Deep-Water Drilling (Shetland)

– in the House of Commons am 5:42 pm ar 18 Tachwedd 2010.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Motion made, and Question proposed, That this House do now adjourn. -(Mr Vara.)

Photo of Caroline Lucas Caroline Lucas Leader of the Green Party 5:50, 18 Tachwedd 2010

Thank you, Mr Deputy Speaker, for giving me the opportunity to debate deep-water oil drilling off the west of Shetland. This is a matter of great importance for the UK's short-term and long-term environmental and economic interests and of significant public interest and concern. This debate was prompted by the Government's recent decision to grant an exploration licence to Chevron to drill into the Lagavulin prospect, approximately 260 km north of the Shetland Isles.

There is, however, much more in question than just that one individual decision and the Government's current push for more deep-water drilling risks undermining their pledge to be "the greenest Government ever". I therefore ask the Minister to cover the following questions. First, how was the decision to approve the exploration drill at Lagavulin made? Secondly, why was the decision announced during a parliamentary recess, just a couple of weeks after the September sitting and 10 days before the House was due to return on l1 October? Thirdly, why was the decision taken before either the official US Government report on the Deepwater Horizon tragedy or the Select Committee on Energy and Climate Change's examination of UK deep-water drilling have reported? Fourthly, on what does he base his conviction that the UK's regulatory and inspection regime is robust enough to avoid another disaster on the scale of Deepwater Horizon? I hope that the Minister will also address the wider points of what the current push for deep-water oil exploration says for the Government's commitment to be the greenest ever and how the opening up of new oilfields in the North sea will benefit efforts to increase energy efficiency as well as energy generation from renewable sources.

As the House may well know, a legal challenge has now been lodged against the Government's approval of deep-water drilling off the west of Shetland. The crux of that legal challenge is the need to protect two nearby special areas of conservation at Darwin mounds and Wyville Thomson ridge. The former is protected for its cold-water corals, the latter for its stony-reef species and bottlenose dolphins. In order to go ahead with any activity that has the potential to have an impact on a special area of conservation, the Government have to be certain that there will be no significant negative impact on the protected sites. Greenpeace is making a strong case that the Government have no way of being certain of this, given that the decision was taken before the official US Government report into the Deepwater Horizon tragedy had published its conclusions.

The Secretary of State's own words and actions reveal the difference between what he said should have been done and the reality of what happened. He said:

"One of the mysteries appears to be the fact that the blow-out preventer was checked within two weeks of the disaster and still failed. Clearly, that is one of the things that the investigation must get to the bottom of."-[ Hansard, 14 June 2010; Vol. 511, c. 634.]

Ten days later, he told The Economist UK energy summit:

"The events in the Gulf of Mexico are devastating. The impacts of the explosion on the Deepwater Horizon give us pause for thought, particularly given the beginning of exploration in deeper UK waters West of Shetland."

In written evidence to the Energy and Climate Change Committee submitted in September, and repeated to me in a letter of 15 October, the Department said that

"we must learn everything we can from the Macondo"- the Deepwater Horizon-

"well. Over the last four months we have been looking very closely at all the information that has come out of the Gulf of Mexico incident including the recent BP investigation report, and determining how this relates to our own regime and will continue doing so until the formal US investigations are completed in 2011."

That sounds very good, yet on 1 October it was announced that the Government had approved Chevron's application to drill into the prospects at Lagavulin, under a mile of North sea water.

I would of course be happy to hear any evidence that the Government were seeking comprehensively to understand the Deepwater Horizon tragedy, reflecting on the implications for drilling in the UK, especially in deep water, and waiting for all the evidence to be gathered so that a balanced and informed decision could be made. That was what the Secretary of State implied he was going to do. Unfortunately, despite having set out such an approach, the Secretary of State has singularly failed to follow it. In what will quite possibly be deemed an illegal decision, the Government have approved drilling at Lagavulin without proper parliamentary consultation and in the absence of all the facts.

