Official Report: Minutes of Evidence

The Deputy Chairperson (Ms Forsythe): From the Department for the Economy, I welcome to the meeting Jimmy Graham, director of business decarbonisation and gas, minerals and renewable electricity; Mark Wilson, head of minerals and petroleum branch; and John McManus, minerals and petroleum branch. It is great to have you here for the briefing. I invite you to make some opening remarks. Take us through the Bill and what is happening on it just now.

Mr Jimmy Graham (Department for the Economy): Good morning, Chair and members. Thank you for the opportunity to speak to you about the petroleum exploration and licensing (repeal) Bill. I will give a brief overview of the Bill's content, practical effect and key provisions, which may assist the Committee in its scrutiny once the Bill is introduced.

In summary, the Bill introduces a ban on issuing licences for all forms of onshore petroleum exploration and production in Northern Ireland by removing the licensing provisions from the Petroleum (Production) Act (Northern Ireland) 1964 and revoking related regulations. It brings the existing petroleum licensing regime to an end by removing the Department's power to grant licences and removing the Department's right:

under the 1964 Act. That means that it will not be possible for individuals or companies to explore for or produce oil and gas in the onshore area of Northern Ireland under a petroleum licence, regardless of the technique used. The Bill also makes a small number of consequential changes to remove now-redundant references in related legislation. Importantly, the property and petroleum remains vested in the Department, and that position is unchanged by the Bill.

The Bill has received Secretary of State consent, and the Attorney General has confirmed that it is within the legislative competence of the Assembly.

As the Committee will be aware, work to introduce the Bill is under way. Subject to Assembly scheduling, officials have asked that the First Stage be timetabled after the Easter recess.

Chair and members, thank you for your time this morning. We are happy to take your questions on the Bill's provisions and to support the Committee's scrutiny as the legislation progresses.

The Deputy Chairperson (Ms Forsythe): Thank you very much for that update. We appreciate that the status quo of importing and consuming fossil fuels at the current levels is unsustainable, but, given the current volatility of the energy market, we need to be conscious of the optics of closing down permanently what some may see as another source. Are the review and the Bill alive to the current situation, or were they prepared at a certain time and have been sitting there?

Mr Graham: The Bill progressed through the previous energy crisis in 2022 as well as the current one. Over the 60 years since the 1964 Act, around 30 licences have been awarded to carry out exploration activities to varying degrees. Through all of those, insufficient oil and gas has been found for commercial development. That is clear evidence. The independent research that started in 2020 also indicates that to get to commercially viable petroleum development would take 10 to 15 years. Even though there is a current crisis, to develop something commercially would take a long time. Furthermore, even if oil and gas were to be found in a commercial quantity here, it would be sold on international markets and would therefore make no difference to fuel prices for local consumers.

The Deputy Chairperson (Ms Forsythe): Thank you. The 2024 consultation document indicated that the Executive were to consider an exploration ban and review outstanding applications. What is the situation for outstanding applications?

Mr Graham: One of the clauses addresses active applications. Two applications were lodged in 2016. Clause 2 sets out how to deal with those applications and makes provision for the Department to refund to the applicants the cost of the applications, with interest if that is applicable. That will be considered when the legislation is in place.

The Deputy Chairperson (Ms Forsythe): Is it normal for an application to sit for 10 years?

Mr Graham: The applications were considered when they were received. There was a review in 2020, and a moratorium was put in place, so they could not be progressed.

The Deputy Chairperson (Ms Forsythe): Thank you. Research seems to show that the development of a low number of conventional vertical wells would have had limited adverse environmental impact. Why is the Department's preferred option to legislate for a ban on all forms of petroleum exploration and production rather than to retain the opportunity to explore and extract conventional hydrocarbons?

Mr Graham: In the consultation, there was overwhelming support for the fourth option, which was a full ban on all forms of exploration and production. That is why that recommendation was put forward and agreed by the Executive.

The Deputy Chairperson (Ms Forsythe): OK. It is just about the consultation response. What volume of responses was there?

Mr John McManus (Department for the Economy): There were 382 responses, 95% of which supported the preferred option of the moratorium and ban.

The Deputy Chairperson (Ms Forsythe): That is a good, strong response to a consultation.

I have a final question. Would the proposed legislative ban have an impact on the use of geothermal boreholes and hydraulic fracturing for other reasons?

Mr Graham: The Bill's provisions apply only to oil and gas. The geological conditions here make it very unlikely that fracking would be required in such instances.

The Deputy Chairperson (Ms Forsythe): That is grand. I am just trying to understand whether the Bill would have unintended consequences elsewhere.

