HL Deb 23 November 1983 vol 445 cc315-34

7.58 p.m.

Lord Teviot rose to ask Her Majesty's Government what is their policy on drilling for oil in areas of outstanding natural beauty, in particular Ditchling Beacon.

The noble Lord said: My Lords, I beg leave to ask the question standing in my name on the Order Paper. I am grateful to your Lordships, first to those who have been kind enough to stay for the debate, and, in particular, to those who will take part. Also I should like to say how delighted I am that the noble Baroness, Lady Nicol, will be making her first contribution from the Front Bench and I am privileged to congratulate her on doing so.

As one has no right of reply on an Unstarred Question. I will say here and now that I am grateful to all concerned and to those bodies which have sent me papers to do with this Question, and, in particular, to the honourable Member for Lewes, Mr. Rathbone, who has also sent me various papers and has given this debate his blessing.

I start by reminding your Lordships that Parliament has, in its wisdom. determined that certain major tracts of land are so—this sounds rather whimsical—intrinsically beautiful and representative of all that is best in the British landscape that they should be afforded national recognition and preserved for the benefit of all the people of this country, both present and future generations. These are the so-called areas of outstanding natural beauty. They represent part of the natural resources and heritage of this country, just as much. for example, as does oil—useful though that is.

There are two vital differences, however. First, the areas of outstanding natural beauty are, by definition, visible. If it is our intention that as a nation we should continue to exploit them, as have past generations. for their ecological, aesthetic. recreational, and inspirational values, we can do so only by ensuring that they are left as they are and by preserving their visual impact. I do not need to remind your Lordships that they also have an economic value in the tourism that they promote.

Secondly, whatever human ingenuity might achieve in overcoming present or future limitations in other natural resources, such as oil, there is nothing whatever that human endeavour can achieve in the way of replacng lost areas of outstanding natural beauty. There is a fixed and finite amount of oil. We cannot drill for more elsewhere. nor develop a substitute. It is out of our hands. If an area of outstanding natural beauty is despoiled. then it is lost forever, and the national resource is diminished. To put this in perspective, my Lords, I would point out that less than 10 per cent. of the English and Welsh landscape is considered worthy of being so designated.

I have dwelt at some length upon the significance and importance of the decision taken by both Houses of Parliament, or through Acts of Parliament, to establish areas of outstanding natural beauty because it is fundamental to the Unstarred Question that I am putting to my noble friend tonight that, having done so, Parliament has not provided the means whereby these areas can be adequately protected for the benefit of the nation as a whole, in particular when it comes to oil exploration and production.

I gather that in the papers that I sought from the mineral and planning committee there are no guidelines for these areas. What then are the means by which these areas are currently protected? The national policy statement states that: …new major industrial and commercial developments (including extractive industries) should continue to be excluded from AONBs, except where it can be proven that it is in the national interest and no alternative sites are available". It is my contention that that policy statement and the manner in which it is implemented are fundamentally flawed. First, there is the implication that the ability to claim the national interest lies, per se, with the potential developer, and that if that claim can be substantiated, however tenuously, then the industrial development has priority. But surely that is wrong.

Areas of outstanding natural beauty are themselves the manifest expression of the national interest in selected parts of the British landscape. They were established first and must surely have the primary claim to the national interest. The developer's claim is secondary. In reality, therefore, such situations represent a direct conflict between two rival national interests, in which natural justice suggests that the status quo should prevail, unless the developer can prove an overwhelming priority.

The second flaw is that Parliament decided that determination of what development would be permitted should rest in the normal local government planning procedures. Is it right that local government should decide national issues? Excellent as they are, their role is to deal with local matters. They have great responsibility, and I do not wish to denigrate them at all. But to me it sounds a little strange. Your Lordships will forgive me if I give a somewhat extreme analogy. It is as though Parliament declared Greenham Common—a place that I was wheeled around in my pram—an area of outstanding defence interest and then left it to Newbury District Council to decide whether to permit nuclear missiles to be stationed there.

I believe that local councils are being placed in an impossible situation. When I say "local councils", I would point out that it is the county councils who have the final authority. I must get it absolutely right because I know that there are present many noble Lords with great experience in that field. The local councils are being asked to do something for which their role and constitution make them manifestly unsuited. Nowhere is this more glaringly evident than when they are confronted with applications for on shore oil development.

At this stage, I should like to make a number of disclaimers. Nothing that I have said, or am yet to say, is intended to impugn the integrity or ability of local government councillors or officers. They do their best in very difficult circumstances. Equally so, on the whole the oil companies deservedly have a good reputation for sensitivity to their surroundings. In particular, Carless Exploration Limited, the Ditchling Beacon applicant, has been frank, very open and understanding in its dealings with local environmental organisations.

The issue is as much one of principle as it is one that relates to the application on the South Downs. Neither is this a party policical issue; for Governments of all colours have neglected their responsibility towards AONBs. It is abundantly clear that where applications for on-shore oil development are concerned, local councils are running to catch up with the flood. The Department of Energy has already issued exploration licences, but it is only now, following receipt of the first planning applications, that many county councils (including East Sussex) are producing oil and gas development policies.

Since these will then need to be incorporated into the county structure plan following public consultation, it is evident that much of this process will be conducted under considerable time duress. The Ditchling Beacon application is a good example. The parish council in whose boundaries this site falls had to give its view without the benefit of even a draft county policy to guide it. May I say that this was voted for, but only by the casting vote of the chairman. The local district council had to postpone its original meeting to enable it to give its view within the context of only a draft policy. Also, I gather that the district council gave its blessing largely because the parish council had given its blessing.

