Meeting date: Tuesday, December 12, 2017
Meeting of the Parliament 12 December 2017
Agenda: Time for Reflection, Urgent Question, Topical Question Time, Year of Young People, Point of Order, Decision Time, Violence Against Women and Commercial Sexual Exploitation
- Time for Reflection
- Urgent Question
- Topical Question Time
- Year of Young People
- Point of Order
- Decision Time
- Violence Against Women and Commercial Sexual Exploitation
To ask the Scottish Government whether it will provide an update on the impact of shutting down the Forties pipeline running through Aberdeenshire.
The Scottish Government is liaising with Ineos FPS, Petroineos, the United Kingdom Government, the Scottish Environment Protection Agency and local resilience partners to monitor the evolving situation. The interests of public safety, worker safety, the wellbeing of local communities that are affected and the environment are all key priorities.
By way of background, I inform the chamber that, on 6 December 2017, a crack was discovered in the Forties pipeline near Netherley, to the north-west of Stonehaven, during routine maintenance. The fact that the crack has extended has required the Forties pipeline system, which carries production from more than 80 fields in the central and southern North Sea, to be shut down to allow for safe repair.
A technical assessment is under way to inform the repairs that will be required and the likely duration of the shutdown. There are no plans to shut down Grangemouth refinery, and no impacts for fuel and gas supplies are anticipated. There are sufficient stocks of crude oil to continue operations in the refinery for more than a week, and Petroineos is developing contingency plans for the importation of alternative supplies of crude oil, if that should become necessary to ensure continued operation. In addition, the company is able to import additional finished products to ensure that there will be no impacts on fuel supplies.
We are very aware that an extended shutdown will have an impact on companies with fields that utilise the Forties export route, and we are seeking clarity from Ineos on the risk of that being necessary. In advance of details emerging on the timescale for returning the pipeline to normal operations, Scottish Government officials remain in close contact with Ineos FPS and Oil & Gas UK to monitor the impacts on the oil and gas sector and the wider economy.
I thank the minister for that update, but he will be aware that people who live along the length of the pipeline—especially those in Aberdeenshire—are worried that there might be further, as yet undetected, fractures. What can the Scottish Government do to reassure local residents about that?
We have thought and had discussions about how we can give confidence to communities along the route, given that similar problems may arise elsewhere. It is obviously very early in the process. We will seek information and reassurances from Ineos with regard to whether we are talking about a technical failure in part of the pipeline or whether it is an indication that there might be further impacts elsewhere on the line. At this stage, it is not possible to provide any clarity on those points, but the Scottish Government has raised them with Ineos and we will seek further clarity on them.
The fault was identified during routine maintenance, which is carried out on the pipeline all the time. I hope that the fact that a breach was discovered before it became a significant issue will give confidence to the public and to the affected communities that safety measures are in place to protect them from such incidents having an impact on their lives.
Considering that the Forties oil pipeline, which is quite an old pipeline, is a critical part of the United Kingdom’s energy infrastructure, what are the implications for the oil workers who are affected by the temporary closure which, from what Ineos has told me, I understand is to last for weeks rather than days? What can the Scottish Government do to help those employees and their families?
In my original answer, I recognised that the potential exists for an extended shutdown to have an impact on those companies that rely on the Forties pipeline to get their product to market and on the livelihoods of the employees of those service and supply chain companies that support that work.
We are trying to get information from Oil & Gas UK, which is doing a ring-round in an effort to speak to all the businesses that are affected. I am not at liberty to discuss openly those companies that are affected by the existing shutdown, but I can say that we are having dialogue with Oil & Gas UK and Ineos on those matters. As a matter of high priority, we will seek to make sure that we protect the interests of those supply chain companies that might have cash-flow difficulties if they are not able to conduct the work that they have been contracted to do at this point in time.
Coincidentally, I spent the whole of yesterday morning at a meeting with senior Ineos management at Grangemouth, at which the Forties pipeline, among other issues, was discussed. I am encouraged by the action that Ineos has taken to safeguard the environment following the identification of the crack in the pipeline.
Has the minister received any further assurances from Ineos about production at Grangemouth and security of supply for fuel and gas in the coming weeks in light of the repairs that are required? What liaison has there been with the UK Government regarding security of supply?
