DTI_NGO_01 by ashrafp


          DTI, 86-88 Guild Street, Atholl House, Aberdeen


Name                                 Organisation
Wendy Kennedy (Chairman)             DTI / Energy Development Unit (EDU)
Kevin O’Carroll                      DTI / EDU
Keith Mayo                           DTI / EDU
Derek Saward                         DTI / EDU
Craig Bunyan                         DTI / EDU
David Foskett                        DTI / EDU
Mick Green                           Whale and Dolphin Conservation Society
Melissa Moore                        Marine Conservation Society (MCS)
(via telephone conference)
Emily Lewis Brown                    WWF-UK
(via telephone conference)
Carol Hatton                         WWF-UK
(via telephone conference)

Apologies: Sarah Dolman - WDCS

1.0   Introduction

1.1   The purpose of the meeting was two fold:

         To respond to NGOs concerns regarding the 24th Licensing Round
          and Appropriate Assessment.

         To enable DTI to provide the NGOs with an overview of a number of
          regulatory issues pertaining to offshore oil and gas (the topics
          covered were not being discussed at the UK Offshore Forum being
          held in the afternoon, on the basis that they were essentially issues
          to be addressed by the regulator).

2.0  Licensing Round and Protected Areas – 24th Licensing Round
and Appropriate Assessment

2.1    DTI confirmed that the Appropriate Assessment (AA) of blocks offered
under the 24th Licensing Round had been completed. The draft AA report
was placed on the SEA website and comments were invited from
stakeholders by Friday 10 November. Once DTI had assessed all comments
received, the draft AA report would be revised, with advice subsequently
given to the new Energy Minister on the blocks that should be awarded. It
was not possible at this stage to determine exactly when blocks would be
awarded to companies, but DTI hoped it would be soon given that decisions
were already late.

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2.2    The NGOs collective view was that the draft AA remained deficient in
many respects (i.e. the conclusions did not fully reflect the potential impacts
referred to elsewhere in the report). The main NGO concerns were:

       (a) Contrary to the AA conclusions, MCS (along with WDCS / WWF)
       believed that the 24th Licensing Round may have adverse affects on
       habitats and species (i.e. pockmarks and bottlenose dolphins / other
       cetaceans) particularly in the Cardigan Bay and Moray Firth areas. As
       these are both designated as Special Areas of Conservation (SACs),
       MCS believed the DTI would be in contravention of the Habitats
       Directive if they licensed blocks in these SACs following the AA.

       (b) WWF-UK (together with MCS / WDCS) said it was important to
       consider possible impacts of oil and gas (O&G) activities (i.e. noise / oil
       discharges etc) on marine species that permanently or transitionally
       inhabited areas (including other SACs) that were adjacent to those
       covered by the AA. In addition, the NGOs felt that the AA did not
       adequately address cumulative effects.

       (c) WDCS stated that habitats / species in the Moray Firth were already
       under ecological stress (i.e. populations of bottlenose dolphins were
       considered to be in decline, with many foraging more widely, and it was
       unclear how much longer the existing habitats could continue
       supporting marine mammals / other species). Therefore, allowing new
       O&G activities to proceed in this area would further exacerbate the
       situation. On that basis, the NGOs were of the opinion that SACs
       (especially those inhabited by bottlenose dolphins) should ideally have
       been excluded under the 24th Licensing Round.

2.3   In terms of potential effects from future O&G developments in SACs
and other areas, DTI made the following points:

      as the prospective development in Cardigan Bay was likely to be a gas
       field, the chances of any major impacts from oil spills and discharges
       would be negligible;

      the Moray Firth had been subject to O&G activities over the last thirty
       years and any evidence (which the Department was aware of) tended
       to indicate that cetacean populations were not adversely affected by
       those activities; and

      the licence applicants for the blocks in Cardigan Bay had not indicated
       that there was a need for seismic surveys, as sufficient data existed
       from previous surveys.

2.4    As existing seismic data for Cardigan Bay dated back to the 1990s,
WDCS were concerned that if activities (i.e. as a result of the 24th Round and
beyond) were allowed to proceed and hydrocarbons were subsequently
found, then it was conceivable that new surveys in that area would be
required to fully evaluate the economic potential of any initial discoveries.