I must explain this site at Ditchling Beacon. It is in the southernmost extremity of the parish, and about one-and-a-half miles from the centre of population. It would not need Mr. Faldo to hit such a golf ball; but one could hit a golf ball into about four local parishes; namely, Westmeston in the south-east, Stanmer in the south-west, Patcham in the west, and Keymer. So the views of the parish council, if that is the ultimate authority, rather explains what I am talking about.

Now the county council, which has the power to decide—the overall power lying in the planning authority—is having to ask Carless Exploration to agree to an extension of the time limit for its right of reply in order to enable it to complete the public consultation process and to finalise its policy document. I ask your Lordships, frankly, whether this is the right context in which policies so vital to the future of our AONBs should be formulated. And what about the content of these policies? In the absence of any clear Government guidelines or direction, it is clear that councils are having to learn as they go along, drawing as best they might. upon the experiences and decisions of other councils before them. But who is to say that they were right, and that originally bad decisions are not being repeated 10 times over?

There is evidence that some county councils are already having second thoughts, but in many instances it is too late. For example, I would draw your Lordships' attention to the case of West Sussex County Council, which granted Conoco permission to explore for oil at Graffham. I am most grateful to the body at Graffham, on the South Downs, who wrote to me about this. This decision subsequently received severe criticism. Your Lordships may have read the correspondence in The Times.

The council is even now reviewing its policy towards oil exploration in AONBs. But what good is that for Graffham? A priceless part of the South Downs heritage has been bulldozed out of recognition. Is this haphazard, piecemeal development of county oil policies really the best method of ensuring protection of the nation's beauty spots? Is it really what Parliament intended when it established AONBs? Is there not a case for some central control and consistency of approach! Before leaving Graffham, I am very sorry to say that my noble friend Lord Cork and Orrery is unable to speak tonight because of another engagement. He lives in the next-door parish of Heyshot and would have been able to give local views and make other important points.

An examination of county structure plans quickly reveals the major difficulties councils encounter when shaping their oil policies. There are five. First, all the councils are united in their desire to protect the small, easily-definable and highly specific items of our national heritage within their county boundaries. Hence, in all the structure plans there is a "presumption against" oil exploration in, for example, sites of special scientific interest, nature reserves and so on. But no such special protection is afforded to areas of outstanding natural beauty. Why not? I suspect that quite simply it is because an AONB is too large a concept for a local council to comprehend because it cuts across county boundaries. But surely the pleasure the Downs give—and presumably the very reason why they are designated as an AONB—is that they are one of the few remaining significantly large tracts of uninterrupted land on which it is still possible to walk for miles without the intrusion of industrial development. Every time industrial development is permitted, however seemingly innocuous and inconsequential it may appear to the immediate locality, it diminishes the greater concept on which the AONBs were established and ultimately give the nation less and less reason for giving them special status.

Secondly, councils usually base their decisions on industrial development applications on the potential benefits for the local community. That is what they are there to serve. But in the case of oil exploration and production there are no benefits for the local community. To illustrate my point, let me take two extracts from the East Sussex County Council's explanatory notes: The financial and economic benefits to the local authorities and to the local economy from drilling exploratory boreholes are very small. Even the full development of an oilfield will produce only a modest boost to local employment. Also: An exploratory borehole is not assessed for rates and the rateable value of a productive oil well is not very great. So, faced with none of their usual assessment criteria and with no specific directions as to the circumstances in which AONBs are to be protected. what are councils supposed to do? The probability is that they will divide along national party political lines and try to decide from their different ideological standpoints whether the applicant has a legitimate claim to the national interest. This is manifestly not something that they are equipped to do and it is something, I would respectfully suggest, which is more correctly the prerogative of these Houses of Parliament. Is it surprising that, placed in this insidious position, councils are more likely to vote for today's fashionable obsession—oil—rather than for the preservation of the status quo for tomorrow's world?

I do not seek thereby to understate the nation's continuing need for oil. But in order to put the need for on-shore oil development into perspective, your Lordships may be interested in the following facts taken from the BP Statistical Review of World Energy, 1982. United Kingdom production was 2,120,000 barrels daily and United Kingdom consumption was 1,580,000 barrels daily. The country is therefore a net exporter of oil. In addition, Western European oil reserves, which comprise in major part the United Kingdom reserves, currently stand at 23 billion barrels.

By contrast, Carless's current predictions for a Ditchling Beacon oilfield, if indeed there is recoverable oil present at all, are for a total of about 5 million barrels to be produced over a period of 20 years. In other words, the total amount of oil, if it were to be produced all at one moment in time, would keep this country going for no more than 3½ days at today's consumption rates, which is equivalent to 0.04 per cent. annually of the nation's requirement. I accept that oil production forecasting is notoriously difficult but Carless Exploration would agree that, given the fairest of minds. that estimate will not rise beyond a total of 10 days. That is the extent of what constitutes, in my view, a very tenuous claim to the national interest and which threatens to destroy if repeated four of five times along the length of the Downs—as now appears distinctly possible—hundreds of years of our visible heritage for present and future generations.

My final point is that local councils, without putting too fine a point on it, are ignorant of the world of oil exploration and production. This is not intended to be taken pejoratively, but simply reognises the fact that onshore oil production is a novel development. Nothing that they have encountered before has quite prepared them for it. For a planner, even with a massive experience, it is a difficult and complex discipline because there are so many variables and uncertainties. It is quite impossible for an applicant to specify precisely at the outset of the development just how many well sites, boreholes and rigs will be required to complete the exploratory stage. Similarly, it is impossible for the applicant to specify precisely the time-scale of this stage of the operation. Similar uncertainties surround the nature and extent of the production facilities eventually required to extract it, until the oil has been tested and its properties and dispersal are known. The initial application to the council has been likened to a blank cheque and although theoretically the council can reject any subsequent applications it is difficult to imagine its happening once the commercial momentum has been started.—

Lord Oram

Hear, hear!

