Revised Draft Overarching National Policy Statement for Energy (EN-1)

Lord Crickhowell Excerpts

Tuesday 11th January 2011 Grand Committee

[Lord Crickhowell]

My Lords, I should like to speak briefly in the gap about the safety issues referred to by my noble friend the Minister. I have to say that I find paragraph 2.4.2 of statement EN-4, about the maritime risks for LNG, extremely unsatisfactory. We are told that,

“the relevant Port Authority is responsible for ensuring that the rules relating to safe port operations are followed. The IPC should be able to rely on these regulatory controls being properly applied and enforced”.

In my previous speeches, I indicated why our experience in Milford Haven suggested that we should not be able to rely on that, because a port authority with a conflict of interest might decide, as it did in that case, to vary the rules of safety that had been accepted worldwide and have led to the very good record that the industry has. At the very least, the IPC should insist that the port authority issue a clear statement of the regulatory regime that it has introduced and a clear explanation of any variations on the generally accepted standards that have produced that good safety record.

I am even more disappointed about paragraph 2.11.6, which comes under the heading “Factors influencing site selection by applicant”, and states:

“The primary technical siting considerations for a conventional LNG terminal will be the combination of a deepwater jetty for berthing LNG carriers, the availability of a suitably large site for industrial development and pipeline access from the LNG terminal to the National Transmission System”.

There is absolutely no reference to offshore berthing terminals, about which I spoke at considerable length at our earlier sessions, and of which I gave more than one example, particularly regarding the Adriatic, south of Venice. There are huge advantages in such terminals because they can mean that the LNG vessels are unloaded well away from population areas. What is more, the pipelines can be much shorter because you can site the terminals close to where you wish to consume the gas. It is extraordinary that there is no reference at all to this highly desirable siting of terminals, which is the policy followed by a good many countries overseas.

I turn to pipeline safety. I did not really raise this on the previous occasion, but people have come to see me, engineers of considerable experience, who have produced worrying evidence to me that safety standards have not always been met to the highest standards in the construction of a major pipeline from Milford Haven across south Wales into England. I have photographic evidence shown to me of some of the shortcomings, and I take it seriously. More worrying still, the HSE has said clearly that it does not have sufficient resources to inspect the whole operation and check on every aspect. Yet we have rules that say that the pipeline safety regulations place general duties on all pipeline operators, and the pipelines have to be designed, constructed and operated so that the risks are as low as is reasonably practical—ALARP, if that is the right phrase for the safety standards. In paragraph 2.18.6 we are told that the pipeline operators should be able to demonstrate “equivalent levels of safety” if they move away from the ordinary established standards, and in paragraph 2.18.5 that:

“In determining compliance, HSE expects pipeline operators to apply relevant good practice as a minimum”.

It is necessary, when we are dealing with pipelines that can create real hazards and have done so elsewhere in the world, that local people, who can be considerably worried by the safety aspect, should be shown clear evidence, and the IPC should insist on clear statements, of what safety precautions have been taken. The HSE must give full information so that people’s anxieties can be properly mitigated.

--- Later in debate ---

[Lord Marland]

I look to the opening words, which state that the Holford rules were,

“intended as a common sense approach”.

In other words, it was a very 1959, laissez-faire rule. What we are doing is hardening the rules. We are not giving anything away on them. We have merely said that the Holford rules should apply, but if there are implications in terms of whether it is not geologically feasible to put lines underground, the rules should be borne in mind for the same reason as the noble Lord, Lord Deben, said—the cost. We cannot impose unrealistic costs just because we are completely determined, as the noble Lord, Lord Judd, and I are, to place those lines underground. However, I assure him that he has my greatest support and sympathy, and I have taken on board what he said. I shall fight the good fight, as he will, on these issues.

I am also grateful for the noble Lord’s point that we have to consider the future of our society. That is fundamental, and it is something that your Lordships’ House takes more seriously than most, because we take a long-term view of these things. What the noble Lord said was very important.

My noble friend Lord Reay is well known for his views on onshore wind. I cannot comment on whether I share them or not, because onshore wind is a government policy. However, I am always interested in his views. He asked some good questions. Onshore wind is part of a mixed portfolio required under our 2050 pathway if we are to supply this country with twice the supply that it needs today. Onshore wind supplies not a significant amount but a relevant amount. We know where the significant amounts of supply will come from, and we talked about them earlier. We want to be very careful about getting sidetracked into the smaller aspects of supply and concentrate our firepower as a Government on the major things, such as new nuclear, CCS and converting our waste into something much more effective.

