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Draft National Policy Statement for Fossil Fuel Electricity Generating Infrastructure (EN-2)

My Lords, I was away for most of February and it was not until I read the Official Report of Tuesday’s remarkable debate on nuclear generation that my attention was drawn to the documents that we are considering today. My appetite was initially whetted by a statement by the noble Baroness, Lady Young of Old Scone, about the Severn barrage. She said that she was looking forward to debating it at length today. In due course and at the right moment I will be standing shoulder to shoulder on that issue, but as the Minister has already pointed out, it is not a subject covered by the statements we are considering and therefore is not on today’s agenda. In passing, I will say one thing about wind turbine generation. As one who is increasingly concerned about the impact of wind farms on some of our most beautiful countryside—a large part of it is in Wales—I am relieved that the emphasis is now switching to offshore wind farms. There is clearly much merit in locating such farms offshore. I have doubts about the scale of the contribution that they can make to our energy policy and about the economic costs, but it is entirely appropriate that they should increasingly be sited offshore. My remarks today will concentrate on LNG import facilities, and in particular on paragraph 2.5.1 of the EN-4 document, which I shall read in full. The paragraph states: ""Gas storage and supply infrastructure sites are subject to stringent safety standards under the Control of Major Accident Hazards (COMAH) Regulations 1999. The COMAH regulations apply to underground gas storage facilities, LNG import facilities and gas reception facilities. All these categories of infrastructure qualify as top tier COMAH sites (those carrying more than 200 tonnes of gas). The COMAH regulations are enforced throughout the life cycle of the facility, i.e. from the design and build stage through to decommissioning. The COMAH regulations are enforced jointly by the competent authority: the HSE and the Environment Agency (EA) in England and Wales (and by the Scottish Environment Protection Agency)"." In its present form this is an extraordinarily misleading and partial description of the arrangements that exist to deal with one of the most critical issues that has to be considered when applications are made for new LNG terminals. It is so seriously misleading that I am at a loss to understand how it can have been included in its present form in the statement. The COMAH regulations and the roles of HSE and the Environment Agency—unless there has been a change since 2006 that I have not observed, and if there has been it should have been referred to in the statement—apply only to onshore facilities. The position was set out in great detail to me in a letter that I received on 12 May 2005 from the Office of the Deputy Prime Minister. I will return to the subject in some detail. Initially, when considering the first application in Milford Haven, HSE gave detailed consideration to the risks arising from damage to tankers alongside the jetty, but it then sought advice from the Office of the Deputy Prime Minister about whether it was in scope for the role as statutory consultees in the planning (hazardous substances) consent, and it was advised that that was not its role. The responsibility for the safety of ships lies with the port authority. I quote from an Answer that I received to a Parliamentary Question in June 2005 from the noble Lord, Lord Davies of Oldham, who said that LNG tankers are designed and constructed to meet the standards that are established by the International Maritime Organisation. He said: ""The Maritime and Coastguard Agency (MCA), an executive agency of the Department for Transport, surveys tankers registered in the United Kingdom and inspects foreign-registered tankers visiting UK ports. Parallel survey and inspection arrangements are in place across Europe. The safety of tanker movements within port areas is a matter for statutory harbour authorities".—[Official Report, 15/6/10; col. WA 134.]" The situation was complicated further when applications were being considered in Milford Haven, because the planning authority was the national park authority, which had looked for technical advice both to the HSE and to the Milford Haven Port Authority. This was at a time when all planners were under considerable pressure from the DTI to get on with dealing with what it regarded as very important for what it described in a series of interesting e-mails, which I have in my possession, as UK plc. I will refer in some detail to what happened with the two planning applications for terminals in Milford Haven, not because I want to reopen my quarrel with the port authority about how it handled the matter. The issues have been decided and the two facilities are operational. I will say only that I hope and pray that the fears that I expressed are unfounded—the same fears were expressed very powerfully by a number of local people: indeed, cases were taken to courts to see whether the whole issue could be dealt with by judicial review—and that no accident occurs. If it did, it would have devastating consequences for my former