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COMMITTEE ON COMMERCE
WARREN G. MAGNTJSON, Washington, Chairman
JOHN 0. PASTORE, Rhode Island NORRIS COTTON, New Hampshire
VANCE HARTKE, Indiana JAMES B. PEARSON, Kansas
PHILIP A. HART, Michigan ROBERT P. GRIFFIN, Michigan
HOWARD W. CANNON, Nevada HOWARD H. BAKER, JR., Tennessee
RUSSELL B. LONG, Louisiana MARLOW W. COOK, Kentucky
FRANK E. MOSS, Utah TED STEVENS, Alaska
ERNEST F. HOLLINGS, South Carolina J. GLENN BEALL, JR., Maryland
DANIEL K. INOUYE, Hawaii
JOHN V. TUNNEY, California
ADLAI E. STEVENSON III, Illinois
FREDERICE J. LORDAN, Staff Director
MICHAEL PERTSCHUCK, Chief Counsel
ARTHUR PANKOPF, Jr., Minority C'ounsel and Staff Director
MALCOLM M. B. STERRETT, Minority Staff Counsel
NATIONAL OCEAN POLICY STUDY
ERNEST F. HOLLINGS, South Carolina, Chairman
WARREN G. MAGNUSON, Washington NORRIS COTTON, New Hampshire
JOHN 0. PASTORE, Rhode Island JAMES B. PEARSON, Kansas
VANCE HARTKE, Indiana ROBERT P. GRIFFIN, Michigan
PHILIP A. HART, Michigan HOWARD H. BAKER, JR., Tennessee
HOWARD W. CANNON, Nevada MARLOW W. COOK, Kentucky
RUSSELL B. LONG, Louisiana TED STEVENS, Alaska
FRANK E. MOSS, Utah J. GLENN BEALL, JR., Maryland
DANIEL K. INOUYE, Hawaii
JOHN V. TUNNEY, California
ADLAI E. STEVENSON III, Illinois
JOHN F. HU55EY, Director, NOPS
JAMES P. WALSH, Staff Counsel
PAMELA L. BALDWIN, Professional Staff Member
ROBERT K. LANE, Professional Staff Member
EARLE E. COSTELLO, Minority Professional Staff Member
EX OFFICIO MEMBERS INCLUDE:
COMMITTEE ON PUBLIC WORKS
EDMUND S. MUSKIE, Maine JAMES L. BUCKLEY, New York
JOSEPH R. BIDEN, JR., Delaware (Alternate)
COMMITTEE ON INTERIOR AND INSULAR AFFAIRS
LEE METCALF, Montana MARK 0. HATFIELD, Oregon
COMMITTEE ON FOREIGN RELATIONS
CLAIBORNE PELL, Rhode Island CLIFFORD P. CASE, New Jersey
COMMITTEE ON APPROPRIATIONS
LAWTON CHILES, Florida CHARLES McC. MATHIAS, JR., Maryland
COMMITTEE ON GOVERNMENT OPERATIONS
ABRAHAM RIBICOFF, Connecticut CHARLES PERCY, Illinois
EDWARD J. GURNEY, Florida (Alternate)
COMMITTEE ON LABOR AND PUBLIC WELFARE
HARRISON A. WILLIAMS, JR., New Jersey RICHARD S. SCHWEIKER, Pennsylvania
EDWARD M. KENNEDY, Massachusetts (Alternate)
COMMITTEE ON ARMED SERVICES
STUART SYMINGTON, Missouri WILLIAM L. SCOTT, Virginia
EX OFFICIO AT LARGE MEMBERS INCLUDE:
HUBERT H. HUMPHREY, Minnesota JOHN TOWER, Texas
LLOYD BENTSEN, Texas BOB PACKWOOD, Oregon
J. BENNETT JOHNSTON, Jn., Louisiana WILLIAM V. ROTH, JR., Delaware
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III. NORTH SEA OIL AND GAS DEVELOPMENT
A. INTRODUCTION
Geologists became interested in the North Sea as a source of oil and
gas in 1959, shortly after the discovery of onshore natural gas field at
Slochteren, Holland. Major geological and geophysical studies of the
North Sea were undertaken in 1964 after the Convention on the Con-
tinental Shelf was approved. Under this agreement, Great Britain,
Norway, Denmark and the Netherlands divided the continental shelf
in accordance with the treaty provisions. Subsequent boundary dis-
putes between Denmark, the Netherlands and West Germany were
settled in 1969 following a decision by the International Court of
Justice.
The United Kingdom issued- the first series of drilling licenses in
June 1964, and the first discovery of natural gas-the West Sole
field-was made a year and a half later. Additional natural gas fields
were discovered in the southern North Sea. Since 1966, when natural
gas was first produced from offshore wells, consumption of natural
gas in Great Britain has trip~ed.
Commercial fields have b~en located throughout the North Sea
region. Ekofisk, the first major oil find in the North Sea (Figure 1),
was discovered in the Norwegian sector in December 1969. While
the British also located a commercial field in their sector in December
1969 (the Montrose field), it took another year before the British
Petroleum Company (BP) discovered its largest field, the Forties
Field. Between 1969 and 1974, eleven commercial fields and ten un-
proven fields have been reported (see Table 1). Most commercial
natural gas fields are located in the southern sector of the North Sea,
and the most promising oil fields have been found north of latitude
56° N. The Danish Dan field is the only commercial field south of 56
degrees.
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I. FINDINGS
1. The oil and gas resources of the North Sea have become and will
continue to be an integral part of energy supplies in the United King-
dom and other North Sea countries. The North Sea oil and gas re-
sources are increasing with new fields being discovered each year.
2. The North Sea physical environment presents many unique and
challenging problems for the development of oil and gas resources,
with similarities to parts of the U.S. outer continental shelf which
have been proposed for development.
3. The impact of North Sea oil and gas resources on the British
economy is and will increasingly be significant. The increased price of
imported crude and refined oil has heightened interest in making
the United Kingdom self-sufficient through development of the North
Sea.
4. North Sea oil and gas development offers an important source of
future employment which could reverse the traditional trends of high
unemployment and large out-migration in some parts of Scotland.
5. Scottish authorities hope to institute long-range planning which
will diversify the economy to ensure continued employment after the
North Sea oil and gas resources are depleted. However, the speed of
oil development to date has resulted in a preoccupation with short-
term planning.
6. Actions by the private sector to develop North Sea oil and gas.
appear to have outpaced the efforts of governments to plan for this
development. The magnitude and nature of onshore facilities required
to accommodate these activities also appear to have been underesti-
mated by governments since development has taken place so quickly.
7. A lack of information on the needs and requirements of the oil
industry appears to have contributed to delays in local and regional
planning efforts. In many instances, neither the national government
nor the oil industry has provided local governments with the informa-
tion needed to implement effective planning measures.
8. Planning at all levels was and is hampered by the need to learn
quickly the capabilities of existing technology and respond to new
technological innovations, particularly in the area of offshore pro-
duction platform design.
9. Aberdeen, Inverness, and other communities have had to expand
both public and private facilities to meet the needs of oil and gas
development. Shortages in labor, housing, public services, and other
factors have become a major constraint on developemnt.
10. The impact of North Sea oil and gas development on communi-
ties has been significant. Increased population, in some cases a tripling
of present levels, is anticipated for communities in Scotland as a
result of oil development. Provision of adequate public services by
local governments has become a problem.
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8
FIGURE 1
- ~ Oft RELATED
DEVELOPMENTS
L..
LL1 / \~ 4,~ `~..# 7-. ~ -~
~-_I ~ ~
V *~_.---*/~v~ /.---
Ld - - -
I \
L - - -
TABLE 1.-PROVED COMMERCIAL DISCOVERIES AND FINDS NOT YET PROVED OF OIL AND GAS
IN THE NORTH SEA
Date of discovery Company Name of find Block number Plans for production
1. Commercial finds:
December 1969_ - Gas Council/Amoco__ Montrose 22/18 To begin 1976 using buoy and tanker
system.
November 197O~ BP Forties 21/10 First deliveries expected early 1975
by undersea pipeline. Total cost of
development £500m or more.
February 1971_~ Shell/Esso Auk 30/16 Expected 1975: Oil to be taken by
tanker to refinery at Teesside.
June 1971 Total/Pelronord Frigg 10/1 (U.K.) and Gas field. To begin early 1976 by
25/1 (Nor- undersea pipeline.
wegian).
August 1971 Hamilton Bros Argyll 30/24 To begin autumn 1974 initially using
a semisubmersible drilling rig
loading into tankers through a buoy
mooring system.