Lord Teviot

My Lords, I would say, Oh good! It is nice to hear a voice. Sometimes one feels one is just talking to cushions! Is this not another reason for lifting the decision-making process out of local government into the national forum so that oil exploration plans in AONBs, if they are to continue to be placed there. can be examined at the outset by technical experts and the chances of them growing, like Topsy, can be reduced?

I am grateful to your Lordships for listening to the points that I have made. I am asking my noble friend on the Government Bench what policies the Government have towards oil exploration in AONBs because in so far as I have seen them in operation they do not seem to be either sufficient or strong enough to protect them. Although I do not wish to pre-empt what he will say, I shall be interested in his views on two possible remedies. The first and ideal one is that the Department of the Environment agrees with the Department of Energy areas where exploration permits will not be issued. These latter will, I hope, include all AONBs. Secondly, failing that. an agreement could be made with local councils on specific no-go areas which extend beyond individual county boundaries and which in particular include high land. Thirdly, councils could be directed to institute a "presumption against" oil exploration in all AONBs. I urge the Government to act quickly and to review those applications which have already been submitted.

Finally, may I say that the whole subject of this debate has been brought to me not from any local authority but from preservation societies and I am sure that the country is very grateful for their efforts regarding the conservation of our countryside over the past twenty years. These societies bring these matters to our attention and they urge us to get up on to our feet and speak for them. My Lords, I look forward to the rest of this short debate.

8.20 p.m.

Lord Oram

My Lords, I very much welcome this opportunity of supporting the noble Lord, Lord Teviot, in his protest about this threat which overhangs the South Downs, which he and I know so well. Like him, I should like to offer my congratulations to my noble friend Lady Nicol on her assumption of duties at the Dispatch Box, and I wish her well not only this evening but in the future.

I join in this debate in my capacity as president of the Society of Sussex Downsmen. That is a role which I am very glad to fulfil, because since my early boyhood, in many different ways and on many different walks, I have appreciated the beauty of the Sussex Downs, sometimes guided by the book which the noble Lord, Lord Teviot, has written in this respect. There is no doubt about the great beauty of the Sussex Downs—what Kipling called our "blunt, bowheaded, whale-backed downs".

That beauty of the Sussex Downs has inspired many of the best of our nation' s poets—Hilaire Belloc, William Blake, Robert Bridges, John Goldsworthy, Rudyard Kipling, Alfred Noyes and Lord Tennyson. All these famous people have extolled the beauty of our downland and now, as the noble Lord has explained so carefully, there is no doubt that that beauty is under threat from unwelcome commercialisation. As he said in his closing remarks, that threat has aroused great protests from many organisations which are concerned to preserve the Sussex countryside.

The noble Lord pointed out that, although his Question this evening refers to Ditchling Beacon, this is the second drilling application in recent times. He explained that in the village of Graffham, in West Sussex, earlier this year there was a similar application and similar controversy. On that occasion, on behalf of the society which I have mentioned, I was in correspondence with the Minister responsible—at that time, it was Mr. Giles Shaw—about the application for drilling in the Graffham area. I urged him, as the Society of Sussex Downsmen urges, that in this matter there should be a public inquiry, and it is that point that I particularly hope to impress upon the Minister who is to reply this evening.

I would just quote one paragraph from the letter which Mr. Giles Shaw sent to me on that occasion. He said: Under the Town and Country Planning Act 1971, Parliament has given the day to day responsibility for the control of development to local planning authorities (the County Council in this case), and it is therefore only in exceptional circumstances—for example, when matters of national or regional importance areinvolved—that the Secretary of State would feel justified in intervening". I believe that that paragraph is based on a complete misconception of the problem with which we are concerned, because this is not a local question. This is a regional question and for that reason it justifies a public inquiry.

Of course, any particular drilling is local. Graffham was a local case. Ditchling Beacon is a local case. But we said at the time, in the spring of this year, that the Graffham application would be the first of many. We now have the Ditchling Beacon one and in a report the planning officer of East Sussex County Council says: Several planning applications are expected for a variety of sites over the County within the next 12 months". What, I wonder, is to come next. Will it be Kingston Ridge near Lewes—that would be a local case. Will it be Wolstanbury?—that would be a local spot. Will it be Mount Caburn, Lancing Clump or Firle Beacon? Each one of these taken seriatim could be considered local and, therefore, not justifying a public inquiry. But when we take them all together, we clearly have a regional problem. The South Downs are a region, and a particularly important region as the noble Lord has pointed out. They are important, because they have been designated as an area of outstanding natural beauty.

The noble Lord quoted a paragraph from the policy statement of the Countryside Commission, which I shall not now need to quote which I was proposing to quote. But I would follow his quotation with one from a press release of the Department of the Environment. That reads: The Government agree with the Commission's"— that is, the Countryside Commission's— view that, in general, it would be inconsistent with the aims of designation to permit the siting of major industrial and commercial development in AONBs. Only proven national interest and lack of alternative sites can justify any exception". That. I suggest, is the Government's policy and I hope that the Minister, in answering the Question this evening, will reiterate that that is the Government's policy and it will be applied in this case.

How can it be said that there is a "proven national interest" to justify these drillings? The noble Lord, Lord Teviot, dealt with the oil question, and whether it is in the national interest that we should seek out this tiny fraction, as it would be, of oil supplies for this country. I do not believe that there is the beginning of a case on the national interest theme. But if it is claimed that there is a national interest, then why should it not be deployed before a properly constituted public inquiry? That is where the oil companies should openly state their case. Not only that, it would give the preservation societies, of which there are many in the county, the chance to state their case in opposition to that of the oil companies.

