NORTH SEA OIL

HC Deb 31 January 1974 vol 868 cc625-38

The Secretary of State for Scotland (Mr. Gordon Campbell)

With permission, Mr. Speaker, I should like to make a statement about onshore installations for offshore oil.

It is a little more than two years since the first announcement was made establishing that oil in commercial quantities had been found in the British continental shelf, off the shores of Scotland. Since then oil in considerable quantities has been found in other parts of the northern basin of the North Sea.

The events of last October have completely changed the world oil situation. The threat to Britain's oil supplies and the effect on our balance of payments of the sharp increase in the price of oil have added immensely to the importance of the North Sea oilfields. It is a matter of extreme national importance that we should procure this oil in quantity as soon as possible.

Part of the process of extracting oil from the sea-bed is the building of the massive platforms to be placed in the sea over the wells. Coastal sites for this purpose have been sought in Scotland and nine have received planning clearance, the first over two years ago.

None of the sites, however, has the particular deep water facilities needed for the construction of concrete platforms required for certain of the oilfields where other forms of platform are unsuitable. As a consequence of the crisis in world oil supplies last October, I have been examining closely, with my right hon. Friends, how soon such concrete platforms will be needed in order to obtain the maximum quantity of oil possible. It has become clear that, if at least one such site does not become available this summer, we could lose a significant proportion of the oil which we would otherwise be extracting from the North Sea in 1977 and 1978.

In the exceptional circumstances of our national need to obtain as much oil from the North Sea as we can as soon as possible, we have decided to introduce a Bill which would enable the Government to acquire, using an accelerated procedure if necessary, land which is urgently needed for certain projects related to the production of offshore oil and gas. The Government would then lease the land to operators with appropriate safeguards as to its use. The accelerated procedures would apply also to planning permissions required for the projects themselves or essential and urgent supporting activities.

It is intended that these powers should be used sparingly and only for a limited range of cases. Advantages would be that a particular area could be developed in an orderly fashion, the best use made of the chosen site, and safeguards provided for the eventual restoration of the land involved.

This proposed legislation is linked with a number of measures being considered by my right hon. and noble Friend, the Secretary of State for Energy, to strengthen Britain's capability to supply its own energy needs.

In view of the national importance of these powers, and the possibility of further oil and gas being found off other parts of the British coast, the Government believe that they should be available throughout the whole of Great Britain. The Bill is therefore to be presented by my right hon. and noble Friend who, in the exercise of the powers, would consult closely the Ministers responsible for land use planning south of the Border as well as in Scotland.

It is intended that the first use of the powers proposed will be to permit an early start to the construction of concrete platforms in the Loch Carron area, in the North West of Scotland, which has been identified as the area most clearly fulfilling the conditions required for building these platforms. At the same time the Government will take steps to prevent the proliferation of similar developments in other areas of the West Coast of Scotland.

Three British companies have already submitted applications for planning permission to build concrete platforms at Loch Carron and a public inquiry is now being held concerning one site there, at Drumbuie. I accept that the parties at this inquiry may well feel that this announcement of Government intention has substantially changed the basis on which the inquiry has been proceeding and it may be that they would wish to seek an adjournment to give them an opportunity to reassess their position. If so, no doubt they will indicate their wishes to the Reporter.

If, however, parties wish it, I would see no objection to the public examination of the arguments for and against the grant of planning permission on the proposed site at Drumbuie being continued meantime. And certainly I am anxious to ensure that the objectors to the site are afforded full opportunity to put their views.

I also accept that the objectors may claim that the Government's proposals have rendered nugatory some parts of their expenses so far incurred at the inquiry. I am prepared to take account of this in the light of the outcome of parliamentary discussion of the Bill.

Under the shortened procedure which we will propose, there will be arrangements for interested parties to make representations, but several valuable months of time should be saved in the case of a Loch Carron site.

This initiative, in the exceptional circumstances described, will ensure some welcome additional employment in the West of Scotland, not only at the coastal site, but also indirectly. Engineering firms in the industrial belt of Scotland will have opportunities of new business in providing equipment for the platforms, including the modules, and the expected development of a concrete platform construction site can bring substantial benefits to Scotland.

Mr. Millan

This is a very important statement, and hon. Members will wish to study it in detail.

