HL Deb 04 December 1986 vol 482 cc966-72

5.24 p.m.

Lord Mountevans rose to ask Her Majesty's Government whether the public inquiry called by the Secretary of State for Energy to consider BP's plans to transport oil by pipeline from Wytch Farm through the New Forest will enable adequate consideration to be given to alternative methods of transporting the oil from the field to refineries, bearing in mind the specific policies for the New Forest advanced by the Secretary of State for the Environment and the interests of the Secretary of State for Transport.

The noble Lord said: My Lords, the Question arises from British Petroleum's plan, which has conditional planning consent from Dorset county council, to expand oil extraction from its Wytch Farm field to a level of perhaps 3 million tonnes per annum, and the consequent need to transport this oil to the Hamble tank farm on East Solent side. There are only two practical routes for this transportation. One is a pipeline through the New Forest, consent for which is the concern of the Department of Energy's inquiry called for Tuesday next, while the other is the railway which already transports Wytch Farm production and will in future convey by-product liquefied petroleum gas from the field.

My interest in the issue stems from my being both a New Forest resident and a regular user of the railway. My concern is that the inquiry does not confine itself to the pipeline and to the pipeline's detailed routing considerations of perhaps, six feet here and six feet there. I would rather ask the noble Lord the Minister to ensure that it also takes into account public policy as stated by the Secretaries of State for the Environment and for Transport, and indeed the interests of those who live in or enjoy the Forest as a whole.

The New Forest has been in existence for thousands of years. Consisting of both public and private lands, it is designated a heritage area and is one of major recreational importance. It can be considered a candidate for national park status. BP's proposal is to drive a 56 mile pipeline, of which some 25 miles lie within the New Forest district council's area. Of these some 15 miles would run within the heritage area, between three and four miles within the New Forest perambulation, and seven miles within the designated South Hampshire coast area of outstanding natural beauty.

We are all trustees of the Forest, charged with conveying our centuries-old inheritance to our successors in as good a state as we received it. Whatever environmental impact assessments say, we would be failing in our duty if we permitted BP's pipeline to go through. During construction there will be disturbance, not only to wild-life but also to botany. And no matter how careful the restoration work which follows upon construction, the pipeline will leave a 60-foot wide scar, including access roads, where hedges and trees will be missing. These will be permanent scars inflicted upon the Forest in the cause of a utility which, we are told, will have a life span of 30 years at most. But will it be just 30 years? There is evidence of considerable reserves of oil beneath the Forest itself and in the fullness of time it may become necessary, or indeed desirable, to exploit these. Such exploitation would go against the South-West Hampshire structure plan which states, in precis, There will be a strong presumption against development in connection with the extraction of oil within the perambulation of the New Forest.". In approving the structure plan, the then Secretary of State for the Environment added in clarification the words, development in connection with extraction is taken to include development in connection with the transportation of oil and natural gas … this applies whether or not the point of extraction is within the perambulation of the New Forest".

These two quotes seem to me to define the Secretary of State for the Environment's interest in the pipeline inquiry. His position would become untenable if the pipeline was allowed and subsequent development applications were made. Authorisation of the pipeline is the key to a future BP policy of exploitation by stealth. How could that be squared with the stewardship that I mentioned earlier, a stewardship which we will be paying to disown, because the pipeline, if authorised, could be funded to the tune of perhaps 75 per cent. by means of tax relief under the petroleum royalty tax formulas. The public purse would, in fact, be subsidising the pipeline.

A pipeline through the New Forest, with the implications for future development, is not a happy thought, any more than is the one that I have just explained that this pipeline would be subsidised. The pipeline would also be duplicating the already subsidised rail facilities which link the Furzebrook gathering station with the Weymouth to Waterloo railway and thus with the branch to Fawley refinery and the route by rail to the Hamble tank farm. The core of this route is the main line from Wareham to Totton—a line currently subject to over £40 million of investment in electrification west of Branksome and in new Inter-City type trains. The Secretary of State for Transport grant-aids this and almost every other railway, in order to ensure provision of a service at a level beyond that which is commercially viable. But taking the passenger railway as a whole, the Secretary of State is keen to see the global subsidy reduced and has for several years reduced the public service obligation grant. The British Rail Board has been given clear directions to increase the viability of all sectors of its business and is setting stiff targets to achieve the Minister's aim.