In recent years your Lordships' House has dealt in great detail with two important Acts which are very relevant to tonight's discussion. There was—and we remember the long proceedings on it—the Wildlife and Countryside Act and, more recently, there was the National Heritage Bill. I claim that the South Downs are one of the most beautiful areas of the British countryside and that they are, indeed, one of the treasures, both historically and aesthetically, of the British heritage. Therefore, it would be criminal to allow their beauty to be despoiled, unless there is an overwhelming national case on the other side; and, as I have indicated. I do not believe that there begins to be such a national case.

The poet Alfred Noyes, one of the poets on the list which I gave just now, wrote a poem of protest against the destruction of the South Downs flora. I believe that his protest might equally be directed against the current threat to the Sussex Downs. I shall quote and then sit down: Not into words can I distil The pity or the pain Which hallowing all that lonely hill Cried out 'Refrain. refrain' ".

8.30 p.m.

Lord Beaumont of Whitley

My Lords, more than the average amount of conventional thanks are due to the noble Lord, Lord Teviot, for having raised this matter this evening. He has given two opportunities to the House: first, to ask about Ditchling; secondly (and this is no less important) to ask about the presently established procedures for coming to a decision on a matter like this. I know that the department has this matter under consideration at the moment, but this is a very suitable moment to reinforce the argument that there should be a rearrangement of the procedures in aid of preserving the countryside, both in areas of outstanding natural beauty and in national parks.

As tonight's debate shows, there is considerable disquiet about the procedures for licensing, prospecting and drilling in those areas. There is no dispute that mineral sources should be explored and, in many cases, exploited; and, of course, that there are times and occasions when exploitation comes very high on the list of priorities—for instance, in wartime, or at a time of fuel crisis. No national park or area of outstanding natural beauty can claim to be completely sacrosanct, and nobody has made that claim tonight. But every proposition to despoil in any way these areas must be explored carefully, publicly and in time so that it can be stopped, if that is what the community decides.

As I understand it, the present procedure envisages three stages: first, an exploration licence, which gives rise to seismic surveys and shallow drills; secondly, what is called a production licence, after which deep exploratory wells can be sunk; and, thirdly, planning permission, after which actual production can go ahead. The stages as they are, and the nomenclatures appended to them, are muddling and can lead to real problems. It is often suggested that there is a real safeguard at the planning permission stage, after which production can go ahead. But I understand that there are no examples of the Government refusing permission to exploit, once oil has been found. And it usually comes to Government. As has been pointed out, this particular stage is not very suitable for local authorities, because so much pressure is put upon them.

I would follow the excellent suggestion which has been put forward, I understand, to the Ministry by the Council for the Protection of Rural England: that at a very early stage, the exploration licence stage, the Secretary of State for the Environment should be brought on to the scene, particularly in sensitive areas—the kind of areas we are discussing tonight. It seems to be absolutely wrong that the Department of Energy should go ahead with issuing licences at this stage without at least alerting and preferably consulting the brother or sister department, which must have a real interest in the situation.

Secondly, in the case of particularly sensitive areas the Secretary of State for Energy should be able to inform potential licensees that if finds are made during exploration no subsequent exploitation is likely to be allowed to be made because they are areas of considerable sensitivity—which, of course, they will know if they have done their homework. But it has to be said that some of the companies which are now exploring for oil do not necessarily have the expertise and ability to discharge to the full their responsibilities. This is the moment when it can be said that production rights will not necessarily be given. Possibly a compromise can be achieved by saying to the company, "You can explore; exploration is in the interests of everybody, since we should know what is there, and, by exploring, you achieve the right to sink wells for oil eventually. But you must not take it for granted that permission and a licence actually to extract oil will come in the near future, or at all. All we can say to you is that if you undertake to go ahead with exploration you will have reserved rights when permission is finally given, if it ever is".

Thirdly, provision should be made for public inquiry where there is a substantive volume of unresolved objections, as happens with road schemes. I can well believe that some of the ministries and civil servants may not be too encouraged by the thought of having to go through the same procedures as apply to road schemes, but on the whole our roads inquiries have been seen, and are seen by other countries, as models of their kind. I see no reason why this kind of public inquiry should not take place.

The present system is confusing. It is too easy for licensees to creep up on their objective, with no real chance for the public interest to intervene. As the noble Lord, Lord Teviot, said, once permission for one well to be sunk has been given the chance of finding the courage, the backing and the independence to say, "No, no further", grows more and more remote. The time to stop, if you are going to stop, is at an earlier stage. That earlier stage must be signposted so that everybody who is interested—both those who want to extract the oil and those who have doubts as to whether it should be extracted—can see exactly what happens at each stage and where the decisions are made.

The object of what I have set out. which I hope the department is already exploring and will continue to explore, is not to stop the exploitation of minerals and oil—still less to stop exploration which, as I have said, is extremely important—but to allow the community as a whole, whether at local or national level (and there is a case for saying that both levels should be brought in) to make up its mind whether in this particular instance, in this particular place, exploration and exploitation should be allowed.

8.40 p.m.

Viscount Torrington

My Lords, I came along tonight to listen to this debate, but as somebody who works in the oil exploration industry—especially, one exploring on-shore in the United Kingdom—I am afraid that I was unable to resist the temptation to rise to my feet. Your Lordships might think mine was a dubious qualification for speaking in this debate, but perhaps I can add a couple of better ones. The first is that I myself live in a fairly attractive area of Hampshire which is under licence to a company which has been mentioned already—Carless Exploration —and the second is that I went to school within what the noble Lord, Lord Teviot, called the good golf shot of Ditchling Beacon. So perhaps I have a little knowledge of this problem.

