§ 6.4 p.m.
§ Viscount Davidson
My Lords, I beg to move that the Bill be now read a second time.
985 The Bill comes before us against a background of low and volatile oil prices, when the industry is facing perhaps the most testing time in its post-war history. Nevertheless the industry has responded to this test with its characteristic resourcefulness and has resolved to look to the future. Oil and gas are, and will remain, big business. Six million pounds a day is spent in support of current ongoing production. Lower prices for oil have not put a stop to the development of the United Kingdom continental shelf. Last year, 14 projects were approved with a total value slightly in excess of £2 billion, and the response to the Government's tenth round of licensing demonstrates confidence in the long-term future of the United Kingdom continental shelf. In essence, the industry is planning for the future.
The Government too must take a long-term view and plan for the future. It is for this reason that we have introduced the Bill, the main provisions of which aim to establish a framework for the safe and orderly abandonment of offshore oil and gas installations and submarine pipelines once their useful production life reaches a close. The need for this important legislation is clear, given the scale of United Kingdom continental shelf operations and the abandonment problems these will pose, and the gaps in the current legislative framework for regulating this process.
There are about 150 fixed installations offshore and 2,900 miles of pipeline. By the 1990s these figures will have increased. The picture is further complicated by the enormous variety of installations: from shallow water light steel structures in the southern basin to the 600,000-tonne concrete platforms of the northern North Sea, the ocean giants of United Kingdom oil production. The cost of removing totally all existing installations on the UK continental shelf would be enormous. At 1984 prices the industry's estimate is £6 billion. That is a large sum of money indeed, a significant proportion of which will fall to be met by the taxpayer through tax and royalty reliefs, or equivalent payments.
It is therefore in the interests of both the industry and the Government that, where possible in accordance with international law, and after consultation with other interests, costs are saved by allowing the partial removal, rather than the total removal, of installations. Financial resources are not all that will be required. The task will prove a challenging test to the engineering and organisational skills of those responsible for the removal.
With a task of this scale it is vital that the Government have an appropriate framework in place to be able to set standards for the removal operations and to ensure that the job is carried out properly. Although existing legislation provides for removal to the satisfaction of the Secretary of State, it does not provide the framework to regulate the submission and approval of abandonment programmes, to enforce the duty to carry these out and to prevent default. This Bill will enable action to be taken in these areas.
In considering this framework we have been aware of the range of interests involved. Apart from the interests of the oil companies there are those of the fishermen and mariners, the United Kingdom's obligations under international law and of course, as I 986 have said, the interests of the taxpayer. This balance has been carefully considered, with more than a year of consultations with interested parties such as the oil industry and the fishermen. The Bill also provides for further consultation when regulations are made and when individual abandonment plans are being drawn up.
The major provisions of the Bill are covered in Part I, which makes clear that the responsibility for removal rests with the owners of an installation or pipeline. Clause 1 enables notices to be served on those responsible for an installation or pipeline to prepare an abandonment programme for approval by the Secretary of State, who, under Clause 5, may draw up his own programme and serve it on those responsible if they have failed to submit their own or have submitted a programme which is wholly unsatisfactory. Under Clause 8 strict duties are laid down on those who submit a programme to ensure that it is properly carried out. In the last resort, under Clause 9, the Secretary of State may himself arrange for the abandonment work to be carried out. This power will hopefully never be needed, but it is essential that it is available.
The pre-eminent responsibility for abandonment lies, however, with the owners, and to give force to this responsibility the Bill introduces criminal offences for failure to comply with certain notices served under this Part of the Bill.
I now turn to a consideration of the persons who might be responsible for the removal of an installation or pipeline. The immediate starting point of responsibility is the licence group who operate the installation, the concession owners and parties to joint operating agreements. It is to these that the Secretary of State will look, in the first instance, for the preparation of an abandonment programme. However, with the high cost and the complexity of abandonment, it is right that the Secretary of State is enabled, if these parties are unable to discharge the obligation, to serve notices on a wider pool of associated and related companies.
However, to strike a balance between the proper interests of good business and the interests of the taxpayer and to give emphasis to the pre-eminent duty of those immediately responsible for the installation the Secretary of State is restrained, under Clause 3, from serving notice on the wider pool provided that he is satisfied, and remains satisfied, that those immediately responsible have put in place appropriate arrangements to ensure that they can meet their obligations.
I now turn to the actual standards which will apply. Your Lordships will have learnt from reading the Bill that no detailed standards are set out. Instead, a power to make regulations, after carrying out the appropriate consultations, is provided in Clause 11. We believe that this is the right way forward. These standards to be embodied in our regulations have not yet been agreed. The enabling power of Clause 11 provides the flexibility we need to put in place a UK regime which meets our international obligations, and enables changes to be made should international standards continue to evolve.
987 To conclude what I have to say about Part I of this Bill, let me repeat the basic aim, which is to establish a framework for the safe and orderly abandonment of oil installations and pipelines on the UK continental shelf, while making clear that the responsibility for abandonment lies with the owners of those installations and pipelines. The need to legislate now on abandonment has also provided the opportunity to update other aspects of oil and gas legislation. Provisions to this effect are covered in Parts II and III of the Bill. I will cover these briefly.
Part II of the Bill updates the royalty regime by rationalising the procedures for royalty accounting and arbitration and contains provisions concerning the measurement of petroleum. It also provides an enabling power to allow repayment of certain royalties to make allowance for abandonment costs. This part of the Bill also enables the extension of the UK offshore licensing regime to the territorial waters off Northern Ireland, and repeals a legislative requirement to publish an annual report of UK continental shelf licences and activity, a report now superseded by the Brown Book.
Part III of the Bill has two main elements. It provides for the automatic creation of safety zones around offshore installations and specifies arrangements concerning onshore pipelines. Around rigs, platforms and other installations there will be automatic safety zones of 500 metres. At present, each safety zone must be established by statutory instrument. In 1981 there were only 30, whereas in 1986 there were over five times as many. This provision is sensible administrative streamlining.
The main onshore pipeline provision concerns the insurance arrangements for pipelines. This enables the Secretary of State to prohibit the use or testing of any pipeline until specified steps have been taken to ensure that funds are available to discharge any liability for loss, damage or so on.
This is an important Bill, and I make no apology for having dwelt mainly on the provisions of Part I. Abandonment is a problem for the future, but it is right to provide the framework for dealing with it now. This Bill puts that framework into place and makes clear the primary responsibility of the owners for removing their installations and pipelines. These provisions succeed, I think, in striking a balance between the various interests involved. It protects the taxpayer and sea users, and provides assurances for far-sighted and prudent oil companies who will be enabled to make their plans accordingly.
