Considered in Grand Committee
Moved By Lord Marland
That the Grand Committee do report to the House that it has considered the Offshore Chemicals (Amendment) Regulations 2011.
Relevant document: 12th Report from the Joint Committee on Statutory Instruments
My Lords, I beg to move that the Committee considers the amendments proposed by the Offshore Chemicals (Amendment) Regulations 2011 and the Offshore Petroleum Activities (Oil Pollution Prevention and Control) (Amendment) Regulations 2011. There is only one major change required, which concerns the 2002 chemicals regulations. These regulations implement an international Ospar Convention commitment, which requires operational uses and discharges of chemicals to be the subject of an application and assessment process. Under the system established in those regulations, the use and discharge of chemicals during operational activities relating to oil and gas exploration, production and decommissioning is only allowed in accordance with the terms of a permit. The types of chemicals for which permits might be granted include, for example, detergents used to clean rigs and hydraulic fluids used to control well-heads and subsea valves.
At the time of bringing them into force, the 2002 chemicals regulations were considered to contain powers relevant to all chemicals emissions. It has since become clear, through discussing an escape of chemicals with an operator, that the regulations do not cover unintentional events such as chemical spills or leaks that occur through accidents or faulty items of equipment that are not functioning within their intended design.
My Lords, a Division has been called in the House. We will resume in 10 minutes.
Sitting suspended for a Division in the House.
My Lords, I am grateful we can continue.
Consequently, unintentional spills or leaks cannot be subject to enforcement action. The purpose, therefore, of the main amendment is to extend the scope of the 2002 chemicals regulations by creating a new distinction between a discharge and a release. Put simply, a discharge will be an intentional emission of an offshore chemical. Such an emission will be lawful if it is made in line with the terms of a permit, which will be granted only if the planned emission does not pose an environmental threat. Any unintentional emission of an offshore chemical will be treated as a release and will be unlawful. This will ensure that unauthorised emissions can be liable to enforcement action, including prosecution. This creates a new offence.
Nevertheless, the creation of a new offence does not mean that there will be a large number of extra prosecutions. Indeed, it is expected that there will be very few as the regulations allow other enforcement actions to be taken before prosecution. Our focus remains on preventing incidents through our robust environmental assessment and inspection regime. Oil spills and leaks are already covered by the 2005 oil regulations, so I should stress that the concept of release is being introduced by the oil regulations 2011 solely to ensure conformity with the chemicals regulations 2011.
The draft regulations also make a number of other changes to the regulatory framework. For example, the 2011 oil regulations include a new definition of offshore installation that encompasses all pipelines, some of which were not previously covered. The chemicals regulations already covered pipelines but, for the sake of conformity, the 2011 chemicals regulations contain the same revised definition.
In addition, the enforcement provisions of the existing chemicals and oil regulations have been strengthened by the amending regulations to allow DECC inspectors to require preventive action to stop spills occurring in the first place. Another change is to the information-gathering powers so that information can now be obtained from a wider range of persons and in respect of a wider range of incidents that might affect the marine environment. Other minor changes are being made by the 2011 chemicals and oil regulations, which will, for example, simplify the process for renewing and varying permits or transferring them to a new permit holder. These changes create even more consistency between the two regimes making them easier to administer and for operators to comply with.
We all hope that the new prosecution powers will never have to be used. Nonetheless, I believe that extending the scope of the offences is essential to provide strengthened enforcement and pollution prevention measures to my department. These regulations will benefit the marine environment through improved enforcement powers. They also introduce more consistency to the existing regulatory regimes which will assist industry compliance. I commend these instruments to the Committee.
My Lords, I thank the Minister for his robust explanation of these regulations which are clearly important in terms of environmental sustainability in the north-east Atlantic area. I want to explore the Ospar agreement a little. It is very important to us and will be critical in carbon capture and storage, which I shall not go into this afternoon. I am interested to understand how we are doing this to comply with a decision by Ospar. Do decisions by contracting parties to Ospar have to be unanimous or are they by qualified majority voting? What incident brought to the attention of the Government the fact that the previous legislation was defective in some way? Listening to the Minister’s explanation, I was surprised that there has to be this difference between a discharge, and I have already forgotten what the other noun was, but never mind. Will the Minister confirm that other contracting parties to the Ospar agreement—the Explanatory Notes mention the harmonised mandatory control system—are fully complying with that decision, as we are attempting to do?
I thank the Minister for introducing these offshore activities regulations. It is obviously eminently sensible that the pollution prevention and control regulations be updated to correct a deficiency, simplify and create more consistency across the two regimes and make compliance with regulatory requirements easier to understand. In addition, information-gathering powers have been strengthened so that information can be obtained from a wider range of persons in relation to a wider range of incidents capable of affecting the environment.
