Dáil debates

Wednesday, 15 July 2015

Petroleum (Exploration and Extraction) Safety Bill 2015 [Seanad]: Committee and Remaining Stages

 

Sections 1 and 2 agreed to.

SECTION 3

7:40 pm

Photo of Michael MoynihanMichael Moynihan (Cork North West, Fianna Fail)
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I move amendment No. 1:

In page 10, between lines 40 and 41, to insert the following:
“(3) The Minister shall issue a clear definition on what constitutes ‘as low as is reasonably practicable’.”.
The term "as low as is reasonably practicable" is open to interpretation - that is the substance of the amendment. It needs to be more clearly defined. Other legislation has been challenged and unclear definitions in legislation can lead to all kinds of views. I call on the Minister of State to consider the amendment.

Photo of Joe McHughJoe McHugh (Donegal North East, Fine Gael)
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The concept of reducing a risk to as low as is reasonably practicable, a concept known as ALARP, is best practice adopted internationally and a concept reflected in the offshore safety directive. There is no definition for ALARP set out in either domestic or international legislation. The concept of what is as low as is reasonably practicable has been considered by the Court of Appeal in the United Kingdom and the courts in Ireland. The courts have found that for a risk to be determined as ALARP it must be possible to demonstrate that the costs involved in reducing the risk further would be grossly disproportionate to the benefit gained. Providing guidance on what constitutes as low as is reasonably practicable is already a matter for the Commission for Energy Regulation under the Petroleum (Exploration and Extraction) Safety Act 2010. In 2013 the Commission for Energy Regulation published a document entitled ALARP Guidance.

The purpose of the ALARP Guidance document is to provide detailed guidance to developers on the requirements of the Commission for Energy Regulation concerning the processes that must be used to determine whether a risk is ALARP. It is important that the concept of ALARP be kept under review and modified from time to time to reflect developing practices. Having regard to the fact the Commission for Energy Regulation has an existing statutory obligation to provide guidance and has already acted in this regard, I do not propose to accept this amendment. However, I appreciate the stance the Deputy and his colleague in the Seanad have taken. It is important to point out that the ALARP definition can be kept under review.

7:50 pm

Photo of Michael MoynihanMichael Moynihan (Cork North West, Fianna Fail)
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I am disappointed the Minister of State is not accepting my amendment because loosely worded legislation leads to bad law. As the Minister of State said, we should keep the legislation under review. I have a concern regarding the role of the Commission for Energy Regulation. We may have devolved too much power to it but I am not sure. Primary legislation should, in the first instance, be as strong as possible. I would have preferred it had the Minister of State accepted the amendment.

Amendment, by leave, withdrawn.

Section 3 agreed to.

Sections 4 to 6, inclusive, agreed to.

SECTION 7

Photo of Michael ColreavyMichael Colreavy (Sligo-North Leitrim, Sinn Fein)
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I move amendment No. 2:

In page 15, between lines 28 and 29, to insert the following:“(12) A petroleum undertaking shall not use the method of flaring of gas.

(13) A petroleum undertaking shall not use unconventional methods of gas exploration or extraction.”.
There are two aspects to the amendment. The first is that a petroleum undertaking shall not use the method of flaring gas. I understand the flaring of gas is sometimes necessary on safety grounds and that it is used to test the volume of supply during the exploratory phase. However, in many places in the world, there is continuous flaring of gas. Norway banned it many years ago because it is a waste of resources and releases an unnecessary amount of carbon dioxide into the atmosphere. The Joint Committee on Communications, Natural Resources and Agriculture, in its report of 2012 entitled Offshore Oil and Gas Exploration, recommended that the practice be banned. I would like to have seen this in the legislation.

May I speak to the second amendment now?

Photo of Michael KittMichael Kitt (Galway East, Fianna Fail)
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They are to be discussed individually.

Photo of Joe McHughJoe McHugh (Donegal North East, Fine Gael)
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The transposition of the offshore safety directive, which is the purpose of this Bill, is to ensure consistent regulation throughout Europe with respect to the potential for major petroleum incidents. It is important we learn from other countries. In the Department of Communications, Energy and Natural Resources, we have tried to source staff from countries with very rich experience of working in the industry. We nearly recruited a member of staff from another country to our Department to share expertise but it did not happen. It is important, however, that we continue to aspire to this. Ireland should not be trying to reinvent the wheel if there are various models available.

With respect to the flaring of gas, the technology in question has more than one purpose. At a gas processing terminal, for example, flaring of gas can be necessary for safety reasons. More generally, gas flaring is contentious where the technology is used in the context of a producing oilfield. Gas that is produced along with oil is sometimes flared as processing it would not be commercially viable. If in the future Ireland has a commercial oil development and the flaring of gas is proposed, that proposal will be subject to an environmental impact assessment, including a public consultation process.

Amendment, by leave, withdrawn.

