their 18th consultative meeting in December 1995, the contracting parties of the London Convention considered whether there ought to be a moratorium similar to that in OSPAR. They rejected that proposal. They concluded that contracting parties should apply the convention and the International Maritime Organisation's guidelines and standards in their national practice on a case-by-case basis. They requested the London Convention's scientific group to review the status of the disposal at sea of offshore installations, taking into account current procedures, existing international technical guidelines and standards, and the introduction of the waste assessment framework in the London Convention. The scientific group concluded that existing arrangements were satisfactory but agreed to propose the introduction of a specific waste assessment framework for the disposal at sea of offshore

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installations. When it is agreed, that waste assessment framework will provide an international mechanism for a comparative assessment of options. This is a welcome development which reinforces the scientific approach to decommissioning.

A number of noble Lords, including the noble Lords, Lord Nathan, Lord Haskel, and indeed the committee themselves, have rightly identified transparency and consultation as central to understanding in the decommissioning process. The Government are committed to improvement in both these areas. The exact mechanism of improved communication between the oil companies and the public on the one hand, and between the public and the Government on the other is yet to be decided. Whatever the process will be, we are clear that it must be the best that we can arrange. I am pleased to confirm that we are looking for an open and transparent system.

The last draft of the DTI guidance notes went out to consultation in May 1995 and the consultation period ended in August of that year. The "Brent Spar" affair happened in the midst of that period. We think it is right that we should look at those guidance notes again and take account of the lessons we have learned. There will certainly be revised sections on transparency and consultation.

The noble and gallant Lord, Lord Craig of Radley, asked for an update on the guidance notes. What the guidelines say on consultation will depend to some extent on the outcome of our international discussions. There must be another round of full consultation within the United Kingdom. On that basis, and bearing in mind that the OSPAR ministerial conversation will not be complete before the end of June 1997, it would not be reasonable to expect publication before the end of 1997.

There is little commercial advantage to be gained at the decommissioning stage. The DTI will be encouraging the oil and gas industry to undertake whatever information-sharing and co-operative ventures will reduce costs. We shall certainly be looking for an increased commitment to joint industry funding for research and development where that is appropriate.

The United Kingdom Offshore Operators Association already has a good record in fostering co-operation between its members. For example, it recently joined with the DTI in commissioning an assessment of the environmental implications of the presence of drill cuttings during the decommissioning process. That study is complete. Its results will play an important part in informing future policy in this area.

A number of noble Lords, including my noble friend Lord Campbell, and the noble Lord, Lord Redesdale, raised this point. They will be keen to learn that the Select Committee recommended that further research should be undertaken. An initial scoping study has been completed recently which has identified a range of options for dealing with drill cuttings. Further research will be undertaken and I hope that will be some reassurance for the noble Lords and particularly the noble Lord, Lord Nathan, and the noble Lord, Lord Redesdale.

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Research is important for the development of future policy and operations. It is vital that we ensure that the best use is made of both past and future studies. Oil and gas companies, commercial consultancies, universities, the research councils, and Government all have their part to play. It is important that all these efforts are co-ordinated and that existing co-operation should be improved.

I should like to mention some of the very interesting points that were raised during the course of this debate. The noble and gallant Lord, Lord Craig, and my noble friend Lord Selborne mentioned (and I am pleased to agree with them) the case by case approach. That will include consideration of the cumulative effects of what we are doing.

The noble and gallant Lord, Lord Craig, and indeed my noble friend Lord Soulsby also mentioned the single grave site. We believe it is unlikely that the number of deep sea disposals will be high. It is possible that the site chosen for the "Brent Spar" will be suitable as a single site but it would clearly be sensible to satisfy ourselves on that point as the cases arise.

The noble and gallant Lord, Lord Craig, also asked about the long term liability. We are ready to discuss any proposal that the industry may wish to make. We recognise the need for provision to be made in those circumstances where, for example, a large concrete installation in deep water may remain in place, and I agree that it is never too early or too soon to be considering this matter. The DTI will be discussing this with the offshore industry.

The noble and gallant, Lord, Lord Craig, also mentioned the importance of buoys. The important thing we need to remember is that any remains of decommissioned installations will be marked on the charts. Fishermen are required to carry such charts with them and they will therefore be in a position to avoid any of the remains.

My noble friend Lord Campbell also spoke about fishing. I would like to acknowledge the role that Lord Campbell of Croy played in establishing the Fisheries and Offshore Oil Consultative Group. The group enables both the fisheries and the oil industries to share their problems and to meet the challenges. I agree with him that solutions may be found which suit all sides, but we should recognise that the area which may be denied to fishermen is probably very small indeed.

The noble Lord, Lord Nathan, spoke about a cradle to grave plan for offshore installations. Regulations administered by the Health and Safety Executive require that the design of all installations should include consideration of decommissioning so that it may be accomplished safely. In addition, the DTI will require companies to demonstrate in their field development proposals that they have taken account of the entire decommissioning process and indicate what their outline plans are for removal and disposal at that stage. However, detailed proposals will be determined by the best practical environmental option at the end of the structure's life.

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My noble friend Lord Soulsby of Swaffham Prior referred to the rigs and reefs programme in the Gulf of Mexico, as indeed did the noble Lord, Lord Dubs. I was interested that the noble Lord, Lord Dubs, took advantage of his holiday in America to find out a little bit more about it. As regards that programme, we are considering the matter. It may be that the benefits conferred by the warm waters off the Gulf of Mexico will not necessarily arise in the North Sea. That matter must be investigated--

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