171 Sh II E 11 2 To begin 1976-Cost over £300m.
Au~ust1973_::: iexa~o_:~:::}B1m5t {~/4~~:::I::::} Initially the oil will be landed by
September 1972... Burmash Thistle 211/18 To come on stream in 1976.
Do Mobil Beryl 9/13 Plans not finalized but hoped to start
1976 using tanker and buoy system
January 1973 Occidental Piper 15/17 Expected to begin 1975, probably
by pipeline to Orkney.
July 1973 ShelI/Esso Dunlin 211/23 Thought to be commercial. Further
evaluation necessary.
January 1974 BP 1Nn n 3 8 Initial production using permanent
February 1974 Burmah a facilities planned by late 1977-78.
Separate plans for earlier produc-
tion being evaluated.
July 1974 BP/Burmah Magnus 211/12 Plans for more drilling.
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Iv
Sea is an enormous undertaking with significant risks involved for
both public and private institutions. Third, the planning process has
the potential for resolving conflicts in a pragmatic and reasoned
manner. Fourth, while it is not always possible to compare the British
experience with U.S. OCS development, there are numerous similari-
ties, and significant insight was obtained, especially with respect to the
coastal zone impacts of offshore oil and gas development. Finally, a
deeper appreciation was obtained by the delegation for the real dif-
ferences and real similarities between the U.S. and British experiences.
A major conclusion of the staff delegation was that the onshore
coastal zone impacts of North Sea development present a particularly
complex problem of which U.S. government decisionmakers should be
aware. The North Sea development should aid efforts to reverse
Scotland's traditionally high unemployment and out-migration. How-
ever, high wages in the oil industry could divert labor from traditional
employment sectors (such as fishing and farming) and bring about im-
portant changes in the Scottish economy. In addition, the impact of
North Sea development on urban centers has been significant. In-
creased populations, in some cases a tripling of present levels, is anti-
cipated for northeast Scotland as a result of oil development. This has
placed a significant strain on the provision of a wide range of public and
private services. It is also placing a strain on the traditional Scottish
way of life.
Scottish officials have attempted to deal with these problems through
the use of existing planning statutes, such as the Town and Country
Planning Act. While the Scottish planning system is highly developed
and complex, the staff delegation was able to view it working on a
small scale in the Shetland Islands. The Shetland experience, while
unique, appears to have been successful in planning for onshore
experience.
The members of the staff delegation offer the report of their inves-
tigation for the consideration of the Senate Committee on Commerce
and the National Ocean Policy Study. I wish to emphasize that the
findings and implications incorporated into this staff report, and which
may prove to be controversial, have not been approved, disapproved,
or considered by the Committee on Commerce or the National Ocean
Policy Study. Additionally, the findings and implications do not
necessarily represent the views of the Executive branch members
of the staff delegation.
ERNEST F. H0LLTNGS,
Chairman, National Ocean Policy Study.
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9
TABLE 1.-PROVED COMMERCIAL DISCOVERIES AND FINDS NOT YET PROVED OF OIL AND GAS
IN THE NORTH SEA-Continued
Date of discovery Company Name of find Block number Plans for production
2. Finds notyet proved
commercial:
September 1970... Phillips Group Josephine 30/12
June 1971 Hamilton (Not named)_...._ 30/2 Gas condensate.
May 1972 Gas Council/Amoco__ Lomond 23/21 Appraisal well now drilling.
September 1972_.... Shell/Esso Cormorant 211/26 Structure complex.
February 1973~_ Phillips Maureen 16/29 Appraisal well now drilling.
July 1973 Total (Not named)..... 3/19 Gas find.
Do do do 3/15
September 1973....~ Conoco/Gulf/NCB~.... - Hutton 211/28
October 1973 Total Alwyn 3/14 Announced Oct. 10, 1973.
November l973~ Unocal (Not named)..... 2/5 Appraisal well now drilling.
A major focus of drilling interest has been directed to the U.K.
region. By the end of 1973, 342 exploration or appraisal wells and 198
production wells had been drilled in the U.K. sector of the North Sea.
While already eleven oil fields and seven natural gas fields had been
declared commercial in 1973, the discovery of new commercial finds
has not yet come to an end. Early in 1974, BP and Burmah Oil
discovered another large oil field (Ninian) in the northern North Sea,
and in July, 1974, BP confirmed another possible major field (Mag-
nus) fifteen miles north of the Thistle field, about 70 miles northeast
of the Shetland Islands.' There may be as many as 125 geologic
structures with potential oil and gas in the British sector of the North
Sea and less than 15 percent have so far been drilled. The North Sea
is therefore expected to remain an area of major exploratory activity.
In 1973, 25 mobile drilling rigs were used, and an estimated 40 rigs
may be deployed in 1974. Between 40 and 100 production platforms,
four to five pipelines, and an undetermined number of onshore termi-
nals, tank farms and refineries will be required.
Of all known oil developments, the area east of Shetland has
emerged as the one with the highest resource potential. Hence,
exploratory activity has rapidly increased in this area since 1973.
Several blocks west of the Shetland and Orkney Islands and to the
west of England and Wales have been leased, but shortages of men and
equipment have stalled exploratory activities in these areas. Geologic
structures in these areas are favorable for oil and gas, but the size of
the basins and the thickness of the sediments indicate smaller quan-
tities of recoverable oil and gas than in the North Sea.
B. RESERVES
Recent studies estimate natural gas reserves in the U.K. section
of the North Sea continental shelf at 65 trillion cubic feet (tcf) and
ultimate potential discoverable resources at between 80 and 116 tcf.
Another 36 tcf may be recovered from the Celtic Sea and the North-
west Atlantic. Proved oil reserves are estimated at 12 billion barrels
and ultimate potential resources around 40.5 billion barrels, of which
28.5 billion barrels are from the North Sea.2
I "North Sea Gets Northernmost Oil Strike," Oil and Gas Journal, July 22, 1974, P. 14.
Oil and Gas Journal, June 3 1974. See also Appendix B.
PAGENO="0030"
2
11. High wages in the oil industry may divert labor from tradi-
tional employment sectors such as fish processing, farming, and other
industries. In addition, the development of oil resources is also chang-
ing many traditional patterns of the Scottish way of life.
12. Concern exists over the environmental impact of North Sea oil
and gas development. Fishing interests are particularly concerned
about the impact of offshore operations on fishing activities. Citizens
are concerned about the general impact of oil developments on coastal
land use patterns.
13. Environmental considerations play a significant role in the
planning process. In several instances, local authorities will require
companies to undertake restoration of facility sites at the end of
their useful lives, to the extent practicable.
14. The United Kingdom has developed a centralized system for
dealing with oil spill prevention and cleanup. However, the question
of liability for oil spills and destruction of fishing equipment is still
an unresolved issue.
1& Decisions about onshore facilities have been made under
procedures set forth in existing planning legislation, the Town and
Country Planning Act (Scotland), as amended.
16. Onshore facility approval is the primary responsibility of local
governments, although oversight is provided by the Secretary of State
for Scotland. Local governments have the authority to issue permits
except when the proposed use is incompatible with previously
approved development plans. In those cases, the final decision rests
with the Secretary.
17. The Shetland Islands will be a major focus of future activity
connected with North Sea oil and gas development. The Shetlands
appear to have been successful in planning for this development
through:
(a) Early adoption and articulation of a policy of control of
onshore development;
(b) acquisition, on a timely basis, of a comprehensive independ-
ent study of likely shoreside oil industry requirements and
impacts;
(e) an effective public information and involvement program;
(d) the acquisition of necessary planning and management
powers through new legislation; and
(e) the effective implementation of planning by local govern-
ment, with the aid and assistance of national legislation.
IMPLICATIONS
These findings contain the following implications for the United
States:
1. There should be encouragement and support by the Federal
government for the early development of effective coastal zone
management programs in States likely to be affected by Federal OCS
activities through the Coastal Zone Management Act of 1972.
2. The Federal government should accept responsibility for ade-
quately informing and preparing State and local governments as to
coastal facilities and services likely to be needed in connection with
OCS activities.
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10
U.K. offshore reserves are comparable to those on the United
States Outer Continental Shelf (OCS). The most recent United States
Geological Survey (USGS) figures on offshore oil and gas reserves
put total U.S. offshore "measured reserves" of oil at 7.6 billion barrels
and natural gas at 47.8 trillion cubic feet. Total OCS "indicated and
inferred reserves" of crude oil are estimated to range between 3 and 5
billion barrels, and such reserves of natural gas between 23 and 45
trillion cubic feet. Offshore ultimate potential crude oil resources are
estimated between 65 and 130 billion barrels, and natural gas between
395 and 790 trillion cubic feet.3
C. PHYSICAL ENVIRONMENT
Oil companies are facing a number of technical problems in coping
with the North Sea physical environment. Most of the discovered
oil is in the northern part of the North Sea where water depth averages
between 350 and 420 feet. One well has been drilled in 520 feet of
water in a block some 75 miles northwest of the Orkney Islands, and
other blocks have been leased in 1,500 feet of water.