constituency, and equally devastating consequences for the Government’s energy policy and for the supply of gas to those who consume it. However, I propose to say a good deal about what happened to illustrate my concerns and why there should have been better coverage of the issues at stake in the document that we are considering. My own direct involvement in the matter began in March 2005, when, during a visit to my former constituency, I was briefed on the concerns in Milford Haven. I then undertook my own research. I tabled Written Questions in the House of Lords and entered into correspondence on LNG shipping safety in Milford Haven with various parties, including the Office of the Deputy Prime Minister, the Secretary of State for Transport, the Maritime and Coastguard Agency, the Health and Safety Executive and Mr Ted Sangster, the chief executive of Milford Haven Port Authority, with whom I had a meeting. My concerns about LNG safety grew as I received answers from all these bodies, and I set out my fears in a speech in a House of Lords energy debate on 27 October 2005. In the course of that speech, I called for a fundamental review of the planning arrangements for LNG facilities. My exchanges and involvement continued right on into 2006. There are those who argue that the risks arising from the operation of LNG ships are very low, because the record has been very good. However, it is quite clear, if you examine the HSE’s very detailed assessments at the time of the first application, that it does not share this view. It prepared remarkably thorough evaluations and concluded that a plume of gas, which would be heavier than air and would therefore sink to the water level, could spread rapidly in the event of an accident and was capable of engulfing the densely populated developments in the vicinity of the jetty. Perhaps even more significant are the views expressed by the gas tanker and terminal operators themselves. They have an organisation, SIGTTO, which represents them, and which has set out the issues in great detail. It says: ""Gas tanker and terminal operations carry a range of operational risks arising from transport, storage and transfer of liquefied natural gas and petroleum gases. These risks are unique to liquefied gas operations and require specific measures to manage them within tolerable limits"." SIGTTO’s paper, ""expounds a doctrine of protective location for gas terminals, arguing for the elimination of major risk elements by locating gas operations in places where they will not be exposed to uncontrolled threats from outside their own operating environments. Under this doctrine operational risks are removed from the operational milieu of gas shipping (by informed selection of locations). Such risks as then remain are assessed and afterwards addressed by the implementation of procedures derived specifically from the risk assessments. Hence gas shipping operations are to be managed within tolerable limits"." I have no criticism of HSE in its handling of its responsibilities for the onshore facilities. Some would argue that, rather than placing tanks in a bund on top of a bank from which the heavier-than-air gas could flow down and possibly on to a terminal, it is better to place them underground, a practice widely followed in Japan. A strong case—this is relevant to the issue of where these things should be sited—can also be made for avoiding risks in populated areas by using single-point moorings and regasification and delivery at sea, well away from centres of population, with the added advantage that the terminals can be sited much closer to where the gas is to be consumed. In the case of Milford Haven, a massive gas pipeline had to be constructed across Wales, partly through a national park, to carry the gas to its eventual destinations in England. I return to SIGTTO and the fact that its recommendations were not complied with in Milford Haven. SIGTTO set out in great detail the kind of quantitative risk assessment that it recommends. The Milford Haven Port Authority has made a number of assessments of various aspects of the operations in the port and it received an assessment from the developers of the terminal at Hook, but it never carried out a QRA of the type recommended by SIGTTO. I shall take two aspects of SIGTTO’s detailed description of the kind of assessment that should be made: ""Quantitative risk assessments cover a probability model of the activity with a wide range of consequential models for determination of the risk picture … A QRA analysis should encompass the likelihood of other ships in the vicinity presenting a threat of intrusion to the LNG terminal as a result of operational misjudgement or mechanical failure. The analysis should entail an assessment of what is the worst feasible case, based on the displacement, speed and striking angle of an intruding ship. This should be established, in the first instance, BEFORE THE INITIAL SITE SELECTION IS MADE"—" again, a highly relevant point in the context of the document that we are considering. As I say, it sets out the case in much more detail. The Milford Haven Conservancy Board said that it had not had a single report that came to any conclusion about whether it should allow LNG ships to use the port. It asserted that it operated an