I am confident that British Rail could handle the expanded Furzebrook production. Three million tonnes per annum flows are not new. British Rail already moves 17.5 million tonnes of coal per annum into the Drax power station complex; 3.5 million tonnes per annum into Didcot; and 3.4 million tonnes of stone products per annum from Minehead in Somerset to the London area. All these transits involve busy main lines. Abroad, Swedish and Norwegian railways have moved as much as 20 million tonnes of iron ore per annum, with the associated empty train traffic, over the single track line from Kiruna in Sweden to Narvik in Norway. So a flow of Wytch Farm dimensions can easily be coped with.

There are of course opponents to the rail option. Those living in the urbanised areas close to the railway are concerned about noise levels. One cannot be dismissive of this concern, but to them I would say that noise levels are part and parcel of living near railway lines. I live within 10 yards of the Bakerloo Line and I have grown used to the noise it generates. Along the Fawley branch there is an argument that considerable housing development has taken place since the line lost its passenger service—a service of three trains a day, in the heady days of July 1939, generally regarded as the all-time climax of the British steam railway. This development occurred not because of the presence or absence of trains on the Fawley branch but because of the insatiable demand for residential accommodation in the area. The residents of the area have seen their public transport decimated and are crying out for investment in corridor road facilities. Wytch Farm oil on the Fawley rail branch might well enable them to enjoy restitution of an electrified passenger railway.

The Secretary of State for Transport has, as I have explained, an interest in next week's planning inquiry, as has the Secretary of State for the Environment. So too do the residents in and the enjoyers of the New Forest. I ask the noble Lord the Minister to assure us that the interests of all will be considered at the forthcoming inquiry.

5.35 p.m.

Lord Stoddart of Swindon

My Lords, I should like to thank the noble Lord, Lord Mountevans, for raising this most important Question and indeed for the manner and the concise way in which he has explained the problem to the House this evening. It is clear that he needs little help from me in making his case, which I support, but the Opposition feels that it should say a few words.

When I was first given that task I felt that I was an interloper in the debate, since the question, as has been said, really involves matters of transport and environmental concern. The connection with energy matters seemed to me quite tenuous and arose only from the fact that the proposed pipeline was to carry crude oil. Presumably, if it was to carry milk, the Government spokesman would have had responsibility for agriculture; if the commodity was to be water, the Government spokesman would have been concerned with environmental matters. However, when I thought further I was persuaded that there is an important energy connotation arising from the Question of the noble Lord.

It is self-evident that had there been no decision to increase output from Wytch Farm from 6,000 barrels a day to 60,000 barrels a day, the question of alternative transport of oil to the refinery at Fawley would not have arisen. No application for a pipeline would have been made and the railways would have continued to handle the traffic as they have done hitherto.

All this raised a question in my mind as to whether such a decision at this point in time to raise tenfold onshore oil production at Wytch Farm is a wise one. I raise this question not in a spirit of contention but as a genuine inquiry. I understand the argument for depletion at a high rate of North Sea oil, though I do not necessarily agree with it. The capital and running costs are very high and a quick return is thought to be necessary to encourage oil companies to explore and develop North Sea oilfields.

However, the same is not true of onshore oil, since the capital costs of exploration and development are much lower and a modest flow of oil over a longer period of time may be beneficial in terms of conserving oil supplies against the rundown of North Sea oil reserves. It may also be beneficial in terms of obtaining a better return later on in the 1990s, when oil prices are almost certain to be much higher than their present depressed level. The noble Viscount, Lord Davidson, may like to comment on this aspect when he winds up, but if he does not do so, bearing in mind the nature of the debate, I shall understand his position.