While winter waves average between 7 and 15 feet 65 percent
of the time, waves of more than 60 feet have been recorded in the
Forties field area, and structures must withstand winds of up to 130
miles per hour. Mean winter temperatures are also severe, averaging
37 degrees Fahrenheit. These temperatures when combined with the
wind, bring the effective temperatures down well below freezing.
Currents are generally weak, but sand waves and strong tides
require construction of strong drilling platforms. In addition, there is
considerable turbidity on the sea floor which restricts underwater
activities.
Hence, environmental conditions in the North Sea are considerably
more hostile than in the Gulf of Mexico or offshore California where
most U.S. offshore oil and gas is currently being produced. North Sea
conditions may be closer to those of the northwest Atlantic, but less
severe than above the Arctic Circle. Hence, the drilling conditions
in the North Sea present a unique "testing ground" against which
the development of "frontier" fields on the U.S. OCS can be compared.
As a recent Council on Environmental Quality report noted, many of
these frontier areas are in areas of similar hostile environment.
U.S. Department of the Interior, Geological Survey, news release, 1\Iar. 26, 1974.
"Measured reserves" are identified resources from which an energy commodity can be
economically extracted with existing technology, and whose location, quality, and quantity
are known from geologic evidence supported by engineering evidence.
"Indicated reserves" are reserves based partly upon specific measurement, samples, or
production data, and partly from projection for a reasonable distance on geologic evidence.
"Inferred reserves" are those reserves based upon broad geologic knowledge for which
quantitative measurements are not available. Such reserves are those estimated to be
recoverable in the future as a result of extensions, revisions of estimates, and deeper
drilling in known fields.
"Ultimate potential" or "undiscovered recoverable resources" are those quantities that
may be reasonably expected to exist in favorable geologic setting, but which have not yet
been identified by drilling. Exploration will permit the reclassification of such resources
to the reserves category.
There is significant disagreement among experts about the accuracy of the USGS figures.
Recent estimates by Mobil Oil Corp., for example, put undiscovered recoverable resources
of offshore oil In the United States at only 54 billion barrels and natural gas at 274
trillion cubic feet. For a full discussion of this debate, see Science, July 12, 1974, pp. 127-
130.
PAGENO="0032"
~7_)
93d Congress } COMMITTEE PRINT
NORTH SEA OIL AND GAS: IMPACT
OF DEVELOPMENT ON THE
COASTAL ZONE
PREPARED AT THE REQLIEST OF
HON. WARREN G. MAGNUSON, Chairman
FOR THE USE OF THE
COMMITTEE ON COMMERCE
PURSUANT TO
S. Res. 222
NATIONAL OCEAN POLICY STUDY
w
OCTOBER 1974
Printed for the use of the Committee on Commerce,
United States Senate
U.S. GOVERNMENT PRINTING OFFICE
40-047 0 WASHINGTON: 1974
For sale by the Superintendent of Documents, U.S. Government Printing Office
Washington, D.C. 20402 - Price $1.90
Stock Number S270-02622
~}~O -~`
PAGENO="0033"
IV. ECONOMIC IMPACT AND LEASING SYSTEM
A. ECONOMIC IMPACT
The impact of the North Sea oil and gas resources on the British
economy is significant. The U.K. has suffered from a chronic deficit
in the balance of payments, and prior to last winter's oil embargo
oil imports were costing $2.5 billion annually. The recent increases
in the price of imported crude and refined oils should quadruple this
figure in 1974.
Current U.K. expectations are, through rapid development of
North Sea reserves, to be self-sufficient in oil by 1980. The U.K. also
hopes to be a net exporter during the nineteen eighties, when a peak
production of 2.5 billion barrels per annum is projected (about one-
third of current Saudi Arabian production). If hopes for the recently
discovered Ninian and Burmah fields are well founded, this could
bring peak production to 3.5 billion barrels annually by the 1980's.
At approximately $9.30 per barrel, the average price international oil
companies are paying for crude oil today,4 oil produced for the
British sector of the North Sea would be worth between $23.3 billion
and $32.5 billion annually during peak production in the nineteen
eighties. After that, income would gradually level off as production
rates drop.
B. LEASING SYSTEM
In order to maximize exploration for oil and gas, Britain instituted
a leasing system quite different from that used in the United States
where offshore oil reserves were not so crucial to national energy
requirements. The British offer licenses to corporations or groups of
companies, covering a stated concession area for a certain period of
time. Under the financial terms, the licensee pays 12~ percent in
royalties (based on wellhead price), an annual payment, and taxes
on profits. The initial payment for an average-sized block of 64,000
acres was £6,250 ($15,000) to cover the first 6 years. After the sixth
year, licensees have to surrender at least 50 per cent of the concession
area and can keep the remainder on lease for a further 40 years. The
annual payment for the average-sized block in the seventh year rises
to £10,000 ($24,000) and thereafter increases annually by £6,250
($15,000) to a maximum of £72,000 ($172,000).
The annual payments to the Crown treasury are considerably less
than the income that could be obtained from lease-bidding. For
example, in 1971, when the British Government tried out the auction-
ing system with 15 blocks it received a total of £37 million ($88.8
million). In contrast, income from 230 discretionary licenses involving
848 blocks between 1964 and 1972 totalled £6 million (14.4 million) .~
Taxes paid to the government have been very small because of double
taxation relief.
The London Times, July 18, 1974.
Irvin L. White et al. North ~S'ea Oil and Gas Implications for Future U.s. Development,
University of Oklal~oma Press, 1973, ch. II.
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40-047 0 - 74 - 2
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3
3. Because of the intimate tie between offshore oil and gas extraction
and necessary coastal support facilities, the Federal government should
examine methods of incorporating the views and interests of affected
coastal States into the planning process on offshore development.
4. State and local governments should be permitted authority to
play a significant role in the decisionmaking process on which areas
adjacent to their coasts will be opened for oil and gas development and
to express their own terms in the leasing agreements.
5. In order to understand the overall impacts of such development,
efforts should be made to obtain more detailed information on:
(a) The scale and nature of proposed offshore and onshore
development in specific geographic regions prior to its inception,
(b) Projection of employment needs in coastal communities to
be impacted,
(c) A forecast of community transition trends and resulting
needs, including an assessment of available and needed housing
and
(d) A projection of types and numbers of municipal facilities
which will be required to service the population and industry
new to coastal communities, as well as indigenous industries, to
be impacted by OCS development.
6. Decisions concerning the areas to be opened for offshore develop-
ment should be made on the basis of careful assessment, taking into
consideration broad national interests as well as the interests of State
and local communities. Such interests include environmental protec-
tion, provision for coastal recreation, and others.
7. Adequate lead times between the planning and implementation
stages are essential to the appropriate mechanisms to deal with on-
shore impacts.
8. All development of the OCS should be paced to minimize the
risks of environmental damage and the disruption of the infrastructure
of impacted coastal areas.
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12
In Britain, government revenue was initially (prior to oil dis-
coveries) considered of secondary importance. Under the existing
system the government expected to receive about 50 per cent of the
value of oil and gas returns from the North Sea. Oil exploration
demands a great deal of venture capital which govermnents are usually
not willing or able to invest. International petroleum companies were
willing to commit sizable investments because the financial arrange-
ments were favorable and political conditions considered most attrac-
tive. Hence, by 1972 (after 8 years) 55 percent of the available acreage
in the British sector of the North Sea had been leased. In the United
States by comparison, only 15 percent of the Federal acreage in the
Gulf of Mexico had been leased over a period 19 years.
However, the honeymoon between the oil companies and the
British Government may soon be over. The unexpected quadrupling
of the price of imported crude, the very size of the North Sea oil
discoveries, and the election of a new government has resulted in
changes. The Labour government published a White Paper in July
1974 which proposes sweeping new powers of control over all phases of
exploration and development. The government intends to close base
loopholes, impose additional taxes on corporate profits, require
government majority participation for all new licenses, and invite
companies holding licenses where commercial fields have been found
to discuss government majority participation. Furthermore, it
intends to control the level of production for current and future
licenses; to control the development of undersea pipelines; to intro-
duce tighter controls of exploration and development; and finally, to
establish a national oil corporation which will play an active part in
future offshore oil developments as well as refining and distribution of
oil. The oil companies contend that under the new proposals the
reward for risk-taking will vanish and if adopted by Parliament, the
new measures are not likely to create additional incentive to explore
for oil in British waters.