open-port policy, and argued that therefore it did not have the ability to say that LNG ships could not use the port if there was capacity—in other words, an available berth. As a former director of Associated British Ports, the country’s largest port operator, I treated that statement with incredulity, because I was absolutely satisfied that if the board thought that ships could be berthed only in unsafe conditions, it had every right to ensure that they did not enter the port. SIGTTO says that, ""the safety record of this class of ship is exemplary. Nevertheless, this safety record notwithstanding, the risk profile of LNG tankers presents a very serious residual hazard in port areas if the vital structure of the tanker is penetrated … Ideally LNG marine terminals should be sited away from port fairways used by other ships … whatever the circumstances, no terminal should be sited on a bend in a shipping channel such that inevitably, the trajectories of transiting ships pass through the terminal as they negotiate the bend … whatever the prevailing circumstances, no terminal should be sited in a position that admits the possibility of its being approached by heavy displacement ships, having an inherent capability for penetrating the hull of an LNG tanker ... where such encounters are possible a protective barrier should be erected to shield the LNG terminal"." Anyone who knows Milford Haven will know that the South Hook terminal fails to comply with those SIGTTO standards. It is sited very close to the fairway, it is a mile long and it is used by other ships. It certainly admits the possibility of its being approached by heavy displacement ships. It is on a bend in the shipping channel, and the trajectories of ships leaving or passing the jetty pass through it. The site is such that an exclusion zone is not a practical possibility. I could elaborate on further criticisms of the sighting of the Waterston jetty, but I made all the points in a previous speech in 2005 and will not repeat them today. I will refer to one final recommendation from SIGTTO, which says: ""Managers of LNG operations will therefore"—" because people do not know much about LNG— ""have a greater need to reach out to port communities—port authorities, other users and service providers—to communicate the risks of their operations and explain the actions being taken to manage these risks, the defences provided and the protections required of others … Communication is pivotal to the entire risk management process for an LNG terminal"." This was disastrously mishandled at Milford Haven. Surely it should be a central feature of the national policy statement that we are considering. I will conclude by referring to a letter I received from Alistair Darling, the then Secretary of State for Transport, and to a parallel letter from the department’s executive agency, the MCA. He said: ""The Maritime and Coastguard Agency (MCA) has responsibility for the Port Marine Safety Code (PMSC). However, this is a voluntary code and the MCA is not empowered to ensure compliance by ports with the code. Nonetheless, the MCA has very good working relations with Milford Haven Port Authority (MHPA) and has no cause for concern that the risks are not properly and proportionately controlled in the port."""No specific correspondence has taken place between the MCA and MHPA with regard to LNG carriers operating in the port. The MCA would expect that any perceived increase in risk arising out of this activity would be addressed within the port safety management system and the necessary risk mitigating options put in place before the activity went ahead"." I turn now to the final sentence from the letter of the chief executive of the Maritime and Coastguard Agency: ""We have no records of any risk assessments carried out in the development of the regulations that apply to LNG tankers and we are not aware of any safety issues that have arisen as a result of LNG tanker operations or technological developments. I hope that this is helpful"." It was not exactly helpful because the question I was pressing was whether there was any supervisory regime if port operators failed in their duty to ensure safety. I wanted to see if government departments had a role in this, and it appears that they do not effectively have a role. In short, there seems to be no arrangement by which government can intervene if things are not done properly. All this may or may not be dealt with under the new arrangements we are debating today, yet they are not referred to at all in the document. It is the most extraordinary omission. In his reply to the debate in October 2005, the noble Lord, Lord Sainsbury, the then Minister, said that these were important issues. He did not know anything about them and that therefore he would write to me. I never received a letter. Whether that was because the department was as ignorant then as it appears to be now by its omission of the necessary information or for any other reason, I do not know, but I did refer in that speech to the existence of a black hole. There is certainly, in my view, a black hole in the draft policy statement, and surely if people are to be satisfied that these facilities, which may be on their doorstep, are safe and secure, that black hole has got to be filled.