It provides a flexible and responsible framework within which to manage the abandonment of UK continental shelf installations and pipelines, in accordance with international law. I commend the Bill to your Lordships' House.
§ Moved, That the Bill be now read a second time.—(Viscount Viscount Davison.)
§ 6.15 p.m.
§ Lord Carmichael of Kelvingrove
My Lords, we should thank the Minister for his very succinct explanation of this Bill. He will appreciate of course that the Bill in the other place was given a general 988 welcome although that is not to say that there are not areas where improvement would be possible. In fact, hope that when we get to the Committee stage the Minister, from the experience of the other place, will have one or two points in respect of which he will be putting down amendments himself after having given some thought to the Bill.
At the Report stage in another place figures of revenue from the North Sea were given by my right honourable friend Mr. Rowlands, who was leading for us. He said that the total tax revenue from North Sea oil, was a staggering, £352.4 billion obtained by way of direct taxes. He said it was the largest fiscal windfall in modern British history. The figure seemed rather high to me and I tried to check it, but since the Minister of State spoke after my honourable friend in another place and he did not correct him, I am assuming that that is the figure.
As I understand it, a very large part of the cost of the abandoment will be met by the Government, and this cost will, of course, fall upon the Government at a time when the income from oil revenue will be falling. In 1979 to 1990 terms, the abandonment costs will be very high when related to these terms. The Minister himself said a few minutes ago that the cost was likely to be somewhere about £6 billion. Again at the Report stage in another place the Minister did not really make the matter as clear as I should have liked. I have read the debate carefully, but it may be that I am not understanding properly. He did not make it really clear which of the tax reliefs would apply to abandonment. There is corporation tax, there is petroleum revenue tax and there are royalty payments. I should like to know if the Minister can find out what these reliefs are and say whether the whole of an abandon-ment could be set off against, for example, petrol revenue tax or any of the other taxes. Furthermore, are there any instances in which the Government, by way of tax offsetting, could have the entire cost of an abandonment to meet?
On this particular subject, it was suggested last time that the Minister of State would look at the question of whether, instead of the rather cumbersome method of using a tax repayment—whatever the combination of taxes chosen—further thought might be given to a grant structure either as well as or instead of tax relief. I understand that the Norwegian Government have got much further ahead than the Minister of State thought when he spoke two weeks ago. The Storting, which is the Norwegian Parliament, had been dealing with it much more fully than we had originally thought at the time when the Minister of State spoke.
So much, very briefly, for the financial background, which I think is roughly what the House and the other place will realise is the proper way to go about it. The whole necessity for getting rid of the rigs in the North Sea and the Irish Sea is to try to return the North Sea and the Irish Sea as near as possible to the state which they were in before. This is particularly important with regard to the North Sea which is probably among the world's finest fishing areas. People have been fishing in these areas for generations for demersal and pelagic fish. The hope is that we shall be able to return the waters to them so that we shall again have profitable catches from the sea and ensure that the interests of people in navigation and particularly fisheries will be 989 protected. Many communities along the east coast of Britain, particularly in Scotland, were built up on the strength of the riches of the North Sea. We hope that they will be returned to their previous condition. I have no doubt that when we reach the Committee stage and examine this aspect more closely, we shall have valuable submissions from fishing interests.
The Minister gave some figures which for the record I should like to fill out a little more. I know that the Minister was reading quickly, but I understand that there are, as he said, 144 to 150 platforms in the North Sea and 2,800 miles of pipeline. However, the significant difficulty is reached when one considers the different types of rig. The Minister touched on this point. In the shallow water in the southern part of the North Sea there are about 99 rigs weighing from 300 tonnes upwards. They are manageable with modern technology. Is is in the deep water of the middle, central and northern North Sea that the real difficulties arise.
There are about 35 steel rigs and 10 concrete rigs. These concrete rigs, as the Minister said, can weigh up to 650,000 tonnes, which is an incredible problem to be dealt with. The steel rigs weigh 58,000 tonnes. I understand that in some cases the rigs go down to a depth of about 185 metres. That means we are absolutely on the edge of a new technology. It is one thing to tilt a rig onto its side from a barge and another to upset it from the sea bottom and drag it, or whatever is required, to shallow water for breaking up. That is a big problem. Therefore, there is no single possible solution, particularly in the conditions of the North Sea, where there is a very heavy scour on the sea bed, with large tidal fluctuations and frequently absolutely atrocious weather.
Even pipelines, which were dealt with in the other place rather more quickly than I would have liked, need special treatment, no matter how strong or how well built they are. Because of the scouring of the North Sea the pipelines can easily lose their foundations. If the foundations are lost over too long a distance there will be bridging and, ultimately, cracking. That too can be a problem. Various suggestions have been made, but again they are all expensive. Everything one does in the North Sea is expensive. Trenching was suggested, which for a 36 inch pipe at the depths we are talking about would be very expensive. More likely, as suggested in another place, steel matting could be placed over them to give some protection.
How realistic is it completely to remove the structures? I know that is what we should like to do. We know that the Americans in the Gulf of Mexico are taking away rigs completely, but the conditions there are quite different. It is much calmer and they have nothing like the depths that we are dealing with in our in-shore waters. I believe the Americans are talking about taking them below the surface of the sea bed but, as I said, they tend to be in shallow water.
It is good that the Government have brought forward the Bill as early as this. However, do we have the technique to put divers down with safety to the depth required for total demolition? I believe the present answer is certainly no. Can we guarantee that a heavy structure left on the sea bed would not be moved by the special conditions in the North Sea and 990 thereby make charts dangerously outdated? Even worse, to my mind, would be to cut off rigs at depths below low tide—say, five fathoms—leaving a hazard to fishermen, submarines and perhaps some of our bigger ships. It was suggested in another place that the rigs could be blown up, but we are a long way from having the ability to blow up rigs at the depths we are talking about.
I should like to speak briefly on the development of new technology. The treatment of the oil/gas platforms and pipelines, whether by complete or partial removal or leaving them as navigational beacons in perpetuity, will require a technology which in many ways is different from that of construction, where rigs can be constructed on dry land, towed out to sea and dropped in position. A very different technique is required for removal. During the Second Reading debate in another place on 24th November the Minister of State said (reported at col. 33 in Hansard):Abandonment will also require a supply industry and the development of new technology. Research is already taking place".We have some years ahead in which to plan for this technology; to develop the personnel at all levels of participation from the oceanographic scientists, the specialist divers, the specialist explosive experts—if that is the way we decide to deal with the rigs—and all the other groups of people who will be required. Barges will need to be operated working in the other direction; that is, hauling things out of the sea instead of tilting them into the sea. Again, that is a new technique.