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TABLE OF CONTENTS
Page
Letter of Transmittal V
I. Findings 1
II. Introduction 5
III. North Sea oil and gas development 7
A. Introduction 7
B. Reserves 9
C. Physical environment 10
IV. Economic impact and leasing system 11
A. Economic impact 11
B. Leasing system 11
V. Effect on employment 13
VI. Socioeconomic problems 15
A. Introduction 15
B. Facilities, equipment, and services 15
C. Urban impact 16
D. Impact on fisheries 17
VII. Protection of the marine environment 21
VIII. Onshore planning 25
A. Introduction 25
B. Planning process 26
C. Highlands and Islands Development Board 27
D. Coastal facility complexes 28
E. Regional planning 28
F. Long-range planning 29
IX. The Shetland Islands: A case study 31
A. Facility requirements 31
B. Socioeconomic impact 31
C. Environmental impact 32
D. Meeting the challenge: Chronology of events 34
E. Conclusions 37
X. Bibliography
APPENDIXES
Appendix A. Scottish Information Office: Programme of arrangements
made by the Scottish Information Office on behalf of the Foreign and
Commonwealth Office and the Central Office of Information for United
States Congressional Delegation, July 1-5, 1974 41
Appendix B. Production and reserves of oil and gas in the United King-
dom: A report to Parliament by the Secretary of State for Energy, May
1974
Appendix C. North East Scotland and the offshore oil industry: A sum-
mary of the main developments, 1974 73
Appendix D. North Sea oil and the environment: A report to the Oil De-
velopment Council for Scotland, 1974 87
Appendix E. North Sea oil and gas: Pipeline landfalls, a discussion paper,
Scottish Development Department, May 1974 111
Appendix F. Scottish Economic Bulletin, Special Number: North Sea oil,
March 1973 123
Appendix G. Interim County development plan, Zetland County Council,
March 28, 1973 149
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V. EFFECT ON EMPLOYMENT
The effect of North Sea oil and gas development on employment
has been significant in northeast Scotland and the Shetland Islands.
However, it has so far had little impact on employment in the heavily
populated areas of central and western Scotland where unemployment
has recently been a significant problem. Thus, many people from
cities in central and western Scotland, such as Glasgow, continue to
migrate to London and the Commonwealth countries.
The oil industry is basically capital intensive and demand for labor
is not high. However, the effect of oil development on employment in
the less populated northeastern part of Scotland is important, and
will result in lasting changes in the region.
Most of the industrial development related to oil exploration and
production will be near Inverness, Aberdeen and a few smaller towns
such as Peterhead. The Inverness region had a population of 90,000 in
1971. The region is expected to grow to 110,000 in just four years; to
120,000 by 1981, and to 140,000 by 1991. Peterhead has a population of
14,000, which is expected to reach 20,000 in the next five years. The
ultimate figure for all of northeast Scotland, taking into account the
need to maintain the high quality of the environment, is planned at
between 270,000 and 300,000. This unprecedented rate of growth will
cause a number of problems, including the provision of infrastructure,
housing, schooling, and recreation facilities. The most immediate
problems, however, are those connected with employment.
In northeast Scotland, employment in projects connected with
North Sea oil exploration grew by 2,665 to 11,275 in the short period
from December, 1973, to March, 1974. Local and regional authorities,
in cooperation with oil related industries, have attempted to plan for
this development, but they have not always succeeded. For example,
Brown & Root, an American construction firm building prodution
platforms, initially anticipated hiring 900 employees. Actual employ-
ment, however, soon grew to 3,000. The company brought in instruc-
tors and established a welding school, but housing and other facilities
could not be provided fast enough. Shortages of housing, skilled labor,
berths in the harbors, and equipment have had an adverse impact on
some of the older established industries.
High wages in petroleum-related industries have resulted in loss of
skilled craftsmen in vital ancillary industries such as shipbuilding
and ship repairing. Although oil-related labor wages are generally
higher than wages of other sectors, there have been complaints that
some North Sea oil companies are not paying wages comparable to
other parts of the world; as one critic noted, the oil companies are
"treating their Scots workers as `tartan coolies'." This problem has
fueled the centuries-old problem of Scottish nationalism. Scottish
Nationalist Member of Parliament, Mr. Gordon Wilson, claimed that
"some international oil companies regard the Norwegians as the `blue-
eyed Arabs of the North' and an equal number treat the Scots as
(13)
PAGENO="0038"
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14
tartan coolies whose remote Government in London is more interested
in getting the oil out as fast as possible than in protecting the rights
of the Scottish workers." 6
Several employment sectors do not appear to have been affected by
North Sea development. The fishing industry, for example, does not
appear to have suffered any significant labor problems, probably
because the industry is economically very sound.
Authorities fear, however, that without proper planning the struc-
tural changes in employment resulting from oil and gas development
could have disastrous effects on the economy once exploration activi-
ties and the platform building boom come to an end. Hence, British
officials believe careful planning for the future is of utmost importance.
The manner in which the British go about this planning could be
significant to the implementation of the coastal zone management
programs by U.S. coastal states. The coastal states, like Britain,
must address the labor and employment aspects of oil and gas devel-
opment to determine adequacy of supply, rate of influx and degree of
employment changeover in coastal communities. Where necessary the
coastal zone management program of a particular state will have to
forecast the employment market and possibly even project training
and retraining needs.
Concerning long-range employment, planning in Scotland will focus
on efforts to attract petrochemical and plastic industries which use oil
as a raw material. Initially, most new development will be in the heavy
steel industry, production of platforms, pipe coating and laying, and
in oil processing and treatment facilities. It has been estimated that
between 1973 and 1985, at least 70 platforms will have to be built for
the North Sea fields. If constructed in Scotland, this would require
about 12 fabrication yards, each employing between 500 and 1,000
workers. Consequently, Aberdeen has become the offshore capital of
Europe, but considerable effort is needed to acquire capital and ad-
vanced technology industries in order to sustain employment after the
oil boom has passed. The British government has established special
development organizations for Scotland and Wales to channel some of
the oil revenues back into the region where oil is produced. Such a
practice does not presently exist in the United States, although
amendments to that effect were included in the Energy Supply~Act of
1974 (S. 3221), as passed by the Senate, and the Coastal Zone Manage-
ment Act.
6 Daily Express, June 28, 1974, p. 2.
PAGENO="0040"
LETTER OF TRANSMITTAL
U.S. SENATE,
COMMITTEE ON COMMERCE,
Washington, D.C.
DEAR COLLEAGUE: One important responsibility of the National
Ocean Policy Study is to evaluate present and future United States
policies affecting the oceans. Toward this end, the NOPS selected as
one of its first areas of investigation the development of oil and gas
resources on the outer continental shelf (OCS). This selection was
made because the United States OCS leasing policy is expected to be
altered greatly over the next few years.
The OCS contains significant reserves of oil and gas, and it is ex-
pected to contribute greatly to future domestic energy production.
At present, the OCS contributes 18 percent of domestic petroleum and
15 percent of domestic natural gas production. Over the next decade,
however, its contribution to national energy needs is expected to in-
crease significantly and play a major role in the United States drive
toward energy self-sufficiency.
In preparation for its hearings on OCS leasing policy, the NOPS
staff received preliminary information about the problems involved
in oil and gas development in the North Sea. Because this effort bore
a direct and highly relevant relationship to the proposed rapid de-
velopment of existing and frontier U.S. OCS areas, a more detailed
and first-hand examination of the North Sea experience was felt
necessary. It was felt a close examination of North Sea oil and gas
development could provide a better basis for understanding future
policy issues which the United States will have to face over the coming
decade, especially in problems on coastal zone management pursuant to
the Coastal Zone Management Act of 1972.
Accordingly, an itinerary for on-site investigation of North Sea
activity was formulated with the assistance of the Department of
State and the Erebassy of the United Kingdom. A staff delegation,
composed of staff from the Executive and Legislative branches, was
selected for the purpose of identifying problems and problem-solving
mechanisms applied by the United Kingdom to the rapid expansion
of North Sea oil and gas resources. The staff survey was undertaken
during the period July 1 thorugh 5, 1974.
The following report documents the observations and findings of the
staff delegation and is presented to the National Ocean Policy Study
for its careful consideration.
While the staff delegation does not make any recommendations for
legislation, its survey of the U.K. North Sea efforts did lead to several
general conclusions. First, it obtained a greater appreciation for the
complexities involved in the rapid development of resources in a
harsh physical environment. Second, the development of the North
(III)
PAGENO="0041"
VI. SOCIOECONOMIC PROBLEMS
A. INTRODUCTION
North Sea oil development is the most important event for the
economy of Scotland in a hundred years. As the Aberdeen Press and
Journal of August 25, 1972, noted: "Centuries of deprivation, exploita-
tion and emigration have suddenly given way to the exciting prospect
of prosperity for all." There is no doubt that this development will
result in a significant boost to the local economy.