It is difficult to see how the Government can expect Parliament to accept that the decision to approve the Lagavulin well is either responsible or reasoned. It should also be pointed out that until today Parliament has had no opportunity to offer its opinion. Made on 1 October, the announcement of the decision fell almost exactly in the middle of the conference recess. That left it-a cynic might suggest-free from the detailed parliamentary scrutiny that a debate on the announcement would have permitted and, indeed, free from the media spotlight that would have accompanied such a deliberation. Given the long lead times that any new oil well works on, I would be interested to know why the Government did not feel the announcement could wait a mere 10 days more until Parliament began to sit again.

The haste even flies in the face of the Government's own advisory group's view on the matter. In evidence to the Select Committee on Energy and Climate, OSPRAG-the Oil Spill Prevention and Response Advisory Group that was set up by the Government following the gulf of Mexico disaster to consider the Deepwater Horizon incident and facilitate the implementation of relevant recommendations-stated:

"The Gulf of Mexico incident obliges the industry to reconsider the worst case scenarios and demonstrate to the satisfaction of all its stakeholders that it is competent to drill all targeted reservoirs on the"-

UK continental shelf-

"has the capacity to respond effectively to a loss of well control and to any resultant oil spill. OSPRAG aims to fulfil this requirement...Work within OSPRAG is proceeding in advance of the publication of the investigation into the Gulf of Mexico incident but will ultimately be informed by the findings. It is important that OSPRAG be given the space to deliver and its recommendations not be pre-empted."

To me, that is pretty strong language:

"It is important that OSPRAG be given the space to deliver and its recommendations not be pre-empted."

A decision to go ahead with oil drilling on 1 October-well before we have the results of the Deepwater Horizon inquiry, meaning that it is impossible for OSPRAG to incorporate those findings into its deliberations-looks like pre-emption.

As well as not waiting for Parliament or OSPRAG, the Secretary of State has not even waited for the official US Government investigation into Deepwater Horizon. As we know, the Deepwater Horizon tragedy cost 11 deaths and caused untold environmental and economic damage in the gulf of Mexico.

Tonight, we need to get to the heart of what informed that hugely important decision and why it was so important that the decision was made in advance of all the advice that would have enabled it to be much better informed. I have tried to answer that question and all I have been able to find is BP's investigation and what the Government describe as the good track record of drilling in the North sea, both of which have obvious flaws. BP is far from an independent observer of the disaster that struck its well, and given its handling of the aftermath over the summer it is hardly surprising that it would seek to limit damage. Many commentators have described the BP investigation as an attempt to spread blame from BP and on to contractors. Others criticised the report's narrow focus on the days leading up to the disaster, rather than on the more systemic failings of design and safety checks. That undermines BP's report.

What about the claim that the UK has a good record of drilling? What the Government describe as the industry's strong track record in the North sea has in fact been built up in far friendlier waters than those found off the west of Shetland. The Department of Energy and Climate Change's information shows that of the 315 wells that have been drilled in deep water anywhere on the UK continental shelf, only three have ever been drilled in more than 1,500 metres of water, as Lagavulin will be. There are only three wells in operation to the west of Shetland, two of which are in about 500 metres of water and the other in only 150 metres. Despite the fact that the previous Government's 2007 energy White Paper stated that the west of Shetland is a particularly challenging location in which reserves remain largely untapped, the current Government are reassured by safety records that are, frankly, of little relevance. Even the safety record on current wells should be examined in more detail. The Government seem satisfied, as proof of safety, that there have been "only" two major disasters-Piper Alpha and Ocean Odyssey-both in 1988.

Motion lapsed (Standing Order No. 9(3)).

Motion made, and Question proposed, That this House do now adjourn. -(Jeremy Wright.)

Photo of Caroline Lucas Caroline Lucas Leader of the Green Party 6:00, 18 Tachwedd 2010

When we look in more detail, a worrying picture emerges. The Health and Safety Executive's offshore oil and gas safety statistics bulletin gives a clearer picture. In the last financial year, 50 major injuries were reported, compared with an average of 42 major injuries over each of the previous five years, and 443 dangerous occurrences, including well incidents, were reported, including hydrocarbon releases and offshore equipment failures. There was also a significant increase in the number of major and significant hydrocarbon releases in 2009-10. In commenting on the worrying increase in safety incidents, the head of the HSE's offshore division said:

"I am particularly disappointed, and concerned, that major and significant hydrocarbon releases are up by more than a third on last year. This is a key indicator of how well the offshore industry is managing its major accident potential, and it really must up its game to identify and rectify the root causes of such events."