With the money that has been obtained from the North Sea—and many people say that it has been used profligately—are the Government seriously considering financing departments in universities and colleges of technology specifically to examine this programme? We should remember that there are apparently 6,000 rigs all over the world. If Britain can look at this in a schematic way and spend some money in developing the technology, and if we can suitably clear the North Sea to the satisfaction of the maritime and shipping people and everyone else, there will be great scope for us in the rest of the world.
With the dismantling of this source of great wealth—a real bonanza, which we had from the late 1960s and early 1970s and which we trust will continue into the 1 990s—let us hope that our expertise will be the first in the field, not only on our own continental shelf but in the rest of the oceans of the world.
We recognise that this Bill has a very important aspect. The Minister in another place showed a great deal of flexibility in Committee. He listened to suggestions and altered the Bill, though perhaps not as much as we wanted. But we hope that at the Committee stage in this place, when time will have allowed the Government to rethink some of the excellent points raised by my honourable friends in another place, the Minister will show equal flexibility so that the Bill will be even more improved than it was in the other place.
§ Lord Kennet
My Lords, by far the greater part of this Bill is concerned with precisely who, and at what 991 moment, is responsible for sending and receiving various notices and other letters. Of course, Bills have to be like that; but in the mass of pettifogging duties and rights which are laid down there lie, partly hidden, major implications for all users of the seas—and there are international implications—and these should be pulled out and examined on Second Reading.
What is required in this matter, as in others, is that our law should be fully in accordance with our treaty obligations and should be such that if the same law is adopted by all the other countries in the world it will not hurt us—at least, not too much. This is sound Kantian doctrine. The provisions of our law have to accord with the interests of all interested parties: fishing, navigation, pollution control, defence, etc., and that means European as well as British interests. Its provisions should be fully in accordance with how we hope to see the law of the sea developing internationally. That is certainly not a legislative free for all within each country's economic exploitation zone.
I believe it is possible that the Department of Energy on behalf of its client industry has pulled a fast one over the other Whitehall departments. It is not really right that the Secretary of State for Energy, who is so very close to one of the industries that is using the seas, should have authority that is not subject to review by the courts to decide all these matters which are of major interest to many other users of the sea, both British and non-British. It is the intention of this Alliance on these Benches, for whom I am speaking this evening, to rationalise sea-use management generally so that such conflicts of interest, whatever seas we are talking about, shall be better dealt with.
The Government should not behave either in this country or in international fora as though they were the agent of one particular commercial interest, and moreover one whose demise in British waters is prefigured by this very Bill. It may be doubted, and I myself doubt, whether the Department of Energy has engaged in the active consultation that it should have done. Mr. Buchanan-Smith, the subordinate Minister in the House of Commons, told the Committee on this Bill that he had had no formal consultations with the environmental groups, national or international. This evening the Minister has told us that there have been consultations with British fishermen. What about European fishermen? In each case, was there any reason why one should not have had these consultations, and what is the hurry now? Is it not legitimate to suspect that it may be one more case of providing for the interests of a major industry that is friendly to the present Government before they are deprived of the opportunity of doing so in the future?
I turn now to the particular point which gives rise to these observations. The 1958 Geneva Convention on the Continental Shelf states that when these oil and gas installations are finished with they are to be "entirely removed"—no ifs and buts. This country is bound by that convention. On the other hand, the United Nations Convention on the Law of the Sea of 1982 simply says "removed" and drops the word "entirely". However, as the House will remember, the Government refused to sign that convention. They 992 should have signed it, but did not in order to please President Reagan.
They are now hoist with their own petard because they are introducing domestic legislation that conflicts with their treaty obligation to ensure the entire removal of these installations. Let us look at what the Bill says. The relevant clause, Clause 1(4)(c) says that such and such will happen:if it [the Government] proposes that an installation or pipe-line be left in position or not wholly removed".It is the major, primary language of the Bill, that it need not be entirely removed. It is perfectly clear from the Minister's speech just now and government speeches in the House of Commons, that the idea is to arrive at a sharing out of costs between the Government and the industry, and that is a good idea, not necessarily for the total removal, but for the partial removal.
There is an argument from changing technology which says that at the time that the 1958 convention was drawn up the very biggest of the rigs, platforms and pipe-lines were the little ones, as was just described by the noble Lord, Lord Carmichael, in the southern part of the North Sea where they are not such a problem and that the concrete monsters in the northern part of the North Sea have been developed since then. If one finds that the law is out of date, I submit that in public as in private life, one does not just break the law but one tries to have it changed. With the UNCLOS convention, the Government have missed their opportunity to change it. I have not heard of any other moves by them to change it.
Moreover, only yesterday, in this House, during the presentation of the Town and Country Planning (Compensation for Restrictions on Mineral Workings) (Scotland) Regulations, the noble Earl, Lord Dundee, made a very interesting point. These regulations are about old permissions to conduct mineral workings in Scotland which have been overtaken by technological change. He said that the mineral industry should accept "reasonable" additional cost arising from the changes in conditions since permission was given. So there we see the Government advocating a shift of the financial burden of clearing up old mineral workings from the public sector to the private, despite new conditions that have arisen since the original deal was done. What is sauce for the goose is sauce for the gander, I think.
The Government's argument for claiming that in law they do not need to have offshore installations entirely removed when they are abandoned or disused is not really a worthy one. They argue that the words of the actual convention to which we are a signatory can be ignored in the light of "customary international law". This argument was set out most clearly in a Written Answer to me from the noble Viscount, Lord Davidson, on the 23rd of last month. He said (at col. 84 of Hansard):We accept that the convention as a whole, including Article 5.5, has not fallen into desuetude, nor is it obsolete. But it has to be interpreted in a manner consistent with the object and purpose of the convention and, so far as possible, with customary international law".It only has to be so interpreted if it is unclear, and I honestly ask the Government: what possible unclarity can there be in the words "entirely removed"?
993 Moreover, the Government's present approach to the 1958 Convention does not tally with Paragraph 31 of the 1969 Vienna Convention on the law of treaties. If there is doubt about whether a treaty means what it obviously does mean, one does not have to guess. One goes to the convention on the law of treaties. This states that a treaty:shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose".The next paragraph shows that "context" means the text of the treaty itself. Only when the text itself is obscure can one go outside it to establish its meaning.
Nevertheless, in his Written Answer the noble Viscount went outside it. If he is to sustain his argument that it is desirable or necessary to do that, he must say why the words "entirely removed" are obscure. The ordinary meaning of the 1958 convention shows that "unjustifiable interference" is not allowed during the process of exploration and exploitation. Equally, there is no obscurity about the article which requires that abandoned or disused installations must be "entirely removed" since the exploration and exploitation have now ceased. There is virtually no state practice—and I again refer to the noble Viscount's Written Answer—and the 1982 Convention is not yet in force, and anyway it would not apply because as yet there are not any international standards. So the 1983 UNCLOS Convention cannot be held to allow the reinterpretation of the words "entirely removed".
