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Oil

Environment Food and Rural Affairs written question – answered on 27th June 2012.

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Photo of Cathy Jamieson Cathy Jamieson Shadow Minister (Treasury)

To ask the Secretary of State for Environment, Food and Rural Affairs what estimate she has made of the costs to the petroleum industry in the UK of compliance with the (a) Industrial Emissions Directive and (b) Environment Agency containment policy.

Photo of Richard Benyon Richard Benyon The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs

In March 2012, DEFRA published a draft impact assessment as part of a consultation on the transposition of the industrial emissions directive. This indicates that 19 large combustion plants within the petroleum refineries sector may be affected, at an average cost of £1.25 million per affected plant per year between 2016-30.

The Health and Safety Executive and the Environment Agency act together as the Competent Authority for the Control of Major Accident Hazards for England and Wales.

The Competent Authority Containment Policy brings together a range of technical measures to be implemented at oil refineries and fuel storage terminals to prevent the loss of containment from fuel storage tanks.

The Environment Agency prepared a regulatory impact assessment and consulted on it prior to the issue of the Containment Policy. This predicted that the cost to industry, summed for all 95 sites and spread over 10-20 years, would be £270 million to £360 million for primary containment, £360 million to £550 million for secondary containment and £46 million for tertiary containment.

A proportion of this cost would have to be incurred in any event to replace ageing infrastructure.

The Competent Authority cannot say what actual costs have been incurred by industry, as measures required at each site may differ and costs are therefore site specific. Individual examples of costs have been in line with the regulatory impact assessment and no evidence has been presented to indicate that the costs to industry as a whole are exceeding those predicted in the regulatory impact assessment.

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