Asked by: Lord Agnew of Oulton (Conservative - Life peer)
Question to the Department for Energy Security & Net Zero:
To ask His Majesty's Government what assessment they have made of the potential for repurposing North Sea oil and gas infrastructure for carbon capture and storage, and what financial or regulatory incentives exist to encourage operators to pursue this option instead of full decommissioning.
Answered by Lord Hunt of Kings Heath - Minister of State (Department for Energy Security and Net Zero)
The Government’s consultation in 2019 on the ‘re-use of oil and gas assets for carbon capture, usage and storage projects’ concluded that there is the potential for significant cost savings for some CCS projects which can re-use appropriate oil and gas infrastructure.
The Government has set out how change of use relief can be issued for certain re-purposed assets. Under this regime, oil and gas companies will be relieved of their decommissioning obligations for repurposed assets if certain conditions are met. Secondary legislation to clarify this process is being developed and is expected to be introduced in due course.
Asked by: Lord Agnew of Oulton (Conservative - Life peer)
Question to the Department for Energy Security & Net Zero:
To ask His Majesty's Government what assessment they have made of the feasibility of introducing a rigs-to-reefs programme in the UK sector of the North Sea, and what legal or regulatory barriers exist to such a programme under domestic and international law.
Answered by Lord Hunt of Kings Heath - Minister of State (Department for Energy Security and Net Zero)
The OSPAR (Oslo and Paris convention for the Protection of the Marine environment of the North-East Atlantic) Convention prohibits the dumping or leaving in place of any disused offshore Oil and Gas installation in the marine environment. To re-purpose an installation, for example as a strategic compensation measure, installations would need to be re-classified and regulated by the relevant competent authority.
Asked by: Lord Agnew of Oulton (Conservative - Life peer)
Question to the Department for Energy Security & Net Zero:
To ask His Majesty's Government what proportion of decommissioned offshore oil and gas infrastructure from the UK sector of the North Sea is currently processed in UK dismantling facilities.
Answered by Lord Hunt of Kings Heath - Minister of State (Department for Energy Security and Net Zero)
This information is not held by government. External estimates suggest that 78% of the onshore dismantling of offshore oil and gas infrastructure is undertaken in the UK.
Asked by: Lord Agnew of Oulton (Conservative - Life peer)
Question to the Department for Energy Security & Net Zero:
To ask His Majesty's Government what assessment they have made of the risk that oil and gas operators in the UK sector of the North Sea may default on their decommissioning obligations; and what measures are in place to prevent taxpayer liability in the event of an operator’s insolvency.
Answered by Lord Hunt of Kings Heath - Minister of State (Department for Energy Security and Net Zero)
The ‘Offshore Petroleum Regulator for Environment and Decommissioning’ (OPRED) monitors North Sea operators’ financial and commercial activities to ensure Government has an accurate picture of industry capacity to honour its decommissioning liabilities. OPRED regularly undertakes decommissioning risk analysis in relation to North Sea offshore installations. The Petroleum Act 1998 provides the Secretary of State for Energy Security and Net Zero, The Rt Hon Ed Miliband MP, with powers to serve legally binding notice on offshore operators to pay for their respective decommissioning programmes. If necessary, OPRED, on behalf of the Secretary of State for Energy Security and Net Zero, can oblige operators to provide additional financial security to further minimise tax-payer liability.
Asked by: Lord Agnew of Oulton (Conservative - Life peer)
Question to the Department for Energy Security & Net Zero:
To ask His Majesty's Government what assessment they have made of the economic impact of North Sea oil and gas decommissioning activities on UK coastal communities, including the estimated number of jobs created and the associated industrial opportunities.
Answered by Lord Hunt of Kings Heath - Minister of State (Department for Energy Security and Net Zero)
The current overall cost estimate for North Sea decommissioning is approximately £40 billion, with UK suppliers in line to receive 70% of planned work in Supply Chain Action Plans submitted to the NSTA in 2022. The Government is currently consulting on the future of the North Sea and is seeking views on how we can seize the opportunities of the energy transition, including decommissioning.
Consultation launched on 5 March, last week.
Asked by: Lord Agnew of Oulton (Conservative - Life peer)
Question to the Department for Energy Security & Net Zero:
To ask His Majesty's Government how many offshore oil and gas installations in the UK sector of the North Sea have been granted exemptions from full removal under OSPAR Decision 98/3 since 2000; and on what grounds these exemptions were approved.
Answered by Lord Hunt of Kings Heath - Minister of State (Department for Energy Security and Net Zero)
Since 2000 there have been 7 derogations (exemptions) approved under the procedures set out under OSPAR Decision 98/3. Following an assessment of options and national and international consultations, HM Government was satisfied that leave in situ was the most appropriate solution on balance considering safety risks, environmental impact, technical feasibility, and economic and societal effects.
Details of all derogations are available via OSPAR’s public Inventory of Offshore Installations website.
Asked by: Lord Agnew of Oulton (Conservative - Life peer)
Question to the Department for Energy Security & Net Zero:
To ask His Majesty's Government what is their latest estimate of the total cost of decommissioning oil and gas infrastructure in the UK sector of the North Sea; and how this compares to previous estimates published by the North Sea Transition Authority.
Answered by Lord Hunt of Kings Heath - Minister of State (Department for Energy Security and Net Zero)
The North Sea Transition Authority (NSTA), an arm’s length body of the Department, is responsible for benchmarking and reviewing the total cost of decommissioning oil and gas infrastructure in the UK’s sector of the North Sea.
The NSTA estimates the cost of decommissioning the remaining oil and gas infrastructure is approximately £40 billion, with £20 billion of that spend forecast in the next decade, in constant with 2021 prices.
The NSTA publishes estimates for the upstream oil and gas industry’s annual expenditure on decommissioning by calendar year up to 2023 which is available on its website.