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2.5     DTI responded by saying that SACs were not intended to be total
exclusion zones. Notwithstanding this fact, DTI emphasised that the awarding
of licences did not mean that licensees could automatically undertake work
e.g. operators were required to seek approval for each stage of a
development’s life-cycle. As such DTI highlighted that an AA would need to
be undertaken of each oil and gas project in an SAC. Accordingly, if DTI -
after consultation with Statutory Consultees – determined that some aspects
of a development were environmentally unacceptable then the operator
concerned would be informed and would be required to revise their plans
accordingly. There could, of course, be instances where certain activities
were crucial / unavoidable. However, even in these circumstances, DTI could
mitigate adverse impacts by reducing the scope of the work programme and /
or the timing required.

2.6    WWF-UK asked what proportion of acreage the four blocks in Cardigan
Bay (3) and Moray Firth (1) represented in comparison to the others being
offered, as they wanted to see if routes for compromise could be established
to balance the economic aspects of future developments with environmental
concerns. DTI confirmed that the acreage of these particular blocks
represented a small proportion of the total (potential) acreage of the other
blocks available under the 24th Round. However, regardless of the number
or location of blocks eventually awarded, the existing regulatory regime would
be applied equally to all developments to protect the marine environment.

2.7     With regard to the development approval process, the NGOs felt that
DTI appeared to favour the advice of Statutory Consultees over the views
expressed by NGOs (despite considerable work by them to provide evidence).
DTI stated that even though it was obligated to seek advice from the Statutory
Consultees, the views of NGOs were not ignored. For instance, NGO views
on Environmental Statements had been taken into consideration and money
had also been spent on environmental research following NGO
representations. In addition, the post-consultation SEA reviews indicated (as
a matter of record) other occasions when NGO comments had been taken on-
board. WDCS said that it would be useful if the NGOs could see (in all
instances) where they were making a difference. DTI went on to explain that
although the views of NGOs were valued, the Department often found itself in
a difficult position, especially when academia opposed NGO views but agreed
with those of the Statutory Consultees.

2.8    WWF-UK therefore suggested that in future it might be a good idea if
meetings were arranged between the relevant NGOs (plus others e.g. the
SAC communities), DTI and licensees in order to discuss conditions for
licences (i.e. to ensure full application of the Habitats Directive and the
precautionary principle). In this context, DTI emphasised that it did not use
conditions in licences as a mechanism for environmental protection, as this
was done far more effectively at a local / project-based level through the EIA
or AA processes, but there was no objection in principle to meetings at that
stage (i.e. post-licensing).

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2.9    As discussions on this item drew to a close, it was agreed that a lot of
useful points had been made, which both sides would need to take into

3.0    EU – Emissions Trading Scheme (EU-ETS)

3.1    DTI confirmed that the public consultation on the draft National
Allocation Plan (NAP) for Phase II closed on 16 October. As a result of earlier
negotiations with the Commission, the total UK NAP for Phase II emissions
had been reduced by 30% compared to the installation baselines.

3.2    Following an evaluation by Defra of the responses to the
abovementioned consultation, there would be a further consultation so that
industry could assess the revised allocations, prior to the submission of the
Final Allocation Decision to the Commission at the end of the year. WWF-UK
asked if the next consultation concerning final Phase II allocations was on the
Defra website. DTI agreed to check this and forward a suitable web-link to
the WWF-UK contact provided.

[Post-meeting update: A link to Defra’s EU-ETS website was sent to Kirsty
Clough (WWF-UK) on 17 November.]

4.0    Environmental Impact Assessment (EIA) Review

4.1    DTI stated that it had been a long-time since the EIA process / quality
of Environmental Statements (ESs) had been reviewed. Therefore, at the
beginning of the year, organisations were invited to tender for conducting a
review consisting of two phases (the specifications for which were drawn-up
by DTI):

       (i) evaluating the preparation / quality and assessment of offshore ESs
       submitted; and

       (ii) identifying / listing the potential adverse non-pollution effects and
       proposed mitigation measures (this phase was added at OSPAR’s

The University of Manchester’s Environmental Impact Assessment (EIA)
Centre was awarded the contract.

4.2    DTI confirmed that the first phase of the review had been completed,
with the second part expected to finish shortly (i.e. by end of November).
Manchester University’s EIA Centre looked at eighty-two ESs submitted
between 2002 - 2005 and had undertaken a detailed review of thirty-five of
them. They now intended to hold meetings with a sample of operators, FRS,
JNCC and relevant consultants, in order to seek their comments on the ES

4.3       Once the finalised report was published (anticipated by the end of the
year) it would be circulated to all key stakeholders (including NGOs) and

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placed on the DTI’s Oil and Gas website. DTI hoped that the report would
demonstrate an improvement in the overall EIA process / quality of ESs.
However, if any significant problems were highlighted in the report, then DTI
would bring them to the attention of stakeholders (i.e. operators and NGOs).