In the past, Scotland has gone through periods of prolonged unem-
ployment, and considerable emigration to England and the Common-
wealth countries has taken place. While the economic boom associated
with the offshore exploratory activities and the construction of produc-
tion platforms could reverse this trend, without proper planning the
old conditions could again prevail. Hence, the Scottish authorities are
attempting to insure that oil revenues will be used to diversify and
stimulate general economic activities which will last beyond the initial
boom. The magnitude of oil activities will significantly affect the gen-
eral economy. The investment in oil drilling equipment and related
services provides an example. Oil company investments in offshore and
onshore facilities are worth billions of dollars. A recent estimate of
North Sea oil development projects showed investments of £2,400
million (about $5.5 billion; see Appendix C). Taking into account infla-
tion and development of other discoveries in the period 1975-79, in-
vestments could amount to £1,300 million ($3.1 billion), while the
investment in new discoveries could total between £4,000 million and
£7,000 million ($9 billion to $16.8 billion). This would mean a total
investment of over £10,000 million ($25 billion). The question remains
how much of the business will go to British firms and foreign companies
investing in Scotland? The British face keen competition from Ameri-
can, Dutch, and French corporations, which have more experience in
manufacturing drilling rigs, platforms and oil drilling equipment.
Several foreign firms, particularly American construction companies,
have already made or are planning to make significant investments in
technologically-advanced oil-related industries, but the nationalization
plans of the Labour Government may slow down foreign investment
plans.
B. FACILITIES, EQUIPMENT, AND SERVICES
Scotland could play a major role in supplying the world with
drilling rigs, production platforms, and drilling and service equipment,
long after the North Sea oil boom has passed. Already, about 18
per cent of the world's oil comes from offshore areas. By the end of the
century it is estimated that this proportion will have risen to 40
per cent of a much larger total demand. In order to meet the present
demands of the oil industry, Scotland intends to make large invest-
ments in improvement of its infrastructure. The new type of concrete
production and storage platforms, for example, require deepwater
(15)
PAGENO="0042"
II. INTRODUCTION
On February 19, 1974, the Senate passed S. Res. 222 to authorize
an extensive examination of the Nation's ocean policy and programs.
The National Ocean Policy Study (NOPS) was established to investi-
gate the wide range of factors influencing national ocean policy,
including:
(1) Current and prospective national capabilities in the oceans;
(2) the adequacy of current Federal programs relating to oceans;
(3) establishing policies to achieve the goal of full utilization and
conservation of ocean resources;
(4) assessing the need for new policies to guide future fuels and
minerals development; /
(5) encouraging implementation of coastal zone management pro-
grams; and
(6) assessing current national and international jurisdictional
problems over the oceans.
Senator Ernest F. Hollings was appointed Chairman of the NOPS
shortly after enactment of S. Res. 222.
The NOPS selected as its first area for investigation the problems
surrounding the development of oil and gas resources on the U.S.
outer continental shelf (OCS). While OCS resources have been devel-
oped for over 20 years, recent events have placed them in a new
perspective. The OCS contains significant oil and gas reserves and will
play a major role in achieving energy self-sufficiency. At the same
time, however, increased concern has developed over the potential
environmental impact on ocean resources and the coastal zone impact
of OCS development. These problems were given new impetus with
the announcement in January, 1974 that the Administration would
attempt to increase 005 leasing ten-fold over the next few years.
The NOPS held five days of hearings on the problems surrounding
005 development on April 23-25, and May 2 and 21, 1974. The hear-
- ings received testimony on a wide range of problems, including the
socioeconomic and environmental impact of development, and the
problems of coastal states in establishing the legal, planning and
management mechanisms to deal with increased OCS leasing through
the Coastal Zone Management Act.
In preparation for these hearings, the NOPS staff received pre-
liminary information about oil and gas development in the North Sea.
Because the European effort bears a direct and highly relevant
relationship to the proposed rapid development of new and existing
U.S. OCS areas, a more detailed and first-hand examination of the
North Sea experience was felt advisable. It was hoped that a close
examination of North Sea oil and gas development could provide a
better basis for understanding future policy issues the U.S. will face
over the next decade.
These preliminary efforts were followed by planning of a more
detailed itinerary for on-site investigations of North Sea activity with
the assistance of the Department of State and the Embassy of the
(5)
PAGENO="0043"
16
construction sites of up to 100 fathoms. While a number of potential
sites exist in Scotland, few are prcsently available, and imprcvements
in existing sites may be necessary. Supply ships which service drilling
rigs and production platforms will also need additional docking and
storage facffities. Initially, only Aberdeen could supply such services,
but when it could no longer cope with all the traffic, new docking space
was made available in other ports such as Peterhead and Dundee. In
addition to expansion of existing docking facilities, northeast Scotland
is also improving its railroads, highways and airports to meet growing
demands on available transportation. In 1972-73 alone, passenger
air traffic increased by 40 per cent in Aberdeen and 60 per cent in the
Shetlands.
FIGURE 2. platform jacket under construction at Ardersier, near Inverness. When
completed, the structure is towed to the drilling site and fixed on the ocean
floor. Photo by George A. Doumani.
C. URBAN IMPACT
Rapid population growth caused by the influx of labor is likely in
the Inverness area and Aberdeen. Aberdeen alone will need some
30,000 additional houses in the next 10 years. Although about 2,000
new houses were completed in the past year and 5,000 are planned or
under construction, the pressure is still enormous on the building
industry.
Construction of additional municipal facilities will also be required.
In Aberdeen, for example, there is no sewage treatment plant. At
present, raw sewage is dumped into the harbor, and the anticipated
increase in housing and population should make these conditions
worse.
A more serious problem resulting from this boom in Aberdeen is the
price of land. Service land with water, sewers and other utilities, rose
PAGENO="0044"
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17
in price from £3,000 ($7,200) an acre to as much as £40,000 ($96,000)
an acre in the last four years.
It is difficult to project accurately total housing needs in every
town and what effects labor and material shortages will create by
inflating the price. In addition, rapid population increases will also
cause additional demands on commercial and social services, hospitals,
schools, and recreation facilities. Crime rates and other adverse con-
sequences may affect considerably the traditionally staid Scottish way
of life. Some experts fear that due to the time lag, standards for housing
and other construction and municipal requirements will be adopted
that are lower than what presently is acceptable. A case in point is the
Brown & Root production platform construction, mentioned earlier.
Not only did the labor force jump from the planned 900 to 3,000 but
the time involved was merely six months, too fast for the local com-
munity to accommodate such an influx of personnel.
D. IMPACT ON FISHERIES
Fishing is one of the oldest industries of Scotland. Total catch in
1973 was valued at $375 million, and in the Aberdeen area alone, it
provided employment for 10,000 people, landing about $100 million
worth of fish. The industry is concerned about North Sea oil develop-
ments, and fishermen are apprehensive of the actual and potential
damage to their trade. Discussions with authorities in Aberdeen and
Peterhead revealed that competition for port facilities, and labor union
disputes over fish handling at the docks, have caused much of the in-
shore fishing fleet to move to lower-cost ports such as Peterhead.
At Peterhead (Figure 3), the port authority indicated that landin~s
increased in volume from an annual value of £600,000 ($1,440,000) in
1970 to more than £1 million ($2.4 million) per month in 1973. Harbor
authorities have attempted to eliminate the conflict between oil-
service supply boats and fishing boats, but, even though fishing boats
in general have priority in Peterhead, the improvements of port
facilities are bound to lead to higher costs, affecting supply boats and
fishing vessels equally.
Aberdeen felt the initial impact of North Sea development since it is
the largest urban area. The demand for rigs increased from about 14 in
in 1973 to about 20 this year, and in 1975 about 25 rigs are expected to
be operating in Scottish waters. With distances between 100 and 150
miles offshore, these rigs each require two to three supply boats
operating continuously, supplying the 25,000 tons of equipment
needed by each rig every year.
PAGENO="0046"
6
United Kingdom. A Congressional staff delegation was selected for the
purpose of identifying problems and problem-solving mechanisms
applied by the United Kingdom to rapid expansion of oil and gas
resources in the U.K. sector of the North Sea. * The delegation also
hoped to gain knowledge about what experience, if any, could be
applicable to conditions presently existing in the United States,
particularly as to the future development of Atlantic and Alaskan
OCS resources.
The following report documents the observations and findings of
the Congressional staff delegation and is presented to the National
Ocean Policy Study for its consideration.