Mr Delargy: I very much welcome this. There are no outstanding questions at my end. I acknowledge that the consultation response was, as the Deputy Chair said, extremely strong and robust, given the number of responses and the fact that they overwhelmingly supported the proposal. Your clarification that none of the 30 explorations that have been done in the past 60 years had any success was really useful.

The legislation is good, and it is one of eight pieces that the Minister will introduce, which makes it strong. It is important to note that it is not stand-alone legislation, because the Minister is bringing forward a suite of measures on renewables. I hope that they will put the focus back on renewable energy and allow for greater focus on it.

As I said, the questions have already been raised. I very much welcome this really strong legislation.

Mr Buckley: When I look at something such as this, I am conscious that it is about trying to form a balanced view, especially in the current situation, as the Deputy Chair said. You said that 30 licences for exploration had been granted since 1964, none of which had much success. I am trying to get my head around how that number compares with onshore petroleum exploration in Scotland, for example, or other regions. How does it compare? Does that number of explorations indicate that there is nothing there, or would significantly more licences for exploration be required to see whether there is potential for extracting onshore petroleum?

Mr Mark Wilson (Department for the Economy): It is more of an indicator that there is nothing that could be commercially viable than of nothing being there. It is about the commercial viability of any target.

Mr Buckley: How does the commercial viability compare with that in other regions? If I were to look at onshore licences in Scotland, for example, how many would I see had been granted in the same period?

Mr Wilson: I do not have that information.

Mr Buckley: I am trying to find a comparator, that is my point. I am trying to establish whether that figure of 30 is representative and indicates that there is nothing commercially viable here compared with other geographic regions of a similar size and scale.

Mr Wilson: We can certainly take that away and provide you with information.

Mr Buckley: There is a key distinction between onshore and offshore licence requirements. Given the ability of other countries to import natural resources such as oil and gas, I am still very much of the view that the current policy in the UK, whereby we import rather than using our own potential, does not help consumers in the current energy scenario. I am trying to ascertain whether or not the safety concerns that have been highlighted are replicated in other regions. I am thinking, in particular, of one of the applications, which was, I think, for lower Lough Neagh.

What were the main concerns that came through in the consultation responses? What environmental issues were raised? Was it water quality?

Mr Wilson: It was a whole host of things, from the impact on agriculture to the impact on fisheries and right across the spectrum.

Mr Buckley: Was there no overarching theme? Were they the same style of response? Was there a generated response? Sometimes there is a generated response to consultations.

Mr Wilson: No. If there had been a generated response, we would have highlighted that in the report.

Mr Buckley: That is fair enough, thank you.

Mr Honeyford: I absolutely support the Bill. Alliance wants to see the end of this. I echo others' words in saying that I hope that this will allow us to move towards renewables at pace and that it gives the Department a focus. Jimmy, we have had some back-and-forth in other Committee meetings. I am delighted to support the Bill.

I want to get clarity on one thing and to take it a little further. Geothermal is not included in this whatsoever, is it?

Mr Graham: No, it is just oil and gas.

Mr Honeyford: It is simply fossil fuel stuff.

I absolutely support the Bill. Hopefully, it will get through, and the Department can focus on moving forward on energy security across the island. Thank you.

The Deputy Chairperson (Ms Forsythe): Thank you.

Mr Buckley: May I come in on a point that you raised earlier, Deputy Chair? Jimmy, you mentioned the two applications that were in the system. Does legislating increase the threat of potentially successful legal action in such cases? Has the Department given consideration to that?

Mr Graham: It has done so in the drafting of the legislation and the clause that states that applications will be treated as being withdrawn once the legislation comes into effect. I do not want to speculate on potential litigation down the line, but the process that we have worked through in drafting the legislation, with the support of the Department and more widely, has got us to this point, and we think that this is the best place that we can be at this time.

Mr Buckley: OK.

Ms D Armstrong: Thank you for coming in. There is already a presumption against unconventional extraction in planning in my area of Fermanagh and Omagh District Council. How will this legislation align with that planning policy?

Mr Graham: It will align. If that is the case in your constituency, this legislation will absolutely align with that.

The Deputy Chairperson (Ms Forsythe): Since Diana has raised that point, I will ask this: has the Department engaged with the Department for Infrastructure on planning at a strategic level, or with councils, on how this will interact?

Mr Wilson: There has been consultation with councils throughout the process.

The Deputy Chairperson (Ms Forsythe): That is grand. No one else has indicated that they wish to ask a question.

Thank you very much. We look forward to the Bill's being introduced to the Assembly after Easter. Thank you very much for coming to the Committee to take our questions, Jimmy, Mark and John.