One of the greatest problems the oil industry faces in exploring on-shore in the United Kingdom is that this country has come to know something about the oil industry from essentially the wrong end. In the United States oil drilling started off as something that was done with a little cable tool rig and two men and a dog—a small engine, a small derrick maybe 20 feet in height which hauled the tool up and down and dropped it. It is essentially the same equipment that has been used in drilling water wells all over the world.

We first saw the oil industry through the development of major off-shore fields in the North Sea. The British public has seen on television huge concrete structures, and they have heard the sort of figures involved in that type of exploration. But the on-shore oil industry is not really comparable. In areas of outstanding natural beauty, I do not believe that anybody ever particularly disliked the sight of an old water well; that simple, latticed mast with a little fan on top. In fact, one hardly ever sees such wells now because they have almost disappeared throughout the entire country. But essentially those old water wells are just the same as oil wells; they are merely completed in a zone below ground from which water is extracted as opposed to oil.

Essentially it is a cottage industry on a slightly larger scale, perhaps, than the old-fashioned cottage industry. I always hate to introduce an American analogy because I believe to do so often puts a number of people's hacks up—hut it is very much a cottage industry still in the United States. The average oil well in the United States produces less than five barrels of oil a day—that is, about 150 gallons of oil a day. The majority of wells are drilled by individuals rather than by companies; by the old-fashioned oil speculator, so called. When wells are drilled, it is a matter between one individual and another—between the man who wants to drill the well and the landowner. People do not feel threatened to anything like the degree they seem to feel here by the very corporate nature of the oil industry.

The noble Lord, Lord Teviot, suggested that areas of outstanding natural beauty can be lost for ever as a result of oil drilling. We appreciate that when a well is drilled, a very large piece of equipment is brought along and an area of land has to be flattened. The process is very visual for a while, but the majority of exploration wells in Southern England have to date been dry, and although techniques for deciding where oil may be are improving, no doubt the majority will continue to be dry in the future. The oil industry puts a great deal of effort into the restoration of these sites. I have some experience of trying to find sites where oil wells have been drilled within the past 20 years, and it is often extremely difficult to identify the precise spot.

Site restoration is something of which the oil industry is only to well aware in the event of a dry hole. In the event that oil is successfully found, a single well will probably consists of a pump jack, and maybe a stock tank and an electricity line laid to drive the pump. But those items can be considerably less disfiguring than, for example, a site I see every day from my house—which results from a neighbouring and very good natured farmer, who nevertheless abandons equipment when it ends its useful life. His land is strewn with old combined harvesters, which are considerably more obtrusive than pump jacks would be.

The oil industry is very aware of the environmental problems. I do not believe, as the noble Lord, Lord Beaumont of Whitley, suggested, that it expects to creep up on planning permissions. The degree of public interest that is shown in these matters really pre-empts that.

Lord Beaumont of Whitley

If the noble Viscount will give way, my Lords, I should like to make it plain that I was not in any way suggesting that the oil companies were doing that on purpose. I was merely suggesting that it was the effect that happened from the public point of view. It may be just as bad for the oil companies because they may get to a stage where they find that public opinion tries to stop them, a stage where they find that they have been put into a false position. I was certainly not suggesting that it was the oil companies' fault.

Viscount Torrington

My Lords, I am grateful to the noble Lord for that clarification. Touching on another point made by the noble Lord, perhaps it would be desirable that the oil industry should explore, given a situation where it had almost no right to exploit—only a right in the sense of a lease from the Government relating to the oil rights but with no reasonable expectation of planning permission unless it can show a very good case.

One of the problems is that drilling for oil is not a cheap business. It is considerably more expensive off-shore than on-shore. I might add that the cost per foot of drilling wells in this country is about ten times the cost in the United States where they have a developed industry of this nature, whereas we have a relatively under-developed industry. To drill a well costs approximately £100 a foot in this country, so if one drills a 5,000 foot well one has £500,000 invested in that well. It would be very difficult to have any wells drilled at all if there was less than a 50–50 chance that companies would have the opportunity to exploit anything they find.

The drilling of a well is an exploratory process. Everything one says or tries to say to local people, to councils or in planning inquiries is based on supposition. One does not know whether oil is down there until one has actually drilled a well to find it. The oil industry has to find a way to live within the constraints of the planning process and in a way that will allow it to do its work and allow people to be reasonably protected—indeed, well protected—from bad and ill-thought-out developments.

In Southern England the oil industry is very aware of the outstanding natural beauty of the country: not just of designated areas but of areas as a whole. I know that a great deal of thought is put into minimising the impact of developments. I hope that we do not create a situation in the planning arena which makes it impossible for this work to go ahead. There are benefits. We have enormous off-shore fields. But if by any chance there was some form of disturbance which affected Europe we would be very grateful for the amounts of oil—albeit small amounts, although perhaps Wytch Farm is not so small—at our fingertips. To that extent, these developments are considerably more secure strategically than our off-shore oil and gas developments.

8.49 p.m.

Baroness Nicol

My Lords, I am very grateful to the noble Lord, Lord Teviot, not only for raising this question so that we may discuss it tonight but also for his kind wishes to me, as I am also grateful for the good wishes of my noble friend Lord Oram. I am conscious of the honour that it is to stand and address your Lordships from this place—second only to the honour of being in your Lordships' House to begin with.