The International Maritime Convention has barely begun to establish what international star Wards would be appropriate. Have the Government r at in a draft proposal for these standards? In Nover iber last they had not. Only Norway—as the noble Lord, Lord Carmichael, mentioned—has moved away from "entirely removed". The United States has a law which required entire removal down to only 200 metres in depth. As Mr. Buchanan-Smith suggested in the House of Commons, if the Government wish to lead the way among the nations in this matter, it is of the greatest importance that the Petroleum Bill should establish an internationally acceptable formula for allowing less than total removal, and until then should be observed.
The Government of our country support the Exploration and Production Forum of the oil companies. I understand that the Government are saying that the International Maritime Organisation may develop standards only for the safety of navigation and not for anything else. However, other interests, such as fishery and pollution control and the rights and duties of other states, must also, they say, be taken into consideration. But, say the Government, these other interests fall within the purview of the coastal state, and therefore no other body or organisation can interfere with the development of standards. I do not know how the Government can say that about the high seas but it appears that they are doing so. Perhaps the noble Viscount will have something to say about that. In any case, the International Maritime Organisation is going beyond safety in navigation. There is a West German paper about modern fishing which claims that the interests of fishermen down to 1,000 metres—not 40—must be 994 taken into account. The Soviet Union and West Germany both want to bring in the IMO legal committee, the maritime environment protection committee of IMO, and the London Dumping Convention. And fisheries in our country, and all round the North Sea are a European Community affair and not national.
The long and the short of it is that this Bill is a curiosity. It is against treaty obligations; and the Government pretend that it is not. That is quite a rare situation. There will have therefore to be amendments not to bring it into line with our treaty obligations—that would be impossible at this stage, with the make-up of Parliament as it now is—but to make it possible for the Secretary of State to behave as well as he can in administering this Bill. At the moment he will be bound by the terms of the Bill to go against international obligations, even though he may not want to.
I shall put down three amendments at Committee stage. If the House does not mind, I shall take the trouble to tell noble Lords what the amendments are because it is good to put them forward in advance. I shall be joined in those amendments by the noble Baroness, Lady White. That will make them all-round Opposition amendments. They are designed to make it easier for the Secretary of State to do the right things as he operates the Bill, although no one can compel him so to do. One amendment will provide for an oilfield installation advisory board. My honourable friend Mr. Malcolm Bruce proposed this in Committee in the House of Commons. This would provide statutory representation for fisherman, environmental and pollution interests, and others. Another amendment will remove the limitation that the Bill imposes on the Secretary of State's consultations; namely, that they shall be with UK people only. A third amendment would require the Secretary of State to have regard to international guidelines and regulations as they come along.
I am sorry to have spoken at a little length, but I thought it worth giving the background to what may be some controversial amendments which will come up later.
§ 6.45 p.m.
Lord Campbell of Croy
My Lords, I should like to thank my noble friend Lord Davidson for carefully explaining the purposes of the Bill. I propose to address my remarks to the main part of the Bill, Part I, on the abandonment or de-commissioning of the structures and pipelines.
I again declare an interest. For the last 11 years I have been working with an oil company which is the operator of one of the largest fields in the North Sea. That field has been on stream for eight years. I agree that a Bill of this kind is needed. It is introducing procedures to ensure that everything necessary is being done beforehand. When installations are no longer required, those responsible will have to put into effect adequate plans which will not be vulnerable to unforeseen financial misfortunes or other changing circumstances. Of course responsible companies have already envisaged, and have been prepared for, work and expense when the life of an offshore field has 995 ended to ensure safety and to remove obstructions to shipping or fisheries.
The Bill should provide the framework and the procedures required on the United Kingdom continental shelf. The first installations are expected to become redundant in the early 1990s. I would remind your Lordships that the first to be installed on the continental shelf of Britain were the gas platforms, starting 20 years ago. With the discovery of oil in the early 1970s, much larger structures were needed in the northern basin of the North Sea, the gas having previously been discovered in the southern basin. Most of those structures were steel but some were concrete. They were floated out to the fields and there firmly secured to the sea bed. It was intended that they should be in position there for the whole life of the field, which typically is between 10 and 30 years.
A system of pipelines has also been laid out to the mainland Orkney and Shetland and connecting some fields with others. Most of the oil and gas so far produced have come from the North Sea, but not all. I would remind the House that the Beatrice Field is within the Moray Firth, only 13 miles from the coast of the mainland. I would also remind the House of the gas field in Morecambe Bay, on the west coast of England. Exploration is being undertaken and licensed in other areas, including to the west of Shetland and to the west of the Scottish mainland, although it is not proceeding as fast as it might owing to the fall in crude oil price over a year ago. More discoveries are expected in these new areas as well as in the North Sea.
There are technical difficulties to be encountered and mounting expense where the depth of water is considerably greater than in the North Sea fields already being developed. Now that we are making positive arrangements for abandonment of oilfields in this Bill we must be careful, I suggest, to avoid misunderstandings which can occur in public discussions. The oil is not due to run out in the next 10 or even 20 years. I foresee it flowing from the United Kingdom continental shelf for at least 40 years.
It is true that there will be a decline in the quantity being produced each year. Indeed, the peak for annual United Kingdom production is probably being reached about now. That does not mean that the oil will shortly come to an end. Some commentators have in the past year or two confused this peak rate being passed with the oil drying up altogether. One has heard remarks about no more oil after 1990 or when the oil runs out in the early 1990s. There is still a lot to come, but the annual rate will decrease over a period of years—a fact which of course the Treasury has to take into account.
The Bill leaves each installation to be dealt with individually, depending upon the circumstances. I am sure that that is right. In very deep water it may not be necessary to remove a platform completely. More than enough of it should be removed to ensure that it offers no obstruction to surface vessels. In shallower water, nearer the coasts, the requirements of the sea fishing industry are likely to influence plans. An obstruction left on the sea bed, if it is on a recognised fishing ground, could make difficult or impossible the use of trawls, seine-nets or similar fishing gear.
996 The action required to remove installations after they have served their purpose is all part of the task of winning the oil. The costs should therefore be taken into account in taxation. This, it seems, the Government recognise. No doubt there will still be detailed discussions ahead about the precise application to various situations.