I welcome the involvement of Mr MacDonald, as the local constituency member, in taking an interest in the welfare of those who work at the Grangemouth plant.
As I understand it, the company has—as I said in my original answer—contingency plans to ensure that it has sufficient crude oil to be able to continue operations at Grangemouth, and it does not anticipate that the closure of the pipeline will affect production. However, it has plans in place so that, if production is affected, it can access the finished product to make sure that there is no disruption to fuel supplies in the Scottish or northern England markets. I think that the company is taking appropriate steps in that respect.
In terms of environmental protection, we believe that the issue has been contained. The company has identified what faults are there and is identifying a solution to repair them. We have every confidence that Ineos is working extremely hard on that at the moment.
The member also asked about engagement with the UK Government. The engagement has been at the level of official to official. We will be keen to engage with UK ministers on the matter if it is necessary, but key powers in relation to the oil and gas industry are reserved, and the security of energy supplies is also a reserved matter. We will be keen to work collaboratively with UK ministers if it proves necessary.
Has the Government been informed about any oil that may have been in the pipeline system, particularly above the site of the repair, before it was closed down overnight? What has been or will be done to remove that oil from the pipeline and make it safe?
Also, what are the financial, commercial and operational implications of the shutdown for operating companies producing that oil, the owners of that oil and other operating companies that are reliant on the infrastructure? By extension, what are the cash-flow implications for companies in the supply chain, in the north-east and across Scotland?
We recognise the number of important issues that Lewis Macdonald raises. The pipeline’s average daily throughput is just under 450,000 barrels of oil and 3,500 tonnes of gas a day. I should stress that we have the assurance that there does not appear to be any threat to gas supplies, as the St Fergus terminal will still be able to supply gas to the national grid. There are no immediate threats to domestic heating supplies and other users of gas.
However, clearly, such a loss of throughput could have an impact on the companies that are affected by it. That is why we are hoping that Oil & Gas UK will be able to assist us by providing data, in confidence, in the course of the day on the impacts on the companies that are affected. We are keen to protect the workforce and the companies that are involved in production on the platforms that have been affected by the shutdown, during what is already a difficult time for the sector, from any further exacerbating effect on employment or profitability.
Does the minister have any knowledge of the nature of the problem that has occurred in the pipeline? More fundamentally, does he know how the information about that failure may be shared with other pipeline operators to ensure that we have the best possible chance of this event being a one-off?
Mr Stevenson makes a very reasonable point about learning lessons from this and relaying any issues around good practice to other pipeline operators as swiftly as can be done. Obviously the Health and Safety Executive is not a devolved agency, but I am sure that it will take a very keen interest in this to ensure that something can be done to prevent a similar risk to safety from occurring in future. That is something that we very much need to take forward.
It appears that there is a crack or breach in the pipe. As yet, we do not have a confirmed cause for that failure, which goes to the heart of what Mr Rumbles was saying about the cause. We have to understand whether it is metal fatigue or another internal cause, or whether something externally damaged the pipe and thereby caused the crack. We do not have an answer to that question yet, but I certainly commit to furnish those answers to members in the chamber who have an interest once we have identified the cause.
Lewis Macdonald has already asked questions about the commercial impact, so I will not repeat them. Does the minister agree that a temporary shutdown of the Forties pipeline and the attendant implications of doing that have highlighted for all those who live in the north-east that, as those who work in the North Sea already know, Scotland’s North Sea oil reserves are hugely important to the UK economy?
That is a very valid point. I think that we all recognise that the oil and gas industry is extremely important to the Scottish economy, but at times like this we also realise that at least some parts of the job make for a dangerous occupation, which we have seen not least in the north-east in the tragic loss of life in Piper Alpha, although this event is on land and there has been damage to a key pipeline. It also illustrates just how important the north-east of Scotland is to meeting energy needs not just in Scotland but in the whole UK through these critical oil and gas supplies.
Clearly, there is a strong imperative for all agencies to get the Forties pipeline system back up and running and doing the job that it has been doing for many years of helping to meet our primary energy needs, which it very much does on a day-to-day basis and which we often take for granted.