That is hardly a ringing endorsement of the UK's regulatory regime. The HSE's offshore division is calling on the industry to up its game, but rather than waiting to find out whether it has and what the implications of Deepwater Horizon are, and rather than waiting for any kind of scrutiny in Parliament, the Government have given the go-ahead to Chevron. Given the general failings of the industry in the North sea and the specific, terrible recent failing of a deep-sea rig in the gulf of Mexico, one might reasonably expect them to demand a fundamental re-examination of equipment and practices, but sadly, that has not happened. I even understand that the drill at Lagavulin will use the same safety equipment and contractor as Deepwater Horizon. Halliburton will do the cementing and a Cameron blow-out preventer is planned for the well.

The Select Committee heard that the essence of the UK's superior inspection regime-at least, we are supposed to believe that it is superior-is the fact that it is less prescriptive than others. Instead of having specific minimum standards in each area of drilling operation, the UK requires operators or duty holders to make sure that they have reduced the risks of their operations to ALARP-as low as is reasonably practicable. This means that it falls to inspectors to ensure that each company's way of achieving that is appropriate, so an awful lot depends on inspectors' judgment. Where do those inspectors come from? As the Select Committee heard, they are industry professionals who work for consultancies. To top it all, those consultants have a client relationship with the companies they are inspecting. This does not make a compelling case that the UK regulatory environment is superior.

Despite the Secretary of State's insistence to the contrary, Norway has taken a significantly different stance on the granting of deep-water drilling licences off its coast. Although it is allowing the drilling of wells from its previous licensing round-the 20th-to continue, when it comes to the latest round, the Minister of Petroleum and Energy, has maintained:

"There will be no drilling in any licenses on deep waters coming out of the 21st round before we have sufficient knowledge of this accident, including possible implications for our regulation."

He also cites the need to respect the precautionary principle, saying:

"The precautionary principle combined with a predictable framework, have to be the foundation for our petroleum politics".

These facts give the lie to Government reassurances that the UK's inspection and enforcement regime is far superior to the US system that so badly failed in the run-up to Deepwater Horizon. Indeed, if our system is so robust and fit for purpose, why would we need to double the number of DECC's annual environmental inspections of offshore drilling rigs? The doubling of annual inspections does not, sadly, amount to very much, given that the baseline is so low.

DECC's written evidence to the Energy and Climate Change Committee states that in the first six months of 2010 it carried out inspections on 35 of the 282 operational oil and gas installations on the UK continental shelf. DECC inspected only one deep-water drilling rig in 2009-10, and as of September this year only one such inspection was planned for 2010-11.

What is at stake if a major incident such as Deepwater Horizon occurs on the newly permitted drilling site to the west of Shetland? Chevron UK has recently doubled its worst-case North sea oil spill scenario from 35,000 to 77,000 barrels leaked per day, 25% more than gushed into the gulf of Mexico. The managing director, Mr Cohagan, says:

"Deepwater Horizon has given us a new perspective on how bad things could be."

The environmental damage of such a major spill could be expected to hit many special areas of conservation-SACs-and specially protected areas on the coasts of the Scottish highlands and islands. In addition, severe damage could be expected to the four nearby offshore SACs, including Darwin mounds, home to deep-water coral that is protected by the convention on international trade in endangered species. However hard the clean-up operation has been on the Mexican gulf coast, such work would be significantly greater in the North sea, because colder waters mean that oil disperses far more slowly and there is much more potential for wildlife damage. The remoteness of the site, more than 160 miles north of Shetland, would add a huge extra strain to the clean-up operation, as would the likelihood of rougher seas and weather.

The Government have not only given the go-ahead to reckless deep-water drilling, but absolutely encouraged it. It has not happened by accident. The industry has been reticent about developing deep-water drilling, precisely because of the dangers and difficulties of so doing; and it is only because of recent tax breaks, which the previous Government and now the coalition Government have given to the oil industry to support the development of new, unconventional UK fields, that companies have geared up to go there. The increased tax breaks for companies drilling of the west of Shetland are estimated to be worth £12 billion over the next eight years, or £160 million per new field opened up. The Government's view, as stated in their evidence to the Select Committee, is:

"UK deep water oil and gas production is necessary during the UK's transition to a low-carbon economy," but their own figures suggest that the pursuit of fossil fuels hampers rather than supports the development of a low-carbon economy.