The staff delegation wishes to acknowledge the assistance of Mr.
David T. Kay of the Scottish Information Office for his arrangement
and execution of the itinerary. The courtesy, candor and cooperation
of officials from the Highlands and Islands Development Board, the
Scottish Economic Planning Department, the North East Scotland
Development Authority, the port authorities of Aberdeen and Peter-
head, the Scottish Trawlers Association, and the Zetland County
Council are also appreciated. Acknowledgment is also due the British
Petroleum Company, J. Ray. McDermott Ltd., Arunta (Scotland)
Ltd., Norscot Services (Fred Olsen Ltd.), and the Comex Diving
Company for their courtesy and permission to inspect their installa-
tions and construction sites.
*The Congressional staff delegation consisted of: John P. Hussey, Staff Director, Na-
tional Ocean Policy Study; George A. Doumani, Specialist in Earth Sciences and Oceanog-
raphy, Congressional Research Service, Library of Congress; Robert Niblock, Ocean Project
Leader, Congressional Office of Technology Assessment; Robert Knecht, Director, Office of
Coastal Zone Management, National Oceanic and Atmospheric Administration; and Richard
Keating, Special Assistant to the Director, Office of Coastal Zone Management, National
Oceanic and Atmospheric Administration.
PAGENO="0047"
18
FIGURE 3. Peterhead Harbor of Refuge, currently undergoing development as an
oil rig supply and servicing base. It is also home port for the in-shore fishing
fleet that left Aberdeen Harbor. Photo courtesy of North East Scotland Develop-
ment Authority.
The Aberdeen harbor authority responded with a massive program
of developing the harbor, undertaken two years ago, which is reflected
in significant changes in the physical composition of the docks (Fig-
ure 4). The program in progress calls for reconstruction and strengthen-
ing of the quay space to support intensive oil-related industry. It will
cost approximately £2 million ($4.5 million). In addition, the Harbor
Board has applied for and is awaiting government authorization for
widening a~id deepening the entrance to Victoria Dock. This effort will
cost close to £1 million ($2.4 million). Despite all this, Aberdeen has
not been able to cope with the traffic, and companies like British
Petroleum and Conoco had to set up their own facilities in Dundee.
Thus, when the in-shore fishing fleet chose to go the Peterhead,
the pressure on the port in Aberdeen eased, although the fishing indus-
try as a whole still faces some apprehensions and acute problems.
PAGENO="0048"
19
The long-term impact of offshore oil and gas development on
fisheries will stem from the structures placed on the ocean floor,
pipelines to convey the hydrocarbons to shore facilities, and the
areas around each of these structures that will be restricted to fishing
access. Fishermen feel that several hundred yards of fishing waters
around each installation would add up to a sizable area of inaccessible
catch. Furthermore, although the individual areas of inaccessibility
may be small relative to the total area fished, the fishing process itself
may be hampered by the haphazard scattering of these structures.
While some fish are attracted to the rigs, the debris on the bottom
jettisoned from the rigs becomes a hazard to fishing. Consequently,
the possibility of a reduced catch poses what fishing interests believe
to be a serious threat.
North Sea fisheries could also be affected by potential oil spills and
iiear-shore developments. Significant development of coastal estuaries
FIGURE 4. Seaward view across Aberdeen Harbor, the main North Sea oil rig
supply base. Photo courtesy of North East Scotland Development authority.
PAGENO="0049"
20
(the most productive marine area) does interfere with the life-cycle of
a great many living organisms in the oceans and onshore.
In the United Kingdom, the authority to cope with oil spills rests
with the Marine Division of the Department of Trade and Industry.
It has identified specific areas which are either ecologically sensitive
or support valuable commercial fisheries. Priority areas have been
identified on maps by the Ministry of Agriculture, Fisheries and Food,
the Nature Conservancy and the Marine Biological Association, with
specific instructions concerning response techniques for each area.
While oil development in the North Sea will in fact interfere at least
to some extent with fishing, British fishermen appear to be more wor-
ried about the activities of Soviet and other foreign trawlers off their
coast than about the possible harmful effects of oil pollution on the
species.
More serious to the fishermen than the reduction in total fishing area
or oil spills is the direct damage their gear could sustain around drilling
rigs and the question of who would be liable for this damage.
The oil companies have assumed responsibility for damages sus-
tained by a fishing boat if fishing gear is jettisoned to avoid damaging
bottom oil installations. However, the sea floor around the rigs and
along supply-boat routes is becoming littered with debris and junk
resulting from offshore construction and other operations. The Scottish
fishermen claim that there is no way of policing the industry and pro-
hibiting the dumping of debris in the offshore area. Consequently, if a
trawler is forced to jettison the fishing gear, not knowing whether or
not it is caught by an oil installation, and the obstruction turns out to
be just debris, the oil company does not consider itself liable. The
British Government has not undertaken initiatives to resolve this
problem.
The Scottish Trawlers Association indicated that other problems
may also affect the future of the fishing industry in the North Sea. For
example, many of the present fishing boats have reached the age of
replacement and only five new vessels are expected to join the Aber-
deen fleet in 1973. However, the threat of the competition with the
oil-related services, the rising cost of fuel, and the escalating costs of
repairs combine to paint a picture of uncertain future. The Association
is considering bringing these grievances to the attention of the central
government and making a strong case for financial assistance to keep
he fleet viable.
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VII. PROTECTION OF THE MARINE ENVIRONMENT
The American offshore drilling experience over a period of almost
thirty years has shown that the probability of a major blow-out is very
small. Of the more than 18,000 offshore wells drilled on the U.S. con-
tinental shelf, only four caused major oil spills. At least one of the four
spills, the Santa Barbara disaster of 1969, could have been prevented,
if current USGS regulations had been in effect in 1969. Moreover, in
the last few years blow-out prevention technology has improved to the
degree that no major accidents have occurred since 1970.
Given this experience, the possibility of large oil spills from drilling
equipment in the North Sea would appear small. If, however, a major
spill would originate from one of the oil fields in the central part of the
North Sea, prevailing winds are most likely to move the oil towards
the Danish Peninsula and the southern and central parts of Norway.
Near-shore oil spills caused by a break in the pipelines or spillage from
tankers could have a significant effect on the British coastline.
While no environmental impact statement is required in the U.K.,
and British environmental groups are not as strong as their American
counterparts, the British Government is still concerned about the
potential environmental impact of North Sea development. British
governments have worked hard for years to reduce air and water pol-
lution in their country. The famous London killer smog has been
effectively controlled during the last decade, and the River Thames,
historically one of the dirtiest and most polluted rivers of England, has
been turned into one of the cleanest rivers of Europe. Birds and fish
which had not been observed in the Thames for many many decades,
have returned in large numbers. Both accomplishments have been
possible through concerted efforts by the British government with the
fullest support of the people.
Attitudes towards offshore oil developments are very realistic.
Suffering from severe unemployment in Scotland and chronic balance
of payment deficits, and faced with further dependence on Middle
Eastern crude, the British appear to realize that the question is not
"if" but "how" North Sea oil should be developed. In other words,
starting with acceptance of the need for the oil, they stress what
"should" be done, rather than what "should not" be done. Scientists,
public officials and civic groups have not advocated halting develop-
ment until conclusive documentation is in hand that no adverse
biological effects will occur. The Scots believe that such studies would
take many years, and even then, their knowledge of fisheries and the
ocean environment may still not be adequate to prove long-lasting
negative (or neutral) impact of oil spills on marine life. However,
when environmental considerations were found conclusive, some proj-
ects have been abandoned.
Offshore operations have received relatively less attention from
British planning authorities than onshore developments. While there
are general and specific regulations on offshore structures and stand-
(21)
PAGENO="0051"
22
ards, in practice much of the offshore exploration procedures are
based on agreements between government and business. The United
Kingdom and other North Sea governments assume that industry will
take primary responsibility for oil spilled from offshore platforms.
General regulations concerning production accident prevention,
field development and production regulation, and storage and trans-
portation regulations are comparable with U.S. procedures. However,
regulations appear not to he as specific as current U.S. Geological
Survey outer continental shelf regulations, which were issued after
the Santa Barbara oil spill of 1969. One OCS rcgulation, for example,
requires that certain information concerning fixed and mobile plat-
forms be submitted to the USGS for review. The regulation includes
detailed requirements on platform safety and anti-pollution equip-
ment. It seems that none of the North Sea governments has issued
comparable specifications. This may be due in part to the fact that
public pressures for safety regulations have not yet been as significant
in the North Sea countries as in the United States.