A lot of money will be spent over the next 30 years at least for work on dismantling offshore structures. This can, and should, be earned by British firms in the ancillary industry which serves the oil companies. They are passing through a difficult time of recession at present. If they can get into this abandonment business at the right time and become specialists, there is a great deal of contracting to be won. They can also use the acquired expertise in oil provinces elsewhere in the world.
I understand that the Government have consulted and kept in close touch with the United Kingdom Off-shore Operators Association and that some amendments made in another place have met, to some extent, the views expressed by the association. Nevertheless, I am sure there will be further points to be raised in later stages as the Bill passes through this House. In principle, I feel that it deserves our support.
§ 6.53 p.m.
§ Lord St. John of Bletso
My Lords, I, too, wish to lend my support to the Bill. As with the noble Lord, Lord Campbell of Croy, my interest in the Bill stems from having worked for two years for a major oil company and now working as an oil analyst for one of the stockbroking firms in the City.
I wish to address my remarks to Clause 1 of the Bill. With the volatility of the oil market and the limited lifespan of several of the North Sea platforms—here I should mention Shell's Auk field, and the Heather, Montrose and Tartan platforms, all of which are scheduled to come off stream in 1992. It is indeed right to tackle the immense problem of dismantling our North Sea platforms now. New Scientist forecast last year that as many as 40 fields, each with many platforms, will become redundant by the year 2010. An article in The Times on 15th November 1986 stated that:Britain has become the first oil-producing country with a cohesive policy of what to do with the big off-shore platforms once the oil runs out.In essence Clause 1 provides a framework for the safe and orderly abandonment of installations. Of the almost 6,000 oil production platforms scattered across the world, most are in shallow water—that is, less than 40 metres, and are comparatively easy to remove. The North Sea with its 139 oil and gas fields makes up the world's largest concentration of deep water platforms. Central to this Bill is the need to balance the safety of navigation, fishing and environ-mental interests with the most cost effective means of abandonment.
As the Minister mentioned in his opening address, estimates of more than £6 billion have been quoted for total removal of the existing platforms from the North Sea, let alone any new ones. As decommissioning is a capital expense, the taxpayer is liable to bear approxi-mately two-thirds of this figure through the oil 997 companies receiving rebates on petroleum revenue tax.
The noble Lord, Lord Kennet made mention of the international law on abandoned platforms. Indeed, this law is ambiguous. The 1958 Geneva convention on the continental shelf is unequivocal about abandoned oil platforms. Article 5.5 states:All installations which arc abandoned or disused must be entirely removed".I have a great respect for the knowledge of the noble Lord, Lord Kennet, of international law, and I stand subject to correction, but I am not of the opinion that Britain is bound by that convention as Britain was not a signatory to the convention.
The United Nations law of the sea Convention of 1982 however permits partial removal to generally accepted standards. We are all aware of the recent International Maritime Organisation conference in January, which sought to identify the key conditions to be met if part of an off-shore structure is to stay on the sea bed. These conditions are: the need to preserve the safety of navigation, to avoid pollution, to protect the needs of fishing, and finally, to protect the needs of other users of the sea.
I understand that the deepest draught of any existing ship is 28.6 metres. This would conform with the Exploration and Production Forum's proposed safety standard, which, requires that:partially removed structures must have 40 metres of water above them at lowest tides".Several noble Lords have mentioned the substantial cost savings, which would be up to £2.7 billion, should the Government permit the toppling or partial removal of abandoned platforms to a safe depth in the deepest parts of the North Sea.
Dumping debris at sea rather than on land would cut costs by a third. However, a note of caution ought to be made on the issue of toppling. New Scientist stated on 27th February 1986:No one has ever toppled a large platform. The technique does not necessarily require any dismantling of topsides and decks, but if anybody does ever try they will have to succeed first time. An incomplete collapse that left wreckage above the 40-metre mark would be very difficult and dangerous to deal with. Toppling a jacket platform into a particular position is a complex task. Platforms have up to eight or more legs and they are buffeted by tides, currents, waves and winds. Cutting the legs in the right place and at the right time is a problem that needs detailed evaluation".I certainly would lend support to such cost cutting measures but of critical importance is the responsibility to ensure the safety of our sea traffic and protection for the fishing industry. Many alternative uses have been raised for the old oil platforms—for example, the formation of artificial reefs, the so-called "rigs-to-reef' idea raised by the honourable Member for Exeter when the Bill was debated on Second Reading in the other place. Other suggestions have been for meteorological stations and also search and rescue bases for helicopters which would keep the deep waters of the North Sea accessible to helicopters for sea rescues. Certainly, these are innovative alternatives but they will cater for only a few of the abandoned platforms.
Much concern has been expressed about segments of partially removed platforms shifting across the sea bed. With partial removal the simplest way to ensure 998 that tanks and chambers stay still on the sea bed is to put a large hole in them with a flame cutter or an explosive charge. Should a partial removal be approved by the Secretary of State under Clause 4 of the Bill, it would obviously be most important to publicise the depth, position and dimension of any structure not entirely removed.
In conclusion, there are two questions upon which I should appreciate some clarification from the Minister. First, it is clear that the fishing industry is adamant that there should be total removal of all abandoned platforms. Apart from the United Kingdom Offshore Operators Association, which pays almost £100,000 each year against claims submitted for fishing equipment damaged by its members' debris in the North Sea, will the fishermen have any compensatory recourse for damage and/or loss caused to their equipment by partially removed platforms?
Secondly, have the Government a general policy on the removal at least of the 99 steel platforms mentioned by the noble Lord, Lord Carmichael of Kelvingrove, which are lying in the southern North Sea and almost all of which are in shallow water?
Ultimately the responsibility rests on the owners of the platforms for their final removal, whether that be partial or complete. There is no doubt that the removal of these platforms will become a multimillion pound industry which could, according to the National Economic Development Council, provide many thousands of new jobs.
The Bill goes a long way to ensuring that oil companies meet their responsibilities. It will assist them in more accurately costing their programmes to clear their abandoned platforms. I therefore reiterate my support for the Bill.
§ Lord Kennet
My Lords, before the noble Lord sits down, may I correct a mistake that he made? He said that this country did not sign the 1958 Convention on the Continental Shelf. We did sign it. Moreover we were the first country to sign it. There is no ambiguity either in the wording of the treaty or in the fact that we are bound by it.
§ Lord St. John of Bletso
My Lords, as I mentioned, I stand subject to correction. I obtained my information from the New Scientist, which states that the 1958 Geneva Convention on the Continental Shelf, which Britain has not signed, is unequivocal about abandoned oil platforms.
§ Lord Kennet
My Lords, to round this off, it is clear that there is confusion with the 1983 Convention on the Law of the Sea. That is the one that we did not sign.
§ 7.2 p.m.