Photo of Michael ColreavyMichael Colreavy (Sligo-North Leitrim, Sinn Fein)
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I move amendment No. 3:

In page 16, between lines 5 and 6, to insert the following:“(6) Any activity referred to in subsection (5) where relevant activity was suspended shall be reported to the Commission.”.
I understand legislation does not contain negatives. Amendment No. 2 states a petroleum undertaking shall not use unconventional methods of gas exploration or extraction. This uses a negative. If we were to opt for offshore hydraulic fracturing, we would have to examine again the safety legislation because there are inherent risks associated with hydraulic fracturing over and above those associated with conventional oil exploration and extraction. I understand why the Government is reluctant to include the negative statement in the Bill but I would like the Minister of State to commit on the record of the House that if there is to be offshore hydraulic fracturing in the future, the Government will re-examine the safety legislation underpinning it and accept that the legislation before us is not adequate.

Photo of Joe McHughJoe McHugh (Donegal North East, Fine Gael)
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I thank the Deputy again. He mentioned earlier that hydraulic fracking is outside the scope of this Bill. For that reason, I will not be accepting the amendment. The Deputy has constantly referred to the duration and scope of the study that is under way. It is important that the debate continue, and I am certainly open to any opportunity to continue it. The EPA has been tasked with responsibility in this area. Given the two main pillars, namely, the environment and human health, it is important that all the various options, including consulting universities, which is occurring both in Northern Ireland and here, be explored. There ought to be a full, frank and open approach to determining strengths, opportunities, weaknesses and the factors that are detrimental to health and the environment. It is important that space be made available to do that work.

I have been doing my own background research on geology. We have very complex geology in this country. In the regions the Deputy is always mentioning, there is a very complex rock formation. Without pre-empting the report, I believe from anecdotal evidence that the complex geography in itself may not lend itself to the activity in question.

Photo of Michael ColreavyMichael Colreavy (Sligo-North Leitrim, Sinn Fein)
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The legislation refers to petroleum exploration and extraction. Could the Minister of State confirm explicitly that hydraulic fracturing is not within the scope of this legislation?

Photo of Joe McHughJoe McHugh (Donegal North East, Fine Gael)
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It is not within the scope of the legislation.

Amendment, by leave, withdrawn.

Photo of Michael ColreavyMichael Colreavy (Sligo-North Leitrim, Sinn Fein)
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I move amendment No. 4:

In page 16, between lines 24 and 25, to insert the following:“(10) The operator shall ensure that verifiably calibrated and tamper proof flow meter systems are used to accurately monitor the volume of petroleum extracted.”.
This probably looks like more like a financial control than a safety provision. While the provision could be used to establish a financial control, it concerns safety because the volume of petroleum or gas extracted has a direct bearing on the level of risk in the business. Does the Government have any way of checking the volume being extracted and, consequently, the level of risk? Consider the example of our friends from Rossport and the pipeline going very close to the houses. Who knows the true volume going through that pipeline?

Are we depending solely on the operators to let us know what is going on or are there calibrated and tamper-proof flow meters that tell the truth?

8:00 pm

Photo of Joe McHughJoe McHugh (Donegal North East, Fine Gael)
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Regulation of metering is principally an economic regulatory function under the existing regime for oversight of metering. Prior to their installation or modification, it is required that the detailed specifications of all metering stations are submitted for approval by my Department and are also subject to inspection. It is important to point this out. Metering of petroleum volumes also constitutes a part of the safety management system to be described in any developer's safety case, which is required to be assessed by the CER. As this activity falls within the current assessment regime, I do not propose to accept this amendment but it is important to go say that a lot of the hard work and heavy lifting in respect of management, regulation and oversight happened in 2010 and the CER is a robust and independent oversight mechanism to ensure that there is constant vigilance in respect of inspection during the process.

Photo of Michael ColreavyMichael Colreavy (Sligo-North Leitrim, Sinn Fein)
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So the Minister of State is saying that what I am looking for is already in place and that there is a tamper-proof and calibrated flow meter system that shows the volume at every stage.

Photo of Joe McHughJoe McHugh (Donegal North East, Fine Gael)
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Yes.

Amendment, by leave, withdrawn.

Section 7 agreed to.

SECTION 8

Photo of Michael MoynihanMichael Moynihan (Cork North West, Fianna Fail)
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I move amendment No. 5:

In page 18, between lines 17 and 18, to insert the following:"(c) the requirement for any operator, who is granted an exploration licence or petroleum prospecting licence by the Minister, to put a bond in place, so that in the event of the decommissioning of petroleum infrastructure, the licensee not dismantling the infrastructure within 2 years of extraction being stopped, all cost associated with the decommissioning can be recouped by the State from the bond;".
We should have a bond in place to make sure that if petroleum extraction or exploratory drilling take place or a licence is given and the infrastructure is not put back or dismantled properly, there is no cost to the State and any costs of decommissioning the entire oil rig, for the want of a better word, are recouped by the State. This is a sensible amendment that could be inserted in that section.