Scottish authorities have also devoted little attention to offshore
pollution and safety. In a report of the Committee on the Environ-
ment to the Oil Development Council of Scotland, the Committee's
only comments on offshore standards are the following:
"We understand that regulations require offshore operators to
carry out regular safety drills and simulation exercises, that there
are frequent and regular tests of safety equipment, and that there
are elaborate procedures to prevent the occurrence of blow-
outs.* * * We understand that ñe companies operating offshore
maintain supplies of materials a~d equipment for dealing with
accidental oil spills, and that the U.K. Off shore Operators Asso-
ciation Ltd. are examining proposals for a blow-out control and
firefighting barge to be stationed in the North Sea.* * ~K" 7
The Committee did not make any other recommendation concern-
ing offshore pollution control, but did stress the need for government
control over pipelines beyond the territorial sea.
One advantage of the British system over the American is the cen-
tralization of authority in case of the occurrence of an oil spill. Whereas
in the United States responsibility is divided between the Coast
Guard (mechanical treatment) and the Environmental Protection
Agency (chemical and biological), in the United Kingdom respon-
sibility rests solely with the Marine Division of the Department of
Trade and Industry. This division is in charge of all cleaning-up
activities and also ensures that there is no unrealistic conffict between
oil development and other marine uses. Local authorities deal only with
oil pollution onshore and within inland waters. As far as the possible
effect of oil spills on fisheries is concerned, the Ministry of Agriculture,
Fisheries and Food has an extensive hydrocarbon monitoring program.
It will assess the toxicity of crude oil in the food chain and measure
tainting of commercial fish.
In contrast to the United States, where mechanical containment
systems are frequently used to combat oil spills, the United Kingdom
and other North Sea countries rely heavily on chemical dispersants
Committee on the Environment, Report to the Oil Development Council for Scotland.
North Sea Oil and the Environment, Edinburgh, 1974, p. 16, Appendix 4.
PAGENO="0052"
23
as their primary response to oil spills. In recent years the British have
developed what they maintain are low toxicity dispersants, which
are expected to be less damaging to marine life than the older ones
which were known to do more harm to the marine environment
than crude oil.
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VIII. ONSHORE PLANNING
"The simple option of total refusal to participate in oil related indus-
try, to reject everything in favour of the status quo, is not open to us.
The national interest calls for our participation and-the more we look
at the problem-our own interest too. For the best prospects for the
Highlands lie in keeping in step with the future."
SIR ANDREW GILcHRI5T,
Chairman, Highlands & Islands Development Board.
A. INTRODUCTION
Sir Andrew Gilchrists's remarks represent the attitude of most
government officials toward offshore oil development. The British
have adopted an elaborate land use planning system to determine the
best use of the land from the point of view of the community as a whole.
Development must take place with the least possible damage to the
physical environment and in such a way as to strengthen rather than
weaken the social fabric of areas affected. This means that a difficult
middle course must be followed between the extreme attitude which
would have nothing stand in the way of industrial development, and
the contrasting view which opposes virtually any change in the existing
environment.
This planning system attempts not only to provide effective coastal
zone land use planning, but also environmental protection. Some-
times, planning authorities insist on beautification of sites and res-
toration of the area after construction of facilities. When British
Petroleum Company, for example, applied for a site to build a tank
farm on a flat sandbank, local authorities allocated instead a former
oil shale development site, with huge tailings of spent shale which
needed to be flattened first. The company was required to landscape
the site upon completion of construction (Figure 5). From the high-
way, only landscaped slopes, seeded and vegetated, are visible. Within
these high banks there were several full-sized oil storage tanks at
different stages of construction, each concealed from passersby.
Understandably, the company had initially objected to incurring the
extra expenses, but the final result serves as an excellent example of
reclaiming a formerly scarred area. It also illustrates the power of
local authorities to insist on development in an environmentally
acceptable manner.
The picturesque village of Drumbuie, located on the northwest
coast of Scotland, which had been under consideration as a site for the
manufacture of concrete offshore production platforms, is an example
of an oil development project rejected on the basis of unacceptable
environmental and socio-economic problems. Following intense public
opposition, the Secretary of State for Scotland, on August 12, 1974,
turned down the proposal altogether on the basis of "conclusive
environmental considerations." 8
8 Terry Robards. "Scottish Village Closed to Oilmen," New York Times, Aug. 13, 1974,
p. 5.
(25)
PAGENO="0055"
26
In several other instances development plans have had to be changed
and alternative sites for onshore facilities needed to be found. These
and other examples indicate that British planning authorities are
out to ensure that environmental damage is kept to a minimum, and
that when it does occur, the social and economic gains are
substantial to justify such development.
FIGURE 5. View of the B.P. tank farm at Dalmeny. The tanks are under different
stages of construction, and the newly landscaped banks behind them conceal
the tank farm from the Scottish countryside. Photo by George A. Doumani.
Because of the British government's view that maximum early
development of North Sea oil and gas is in the nation's best economic
interest, both the Conservative and the Labour parties have advanced
proposals for nationalization of sites for platform construction. The
Conservative proposal, announced just before that party's defeat in
the February 1974 general election, would have bypassed normal
planning procedures in the nationalization process in order to expedite
the siting process. In August 1974, the Labour government announced
its own nationalization scheme, which would permit the normal plan~
fling process to proceed prior to nationalization. At this writing, the
necessary Parliamentary action has not taken place and no sites have
been nationalized.
B. PLANNING PROCEDURES
The British planning system is designed to coordinate policies and
actions of various levels of government, providing adequate access to
all interested parties. It minimizes the possibility of any interest group
being caught by surprise. Sufficient information is provided to all
parties early in the planning process, enabling each interest group to
PAGENO="0056"
27
evaluate and respond to proposed actions. When a coastal siting need
arises in connection with offshore petroleum development, the com-
pany or agency desiring the use of the site applies to the appropriate
county clerk. The clerk enters the application in a register which is
freely available for public inspection. If the application proposes an
action in accordance with the existing development plan and zoning
regulations, the company can go ahead and build.
Zoning in Scotland is regulated by the Town and Country Planning
Act, which has established the machinery for the development of land
use plans and for control of development through the planning process.
County development plans are drawn up by local authorities after a
process of extensive consultation with interest groups and after due
public participation. The plans are then submitted to the Secretary of
State for Scotland for approval, and before approving the plan-
with or without modification-there is an opportunity for objections
to be made and for a public local inquiry if necessary.
The Town and Country Planning Act has been amended contin-
uously (last time in 1972) to keep procedures up-to-date. Amendments
are subject to a similar process of consideration, and objections and
inquiry if necessary, before their approval by the Secretary of State for
Scotland.
In general, the Development Plan for an area zones land for the
major known and foreseeable use, including housing, industry, com-
merce, recreation and others. Local authorities have a statutory duty
to prepare such development plans, and are provided with national
guidelines and data by the Secretary of State.
When a developer chooses a site for industry which is not zoned for
industrial development, the Secretary of State for Scotland may decide
to approve or reject the application. In that event the procedure caLls
for a public inquiry at the discretion of the Secretary of State before he
issues a decision on the application. Some developments raise questions
of national importance which go well beyond the jurisdictiona] bound-
aries of local planning authorities. In such cases the Secretary of State
may "call in" any proposal for his own cçnsideration. He may call a
public inquiry, and after that approve or reject the proposal depending
on the inquiry findings. He may make his approval conditional on
certain points, such as a limitation on the size of the work force at the
proposed site.
The planning situation in the United States is rather different. No
national or state legislation requires counties or municipalities to
develop plans or adopt zoning. The Coastal Zone Management Act of
1972, however, is designed to encourage and support state and local
efforts in this direction, but it is not mandatory. Furthermore, the
public inquiry process provided by law in Scotland seems to do a
better job of involving the appropriate interests in controversial
proposals than any corresponding mechanism presently used at the
local level in the United States.
C. HIGHLANDS AND ISLANDS DEVELOPMENT BOARD
Companies interested in locating in northern Scotland are assisted
by a special development agency, the Highlands and Islands De-
velopment Board. The Board was established in 1965 to improve the
economic and social conditions of the people, and to assist the area to
40-047 0 - 74 - 3
PAGENO="0057"
28
play a more effective part in the economic and social development of
the nation. In carrying out this role, it is required to "have regard for
the desirability of preserving the beauty of the scenery." The Board
works closely with local authorities and has discretionary powers and
finance to assist developments of all kinds. It advises interested in-
dustries on development opportunities, industrial sites, labor avail-
ability and financial assistance. The Board also pays attention to
long-term infrastructure needs of the region.9
When the North Sea oil was discovered, it became the task of the
Highlands and Islands Development Board to ensure that major
changes resulting from oil development would take place as smoothly
as possible and in such a way that they bring the greatest economic
benefit to the local, regional and national economy, without impairing
existing residents and industry.