§ The Earl of Lauderdale
My Lords, like the noble Lords, Lord St. John and Lord Campbell of Croy, I have an interest to declare. During the last seven years I have been working for an oil company which has produced from the Frigg Field one-third of Britain's domestic gas supply and in the coming year will be bringing on stream the North Alwyn Field in which we have a two-thirds financial stake. That is an example of the development that is still going on, and we have projects in our minds for further developments, 999 whatever the relatively ignorant public may say about oil and gas running out.
We are all agreed that this is a useful Bill. It is an enabling Bill, but it is one that proceeds with its life under the dark shadow of interpretation and implementation. The Bill leaves literally all the options open and, in my view, that is to its advantage. It focuses mainly on different categories of structure where about 10 heavy concrete platforms were floated out. It remains to be seen whether they can be floated away again having been de-watered. It relates in effect to the toppling of 35 or more of the heavier steel or steel and concrete hybrid platforms, leaving a clearance of a good 120 feet of water above them so that shipping can pass freely. The Bill relates to about 100 smaller platforms—this is sometimes overlooked and my noble friend referred to it briefly—and to nearly 3,000 miles of sea bed pipelines.
I was very interested in, and look forward to hearing more about, my noble friend's statement that of course, first of all, partial removal is in the Government's mind, but that we shall nonetheless conform to our international obligations.
I was not surprised that the noble Lord, Lord Kennet, dwelt on this at some length. It is a subject in which he has specialised and in which he is terrifyingly knowledgeable. It is fair to say that the 1958 Geneva convention is about as far removed from today's North Sea bed conditions as the Iron Age is from the present day. So much has happened technologically that it must be open to question how far it is even relevant.
I should like to know, and I hope that at some stage my noble friend can enlighten us, the extent to which other countries have signed and ratified the convention (if it requires ratification) and how far that convention is now part, in effect, of our domestic law and how far it is part of the domestic law of other countries. This is a matter which obviously we can probe when we come to the Committee stage. It is helpful of the noble Lord, Lord Kennet, to tell us what amendments he proposes to put down so that we can focus our minds on them in the meantime.
What is important about this Bill is that whatever the 1958 Geneva convention says about the removal of "every trace" (I think that is the term) of the structures—however it may use that term—this Bill is an enabling Bill. It leaves the Government free to do what they think is best or, to take a term from the noble Lord, Lord St. John, what is most cost-effective.
It is important to bear in mind that the drift, seemingly, of thinking in the International Maritime Organisation is towards toughening rather than easing the conditions about removal that should obtain. A working group of its sub-committee on safety of navigation as recently as 15th January last issued a report including an annex which suggested guidelines. In them there is the term "entirely removed …without exception", in cases where there is no further use for a structure.
There is a further point which will no doubt come up in Committee; the IMO thinking, so far as it is accurately represented by this working group, is that: 1000coastal states must unambiguously ensure that legal title to, or responsibility for, any installations (or parts of them that may be allowed to remain) is established quite clearly".It seems that the IMO at any rate and those who think in that way are trying to weave a web of restrictions which may in the end not be helpful to anybody. The sea bed is already strewn with wrecks. I do not remember it ever being said that the hapless owner of a ship that goes down is for all time responsible for the wreck. It may be that he is, but I should like to know what international law says about the matter.
I understand that it is because of the trend of thinking in the IMO that in proceedings in another place the Government resisted pressure from industry against companies being committed to continued liability indefinitely, even after the Government have given an official certification that any abandonment programme has been properly completed.
We cannot look at the matter without also looking at the economic uncertainties of sea bed exploration and development. As my noble friend Lord Campbell of Croy said, there is still much to come, and to throttle or prevent that may be greatly to everybody's disadvantage, including the fishermen who use diesel oil to fuel their vessels.
We shall need to encourage further investment. Between them the oil and gas companies have already given the Government more than £50 billion in revenue over the past 10 years and have re-invested £33 billion over the same period. So the input and the benefit to our economy from those operations is considerable.
While I respect the comments of the noble Lord, Lord Kennet, that perhaps the Department of Energy has for once pulled a fast one on the other departments and got in with a Bill which may be said to favour the oil and gas companies rather than other interests, these are not interests that should be lightly cast aside. I ask the Government whether they really want North Sea or offshore continental shelf investment to dry up. Given the uncertainty of the market, almost anything can happen.
At a price of 15 dollars a barrel, which we had as recently as the other day, about eight platforms would be deemed to be superfluous—perhaps I should say that they would be doomed to be deemed to be superfluous—by about 1990, in three years' time. On the other hand, at 25 dollars the figure would be half that. Therefore the uncertain climate of the oil world is a factor that must be taken into consideration when the environmentalists, the fishermen and all the others plead their cause. We, too, have a cause to plead and it is one that we have no reason to be ashamed of.
§ Lord Kennet
My Lords, before the noble Earl finishes blaming me for the drying up of North Sea investment single-handed, does he agree that to ask a Cabinet Minister to judge fairly between conflicting claims on the public purse and the public wealth is not automatically to ensure a victory of the weakest over the strongest; nor would one wish a victory of the weakest over the strongest—just balance and justice?
§ The Earl of Lauderdale
My Lords, I am grateful to the noble Lord for the intervention. He has had more experience in government than have I and therefore I 1001 would defer, with respect, to what he said. However, I am certain that it is important that the energy industry should be encouraged, and be seen to be encouraged, if investment is to proceed.
I believe that it is important—and industry has indicated its appreciation—that the Government appear to have dropped their Wild West, scatter-gun approach by which almost any bank involved in helping to finance development might, under the original terms of the Bill, be sucked into a joint and several liability for abandonment costs. As with extractive industries in general, it is quite clear that the Government accept that site restoration is a cost over the whole life of the enterprise and is therefore properly to be set against tax. However, the point remains that unless investment is encouraged it will become more costly and there will be less of it and less benefit to the community at large.
There was relatively little reference to pipelines, except by the noble Lord, Lord Carmichael of Kelvingrove, whose points I thought were of great interest. There is a real war on not only against the stubble of toppled structures leaving a seaway clearance of 120 feet above them, but also against pipelines. Most of the pipelines are on, and also often under, the sea bed, having been deeply trenched when they were laid. There are more than 2,200 miles of pipeline in deep water and about 650 miles in shallow water; nearly 3,000 miles in all.
As far as I am aware, there has been relatively little complaint hitherto concerning the damage to trawl nets and seine nets through entanglement with those pipes. Even if there were such complaints in the future, I believe that the free replacement of nets would make much more sense than to tear up the pipelines.
