Energy BILL [ Lords ] (Third sitting)

Chris Heaton-Harris Excerpts

Thursday 28th January 2016 Public Bill Committees

[Dr Whitehead]

In this clause, we come to the substantial and often vexed question of decommissioning. Indeed, if we take into account the related schedule, the clause contains provisions about abandonment of offshore installations and the duty to act in accordance with the maximising economic recovery strategy as far as decommissioning and its alternatives are concerned.

I emphasise that the Bill already deals with some considerations, but we contend—we may discuss this later in our proceedings—that the alternatives to decommissioning may need to be looked at rather more carefully to make sure the strategy works as well as it can overall.

[Chris Heaton-Harris (Daventry) (Con)]

I would just like a bit of clarification from the hon. Gentleman. I assume he will be talking about the need for decommissioning and about how to incentivise it and to make sure that the funds are available under the decommissioning fund.

[Dr Whitehead]

Indeed. That is already in the Bill. Clearly, we need to decommission substantial parts of the precommissioned asset in the North sea. The question I hope that we will discuss in some detail is what one needs to do to achieve a proper balance, so that we get decommissioning firmly under way, because an enormous amount of asset clearly needs to be decommissioned. There should certainly be no suggestion that part of the policy is simply to abandon that infrastructure and leave it there to decay.

It is clear that activity needs to be undertaken. As I will mention in a moment, the extent of that activity needs to be understood, because decommissioning could be a substantial new industry in its own right in the North sea—it certainly already appears to be one to many people. Indeed, at conferences, exhibitions and various other things, people are looking at the opportunities the process offers for employment, for supply chain development and for translating decommissioning expertise and practice in the North sea to other parts of the world to create added value. There is, therefore, no doubt that decommissioning is a substantial enterprise that will produce jobs, as well as opportunities in the supply chain and elsewhere, and that is underlined by the scale of decommissioning on the UK continental shelf.

Decommissioning is not just a question of the external infrastructure of the North sea; there is also the important point that we need to plug and cap the wells themselves, as the depletion process continues, and that is—certainly from an environmental point of view—the most important part of the process. We need to make sure that the abandoned, worked-out wells are properly stewarded and plugged and securely taken down and put out of use. At that point, all the other infrastructure that surrounds them can be safely and properly dismantled.

[Chris Heaton-Harris]

I thank the hon. Gentleman for making that point so plainly and putting it in layman’s terms so that even I can understand it. I just wanted to ensure that we had established—and were not going to talk about—the principle of the need to decommission large-scale energy projects and the importance of that to the environment. As that is a given across all political parties, we can get to the meat of the Bill.

[Dr Whitehead]

Indeed, that is a given regarding the situation in the North sea. Of course, that relates to the fact that the North sea is a mature basin. Having a new dawn of massive exploration and the need to develop infrastructure on the back of that massive exploration is only a relatively small part of the future of the North sea. The fact that we have to deal with what has happened so far in the North sea properly, safely and with full confidence is what some people determine is at the heart of the decommissioning industry at the moment.

The scale of decommissioning before us on the UKCS is frankly enormous. Something like 4,000 wells need to be plugged, securely abandoned, and have all the infrastructure taken away. There are something like 290 fixed platforms and 33 floating installations that require particular arrangements to be removed. It is not only that the wells need to be plugged. A substantial number of subsea wellheads and structures that sit on the bottom of the sea to undertake some activities that otherwise would be on the fixed platforms need to be dealt with, and they also need a pretty specialised approach. Above that is the question of the pipelines connecting those wellheads, platforms and installations to the landing points. Something like 20,000 km of pipelines may need to be decommissioned over the next period.

The Committee has discussed the fact that the North sea will have different uses in the longer term, not only carbon capture and storage, and I have already mentioned other uses that may arise. Even if one goes down that particular route—our concern is that proper account is taken of that route when it comes to decommissioning in the North sea—there is still an enormous amount of decommissioning to undertake.