With the exception of the noble Viscount who has just spoken, we are all saying roughly the same thing although perhaps we have some variations on the theme. The subject raises issues far beyond that of Ditchling and even beyond areas of natural beauty. The Government's present policy, as I understand it, is to encourage the fullest possible development of oil resources, a policy based on economic and strategic considerations and not on environmental ones. The economic assessments appear to be based on assumptions about a possible future alternative source of energy. Perhaps these assumptions should be questioned at another time.

Tonight we are concerned with the environmental impact of drilling for oil or indeed gas. The noble Lord, Lord Teviot, drew attention to the need for central Government, policy on areas of natural beauty. It seems incredible, as other speakers have said, that licences to explore can be issued by the Department of Energy without reference to the Department of the Environment at all. Yet this appears to be the case. These licences enable the applicant to carry out seismic works and to drill shallow boreholes and he does not require planning permission at this stage. If his exploration is promising he then applies for a production In licence and will he required to obtain planning, permission for each borehole from then on. Lord Teviot was I think a little doubtful of the abilities of planning authorities to control the operation at this stage. Indeed the protection offered by the need for planning permission is of doubtful value.

Local authorities find arguments about the national interest very hard to resist. In any case, planning refusal can be overturned by the Minister from whom companies who have already made large investments in exploration are likely to receive sympathetic consideration, given the existing policy. During the past few years there has been a dramatic increase in the number of licences issued, and large areas of the country, much of it of outstanding natural beauty, will be explored on existing licences. There is an urgent need for a firm policy to rationalise the issue of exploration licences and to establish firm protection for particular areas.

We must define these areas with great care. No one denies the need for a healthy economy, especially in the fight against unemployment: but we also have a duty to protect our environment for the sake of this and future generations. I agree with Lord Teviot, who says that we must ask the Minister to consider that all applications for exploration licences should be cleared with the Department of the Environment. We further suggest that certain areas should be given absolute protection by a classification which would indicate that exploration licences would not even be considered. These areas would be limited in number. They would include certain areas of outstanding natural beauty of a particularly vulnerable nature where restoration is likely to be unsatisfactory. Also included would be sites of special scientific interest, and in a moment I shall enlarge on the present difficulties of these sites.

There could be a second classification of other areas of natural beauty or local amenity where exploration could be allowed against the possibility of future national need, but where production permissions would not normally follow. The public inquiry procedure suggested by the noble Lord, Lord Oram, could probably operate at this stage and in this classification, but it would be no substitute for a firm Government policy in the first place.

Now I should like to say a special word about SSSIs. These fragile survivors from better times are already under threat. They contain flora and fauna of recognised value and in many cases are irreplaceable. Even the noble Viscount's modest wells would wreak havoc on these sites. It is widely believed that the Wildlife and Countryside Act 1981 offers adequate protection for them. In fact the renotification necessary for their protection is proceeding too slowly because of the reduced budget of the Nature Conservancy Council, and many are being destroyed as each year passes. These sites are often not in areas of outstanding natural beauty and will therefore require to be specially defined in any new approach to exploration controls. The formula of "lost profits" compensation applied to agricultural protection would be far beyond the resources of the NCC if applied to oil or gas, and this would need to be recognised by the Government.

And now at last to Ditchling Beacon. Other noble Lords who know more of the area than I do have spoken with feeling on this subject. and I share their concern. The proposed alteration to the East Sussex County Council's structure plan indicates that they may take a less positive stand in defence of sensitive areas. I have the draft proposal, and as one who has been closely involved with the production of a structure plan I can see all the dangers in this one. Although Policy 1, as drafted, would appear to give fairly comprehensive protection to areas of natural beauty and indeed for the whole business of exploration, Policy 2 starts: Oil and gas development will normally he permitted only if the following criteria are met to the satisfaction of the planning authority… I am aware of the number of times that word "normally" has been included in structure plans for the sole purpose of allowing exceptions, which it is expected will be numerous and which are then the subject of inquiry after inquiry. I should think a lot more of the attempts of the County Council to protect if they had omitted that particular word.

They go on to list the criteria which will protect the sites and which must be followed. One of them is, It does not significantly injure an ancient monument or a listed building or its setting. What does the word "significantly" mean in this case? There are some of us who would argue that any injury to an ancient monument or a listed building or its setting is unacceptable. Again, this word "significantly" shows, to my mind, a lack of intention on the part of the authority. They continue in the next item: A landscape plan and programme is provided to ensure that the impact of the development is reduced as far as possible. There are other get-out phrases of this kind with which I will not weary your Lordships. But as a protective document that structure plan proposal is useless. In view of the attitude displayed in it, an attitude not unique to East Sussex, it becomes a matter of urgency that a national policy should be evolved for the protection of a national resource which, as the noble Lord, Lord Teviot, has said, is in its way as important to our well-being as the resources of oil and gas. All of them are finite.

8.59 p.m.

Lord Skelmersdale

My Lords—perhaps, just to prove that I have been listening to my noble friend Lord Teviot, I should say "my cushions"—I am most grateful to my noble friend for raising this Question this evening. It touches on a subject which I know to be of great concern to this House and to many outside. Energy and environment issues invariably arouse strong interest—even passion—not least among your Lordships. I must in this connection restrain my natural impulse to blow a kiss across the Dispatch Box in welcoming the noble Baroness, Lady Nicol, to the Opposition Front Bench. I am delighted to see her in her new position and to welcome her as Environment co-spokesman on the Front Bench opposite. I have no doubt that she will bring a lightness of touch which is on occasion so needed in countryside matters. I do not know whether the noble Baroness was here when we had the wide-ranging and informative debate earlier this year on the future of the Commission on Energy and Environment, but I can tell her that tonight's debate has definitely been in that tradition. I am grateful to noble Lords who have spoken in the debate.