What else could the Government do with that £12 billion subsidy of one of the most dangerous and risky types of drilling we could imagine? First, they could end the subsidy and invest the money in energy efficiency and renewable energy technologies, which could fund a significant step in the transition to the low-carbon economy that the Government say they want. Importantly, there are far more jobs in that greener economy than in oil and gas. I understand colleagues' concerns about potential job losses if a moratorium goes ahead, and we need Government support to ensure that does not happen, but offshore oil and gas each provide only about 265 jobs per terawatt-hour of energy produced. In comparison, the same unit of energy from renewables, such as wind power, creates between 1,000 and 2,000 jobs per terawatt-hour.

Indeed, detailed analysis shows that investing in renewable energy could almost double the UK's total energy generation over 20 years and create at least 425,000 jobs, so that money should go into green energy. Half the £12 billion that is saved could be used to fund the green investment bank fully. There are great hopes for the bank's proper capitalisation, but the Government have so far committed only £1 billion to it. Estimates suggest that we need between £4 billion and £6 billion to make the bank a success, so I call on the Government to put some of that £12 billion into it.

I hope that other Members join me in calling on the Government to place a moratorium on all new deep-water drilling on the UK continental shelf-at the very least until the judicial review, and until we have the results of the US Government's investigation into Deepwater Horizon.

Photo of Charles Hendry Charles Hendry The Minister of State, Department of Energy and Climate Change 6:09, 18 Tachwedd 2010

It is a pleasure to respond to this important debate. I am grateful to Caroline Lucas for securing it, although I have found it hard at times to understand what her motivation has been. Has it been in general opposition to drilling for oil and gas at all? That is what she indicated in Westminster Hall last week. Alternatively, is it specifically about the deep-sea issues west of Shetland, on which she has focused tonight? It would be helpful to have a clear understanding of exactly her objective and whether she is trying to end what is, for Britain, an extremely important industry. There is a great deal of confusion in the arguments that she has put forward. I shall try to clarify some of the issues, the Government's approach and why we have reached the decisions that we have made.

It is right to put this debate in context. We have all been profoundly concerned about the terrible accident at Deepwater Horizon earlier this year. It was a very serious and tragic event. Eleven people died and there have been huge consequences for the gulf of Mexico and those who make their living there. As new developments focus increasingly on more challenging prospects, including deep water, the situation presents Governments, regulators and the industry with a real challenge, which they must address. That has been recognised by the Energy and Climate Change Committee, which is conducting an inquiry into the matter with great thoroughness.

I want to pick up on one of the issues that the hon. Lady was talking about towards the end of her speech. She spoke about tax breaks, as if they involved money that could be spent somewhere else. The reality is that the companies pay in tax 50% or 75% of their profits from oil and gas production. To encourage them to go into more difficult, challenging and expensive waters, the Government have reduced that rate so that they pay slightly less tax. The consequence of what the hon. Lady is saying would be that those billions of pounds of funding from the North sea oil and gas sector would simply dry up completely. Far from having £12 billion, which could be reallocated to other facilities and services, we would be billions of pounds short in the public finances, and massive cuts would have to be made elsewhere. That is the reality. We are talking not about a subsidy, but about a reduction in one of the highest rates of tax that any industry pays in this country.

Photo of Caroline Lucas Caroline Lucas Leader of the Green Party

I want to clarify two things. First, I want to make very clear my motive for securing this debate: it is indeed to try to secure a moratorium on any new oil licensing, including the Lagavulin prospect, until the result of the judicial review and until we find out what happened at Deepwater Horizon. The Minister is correct: over time, of course, I would like to see a transition away from fossil fuels and towards green energy. However, I am not suggesting that we do that via a moratorium now; I am suggesting that the particular risks off Shetland are such that we should be acting.