4.4   WWF-UK wondered whether issues surrounding acidification, climate
change and cumulative impacts were adequately addressed under the EIA
process. DTI stated that these issues could be included in the review report,
and would also be considered as part of the DTI’s on-going review of its EIA

5.0   Environmental Management Systems (EMS)

5.1    DTI confirmed that it had issued guidance to promote the use of EMS
by the offshore industry in accordance with OSPAR Recommendation 2003/5.
The guidance also takes account of, and endorses, the formal Government
position statement on EMS. The aim was to ensure that all operators of
offshore installations on the UKCS had an EMS incorporating mechanisms
designed to achieve the environmental goals established to meet the
requirements of the OSPAR Offshore Strategy and achieve continual
improvement in environmental performance.

5.2     Although all operators had implemented an EMS, eight operators
notified that an independent verification exercise had concluded that their
EMS failed to meet the requirements set out within OSPAR Recommendation
2003/5 and associated DTI Guidance. DTI was now meeting these operators
in order to confirm the specific steps being taken to address the EMS
deficiencies and ensure robust environmental management.

5.3     DTI advised that it had submitted an implementation report to OSPAR
for discussion at OIC in March 2007. In terms of re-confirming EMS status:

         Operators maintaining EMS to an accredited standard (i.e. ISO
          14001 or EMAS) would be obliged to re-confirm their EMS status
          every three-years.

         Operators not maintaining EMS to a certified standard would need
          to obtain independent verification to re-confirm the status of their
          EMS every two-years.

Under the terms of the Recommendation, operators would also be required (in
June each year) to prepare annual public statements on EMS performance,
and to copy these to DTI as well as making them publicly available.

5.4    WWF-UK stated that they considered EMS to be a good initiative but
had some reservations about the overall usefulness of such systems e.g. they
appeared to concentrate on documenting procedures as apposed to enforcing
concrete actions beyond that (i.e. benchmarking levels of improvements).
Even though there were no regulations requiring EMS implementation, DTI
stressed that it was taking non-compliance with the OSPAR Recommendation

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seriously and would continue its efforts to keep operators on track. The re-
confirmation process would also take account of performance against the
EMS, and DTI agreed that this should be raised at OIC. WWF-UK asked
whether EMS would eventually cover actions taken by operators to reduce
climate change and noise impacts. DTI informed that this was unlikely to be
the case as EMS was the tool for achieving objectives and targets rather than
setting them. Any targets would be set by the companies in accordance with
their Environmental Policy and any legal / other requirements. Once set
however, the robust EMS should ensure effective management and
implementation of environmental targets and objectives. WWF-UK requested
a copy of the EMS guidance and DTI agreed to send it to them.

[Post-meeting update: DTI guidance on EMS was e-mailed to WWF-UK
(Emily Lewis Brown) on 15 November.]

6.0   Future of the UK Offshore Forum

6.1     DTI asked the NGOs how their attendance at future UK Offshore
Forum meetings could be improved. The NGOs agreed that London was still
the preferred option. MCS cited the lack of a `pollution officer’ as a major
obstacle to them being able to guarantee attendance at the Forum. WDCS
stated that budgetary provisions were a determining factor regards their
participation. DTI confirmed that it would be willing to assist with transport
costs, which WDCS said would be helpful.

6.2     The NGOs confirmed that the Forum was still considered useful, but
they recommended that agendas should contain substantial topics with
sufficient time allocated for detailed discussions. To further facilitate NGO
representation, it was agreed that DTI should continue to synchronise future
Offshore Forum meetings with those of the Renewables Forum. In this
context, DTI suggested that it would happy to hold separate O&G-related
sessions with the NGOs the day before, if there were any particular issues
that they wanted to discuss (feedback on topics covered at such sessions
could then be provided to the Offshore Forum the next day).

6.3    WWF-UK said its future representation at the Forum was presently
unclear and that any invitations to O&G-specific meetings / events should be
sent to James Leaton.

[Post-meeting update: Following further `post-meeting’ discussions with
Emily Lewis Brown, DTI contacted James Leaton and other WWF-UK
contacts on 22 December to establish who should remain on the UK Offshore
Forum distribution list.]

7.0   Any Other Business

7.1    DTI advised that parties to the London Convention on the Dumping of
Waste at Sea had approved (in early November) carbon capture and
sequestration in sub-seabed geological formations. The rule change would
take effect on 10 February 2007. As the London Convention had now been

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amended, this would hopefully pave the way for an agreement within OSPAR
on the same issue.

Energy Development Unit (EDU)

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