My noble friend Lord Teviot naturally (if I may use the word) started with the concept of areas of outstanding natural beauty. He then continued to discuss the oil implications which are implicit in his Question. With the permission of the House, I intend to reverse that order.

It has been the policy of successive Govenments over the years to give every possible encouragement to the exploration for and proving of our indigenous mineral reserves. Oil and natural gas are an integral part of those resources. The cynic would probably say that this is because the Petroleum Production Act 1934 vested oil and gas in the Crown, but I am only a part-time cynic and certainly not one tonight. Whether or not this vesting had happened, in my view it is quite irresponsible for any Government not to discover the extent of what are clearly our national assets. It is only by determining the location and the full extent of these hydrocarbon resources that we can make sensible provision for the future and ensure that energy needs are balanced against environmental considerations.

I must agree with every noble Lord who has spoken that that is exactly the right policy to seek. We must at all times seek to achieve a balance in our planning law. Nobody would argue with that. It must be in the country's long-term interest to know at the very least what resources are potentially available.

Oil and gas exploration and extraction are by their very nature less intrusive than other forms of mineral working, and the potentially most objectionable phase—the drilling—is completed relatively quickly. However, when drilling is taking place, there can be considerable noise from the operations, together with visual intrusion from a derrick 120 ft. or so high—my noble friend Lord Teviot will correct me if I am wrong—and the flaring of gas if found and if allowed. Although each site may be occupied for only four to eight weeks, drilling in a particular district may continue for several years. The remaining surface development, if oil is found, can be effectively screened and operated without causing a nuisance or environmental problems. The outstanding example is Wytch Farm on the Purbeck peninsula in Dorset, the success of which won British Gas and the Dorset County Council jointly the Jubilee Cup of the Royal Institution of Chartered Surveyors.

My noble friend Lord Teviot compared such exploration with that of water. Like the Lord High Executioner, I have a list of exactly what has gone on since 1966 in the area of outstanding natural beauty that we are discussing. Let us take first public utilities: water bore holes and associated pumping stations; some covered reservoirs; overhead power lines; high pressure gas mains; and radio masts. Then there are playing fields. I think probably every noble Lord would admit that these are perfectly allowable under the Access to the Countryside Act 1949. The tipping of inert material at Waterhall at the back of Brighton was carried out for some years by the Brighton council. There is the case involving the University of Sussex and the polytechnic at Falmouth. There is then residential development in three villages which I need not mention. There are road schemes: for example, the improvement of the A..27 at Newmarket. An old chalk quarry is used as a county council tip. Another chalk quarry at Tarring Neville has recently been given planning permission for an extension. To say that areas of outstanding natural beauty should be sacrosanct and prevented from having change occurring in them is quite evidently nonsense.

Lord Teviot

My Lords. I am hoping that my noble friend has a point in bringing all these lovelies along about overhead power cables, chalk pits and all the other things referred to, but I cannot say that one accepts those any more than one accepts these. The power cables going up have made certain areas quite hideous. One certainly does not want any more. I cannot let my noble friend get away with it. I do not know what is on the rest of his list, or whether there will be any more items, but I shall listen.

Lord Skelmersdale

My Lords, I had hoped that I had proved my point. I certainly was not going to read any more from my list. In all those applications, I have not noticed the enormous public or local outcry which has been occasioned by the particular application—perhaps I might better call it a series of applications, as we are now on our second—to drill for oil on the Sussex Downs.

Where a mineral such as oil is found in any quantity within an environmentally attractive area some conflict of interest is inevitable. Resolving such conflicts depends upon assigning a value both to the mineral and to the damage that the working will cause both during the life of the site and permanently thereafter. This can only sensibly be done where details of the exact location, size and quality of mineral deposit have been proved and the various possible ways of exploiting it have been fully explained. In the case of oil, I understand moreover that on average only one in 35 exploratory bore holes drilled reveal oil in commercial quantities.

Noble Lords question whether the need for oil is so great in the present circumstances. The Government seek to ensure that United Kingdom oil and gas resources are developed economically and expeditiously, while taking full account of environmental and other considerations, and that a fair return to the Exchequer is obtained while ensuring that developments which are economic pre-tax remain so post-tax.

Oil and gas production on the United Kingdom Continental Shelf is expected to peak within the next few years. In particular, the Government seek through their fiscal and regulatory functions to ensure that a high level of United Kingdom oil and gas production will be maintained at least until the end of the century. This means exploration both on the Continental Shelf out at sea and at land-based sites.

Having said that, we recognise that even the prospect of exploration, much less a firm intention to exploit, arouses strong feelings in areas of attractive and beautiful countryside such as is typified by the Sussex Downs. This is entirely understandable, but it is an uncomfortable fact that many mineral deposits occur in some of the most beautiful parts of the countryside. We cannot pretend that these do not exist, nor that the economy can prosper without our exploiting some of these essential sources of supply. It is a truism to say that the extractive industries can operate only where the raw products are to be found, be they coal, limestone, oil or any other of the natural substances upon which our modern world relies. The Government have a duty to ensure that adequate provision is made for the development of these resources in the years ahead. Equally however we have a responsibility to weigh carefully short term economic gains against the longer term implications for the beauty of our countryside and for nature conservation.

It might be helpful to the House if I, like the noble Baroness, Lady Nicol, and indeed the noble Lord, Lord Beaumont, were to say a few words about the respective roles of the licensing and planning systems. Licensing gives certain rights and responsibilities to a single company for any given area. What it does not do—and I think this is important—is to confer any planning or access rights: a company licensed by my right honourable friend the Secretary of State for Energy needs to obtain any necessary planning permissions before any development can take place at any particular site.