Many of the pipes may well be of use to smaller oil and gas fields in the future, controlled by sub-sea wellheads. In that sense, the surviving pipelines could well assist cheaper energy provision. In the meantime, they are easily sterilised by being filled with water and plugged at either end. I believe that to tear them up would be vandalism of monumental proportions; but that seems to be implied in IMO thinking.
One is much tempted to seek for alternative uses for the platforms. I find that the great difficulty is that as the platforms become older they need increasing maintenance. For a platform which is 300 feet high, having cost, say, £300 million, after 10 years of life, or maybe less, one will probably have to spend £10 million on maintenance each year as metal fatigue advances and wear and tear take effect.
At one time I was tempted with the idea that some of the platforms might be used for offshore power plants. However, one would not get many windmills on a platform which had a top about the size of a rugger field, and it would require great ingenuity to design a nuclear power plant to fit into such a small place. Therefore, it would seem that the upkeep of platforms is not on, once they are no longer needed. It seems to me that far the best hope is that either the shipbreakers can take them away or that they can be toppled to a suitable depth.
So far as I understand the position, the industry is broadly satisfied with the Government's response to its anxieties. However, the industry is anxious 1002 (reasonably so, in my view) about unlimited financial liability for what in many cases will be sea bed wrecks. I join with other noble Lords in wishing well to the Bill, and I wish good sense to the Government in its application.
§ 7.20 p.m.
§ Lord Taylor of Gryfe
My Lords, the content of this Bill has been well covered this afternoon by experts in this House. Once more we have the good fortune to be able to draw on a wide range of experience in dealing with this matter. I very much welcome the opening statement of the Minister in which he said that abandonment is a problem for the future but steps have to be taken now. It is almost unique in political experience these days to find anticipated difficulties being dealt with at the appropriate time. What we are dealing with this afternoon is providing the legislative framework which makes these anticipated necessary steps real.
Several noble Lords have mentioned that while we are out to establish the legislative framework, the physical effort of removal of these rigs is a matter for industry. I hope that the Scottish industry, which developed a considerable expertise in oil industry exploration, will tackle the abandonment with the same enthusiasm. It is probably difficult psychologically to become equally enthusiastic about dismantling when you lose all the excitement of the creation of this considerable industry.
I would be interested too in the Government's comment on the financial aspect of these provisions. I accept of course that this will be a phased operation, and I accept that the obligation to the companies might be in the region of £6 billion, of which perhaps 70 or 80 per cent. might be reclaimed from the taxpayer in the royalties and the PRT which have already been paid by the companies to the Government, but there is a considerable problem of government funding involved in the passing of this Bill.
We are indebted especially to the noble Lord, Lord Kennet, on these Alliance Benches for his considerable knowledge of our international obligations. I do not expect that the Minister will be able to spell out tonight all the details of the Geneva Convention and the other conventions and international agreements covering fisheries, navigation safety, pollution and other matters which are matters of international regulation. We must not assume that we ourselves in this country can undertake responsibilities in these fields, ignoring the implications for other users of the sea. I assume that the Minister will be able to give us some assurance in general terms that wider consultations will take place in this area beyond those which have already been mentioned by Mr. Buchanan-Smith in the other place.
I should like to say a word about the oil companies themselves and their response to our proposals. The offshore oil industry has put on record that it recognises its duty and responsibility to comply with abandonment regulations, and will make every effort to carry them out as efficiently as possible and at minimum cost. However, some of the detail of the clauses is disturbing to the industry. In particular, the effective removal of the principle of corporate limited 1003 liability in relation to abandonment ought to be clarified.
There is a power assumed in the Bill—and it is a complete power—by the Secretary of State to approve, reject, amend or even impose a programme of abandonment without there being any published form of appeal or any published criteria of the basis on which he is going to judge these plans, and perhaps at some stage the Minister would care to look at this overwhelming power. It is a matter of public debate. We are talking about large sums of money, and we have to make some public declaration of the kind of criteria against which these plans may be rejected or amended.
I agree with the noble Earl, Lord Lauderdale, that we must ensure that this is a continuing business so far as possible, and that it does not become unattractive to develop marginal fields. The Government wisely and rightly in the past have encouraged small companies in this industry. I think that half of all the licensed acreage is in the hands of the small companies, and one-third of the total oil and gas reserves are in the hands of the small companies. I know very well that some of the large companies have been careful to make provision for the eventuality that is contained in the Bill, but we must not be unmindful of the fact that small companies have a role in this Bill, and I hope that small companies will continue to be encouraged to develop in this area.
I should like to say—perhaps I should declare an interest—a word about the position of banks and financial institutions in relation to the Bill. The potential liability of banks and financial institutions having a financial interest in offshore installations or pipelines for the abandonment obligations of their borrowers could have serious knock-on effects for investment in offshore activities generally. It was never the intention to serve notice on these organisations where their interest was confined to security for a loan, but I think that this must be looked at seriously. However, where their interest is greater than just security for a loan—for example, if the bank becomes the owner of a licence—then inevitably the obligation for abandonment falls on a bank or a financial institution. We have to watch where that leads us in relation to further support in the form of bank loans and bank support for new exploration.
On these Benches we give general support to the Bill. It is a wise Bill, it anticipates a need, but we shall of course require to be satisfied on the points raised by the noble Lord, Lord Kennet, in relation to international obligations. We shall require to have some satisfaction as to the powers of the Minister in relation to acceptance of abandonment plans. Subject to seeking these further assurances, on these Benches we shall give support to the Bill.
§ 7.28 p.m.
§ Viscount Davidson
My Lords, this has been a valuable and interesting debate on an important piece of legislation. I am most grateful to noble Lords who have taken part and for the general welcome that the House has given to the Bill. This Bill concerns the operations of a major industry which has brought enormous benefits to the United Kingdom. The 1004 abandonment of offshore installations needs to be carried out in a safe and orderly way, taking account of the many other interests that are included, such as the fishermen and the taxpayer, and within the UK's international responsibility to protect the safety of navigation.
Responsibility and consultation are key words: the responsibility of the owner of an installation to ensure that adequate arrangements are made for abandonment and to ensure that the job is properly carried out; and consultation because we recognise the complex interests involved. As I said in my opening speech, this Bill is the product of over a year of consultation, and further consultation is enshrined in its provisions. As a result of this consultation a number of improvements have already been effected in another place.
The spirit of co-operation with which your Lordships have approached the Bill is true to this consultative principle, and I shall do my best briefly to answer some of the points which have been raised. But I am sure your Lordships will forgive me if I do not answer all of them at this stage of the Bill. It is clear that we shall have ample opportunity to discuss all these matters further at later stages. The noble Lord, Lord Carmichael, to begin with, quoted his honourable friend's reference to a figure of £352 billion revenues from the North Sea. That is a misprint in Hansard. That is a good start! The actual figure from 1979–80 to 1985–86 was £52 billion.
