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The National Audit Office (NAO) has said British taxpayers face a £24 billion bill for tax relief awarded to oil and gas companies removing hundreds of North Sea wells, rigs and pipelines.

The NAO said the figure would climb if companies collapse and are unable to pay for cleaning up their operations, leaving the Government to pay for them.

The industry has contributed to more than £300 billion in tax revenues to the Treasury since the 1960s. North Sea production peaked in the mid 1980s and the late 1990s, and has been declining ever since.

Tax revenue peaked at about 3% of GDP during the 1980s, but slumped as output from the region declined. A combination of low oil prices and decommissioning costs resulted in the industry becoming a net drain for Government funding for the first time in 2016.

The NAO, in a report on the cost of decommissioning the region's oil and gas fields, said the Treasury faced a £24 billion bill because of tax arrangements.

Approximately half of the figure comes from decommissioning reducing companies' taxable profits, with the rest from tax relief based on the large sums of tax paid historically. The relief allows companies to offset decommissioning costs against revenue, cutting the amount of tax they pay on their profits.

The vast majority of the costs will land over the next 20 years, with a small amount falling as late as the 2060s. However this £24 billion estimate was "highly uncertain" as it relied on factors that are hard to predict, such as future oil prices.

The bill could also be bigger if oil and gas companies become insolvent, leaving the Government liable for clean-up costs.

The NAO have commented that: "taxpayers are ultimately liable for the total cost of decommissioning assets that operators cannot decommission".

The report revealed there have been cases of companies defaulting on their clean-up obligations. The Treasury had to pay out £5.4 million in 2016 and £45 million in 2017 for decommissioning because of unnamed companies not meeting the costs.

Decommissioning involves everything from plugged old wells to removing the miles of pipelines on the seabed in the region.

The industry has been set a target of reducing the total costs of decommissioning by 35% in three years' time. However, experts have said this is very ambitious.

Labour said the Government needed to rethink changes last year that allow buyers of oil and gas fields to inherit the seller's tax relief.

The Shadow Treasury Minister, Clive Lewis commented: "the obvious issue looming over all of this is the climate emergency. We know we need to urgently be ending the UK's resilience on fossil fuels, not offering yet more tax breaks for big oil companies".

Oil and Gas UK said it was wholly committed to making decommissioning cost-effective and environmentally responsible.

The Government said it is working to reduce costs, that "by providing tax relief on decommissioning, we are attracting continued investment into our reserves - supporting jobs, boosting the economy and protecting our energy supply"

Despite fracking failing to get started at a gas well in the North of England, company's lorries, police vehicles and protesters' wood fires have combined to drive up air pollution levels near the area.

Operations at the Kirby Misperton well in North Yorkshire have been delayed after the operator Third Energy ran into financial problems. Nevertheless the project's local pollution impact has been revealed by Government supported research.

A professor of atmospheric chemistry at the University of York, Alastair Lewis, said his air quality monitoring project found a group of pollutants had increased in the vicinity of the site to levels normally seen in a city rather than a rural area.

Lewis discovered the main causes were:

  • lorries supplying the well, were producing the largest, most visible impacts above the surface on nitrogen oxides (NOx) from the use of compressors, generators and truck movements;
  • opposition by campaigners, such as slow walking in front of lorries supplying the site, and burning of wood by protest camps, would have driven up NOx levels;
  • police operation and police vehicles have been a significant source of the pollutants, with North Yorkshire police spending more that £600,000 on policing protests on the site over the Autumn and Winter period of 2017/18.

As a result Lewis commented that the above causes "shifted a semi-rural location into a chemical environment that looked more similar to a city suburban environment for NOx".

However he did add that the levels did not breach regulatory limits, and the full research will be published in due course.

Steve Mason, who lives near the well and a campaigner for Frack Free United, said he was extremely concerned that air quality had been impacted. 

"If the air quality of rural Yorkshire can be turned into that of a city environment by preparatory work for a single well that was never even fracked, imagine the impact if there are thousands of fracking wells strewn across our countryside, which is what the industry is planning to do".

