Pollution Prevention and Control (Fees) (Miscellaneous Amendments) Regulations 2022

Lord Lennie Excerpts

Monday 23rd May 2022 Grand Committee

[Lord Redesdale (LD)]

My Lords, I will speak to the regulations very briefly. This is one of the briefest SIs I have ever had to speak to, and it seems utterly bizarre that we are having this discussion about a very minor matter. This is an area I have interest in because I was on the Science and Technology Committee in 1996, looking at the decommissioning of oil and gas rigs. I even went out to one of the rigs at the time.

I want to raise two questions. When we conducted the original committee report and it was debated, it was assumed that metal pipework that was to be laid would be left in the ground and forgotten about. I declare my interest as chairman of the UK Metals Expo. I went to an interesting presentation on the value of the metal in the pipework in the North Sea. Of course, if it has value it is quite likely to be dredged up again, but that will have environmental issues associated with it. Is this being taken into account by OPRED? Is the value of that metalwork being assessed?

The second question concerns the Government’s long-term views on removing large structures. The very large gas rigs still in place are surrounded by drilling offsets, which was a normal aspect, but of course a lot of oil and pollution is then tied up around the base of these structures. If they are to be removed from the seabed, there will be a great deal of localised pollution in that operation. Have the Government looked at a recent report? No report had been carried out on that issue at that point.

I will finish there because it is so brief a report. On that basis I actually read the whole report, and I was quite amused by a slight error in paragraph 8.1 of the Explanatory Memorandum.

[Lord Lennie (Lab)]

I thank the Minister for putting forward these proposals, which are, as we have heard, rather inconsequential and unremarkable. There is nothing I want to add by way of commentary, but I have a few questions.

First, as the noble Baroness, Lady McIntosh, asked, can the Minister explain why the fee for specialists has risen at the same time as the fee for non-specialists has fallen? If it is to do with numbers, can he explain the reason for this change in the balance between specialists and non-specialists?

Secondly, the fees received have remained the same as the previous average, £6.2 million. In the Government’s assessment, is this is likely to remain the case for the foreseeable future, bearing in mind what the noble Lord has said?

Thirdly, while I understand that no formal representations were made by the industry regarding OPRED’s plans, can the Minister say whether any informal opinions were given and whether the industry as a whole is satisfied by the proposals? I look forward to his response.

[Lord Callanan (Con)]

I thank noble Lords for their brief contributions to this debate, which reflect the relatively uncontroversial nature of the regulations. As I said in my introduction, the regulations will enable OPRED to recover its costs for the provision of regulatory services under the offshore oil and gas environmental legislative regime, as opposed to the alternative—those costs being borne by the taxpayer.

The annual fees income is, on average, £6.2 million, which represents around 65% of the cost of running OPRED’s environmental operations unit. The total running cost of around £10 million per year includes the cost of the office in Aberdeen and corporate support provided from London.

In terms of chargeable activities, OPRED considers the environmental implications of all offshore oil and gas operations before issuing permits and consents covering areas as diverse as seismic surveys, marine licences, oil pollution emergency plans, chemical permits, oil discharge permits and consents to locate permissions for offshore installations. OPRED reviews around 3,000 applications for permits and consents annually. In addition, there is a regular programme of monitoring and inspections to ensure compliance with environmental regulations.

As I said in my introduction, in line with the Treasury’s Managing Public Money guidance, OPRED does not charge for policy work—for example, the enacting of new or revisions to existing offshore environmental legislation—and nor is OPRED able to charge for enforcement activity, such as prosecutions. OPRED is proposing the fees regulations pursuant to a power that requires an affirmative procedure. This is because the changes allowing OPRED to recoup the costs for the provision of regulatory services are not alterations to reflect changes in the value of money.

Questions were asked by both my noble friend Lady McIntosh and the noble Lord, Lord Lennie, about what proportion of the workforce are specialists, compared with non-specialists. Both also asked for an explanation of the fee rise for specialists and the reasons for the change. The revisions to the hourly rates reflect changes to OPRED’s staffing levels and associated costs, plus corporate costs such as IT, accommodation, human resources and finance, which are allocated on a per-head basis. There are 53 staff who work in the offshore environmental unit, of whom 40 are environmental specialists and 13 are non-specialists. The reduction for non-specialists is largely due to a reduction in London corporate costs; the increase for specialists relates to an increase in the cost for advice from statutory nature conservation bodies.

The question from the noble Lord, Lord Redesdale, was nothing to do with these regulations, but I am happy to take it back to the department and send the noble Lord a reply in writing. As I said in my introduction, about 45% of the cost of running OPRED is currently recovered from the offshore hydrocarbons sector through these fees.

With the exception of the noble Lord, Lord Redesdale, to whom I will write, I hope I have answered the questions raised by noble Lords—the noble Lord, Lord Lennie, and my noble friend Lady McIntosh. Therefore, I commend the draft fees regulations to the Committee.