Of course, onshore wind has tremendous support in certain parts of the country, particularly in Scotland and Wales, where local communities have come together and determined that there are benefits. Equally, a huge number of communities in England do not see the financial benefits to them. Luckily, we have rigorous planning procedures which ensure that fair play is maintained.

The noble Lord asked what the effects are on the CCR requirement and what extra costs there are on the companies for fulfilling it. There are no delays at the moment because everyone who applies for CCS is just buying the land next to them. There have been no problems with approval on that. The only extra cost is that of purchasing the land. I have mentioned two or three good points about CCS and the Holford rules, with which I hope the noble Lord is satisfied.

As far as the Met Office is concerned, the Government should review several things. First, should we be the owners of the Met Office? There are compelling reasons for the Government not owning an institution, and I am on the PEX-A committee which is reviewing whether the Met Office and its advice should be owned by the Government. However, people tell me that there is only one nation in the world that does not own its own meteorological office and that is Malta. That would be an interesting combination.

I am disappointed that the noble Lord, Lord Crickhowell, did not applaud me to the rooftops for the changes that we have made on LNG and siting. We have made great strides and have listened carefully to what he has said, as I said in my opening speech. The noble Lord, who is an expert in this field, notes that this is a complicated area. There is no single legislative body and there are many different licensing conditions. Clearly, the Government are absolutely adamant that safety at all standards must be maintained. We have the best health and safety standards in the world. On the pipelines, he raises the very good point that standards should be maintained and constantly reviewed. Lessons should be learnt from the BP incident in the Gulf of Mexico. We are reappraising standards rigorously. Perhaps the noble Lord is going to applaud me to the rooftops.

[Lord Crickhowell]

Clearly, we are not just dealing with the safety of individuals and property. The security of our whole energy policy is dependent on these facilities being safe. However, I hope that the Minister and his colleagues will look again at the possibility of referring to offshore LNG facilities, rather than taking the view that these facilities must in future always be close to centres of population with long pipelines. Examples from other parts of the world should guide us here.

[Lord Marland]

As I said, the noble Lord has great knowledge in this area and we take on board what he has to say. I am perfectly happy to discuss this with him later to see how we can improve. It is a complicated area, as the noble Lord knows.

I will deal with the issue, raised by the right reverend Prelate the Bishop of Chester, of nuclear subsidy. The Government do not intend to provide a subsidy for nuclear because it is a very mature market. Subsidies should be for new technologies, which we can pump-prime to generate electricity. Of course we should maximise our resources in oil and gas, but we should also husband them because they do not last forever, as the noble Lord, Lord Deben, said. That requirement is satisfied. We have just granted licences in the Shetlands to allow new oil drilling to happen.

I thank the noble Lord, Lord Oxburgh, for answering half my questions and the noble Lord, Lord Deben, for his sage-like remarks and for laying out the landscape for us. He rightly says, in the true Conservative way, that we will look at the costs. We cannot waste taxpayers’ money and must be careful. We must also remove any impediments to this substantial development.

I will be as brief as I can in answering the noble Baroness, Lady Smith, whom I thank for her co-operation. She asked about the Localism Bill and what is material in the Secretary of State putting a matter to the vote. I am not the arbiter of what is material and neither is she. We all know in our heart of hearts what is material and what we would expect. We will bring the usual pressures to bear through the other place or here to make sure that anything material gets debated because of the cross-relationship.

I mentioned earlier our reason for abolishing the IPC. The noble Baroness asked me to talk about the green investment bank, which is complicated. We have committed money to it. It is being set up primarily to commit to new technologies. We are investing taxpayers’ money and other banking institutions’ money in it. Therefore, there will be a rigorous test of whether it is a profitable enterprise. It is not a giveaway bank; it is an investment bank. However, it is an investment opportunity that will be available to people with new technologies to help them develop, provided they have a profitable end to them. We are not in the business of unprofitable enterprises.

The need case that was referred to is set out clearly in the 2050 Pathways Analysis, which is a very substantive document. If the noble Baroness would like to discuss issues on that after the event, I am very happy to do so. She also mentioned Renewables UK, the “dash for gas” and all those sorts of things. We need to have a broad portfolio in order to achieve our 2050 pathway, which is an enormous task. There is no point in saying, “I don’t like that, and I don’t like that”. We have to like it all because we need it, and we owe it to the next generations among us here to provide it. We cannot say, in our own isolated world, that we think this and we think that. We owe it to the next generations to deliver their requirements in a low-carbon, secure-energy framework. That is why I commend these NPSs to the Committee.