Photo of Joe McHughJoe McHugh (Donegal North East, Fine Gael)
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There is a distinction in terms of responsibility. It is addressed elsewhere so I am not accepting this amendment but I wish to put on record that the ultimate responsibility is not borne by the State. As a Cork man, the Deputy will have experience in respect of what is happening and what is in place in Kinsale. The decommissioning of petroleum infrastructure at the end of field life is addressed by the petroleum lease granted to the developer once the commerciality of a field has been determined. The decommissioning regime that is in place in Ireland for the Kinsale area gas fields and the Corrib gas field is based on the full cost of decommissioning being borne by the holders of the petroleum lease and not by the State. A petroleum lease also includes a condition that requires a parent guarantee which means that a deed of guarantee and an indemnity in favour of the Minister must be given by each leasee. As this Bill is focused on safety and the prevention of major accidents and the question of liability for the cost of decommissioning is already addressed elsewhere, I do not propose to accept this amendment. However, the Deputy has raised an important issue, namely, the question of who bears the responsibility - the State or the operator. It clearly says elsewhere that it is developer who bears the responsibility.

Photo of Michael MoynihanMichael Moynihan (Cork North West, Fianna Fail)
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I am disappointed that the Minister of State is not accepting it. This is a genuine effort to ensure that we are strengthening the legislation. We have seen that bonds work in other fields.

Amendment put and declared lost.

Section 8 agreed to.

Sections 9 and 10 agreed to.

SECTION 11

Photo of Michael MoynihanMichael Moynihan (Cork North West, Fianna Fail)
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I move amendment No. 6:

In page 24, line 32, to delete "not exceeding €3,000,000".
My concern is about the lack of sanction regarding not carrying out requirements by the new authority and the limits on fines. One of the sections refers to a fine not exceeding €3 million on conviction on indictment. I do not know why we would limit that. We have seen the clean-up job in the Gulf of Mexico, which is somewhere in the region of €11 billion or €12 billion. We want to be very careful about putting a limit on the fine even if it looks large in the legislation. We should not put any limit on the fine because regardless of whether this legislation will operate into future, we should have a very high ceiling.

Photo of Joe McHughJoe McHugh (Donegal North East, Fine Gael)
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I again make the distinction between the fine and costs involved in environmental clean up. The maximum fine of €3 million is for infringement of contracts entered into in respect of permit and proper safety guidelines: the €3 million is a fine if those commitments are infringed upon. There is no cap if there is an accident, there is environmental damage and there are considerable costs involved in that clean up. There is no limit in respect of the cost that should be borne in respect of the clean up. If one looks at what happened in the Gulf of Mexico, one can see that one is into entirely new territory in respect of responsibility. I want to make the distinction. The figure of €3 million is a cap on the fine for infringement and there is no limit to environmental damage.

Amendment, by leave, withdrawn.

Section 11 agreed to.

Sections 12 to 15, inclusive, agreed to.

SECTION 16

Photo of Michael MoynihanMichael Moynihan (Cork North West, Fianna Fail)
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I move amendment No. 7:

In page 29, between lines 38 and 39, to insert the following:"(2) Such reports can be released on the instruction of the Minister.".
For the sake of openness and transparency, the Minister should be empowered to release all reports. Any reports that are within any Departments are public property anyway. The Minister of State should accept this amendment.

Photo of Joe McHughJoe McHugh (Donegal North East, Fine Gael)
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Amendment No. 7 speaks to the part of section 16 that confers on the CER a power to appoint a petroleum safety officer to investigate petroleum incidents notified to it or safety or environmental concerns that have been reported to the CER by individuals on a confidential basis. While it would be a matter for the CER to decide whether or not such reports should be released, it would not be appropriate to give the Minister a role in what should be a matter for the independent safety regulator. Section 16 gives the CER the power to investigate what would include whistleblower reports. Providing that such confidential reports might be published would be likely to discourage confidential reporting or disclosure.

Photo of Michael MoynihanMichael Moynihan (Cork North West, Fianna Fail)
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Again, our legislation gives an awful lot of power to people outside this House in terms of the CER. We have seen that it does not have enough powers to regulate properly some sectors we believe it is regulating. It gives the wrong impression. The Minister who is directly elected by the people should have power to distinguish what should or should not be put before the people.

Amendment, by leave, withdrawn.

Section 16 agreed to.

SECTION 17

8:10 pm

Photo of Michael MoynihanMichael Moynihan (Cork North West, Fianna Fail)
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I move amendment No. 8:

In page 30, lines 34 and 35, to delete “a non-confidential version of the reports” and substitute “the reports in their entirety”.

Amendment put and declared lost.

Section 17 agreed to.

Sections 18 to 24, inclusive, agreed to.

Title agreed to.

Bill reported without amendment, received for final consideration and passed.

Sitting suspended at 9.10 p.m. and resumed at 9.30 p.m.