Photo of Charles Hendry Charles Hendry The Minister of State, Department of Energy and Climate Change

I am grateful to the hon. Lady for that clarification, and I shall respond in the same tone. We have looked extremely carefully at the UK regime. We believe that it is absolutely paramount that we in the United Kingdom should have the toughest safety standards. We have a long record of safety. The UK was one of the first areas worldwide in which offshore exploration and production took off. We have four decades of experience. More than 10,000 wells have been drilled in UK waters, including more than 300 in waters more than 300 metres deep.

Our regulatory system has been developed to meet the evolving challenges faced by the industry. Following the Piper Alpha disaster, safety regulation was brought under the Health and Safety Executive umbrella, to get the benefit of its expertise in regulating major hazards. The Department of Energy and Climate Change, of course, plays a vital role in overseeing the environmental performance of the offshore industry.

In light of the evidence, we have taken further steps to strengthen our regulatory regime by doubling the number of environmental inspections of mobile rigs, and we are satisfied that the regime remains one of the most robust in the world. I am sorry that the hon. Lady cannot recognise that. With great care and scrutiny, we have reassured ourselves about the steps in place, decided what more should be done to maintain our gold standard in oil and gas security and safety mechanisms, and made sure that we have gone a bit further to enhance that. People should welcome what the Government have chosen to do. Of course, we have been looking extremely carefully at all the information from the Macondo incident, and we will continue to do so. When those investigations are complete, we will determine what more, if anything, needs to be done to reinforce our regulatory approach.

The hon. Lady questioned the ability of the inspectors to do the work that is most important. We do not believe it is necessary to inspect every single offshore facility every single year, but we focus on those more challenging operationally, which is appropriate.

Photo of Caroline Lucas Caroline Lucas Leader of the Green Party

It is interesting to talk about the checks that went on. In fact, Deepwater Horizon had been checked just two weeks before the tragedy happened, so we can put to one side arguments about the regularity of the checks. The hon. Gentleman talked about doubling them, but I understand that that still means only going from two to four, so that is not going very far. The point is that we do not know why Deepwater Horizon happened. One of the complicated aspects is that it was checked two weeks before, so why are we putting so much stress on that as a way of being able to say that we are certain that we will be safe?

Photo of Charles Hendry Charles Hendry The Minister of State, Department of Energy and Climate Change

I hope that the hon. Lady accepts that there has always been a fundamental difference between the way that safety is handled and monitored in the United States and how it is done here. We have had significant contact with the American Administration since Macondo, and they are looking to see what lessons they can learn from our regime. After Piper Alpha, we separated out the licensing roles and the health and safety and environmental roles, so the body responsible for health and safety-the HSE-has no financial involvement whatsoever in the licensing rounds. As a result, over 20 years we have had in place an extremely robust mechanism.

We believe that there is an imperative national interest in ensuring that we get the best of the resources available. The reality is that for all the ambitions the hon. Lady may have-we want to decarbonise this country as well-by 2020, and well beyond, we will still be dependent on a significant amount of oil and gas. We can either find those resources within our national waters or import them. About 17% of our remaining reserves in the United Kingdom lie in deepwater areas west of Shetland. About 3.5 billion barrels of oil of the remaining 20 billion or so on the entire UK continental shelf are in that area. We think it is a matter of great national importance that we should be maximising the economic recovery of those resources, and there is a great deal more that needs to be done in this entirely legitimate and proper activity. That is why we were pleased recently to offer 144 new licences in the 26th round. That shows the continuing confidence of the industry in the UK continental shelf and provides a strong basis for continuing exploration and development activity. We will encourage industry to continue to invest in exploration, development and production while maintaining high standards of management and minimising environmental impacts.

Photo of Caroline Lucas Caroline Lucas Leader of the Green Party

On safety, I want to come back to the quote from the Health and Safety Executive's offshore division, which says that it is

"particularly disappointed, and concerned, that major and significant hydrocarbon releases are up by more than a third on last year" and calls on the industry to up its game. The HSE itself is expressing that concern. How is that consistent with the hon. Gentleman's words about how safe everything is and how fantastic our record is?