Will there not be considerable anger at Drumbuie that this inquiry has been allowed to continue for such a long time at a considerable expense of time and money and is now to be overruled by what amounts to retrospective legislation?

Is not the legislation based on the principle of the maximum exploitation of North Sea oil which in the current energy circumstances may have a great deal to commend it? But is there not a substantial danger that this will be done completely to the detriment of Scottish interests, especially environmental interests?

In that connection, is it not significant and wholly deplorable that this should be a United Kingdom Bill introduced by the Secretary of State for Energy, who is not even a Member of this House? Where are these other sites in the United Kingdom outside Scotland to which this Bill is likely to apply? Is it not a gross dereliction of duty on the part of the Secretary of State, who is Scotland's planning Minister, that if the Bill is to be introduced he should allow it to be introduced in another place by a United Kingdom Minister and not introduce it himself?

Is there not an urgent need for the study of alternative designs of oil production platforms not requiring this deep water which could be built on sites in the industrial belt of Scotland and therefore provide jobs in Scotland where they are most needed? What initiative are the Government taking in consultation with construction companies and oil companies bearing on this matter?

Mr. Campbell

The inquiry started only in November. One of the reasons for my making this statement as soon as possible was that the parties to the inquiry should know that the Government had taken this decision. This is not detrimental to Scottish interests. We have been working out carefully the way in which the planning procedures could be streamlined in such a way that representations can be made by objectors. The inquiry can continue, as I have said, if that is the wish of the parties.

It is to be a Great Britain Bill because there could be exploration in other seas off the shores of this country. Indeed, it is already starting in the Atlantic to the west of Shetland. Therefore, although we know of this one area of Loch Carron, there could be some other individual areas which are in the same situation.

This is very largely a matter of planning inasmuch as the new procedure will be superimposed for use only for a restricted range of cases in exceptional circumstances. The intention is to introduce the Bill into this House.

The hon. Gentleman also asked about other parts of Scotland. I think he was referring particularly to the Clyde, because he spoke about centres of population. It is not possible to build the deep-water platforms in concrete requisite and tow them out of the Clyde area, because the water is not deep enough.

Mr. Skeet

Can my right hon. Friend estimate the yield of the North Sea for 1977 and 1978? Can he also give a realistic estimate of the reserves of oil in the North Sea? Will he recommend to my right hon. and noble Friend the Secretary of State for Energy that there should be a posted price for oil prior to delivery?

Mr. Campbell

I cannot deal with my hon. Friend's final point, which does not arise on this question. It is a matter for my right hon. and noble Friend the Minister for Energy.

We have estimated that by 1980 the North Sea oilfields should be providing between 70 million and 100 million tons of oil. The figure would not be as high as that in 1977 and 1978. But our object is to obtain the maximum oil from the deep-water oilfields, which are the Piper, Dunlin, Brent and Thistle fields.

Mr. Grimond

Is this not an extraordinary example of Government incompetence? I, and many other people, have been urging the Government, not for months but for years, that planning procedures needed alteration. Only a fortnight ago the Secretary of State assured me that nothing needed to be done. Last Tuesday the Prime Minister assured the House that his noble Friend Lord Polwarth would continue to be responsible for all the functions of the Scottish Office which related to oil in Scotland. We now know that the Secretary of State for Energy will be responsible, and will introduce a Bill in another place which will deeply affect Scotland.

Is there any complete survey, even now, of sites not only in the North of Scotland but also in the Islands? If so has it been made public?

Does the statement affect only concrete rig building? It has been drafted in a way which makes it applicable to any oil-related activities. If this is so what is to happen to the Shetland and Orkney legislation? What about the vast waste of time, energy and money which has continued while the Government sat complacently on the fence, saying that nothing needed to be done? This is a monstrous example of the worst form of Government complacency.

Mr. Campbell

I give the right hon. Gentleman the benefit of saying that he has not had time to read my statement. He has had time to listen to it, but he cannot yet have read it properly. It is not a question of changing existing planning procedures, which will continue to operate in the vast majority of cases, including those connected with North Sea oil. It is a question of adding and superimposing an additional procedure for the exceptional and important cases which I have been dealing with involving a possible shortfall of as much as £100 million on our balance of payments in 1977 and 1978. As I indicated earlier, the total quantity of oil which we expect by 1980 is 100 million tons.