If the shale gas industry scales up to a national level with 400 wells, NOx levels would increase by up to 4%, according to an earlier Government report.

A study undertaken by the London Green Belt Council has found developers are threatening London's green belt land, with five out of six local authorities planning to build on protected land.

They discovered that 202,700 developments have been proposed for green belt land, an increase of 64% based on the previous two years. This is despite enough previously developed land being available in the area, over 4,934 hectares of brownfield land, to accommodate the planned new homes and many more.

The researchers stated that contrary to developers claims, building in the green belt did not create affordable housing especially for people in the South East. Findings revealed only 22% of the homes planned on land released from the green belt would meet the government’s definition of affordable.

Chair of the London Green Belt Council, Richard Knox-Johnston, urged that the government must take action to avoid irreparable damage to the integrity of London’s protected land. He added:

''Government at all levels, supported by developers, claim that development in the green belt will provide more affordable housing, especially for young people but, as this report shows, this is not the case. Young people are being cruelly misled. Councils are being pressurised by government to set targets which are much higher than the likely need and are, on occasions, forced to accept even higher housing numbers to accommodate growth from neighbouring authorities. The government should be taking steps to reduce the pressure on councils to build on green belt land by focusing on brownfield land and genuine housing need and restricting the ability of councils to de-designate Green Belt land.''

Housing minister Kit Malthouse commented: ''We are determined to build the homes our country needs, but we have been clear that the use of green belt land should be a last resort.''

Bristol City Council in partnership with Plymouth and Devon Councils have been granted €1.9 million by the European Investment Bank and the European Commission for energy projects.

The projects which will be managed by a central delivery team in Bristol, include electric vehicle (EV) infrastructure, renewable energy, heat network projects, and improvements to the energy efficiency of domestic and commercial properties.

Cabinet Member for Energy, Waste and Regulatory Services, Councillor Kye Dudd, commented: ''It’s great that Bristol has once again been recognised as a national leader in the field of sustainability as our goal to become a carbon neutral city by 2050 moves a step closer. It’s even more exciting now that we are in a position to share our knowledge and expertise with other parts of the region, helping them to reduce carbon and provide clean energy to towns and cities across the South West.''

This is the second time Bristol City Council has been granted a funding bid from the European Local Energy Assistance (ELENA) facility. In 2014 the Council was granted 50 million for energy and sustainability projects.

Met Office forecasts have predicted that atmospheric levels of carbon dioxide are set to soar through 2019.

Continued deforestation and burning of fossil fuels combined with El Niño-like conditions are expected to lead to an average rise in CO2 concentrations of 2.75 parts per million (ppm). Globally this would mean average CO2 increased to 411ppm.

These predictions put the forecast for 2019 as having one of the highest annual rises in CO2 levels since records began. Greenhouse gases have not been in as concentrated levels as they are today, and the past four years have been the hottest ever recorded.

Professor Richard Betts, from the Met Office, commented: ''Looking at the monthly figures, it’s as if you can see the planet ‘breathing’ as the levels of carbon dioxide fall and rise with the seasonal cycle of plant growth and decay in the northern hemisphere. Each year’s carbon dioxide is higher than the last and this will keep happening until humans stop adding carbon dioxide to the atmosphere.''

A London-based construction company was sentenced this month for safety breaches after a worker was killed.

In November 2015 an employee from Formation Construction Limited was using a concrete breaker at Tech West House in Acton, to make an opening for a stairwell when he fell 7.5 metres, sustaining fatal head injuries.

An investigation by the Health and Safety Executive (HSE) found the work was not properly planned, adequately supervised or carried out in a safe manner when the incident occurred.

Formation Construction Limited pleaded guilty to breaching the Health & Safety at Work etc. Act 1974, was fined £300,000 and ordered to pay £17,528 in costs.

HSE inspector Kevin Smith commented on the case, that "this was a tragic and wholly avoidable incident, caused by the failure of the company to implement suitable and sufficient measures to prevent falls".

He added that safeguards put in place were "virtually absent" and "ultimately, the company failed to control the risk on site and as a result one of its workers fell to his death".


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