There is another point which I should like to raise, which is the apparent lack of a coherent oil transportation policy. There is a good deal of oil exploration going on at the present time, and it is likely to increase. It is important that the Government, and indeed all of us who are concerned with the environment, should consider this question. None of us wants a situation where oil pipelines spring up willy-nilly all over the place and where proper consideration is not given to alternative means of transport which may be available. Whether that alternative transport is by rail, by sea, or perhaps even by means of oil pipelines under the sea, I think it is necessary to think about this problem, bearing in mind the increase in exploration and the increase in oil finds onshore. We need a coherent policy which is known and which can be inquired into and understood.

I also wonder whether it is good environmental practice to construct a pipeline with so limited a life. The noble Lord, Lord Mountevans, has asked this question, but it is important that it be emphasised. Is it envisaged that this pipeline will be used for a much longer period of time because the Government intend—or perhaps BP intend—that there will be further exploration of oil which will perhaps fall just outside or even within the perambulations of the New Forest? Perhaps the noble Lord can comment on that.

I also believe that the people of the New Forest are entitled to ask whether the construction of a pipeline through the perambulations of the New Forest would set a precedent for other possible applications for pipeline use. For example, if British Gas wished to construct a pipeline, would this application have set a precedent. Could such a pipeline be refused? These are questions in which the residents of the area would be interested.

Finally, I should like to support the noble Lord, Lord Mountevans, concerning rail transport. The necessary infrastructure already exists. Oil traffic is already being carried by British Rail. They have the technical ability to carry the increased freight and the increased oil. They can do that with improved track; they can do it with improved vehicles; and they can do it with improved locomotives. They would be enabled to do that if they had the necessary amount of traffic.

I appreciate the problems of people who live alongside the railways. I appreciate the problems that the people of Brockenhurst might experience with level crossings, although I understand that the delays at level crossings will be minimal. We must also bear in mind that with the electrification of the line the noise levels could be reduced to about 78 decibels. If my memory serves me correctly, the noise from a roadside is about 92 decibels. I live alongside a main road, and in time of course one gets used to the traffic. But it seems to me that, with improvements, the people living alongside the track would be better off in the long run because the capital would be available to improve the track, to improve the trains and reduce the noise levels.

I should like to support the noble Lord, Lord Mountevans. I think he has made a very good case for ensuring that all the aspects of transporting oil from Wytch Farm—the environmental and transportation aspects—should be taken into account. I await the noble Viscount's reply with the greatest of interest.

5.41 p.m.

Viscount Davidson

My Lords, I am most grateful to the noble Lord, Lord Mountevans, for raising this subject. I shall start by saying to him that my department will study carefully both his remarks and those of the noble Lord, Lord Stoddart of Swindon.

Our oil reserves are a valuable national asset which need to be developed in an environmentally acceptable way. Wytch Farm has been in production since 1979 and is currently yielding some 6,000 barrels of oil per day. As noble Lords will know, Dorset County Council recently decided that, subject to the provision of a satisfactory export route for the oil, it would give planning permission for its further development with a 10-fold increase in production to 60,000 barrels. I should emphasise that this decision was not reached lightly but followed nearly two years of consultation and more than 200 meetings between BP, the local authorities, statutory bodies, environmental groups, local communities and private individuals. Detailed environmental studies were carried out and BP's planning submission I am told weighed 78 pounds!

Wytch Farm is the largest onshore field yet discovered in the United Kingdom. It will generate economic activity both at the local and national level and will be reaching its maximum production around 1990 when our offshore production will already be declining and we might expect oil prices to be on the increase. My right honourable friend the Secretary of State for Energy is currently examining BP's proposed development programme to ensure that recovery of oil will be maximised in accordance with good oilfield practice.

However, before he can reach a decision there is one further step in the legal process which needs to be completed. The expansion of Wytch Farm is dependent on some system for removal of the oil produced there so there needs to be agreement on an acceptable transportation route. To this end BP, during the consultative process, made freely available a consultative document entitled "Oil from Dorset" which considers the advantages and disadvantages of the various possibilities. The transportation of 60,000 barrels of oil a day is no mean task. It could be moved to a refinery by train, tanker or by pipeline, or a combination of these.

All these methods have been examined in detail and each has its protagonists and objectors. However, the intensive consultation I have just referred to clearly indicated that the most widely preferred route is to transport the oil by pipeline to Southampton Water by a route which passes through agricultural land in the perambulations of the New Forest. But there were some objections to this route and I think it would help noble Lords if I were to describe the process by which they will be heard.