The right hon. Gentleman asked about the Islands. The Islands are being examined, but the Shetland Bill has already been through the House and is now being considered in the other place. What we are now proposing need not conflict with what is happening in regard to that Bill.

The Bill which we propose is to be introduced into this House. It is to be a Great Britain Bill, and, therefore it would be inappropriate for it to be introduced by a Scottish Minister, because it will apply to the whole country

Mr. Alexander Fletcher

Is my right hon. Friend aware that there is already much dissatisfaction in Scotland with planning procedures, and that this also applies throughout the United Kingdom? Therefore, the new legislation, covering the whole area of planning and planning inquiries, will be welcomed throughout the country. The present procedures do not help developers, nor do they give confidence to objectors at planning inquiries. If the Government are to revise the procedures on a United Kingdom basis, I agree with my right hon. Friend that it will be United Kingdom legislation and should be dealt with as such. If the Government, in order, to speed up North Sea oil, are to introduce what will, in fact, be compulsory purchase orders, my right hon. Friend should say so, as that would be in the best interests of the whole of the United Kingdom.

Mr. Campbell

I have said in the past that the Government have to operate within the planning Acts as they stand. I have never defended those Acts. I have pointed out that they have been passed by Parliament and that the Government must act within them unless or until Parlament amends them. We are suggesting that amendments to the Acts should be made to cover a very restricted type of case.

With regard to compulsory purchase, we shall in the Bill propose procedures whereby the Government can acquire certain sites for leasing. As Secretary of State for Scotland, I already own a lot of farm land, forestry and other land, which I am rapidly disposing of. Land acquisition which will be made under our new proposals will be small compared with the amount of land which is now being sold.

Mr. Maclennan

Is the right hon. Gentleman saying that the Government intend to apply the procedures only to the narrow and special case of concrete platforms which require deep water? If so, many people will consider this action to be too little and too late. I have in mind the Dunnet Bay fiasco, which could be repeated, even with the measure the Government now propose.

It is not only a question of meeting the needs of the industry and obtaining the oil by the time which the right hon. Gentleman mentioned. It is the whole question of the possibility of oil-related industries' orders being lost to other countries because of planning delays which occur under existing legislation. Will the right hon. Gentleman expedite planning procedure, or introduce much wider legislation than that which he has suggested this afternoon, to deal with, for example, the planning situation which is operating at Brora, in Sutherland, in a case which is before him at present?

Mr. Campbell

The hon. Gentleman seems to be in favour of the Government's taking action on the lines proposed. The categories of project associated with oil and gas would not be limited to concrete platforms. It is our intention that the Bill should cover platform building and should include installations for pipeline landing. The categories can be described exactly and investigated when the Bill comes before the House. I wish to make it clear that there is no question of refineries being included.

There has been no delay in the building of platforms due to planning procedures so far. Nine sites have been cleared, and in only one case was there need for an inquiry. That was at Dunnet Bay. Planning permission was granted there three months before the company involved took its decision on where to build the platform. Therefore, no delay was caused through planning procedures.

Mr. Bruce-Gardyne

Are we not witnessing a remarkable display of fractious opposition? Have not the Opposition for years campaigned for the Government to carry out land nationalisation? Now that the Government are proposing to do so—but I hope on the most modest scale conceivable—the Opposition do nothing but complain.

Mr. Campbell

I agree with my hon. Friend. I am forced to, though I know that some Labour Members are aware of the problems and would wish to assist us.

Mrs. MacDonald

The crass insensitivity of the Bill will probably shorten the time scale of events leading to the Scots taking control of the oil and gas industries. The final pretence has been dropped that the Scottish people have any means of expression at the decisionmaking level through the office of the Secretary of State. Does the right hon. Gentleman accept that with the Bill he will make himself redundant?

Mr. Campbell

I am concerned—and it is a Scottish interest as much as an interest of the whole of Britain—that we should get the oil at the earliest possible moment. A vice-president of the Scottish National Party said in a public speech at the end of last year that all the oil and gas should be left at the bottom of the sea. I should be interested to know whether the hon. Lady agrees.

Dr. Dickson Mabon

Is the Secretary of State aware that, while his statement appears in principle to be a good step forward by the Government, it is somewhat clouded by the reference to Drambuie, in as much as a Bill of this kind can be only general unless it is to run into all kinds of legislative troubles? Will he clarify the point? How shall we know from the Bill which areas will be within the category of acquisition and which areas will not?