Photo of Charles Hendry Charles Hendry The Minister of State, Department of Energy and Climate Change

If one looks further into the figures, one sees that the volumes released have been gradually coming down over time. We are safer, we have fewer leakages, and every single leakage is required to be reported. Any leakage is unfortunate and should be avoided or stopped, and any threat to human well-being has to be addressed, but I have never seen any industry anywhere with higher safety standards than the offshore oil and gas sector. Those people are constantly driving and striving to improve standards, and the Government will work with them in ensuring that they achieve that.

Let me turn to the Chevron consent at Lagavulin. The hon. Lady questions why we announced that while the House was not sitting. There is no requirement on the Government to announce the issuing of new rounds of licences to Parliament, but we have always done so, as we believe that it is right and proper that Parliament should know about it first. However, individual consents do not require to be announced to Parliament. Before we could make the announcement of the consent, we needed to be absolutely satisfied that Chevron's plans were fit for purpose, had been thoroughly assessed, and, in the light of any additional evidence from the challengers in the gulf of Mexico, had been tightened up even further. That meant, for example, that we required an update of the oil pollution emergency plan. We considered that very carefully, and not until Chevron was able to satisfy the additional requirements was consent granted.

The additional requirements included an exercise to co-ordinate the work of all the key contractors and to examine the roles, plans and procedures in place to prevent incidents and identify gaps and mitigations, taking into account the Macondo experience. Workshops were required for key onshore and offshore Chevron drilling and service personnel, to secure the alignment of all parties with Chevron's safety and environmental principles. An audit of Halliburton's practices and procedures by Chevron's in-house cementing experts was required, as was comprehensive checking that all relevant Chevron and Stena personnel held up-to-date certification in well control. Regular well control drills were required to test the equipment and crews weekly or more frequently. A dedicated safety meeting of all key rigging contractor crews was required, to review the key findings of the Macondo well experience. There were further steps to ensure that the blow-out preventer would operate reliably if needed, including a third-party audit of the equipment and the presence of a Cameron engineer on board at all times to maintain the equipment and its control system.

A further reason why we can have confidence in the system in this country is that we have also made progress in putting in place capping devices, so that if there is a disaster we can respond much more quickly. Since 1974, some 315 deep-water wells have been drilled in UK waters, with no blow-out or drilling-related oil spill, but we nevertheless require detailed contingency plans that can be brought into force in the event of a spill. Those requirements have been updated in the light of what happened in the gulf, and every single well is subject to detailed case-by-case scrutiny. We now also have containment devices from the gulf of Mexico in the UK, based in Southampton.

The work of OSPRAG is aimed at adding a third dimension to the equation-a capping device that can be deployed on any well head, not just deep-water ones, to mitigate and capture oil flows in the event of failures such as we saw in the gulf. That should be available by the end of 2011 or sooner. In addition, Chevron has developed a quickly deployable capping device that is located in Scotland and could be deployed on the Lagavulin well within nine days of any incident.

Photo of Caroline Lucas Caroline Lucas Leader of the Green Party

Will the Minister answer just two questions? First, why was it so urgent to grant the licence now, before we have understood what happened at Deepwater Horizon? We do not know why that happened, so could we not have waited a few more months to find out before going ahead? Secondly, I go back to the HSE's stating that

"major and significant hydrocarbon releases are up by more than a third on last year."

Surely those two things should give the Government pause.

Photo of Charles Hendry Charles Hendry The Minister of State, Department of Energy and Climate Change

On the second point, the hon. Lady should examine the long-term trend and give the House the full details. She will see that, over time, there has been a steady reduction in injuries, leakages and emissions, and that there has been continual progress.

On why we made the decision when we did, we did not believe that there was any case for holding back the decision once we had been fully satisfied that every necessary safety mechanism was in place and every safety issue had been properly addressed. After all the extra questions that were put to Chevron, we believed that it had been able to satisfy that requirement. One must also consider the commercial factors involved. When a ship is available to do the drilling work, it costs thousands of pounds a day. Once we were satisfied that it was entirely safe and proper for the work to go ahead, there was no case for holding back further.

The hon. Lady made comparisons with the US approach, pointing to a difference between its prescriptive approach and our safety case approach. Our practice already includes, and goes further than, the measures being proposed under the new US rules. The US Government themselves have examined what needs to be done and lifted the ban on deep-sea drilling in the gulf of Mexico, which is beginning again. They have recognised that it can be done safely, even with all the tensions and pressures that exist in the United States on the matter.