It must be correct that all unauthorised emissions—discharges and releases—are liable to enforcement action, including prosecution. It must also be correct to allow inspectors to require preventive action to stop spills occurring in the first place. When these regulations were debated in the other place on 1 March, the Minister gave the context of spills recorded over recent years. Between 2005 and 2009, chemical spills averaged 157 notifications per year, totalling 735 tonnes, none of which posed an environmental threat, with chemicals being defined in their broadest sense and including substances such as brine. Between 2005 and 2009, oil spills averaged 283 notifications per year, totalling 51 tonnes, 6 tonnes of which were crude oil, with the remainder being diesel and hydraulic fluid, none of which posed an environmental threat. The Minister added that if the chemical releases deficiency had not existed, another three incidents would have been liable to enforcement action, although it is tempting to ask whether the department can be sure that that is all there would have been if by the new definition a release was not then notifiable. Is the department confident that its knowledge of operations is exhaustive in this respect?
What does this figure of spills mean? Does it include only unauthorised emissions, or does it also include permit releases by agreement, which therefore do not result in an offence? If it is only the former, will the Minister give us the comparable figures on emissions that have occurred through permits? This will allow us to appreciate the balance between authorised discharges and unintended releases and the totality of all emissions. I also understand that permit applications are not granted where it is thought that operators should be able to operate without an emission. In other words, permits should not be applied for to cover possible discharges. Have there been such occasions? If a permit application was refused, has there subsequently been a release?
Will the Minister give us an understanding of how the enforcement agency—presumably the Environment Agency, but perhaps also the Health and Safety Executive—goes about its enforcement role? With the number of notifications of spills of chemicals and from the oil industry, not all spills would have resulted in a prosecution. In notification, what is the typical response? The numbers seem to suggest that this is a frequent, almost daily, occurrence. Does this lead to an element of complacency? Are these spills analysed to see whether action could be taken to reduce the amount? I am sure the industry is tireless in its pursuit of perfection, but an understanding of the interplay between the regulators and the relevant industries might be enlightening.
These regulations are brought forward with the recent events in the Gulf of Mexico fresh in our minds. We debated this situation on 16 December when the differences between the two regulatory regimes were explored and noted. The Minister rightly praised the UK industry for its high safety standards. In response to the gulf disaster, the industry set up the oil spill prevention and response advisory group, OSPRAG. Will the Minister update us on any developments that have occurred in its deliberations following various reports on the disaster by the congressional inquiries?
These regulations will come into force the day after they are laid. This is justified by the high level of awareness of the proposed change following extensive consultations. Will the Minister confirm that it can be confidently expected that operators have taken the regulations on board already and therefore do not require a period in which to comply? Will he further confirm that these regulations have been drawn up with future developments in mind? In that regard, will they be sufficient to apply to LNG as well as to developments on carbon capture and storage where it is to be expected that the flow will be reversed?
Finally, we are aware of the regulatory burden whereby the Government are committed to balance the introduction of new regulations with the withdrawal of others. Am I able to tempt the Minister to say how these regulations will be assessed? Do they count as replacements of the 2002 and 2005 regulations or should they be assessed as extending their jurisdiction? From these Benches, these questions seek only further clarity on the workings and the background to the regulations. We are in agreement with the regulations.
My Lords, I, too, would be interested to understand what would be the prosecuting authority. Under the Marine and Coastal Access Act, I would have thought that it would not be the Environment Agency but the Marine Management Organisation. I would be interested in that clarification.
My Lords, I thank noble Lords for their comments. I did not realise that such an SI would have so many incisive questions associated with it. I shall do my best to plough through them in the technical scope that they require. I will not take them in any particular order, but I shall immediately turn to the Gulf of Mexico. It is not a subject for discussion under these regulations. Clearly, a lot of future consideration needs to be taken into account as a result of the event. We are not at that point yet, but in various debates we have readily established that the UK has a safety record which is second to none.
Moving on to who is responsible for overseeing these regulations, in DECC we have our offshore environmental inspectorate which reviews and assesses all spills and reports to ensure that the operators take action where appropriate to respond to any spill. It is very much within our own department and we work closely with Oil & Gas UK and the various trade associations.
The point behind these regulations is that there obviously have been discharges. They were provoked by a modest discharge in the north North Sea from a chemical pipeline where an element of leakage and spillage was found that was not technically covered by the regulations. We have acted accordingly to embrace that sort of incident to ensure that the excellent environmental safety record that we maintain continues.
Perhaps I may provide the statistics that the noble Lord, Lord Grantchester, wants in writing rather than go through them now. I think that they are a slight sideshow to the real effect here, which is to make sure that we have got all the areas of concern covered. I apologise for jumping around the questions a bit. The noble Lord also asked whether these regulations refer to carbon capture and storage, for example. I can confirm that they do. Now that I am in the middle of negotiating the demonstration project, it is very important that this is taken into account as, indeed, are gas storage and pipelines.
The noble Lord, Lord Teverson, rightly asked about Ospar’s decision. It must be unanimous. North Atlantic states are involved in that decision, and it is then transposed into UK law. He also asked whether these regulations extend previous ones. They do because we are broadening the scope. In answer to the question on the Marine Management Organisation, it is DECC inspectors, as I mentioned earlier.
This is a very technical clause—as you can imagine it is far too technical for me—but I hope we have dealt with a number of the questions, but because of the technical nature there might be one or two areas I have not covered. I am sure that the noble Lord, Lord Grantchester, is a great technician in this area. I am happy to answer in writing—actually I prefer my officials to do so because I do not have a clue what I am writing about—and I hope noble Lords will support the two sets of draft regulations. I commend these two instruments to the Committee.