§ Lord Carmichael of Kelvingrove
My Lords, I am grateful to the noble Viscount. He will realise that after seeing that figure I asked a number of people about it. They were amazed, but since the Minister had not corrected it that is the only explanation that could possibly fit the facts. Thank you very much.
§ Viscount Davidson
My Lords, I am delighted I have been able to help the noble Lord. He also talked about fiscal problems. On that, I have to say that if a fiscal route to abandonment relief is maintained relief will be against royalty, PRT and corporation tax earned by the companies previously. The noble Lord suggested that the Government should contribute towards the costs of abandonment through grants rather than tax relief. We have not closed our minds to the idea, though we need some convincing that it is right. If subsequent discussions lead to its adoption, the provisions for carry-back in the Bill will not be used. As a matter of interest, I should mention that in April 1986 the Norwegians passed an Act establishing the framework for meeting the government's share of abandonment costs and a company there is likely to receive grants of a proportion of the costs equal to that proportion of field profits previously paid in tax.
The noble Lord also asked about research and development programmes. The Department of Energy is contributing £70,000 to a Science and Engineering Research Council programme costing £570,000 on the abandonment of offshore structures. The programme includes research on wells shut down, debris removal, environmental and fisheries implications, explosives technologies including safety aspects, metal and cutting technology and removal of gravity structures. Other contributors include oil companies and contractors. The overall aim of the programme is to 1005 identify those activities in the decommissioning, abandonment and dismantling of structures where technological development is a prerequisite or where such development leads to major cost savings and to identify where safe, efficient and cost-effective removal strategies can be established.
§ The Earl of Lauderdale
My Lords, will my noble friend say before he leaves that point whether this research will include consideration of alternative uses for platforms?
§ Viscount Davidson
My Lords, at the moment I cannot tell my noble friend whether or not it does, but I shall write to him and make sure that he knows before the next stage of the Bill.
The noble Lord, Lord Kennet, asked about the 1958 Geneva Convention on the Continental Shelf. He mentioned that I had answered a question in Hansard on 23rd February 1987. I do not think I can really add much to that except to say that the 1958 convention is to be interpreted, first, in accordance with its purpose to prevent unjustifiable interference with other users of the sea; and, secondly, recognising that in 1958 all existing platforms were in shallow water and were relatively easy to remove.
Circumstances today, as my noble friend Lord Lauderdale rightly pointed out, are completely different with many platforms in deep water which will be difficult and very expensive to remove. These concerns led the provisions of the 1982 (not 1983, I believe) Convention on the Law of the Sea which allowed partial removal. These provisions reflect international consensus that the purpose of the 1958 convention to prevent unjustifiable interference with other users of the sea can be achieved without the need for the entire removal of all installations. I confirm to the noble Lord, Lord St. John, that we have not signed the 1982 convention. I did not want to get involved in what was becoming a private argument at the time.
The noble Lord, Lord Kennet, will not expect me to go into too much further detail at this stage in reply to his speech, as the noble Lord, Lord Taylor, anticipated, especially as he has kindly told the House of his intention to put down three amendments at Committee stage, when I suggest it might be more appropriate to discuss the subject in greater detail.
I very much welcome the support which my noble friend Lord Campbell of Croy has given to the objectives of the Bill. I echo the remarks he made concerning the importance to the future of the UK offshore supplies industry of seizing the opportunities arising from the abandonment operations. The industry has been at the forefront of the development of deep water production technology and I believe that ii. is well placed to apply this knowledge in relation to abandonment both in the UK and elsewhere.
The noble Lord, Lord St. John of Bletso, asked me two questions. The first was about compensation for fishermen's claims as a result of possible damage caused by partly removed platforms, presumably when the oil companies have left the North Sea or that part of it. This question is under discussion between officials and the fishermen. It will also need to be discussed with the oil industry. I very much hope that 1006 some permanent arrangements can be put in place which will meet the fishermen's worries about damage caused by oil-related debris. He also asked me about the Government's attitude towards shallow water steel platforms in the southern North Sea. The abandonment of each installation will be approached on a case-by-case basis. However, it is likely, given the shallowness of the water in the southern North Sea, that installations in this area will be totally removed to ensure safety of navigation.
My noble friend Lord Lauderdale mentioned the January meeting of the International Maritime Organisation. A helpful feature of this was the clear acceptance by the IMO working group of the principle of partial or non-removal in appropriate circumstances; for example, where the installation or part of it will serve a genuine use or a genuine new use and where it can be left in place without causing unjustifiable interference with other users of the sea. The group also suggested that partial removal is also admissible where entire removal is technically not feasible or would involve extreme cost or an unacceptable risk to personnel or the the marine environment.
My noble friend also asked me whether the 1958 Geneva Convention on the Continental Shelf has been incorporated into UK domestic law. The answer is, yes and no. Effect has been given to some of the provisions—for example, those permitting the creation of safety zones around offshore installations—but other provisions of the convention including those dealing with the removal of offshore installations have not been incorporated into UK domestic law.
The noble Lord, Lord Taylor of Gryfe, made the point that it was rare for legislation to be prepared and passed well in advance of the time when the problems which it was drafted to resolve are likely to arise. or words to that effect. I must agree with him. It usually works the other way round, but I am very happy to be associated with this particular instance. There is nothing in the Bill which restricts the extent to which the Government may consult nationally or internationally. We shall play a full part in those international organisations which have a role in this matter, such as the IMO and others who may develop an interest in abandonment; for example, the London Dumping Convention and the Oslo Commission. On environmental matters we already have a well-established relationship with the Nature Conservancy Council which will be well maintained.
§ Lord Kennet
My Lords, it states in the Bill at Clause 11(5):Before making regulations under this section the Secretary of State shall consult organisations in the United Kingdom appearing to him to be representative"—and so on. The Minister just said that there was nothing in the Bill to confine consultations to the United Kingdom.
§ Viscount Davidson
I am afraid, my Lords, that the noble Lord has bowled me a very fast one. I cannot answer that question but, again, I shall write to him.
Finally, this is not a Bill dealing with a hypothetical situation. It deals with real events of importance to the 1007 UK offshore operations in the years to come. The Bill highlights and demonstrates a continuing need for co-operation between the Government and the industry. It provides a framework upon which time and the necessary knowledge and experience will allow us to build the detailed standards and practices required for the safe and orderly abandonment of offshore oil and gas installations on the United Kingdom continental shelf. I commend the Bill to your Lordships.
§ On Question, Bill read a second time, and committed to a Committee of the Whole House.