Planning permission will normally be required on at least two occasions. First, when an application is made to drill an exploratory well; and, secondly, if oil is found, to put in production and transportation facilities. Under planning law, it is the responsibility of county councils—in this case, East Sussex—to determine applications relating to mineral exploration and extraction. This they do in their county plan, and the noble Baroness referred to the green document and she has a very good point. The noble Baroness and the House will of course know that it is part of the perogative of my right honourable friend the Secretary of State for the Environment to approve proposed changes in structure plans and I will see that he takes her remarks into account when he comes to look at that particular proposal.

Having made sure that the proposed application is within the structure plan, the planning authority will decide such applications, taking into consideration the views of local people, the district and parish councils, and so on. In only very rare circumstances, where issues of regional and national significance are involved, are such cases called in for determination by my right honourable friend the Secretary of State for the Environment after a public local inquiry. I am sure that noble Lords will agree that it must be right for the vast majority of planning applications to be decided by local authorities. After all, it is local people elected to such councils who know the site where the development is proposed and who can take into account all relevant considerations.

The Ditchling Site is, as we now know, in the Sussex Downs area of outstanding natural beauty. The Government regard the AONB system as having a most important role in conserving our natural heritage. The landscape of designated areas is recognised as being of national importance in terms of their natural beauty. This means in general we should not expect to see the siting in those areas of, for example, large scale industrial or commercial development unless there was a proven national interest and no reasonable alternative site was available. In other words, the national significance of the amenity value in these circumstances becomes a factor to be weighed in the balance against the need for the development concerned. As I have already said, in the case of minerals this "need" argument has to include the unhappy fact that they can only be worked where they occur.

I apologise if that sounds an unnecessarily abstract way of talking about some of our finest areas of countryside. I like, I am sure, every noble Lord in the House this evening was very moved by the speech of the noble Lord, Lord Oram. I wish that I had his facility with quotations so that I could quote one back at him. But I can assure the House that I have not lost sight of the basic issues that we are discussing here today. Few visitors walking along the South Downs Way on a fine summer's day would be very much concerned with terms such as "national scenic importance", or "outstanding natural beauty". They would be too busy enjoying a day out in one of the most beautiful parts of Southern England. The scenery and the magnificent views would be sufficient in themselves.

The Government's job is to provide guidelines by which others, principally the local authorities, may formulate more detailed proposals for the shape of future land use within each area. Local authorities should take these guidelines into account in preparing their structure and local plans. A number of local authorities now have approved structure plans containing policies for oil and gas development as well as those for the protection of the environment. As I said just now to the noble Baroness, East Sussex County Council are in the midst of this process.

My Lords, you will understand if I do not venture into discussion on the merits of the County Council's policies in this respect, nor on any application to the proposals for exploration near Ditchling Beacon which the Council is at present considering. As long as the possibility remains that those proposals might at some future stage come before my right honourable friend, the Secretary of State for the Environment, for decision, I think it would be preferable if I were to confine myself to matters of general principle rather than individual cases. But the approach adopted by many local authorities towards oil and gas development is certainly one which we would commend to your Lordships. It offers in our view a sound basis for the proper consideration of mineral applications and reflects the Government's firm policy that all such applications for substantial new working in AONBs, or extensions to existing workings, should he subject to the most rigorous examination because of their potential impact on the natural beauty of those areas.

I hope it is clear from what I have said this evening that we are acutely conscious of the need to strike the right balance between meeting the nation's energy requirements from indigenous sources and protecting the environment in some of our more beautiful areas. But there is no escape from the dilemma that I put to the House at the beginning—that many valuable mineral resources are to be found in outstanding, naturally attractive areas. I can assure the House that we shall continue to encourage local authorities to take a responsible attitude towards these matters and to insist that all applications in AONBs and in other environmentally sensitive areas are subjected to a full and rigorous assessment.

The noble Baroness, Lady Nicol, suggested, if I have understood her correctly, that it is wrong for large areas of environmentally attractive country to be covered by oil production licences, and that such licences, anyway, should not be issued without the consent of the Department of the Environment. As I understood it, she proposed the creation of super sensitive sites. It is my view that this would undervalue areas of outstanding natural beauty that have been with us since the National Parks and Access to the Countryside Act 1949. I would hate to have a new body, or even a sub-body, to determine what, or perhaps where, such sites should be. We would immediately have second-class sites. In this connection, I would remind the noble Baroness of her own answer to the question, rather like her noble friend Lord Graham the other day, that in this connection, anyway, SSSIs have nothing to do with AONBs. One might be superimposed on the other, but they are there for totally different reasons.

Lord Graham of Edmonton

My Lords, they are both badly treated by way of being looked after and cared for by the resources that the Government give to the Nature Conservancy Council.

Lord Skelmersdale

My Lords, they are considerably better treated than if they had not been identified in the first place.

My noble friend Lord Teviot had, I think, a rather better idea. That was to have all areas of outstanding natural beauty excluded from oil and gas extraction applications. But we all know what is contained in Section 39, I think it is, of the 1949 Act. But only the Government can decide upon just what is the national interest. Once that is established, I can see no possible reason why a planning authority should not decide on local issues of environmental sensitivity and all the other local issues.

Having said that, the noble Lord, Lord Beaumont, is correct. My right honourable friend the Secretary of State for Energy is undertaking a review of current licensing procedures, and the views expressed by noble Lords tonight will be carefully considered in this context. I must say, however, that I can see grave dangers in a system whereby the Department of the Environment is asked to give its blessing to licensing large areas of countryside, for, really, the environmental implications of a proposal can be fully considered only when the exact site is known. I can see a good deal of merit in the current clear distinction between licensing and planning procedures.

House adjourned at seventeen minutes past nine o'clock.