The right hon. Gentleman has already said in reply to a question that it is not just a matter of concrete platforms. Does that mean that he, the Secretary of State for Wales and the Secretary of State for Energy will publish with the Bill a list of sites within the coast of the United Kingdom that could possibly fall within the categorisation? Without such a list, we do not know what we are talking about in general terms.

As an Opposition back bencher, I very much welcome a Bill which acquires land for the State's use, making sure that it is afterwards restored to the environmental state it was in when acquired.

Mr. Campbell

The hon. Gentleman asked about the Drumbuie situation. I wished to refer to that particularly because an inquiry has just started on it. As I said earlier, it was important that the parties to that inquiry should know as soon as possible about the Government's decision and should be given an opportunity to decide whether to continue to give evidence.

It is proposed that there should be a parliamentary procedure whereby a particular area can be designated. This will all be discussed when the Bill is before the House. The first area to which I was able to draw attention straight away, and the only one in the Government's mind now, was the Loch Carron area.

Mr. Laurance Reed

Are the Government doing the right thing? If the Department of Trade and Industry went for the articulated column type of design used by the French in the Bay of Biscay, there would probably be no need for all these sites, and we should get the oil ashore from the deeper fields very much earlier.

Mr. Campbell

I can assure my hon. Friend and the House that at present there is no method other than the deep-water concrete platform which could be used immediately in order to extract the oil in 1977 and 1978 from the deep-water fields. Steel platforms have been constructed for some time, and are being constructed, in other parts of Scotland, but they have to operate in shallower water. There are also platforms in concrete and steel, one of which has been started at Ardyne Point, but they are not suitable for the deep-water fields.

Mr. Robert Hughes

What are the terms of acquisition of the land? Will it be at existing use value or development value? If it is the latter, what will be the terms of the lease of the land to the companies to which it is leased?

Mr. Campbell

The land will be acquired at market value. Those who are dissatisfied can resort to arbitration before the Lands Tribunal for Scotland.

Rear-Admiral Morgan-Giles

Does my right hon. Friend realise that his statement provides welcome evidence that the Government are determined to get on with the business of gathering North Sea oil, and are determined not to fall into the sort of difficulties and delays caused over the Alaska pipeline by people who, although they clamour for the oil, are determined to make absurd difficulties about every aspect of it?

Mr. Campbell

I am glad that my hon. and gallant Friend recognises what lies behind my statement. I have been working on the matter since the October fuel crisis hit the world.

Mr. Lawson

Will not the Secretary of State admit right away that what has been determined is that the Government intend to ride roughshod over the views and interests of the National Trust for Scotland? If his proposal is to be carried out, will he ensure that the National Trust and the other bodies which have been objecting receive back every penny they have spent on their legitimate objections?

Many of us are deeply suspicious of the so-called experts who argue that the proposed site is the only one possible for such platforms, in contradistinction to other experts who have argued that similar work can be done in the Forth and the Clyde, and perhaps the Dee. Therefore, will the right hon. Gentleman ensure that we have proper estimates by the various experts, so that we are not deceived by people who want an easy site to get on with the job, which means despoiling one of the most beautiful parts of the West Coast of Scotland?

Mr. Campbell

I have pointed out that the type of deep-water platform in question cannot be constructed in the Clyde area. The hon. Gentleman knows of my personal interest in conservation, particularly in the part of Scotland concerned, and he will realise that I shall not dismiss it from my mind.

As regards the National Trust, I have said I will consider the question of costs incurred to date. I believe that the National Trust and other objectors may well see the advantage of eventually deciding upon a single site and concentrating all the work there, rather than proliferating elsewhere along the coast.

Mr. Douglas

Will not the right hon. Gentleman come clean with the House? The Bill is related to a unique site—Loch Carron—and a unique design—the con-deep design, which is Norwegian. Have any of the companies applying for planning permission at Loch Carron orders from any oil company for such a design to be built there? Will the land, which is held by the National Trust inalienably, be taken from it by the Bill for all time? That is an important consideration.

To safeguard all other people who might be involved, will the right hon. Gentleman consider looking at the Bill as a Hybrid Bill, so that a Select Committee procedure could be involved, rather than the ordinary Bill procedure?