Following the extensive discussion of the alternatives referred to earlier, the application for a pipeline was made in December 1985, and was revised in February and April 1986. The application covers a 90 kilometre pipeline, of 16 inch diameter, from Wytch Farm in Dorset to Southampton Water in Hampshire. The application was circulated to Government departments which were likely to have an interest in the proposals and other appropriate environmental authorities. None of the Government departments circulated objected to the application for the pipeline to be publicly advertised. The nature conservancy officer in charge of the Hampshire and Isle of Wight area had made a strong objection, but the route was changed by BP before public advertising in order to accommodate the objection, which was then withdrawn.

In April 1986, my right honourable friend the Secretary of State authorised BP to advertise its application without prejudice to his rights to refuse the application at a later date. In accordance with the requirements of the Pipe-lines Act 1962, all planning authorities, owners and occupiers affected by the route were notified of the proposals. The proposals were also advertised in the national and local press along the route. There were originally 27 statutory objectors, three late objectors and comments from eight other organisations. Of the 27 statutory objectors (including three planning authorities, two of which have subsequently withdrawn), 13 were still outstanding as of 21st November.

In view of the continuing objection of the New Forest District Council, a public inquiry has been organised for 9th December at Ringwood in Hampshire. An independent person has been nominated by the Department of the Environment from the Lord Chancellor's panel of independent inspectors in accordance with the Pipe-lines Act 1962. The inquiry is to be held under the Pipe-lines (Inquiries Procedure) Rules 1967, Statutory Instrument 1967 No. 1769. In accordance with the requirements of the rules, the applicant has to furnish a statement of case to all objectors four weeks before the case is to be heard. This has now been complied with.

The remaining 13 statutory objectors include the New Forest Association, the New Forest District Council and the Council for the Preservation of Rural England, all of which are either specifically indicating that the rail option should be used, or that the pipeline does not present the best option for transportation of the oil. In addition, there is a late objection from Fawley Parish Council indicating that alternative methods of oil transfer should be considered. All objections by these bodies will of course be heard by the independent inspector and will be considered when making his report to the Secretary of State for Energy.

On the use of the railway, I would say to the noble Lord, Lord Stoddart of Swindon, who, not unexpectedly, prefers the rail option, that I will not dispute the capability of railways to move crude oil in bulk—indeed, this option was discussed in the early stages of consultation—but local interests have generally been satisfied that the pipeline is the preferred option.

The noble Lord also asked whether this would be a precedent for other pipelines. This is a matter for planning and other authorities and I would expect each case to be considered on its merits.

In conclusion, I can assure the House that it is well recognised that Wytch Farm and the proposed pipeline route are in areas of great environmental sensitivity and natural beauty where the needs of other economic activity such as tourism have to be addressed. I would remind your Lordships that Government policy on the relationship of development planning and the exploitation of minerals including oil and gas described in Planning Circular 2/85, which was circulated by the Department of the Environment in January 1985, states, among other things, that it is Government policy to ensure maximum economic exploitation of oil and gas reserves over time, consistent with good oilfield practice and with the protection of the environment. The circular also goes on to state that where particular designated areas are concerned (such as the New Forest) it is for the industry to demonstrate that the need for the development outweighs the environmental objections.

I am aware and agree that special policy considerations protect the New Forest. Indeed the South-West Hampshire Structure Plan specifically states that there is a strong presumption against development in connection with extraction of oil or gas within the perambulations of the New Forest. It was this recognition which led to the detailed discussions between the developer and all interested parties. Their discussions in turn led, I understand, to many significant changes of detail in layout, design and operating régime for the proposed development in and around Wytch Heath. It is right that the same care and attention should be applied to the proposed pipeline and that objections to it should be heard.

I am confident, and I can assure the noble Lord, Lord Mountevans, that the inspector will take all those factors into account in hearing the case and that his report will, of course, be considered most carefully by my right honourable friend the Secretary of State before deciding whether or not to approve the proposed pipeline.

House adjourned at ten minutes before six o'clock.