In addition, we have established processes for environmental management that require operators to have an effective environmental management system in place before starting operations. The new US rules will require a similar system, but they will not be in place for another year. Whereas we already have third-party audit of the environmental management system, the US is still considering whether to adopt it.

We have looked carefully at the systems that operate here and elsewhere in the world and we have talked to the companies involved. We should not shy away from the fact that nowhere, apart from Norway, has such exacting standards on safety and environmental protections. The hon. Lady says that Norway has put in place a moratorium, but that is not correct; it has not adopted a moratorium on deep-water drilling, and a number of deep-water wells have been drilled in Norwegian waters this year since Macondo.

Photo of Caroline Lucas Caroline Lucas Leader of the Green Party

In fact, I was careful not to say that Norway had put in place a blanket moratorium. I said that it had allowed ongoing drilling under the 20th round of licences, but that it will not release any licences under the 21st round-the new round-until it has learned the lessons. Surely that is the kind of model that we should follow. I come back to my point that I do not understand how Ministers can reassure the House that deep-water drilling is safe until we know why the blow-out happened. We do not know what went wrong, so we cannot be sure that we have put it right or made sure that it will not happen again.

Photo of Charles Hendry Charles Hendry The Minister of State, Department of Energy and Climate Change

We have looked at the safety mechanisms-the tests, structures, emergency procedures and fail-safe devices-to see how they are imposed in the United Kingdom. What happened in the gulf of Mexico happened under a very different licensing and safety regime. We have looked at practices here, and we believe that it is safe to go forward, particularly given the many years of deep-water drilling in the United Kingdom. That is the basis of our decision.

In addition, we have looked at the oil pollution emergency plans. We had a review of their format and content. As a result, plans submitted for all drilling activities must now assess the worst-case scenario, where all containment barriers have failed, resulting in a well blow-out that cannot be controlled in the short term. All ongoing drilling operations now have revised oil pollution emergency plans to assess the worst-case scenario. All OPEPs submitted by operators contain a section relating to oil spill modelling. Operators conduct computer modelling on worst-case scenarios to give an indication of the consequences that could arise if the scenarios were to occur. As such, that information gives an indication of where oil might beach on shore and of the time factors involved. That allows pre-planning to take place to address such issues.

The UK has a tough regulatory regime. Everyone anywhere who has looked at the approach in the UK believes that it is a gold standard to which others should aspire. However, we will continue to look at any evidence from anywhere in the world, and we will refine and improves things as necessary. We have made a number of changes in the light of Macondo, such as increasing the number of environmental inspections and seeking revised oil pollution emergency plans.

All drilling applications are considered on a case-by-case basis, and no consents are issued until DECC and the HSE are absolutely satisfied that the drilling proposals are sound and have taken into account the issues that contributed to the Macondo incident. More than 300 deep-water wells have been drilled to the north and west of Shetland with no incidence of a blow-out or oil spill. Deep-water drilling is not a new concept in this country; the industry has been conducting such activities here since 1974.

Taking account of those factors, we do not believe that there is a need to halt deep-water drilling on the UK continental shelf. As I said, the US has recently lifted its moratorium, and Norway has never had one.

The UK oil and gas industry is a great success story, but it does not always receive the praise and attention that it deserves. I have been offshore and seen first hand the dedication, determination and skill of the work force. The industry has shown continuous technical innovation to meet the tough challenges of operating in the North sea and beyond. It is of course vital that operations are carried out safely and that environmental impacts are minimised, and we must ensure that lessons are learned from the US incident. However, the UK regulatory system already provides one of the toughest regimes for the upstream oil and gas industry to operate in.

Photo of Charles Hendry Charles Hendry The Minister of State, Department of Energy and Climate Change

I am about to conclude.

The industry's track record, particularly post-Piper Alpha, demonstrates its effectiveness. As I said, we have been looking closely at information from the Macondo incident and we will continue to do so. When those investigations are complete, we will determine what more, if anything, needs to be done to reinforce our regulatory approach. However, I can give the hon. Lady and the House an absolute undertaking that we will take no gambles or risks in making sure that we do these things in the most effective and safest way possible.

Question put and agreed to .

House adjourned.