In view of the massive sums involved in the public inquiry at Drumbuie, the estimate for the National Trust being £20,000 so far, will the right hon. Gentleman say how he might speedily compensate all objectors at that inquiry?

Mr. Campbell

I have already said that I shall consider that matter. I know that the hon. Gentleman can see Doth sides of the question, because I think that he is a member of the Scottish National Trust, and he is also very concerned that we should get the North Sea oil as soon as possible. As the hon. Gentleman referred to a Norwegian design, I would make it clear that the firms in question are British. I understand that there is no difficulty about their obtaining orders if they can move in and start the work.

The inalienability of Scottish National Trust land means that parliamentary procedure must be used before the land can be acquired against the wishes of the trust. The Bill will give us in Parliament the opportunity lo discuss that important point.

Treating the Bill as a Hybrid Bill would mean a great deal of delay, and we should lose the purpose of the Bill, which is to act quickly.

Mr. Baxter

Is the Secretary of State aware that there is considerable dissatisfaction in Scotland about the terrific-hurry to exploit the oil, which has been in the North Sea around Scotland for millions of years? Does he realise that such speedy exploitation of the oil as he seems to envisage could do irreparable damage to Scotland, not only to Scotland's beauty but to its economy, through our not knowing the full facts about how the oil should be exploited, which is a very difficult technological task? There is no certaintv that there will not be terrible calamities as a result of exploitation, damaging our fishing areas irreparably. Many factors should be borne in mind before this rape of Scotland takes place.

I implore the right hon. Gentleman, even at this late hour, to set up a Royal Commission or a commission of Members of Parliament, to go further into all aspects of the exploitation of oil. Let us not be dubbed as the greedy people of civilisation because we are anxious only to exploit that oil for our own needs.

Mr. Deputy Speaker (Sir Robert Grant-Ferris)

Order. The hon. Gentleman really is taking rather a long time. I have tried to be considerate to all hon. Members, but it seems that the questions get longer the longer we go on.

Mr. Campbell

The hon. Gentleman has overstated the objections. It is in the Scottish interest that we should get the jobs and the business that go with the development of North Sea oil. It need not be damaging to the Scottish environment or in other ways to obtain the oil speedily. I should point out that if there had not been encouragement for the high-risk exploration that has been taking place in the North Sea during the past 12 years we probably would not yet know that the oil—it has been there for millions of years—was there, because the exploration would probably still only be level with somewhere like Hull.

Mr. Small

Will the right hon. Gentleman now admit that this technically doctrinal Bill is a nationalisation measure? He has talked about a Hybrid Bill. If it is a United Kingdom Bill, representation ought to go to the highest court of appeal in the land. If representation can be made only to the Lands Tribunal for Scotland, that makes nonsense of the concept that it is a United Kingdom Bill.

Mr. Campbell

No. There is an equivalent tribunal in England. I was asked by a Scottish Member how land would be acquired and at what price, and I gave him a Scottish answer.

As for this being a nationalisation measure, it does not arise under that heading. This is the best way of dealing with the situation. Indeed, we dealt with the provision of facilities at Peterhead harbour in a similar way—there the Secretary of State for Scotland is the harbour authority—and that proved the quickest way of dealing with that matter.

Mr. Strang

Will the Secretary of State stop pussyfooting about and confirm that the Government have taken the decision at the highest level to facilitate the building of concrete platforms at Loch Carron? Would it not be prudent to announce that all the costs that have been incurred at the inquiry in Drambuie will be reimbursed and that urgent discussions will take place with the interested parties to ensure that public ownership of land will be used to minimise damage to the environment and see that we get the best out of this project?

Mr. Campbell

My announcement makes it clear that the platforms proposed to be built in the Strathcarron area are needed to get the oil that we might otherwise lose in 1977 and 1978. I should again point out that the way that it is being done is the quickest. It is vital in the national interest to get this oil in time so that we do not lose about £100 million on our balance of payments both by building platforms and by engaging in other industrial activity. This is a matter of extreme national importance, and the Strathcarron area is the first that we would consider.

Mr. Millan

The right hon. Gentleman's answers have confused the issue further rather than clarified it. I should like to know exactly what the Government intend to do. When will the Bill be published?

Mr. Campbell

As soon as practicable.