D. COASTAL FACILITY COMPLEXES
Coastal installations associated with oil development vary depend-
ing on the marketing and treatment plans of oil companies. They will
vary from small booster stations or pumphouses serving pipelines, to
tank farms and tank terminals (for storage and transportation) with
associated treatment plants (Appendix E).
Instead of allowing each oil company to select sites for pipelines and
landfalls, gas treatment plants, terminals, separation and storage
tanks, Scottish authorities are trying-where possible-to combine
as much of the oil company activities as possible in a few areas in order
to minimize environmental impact. Concentrating facilities is coor-
dinated with regional planning efforts, which now also requires local
authorities to notify central authorities of all applications for the
development of land for production platforms, booster platforms for
pipelines, fabrication for pipelines, installation of storage tanks asso-
ciated with landing and transportation of offshore oil and gas, refineries,
gas liquefaction plants, and the like.
E. REGIONAL PLANNiNG
Regional socioeconomic and environmental impact of industries
associated with oil development is receiving as much attention as
local impact. Regional interests were strengthened with the enactment
of the 1972 Town and Country Planning Act which introduced
structured plans setting out the regional planning authority's policy and
national development objectives. However, the provisions of the 1972
Act are not yet in force in Scotland. It is declared policy to implement
them gradually over the country as a whole after local government
reorganization takes place in 1975.
An Interim Coastal Planning Framework, developed as a discussion
paper by the Scottish Development Department in October 1973,
suggests greater government guidance on land use. Based on demand
° The Scottish Economic Planning Board has principal responsibility for planning and
coordinating the provision of infrastructure and services required for economic develop-
ment. All main government departments are represented on the Board, and the chairman
is the head of the Regional Development Division In the Scottish Office. It set up the North
Sea Development Committee In 1972 to ensure that the planning provision of Infrastructure
for North Sea oil was given maximum priority. The Committee keeps In close contact with
local authorities and advises them on all planning aspects related to oil developments.
PAGENO="0058"
29
for sites and their physical requirements on the one hand, and the
quality of the coast and its capacity to sustain development on the
other, it made recommendations for 14 Preferred Major Development
Zones for the east and southwest coast in which development might, in
principle, be acceptable and within which developers should be en-
couraged to look for sites. It. also calls for 23 Preferred Conservation
Zones in which developers might be expected to encounter difficulties
in obtaining permission to develop sites, and for a West Coast Zone of
high environmental quality where the development of individual
small-scale sites may be justified, but where conservation should be
predominant policy. Whenever possible, the Interim report advises,
oil related developments should be sited in the more populated central
belt of Scotland.
F. LONG-RANGE PLANNING
Some of the problems being examined by the responsible Scottish
planning authorities will stem from factors that may affect the volume
and duration of prosperity associated with oil and gas development.
Apprehension has already been expressed concerning such factors as
intense environmental opposition, bureaucratic controls, failure to
secure the necessary facilities, and even the prospects of the United
States opening up its Atlantic continental shelf acreage for oil and gas
development. These factors, combined with the eventual decline of
production in the North Sea itself, will cause the companies to start
looking elsewhere for more promising prospects.
In order to prepare for the future slow-down, authorities are looking
beyond the oil boom by encouraging petrochemical, plastic, as well as
non-oil related industries to settle in the northeast. Technical skills
required during the short-term production activities, combined with
expected oil revenues, could provide the basis for a diversified tech-
nology-intensive, high-wage industry which will continue to prosper
long after oil resources have been depleted.
In addition to the value of the market created for Scottish goods and
services, the central government is committed to share a considerable
part of the oil revenues with Scotland, to pay for the improvement of
the infrastructure, and enable the Scots to diversify their economy in
order to outlive the oil resources. The challenge ahead will be to balance
oil related development with other industries, and to see to it that
existing industries will not collapse as a result of the possibly short-
term oil boom. All this needs to be done without causing irreparable
damage to the physical environment, and with proper care to ensure
the general welfare of the population of Scotland.
The Shetland Islands present a unique case study for the problems
which will be encountered in the future. These problems are the subject
of the next section.
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IX. THE SHETLAND ISLANDS-A CASE STUDY
"It is not practical to try to preserve the countryside as it is at present.
Change will occur and it must be planned for."
ZETLAND COUNTY COUNCIL, 1973.
The above quote succinctly captures the attitude of the Shet-
land officials toward the challenge of participating in the develop-
ment of offshore oil and gas in the northern North Sea. The Islands
are not in any desperate need to embrace development, but a combina-
tion of economic incentives and genuine understanding of national
needs has resulted in a positive attitude toward planned development.
The Shetland Islands present a unique place to view the onshore
impact of offshore oil and gas development. The Islands are isolated
and not heavily industrialized. Thus, the onshore impacts associated
with oil and gas activities will be highly visible and easily assessed.
A. FACILITY REQUIREMENTS
Some of the largest oil fields discovered in the North Sea are located
east of the Shetland Islands. The Brent, Hutton, Cormorant, Dunlin,
and Thistle fields, all discovered before 1974, are expected to produce
about 1.35 million barrels of oil per day a few years from now. Two
new fields found in 1974 will increase production from the northern
North Sea to an estimated 2 million barrels per day. A large oil field,
Ninian, was found a few months ago, and only recently, British
Petroleum Co. announced discovery of yet another field, Magnus,
about 15 miles southwest of Thistle.
Eventually more than half of the North Sea oil will be produced
from the northern North Sea (British sector), and because of proximity
to the Shetland Islands, most of the petroleum~ is expected to be
pumped to the Islands. Within the next few years the Shetland Islands
may become one of the major oil bases in the world. Oil companies
generally find pumping oil through undersea pipelines to terminals
onshore more economical than building large storage tanks offshore,
from which tankers would haul oil to the mainland. In addition to a
pipeline terminal, the Shetland Islands will need storage facilities
which can hold production of several days, and transshipment facil-
ities. It is also possible that oil companies may want to use the deep-
water port facilities to transship Middle Eastern crude from Very
Large Crude Carriers (VLCC) to smaller tankers which can dock in
most European ports. Some observers believe that a gas liquefaction
plant and a refinery may also have to be constructed on the Shetlands.
It is certain that these developments will have a major impact on
the socioeconomic and environmental conditions on the Islands.
B. SOCIOECONOMIC IMPACT
Prior to the North Sea oil developments, the net population was
expected to grow from 17,327 in 1971 to 17,700 in 1981 and 17,900 by
1991. Oil development is likely to double these estimates. It could
very well be that the Islands will reach over 30,000 inhabitants in the
early nineteen nineties, which is about equal to the peak population
(81)
PAGENO="0061"
32
of 31,700 in 1861. The actual population growth will depend to a large
extent on the construction of necessary and optional development
projects.
Depending on development decisions by the oil companies and
Zetland County Council, between 600 and 1,500 jobs may be added
in the next few years. A figure of 1,000 employees being wanted as a
direct result of oil related developments is considered most realistic
at this time. However, one may assume that several hundred addi-
tional jobs will be created by servicing, construction and other
indirect developments.
Demand on housing, health, schooling, recreational and other
social and commercial needs will depend on the actual increase of
population, but it is certain to cause stress on the infrastructure and
the local economy. While the Zetland County Council will attempt
not to upset the present satisfactory economic and soci al conditions,
a recent study (Appendix F) indicated that the She tlands had a
maximum absorption capacity of 100 families per year without
upsetting the social and economic balance. Moreover, the local
government is planning to spread the new population over four existing
towns in an effort to integrate the new and old populations.
The very size of the population increase, mainly migrants from
the mainland, and the differences in outlook between traditional
islanders (mainly fishermen and farmers) and the newcomers, will
make integration a very difficult goal to achieve. Development of the
Shetlands into a major oil base is very likely to lead to significant
changes in the entire way of life of its citizens. Higher wages in the
oil-related industries will have a major impact on employment in
agriculture, fisheries, tourism and the knitwear industry. Many of
those presently employed in the traditional industries, particularly
the young, will be attracted to the oil industry by higher wages.
Eventually, the Islands could end up with one major employer-the
oil industry. The danger of such development would become evident
some thirty to forty years from now when the "oil boom" dies. The
County Council may decide to build permanent infras~tructure and
social facilities for the production phase only, and expect the oil
companies to provide temporary accommodation and facilities during
the short-term exploration and construction phases.
It is for these reasons that the Zetland County Council decided to
apply for special parliamentary powers to reinforce normal planning
and controls. Through legislation, they have won Port Authority
powers for the whole Island group, blanket powers of compulsory
acquisition of land within designated areas, and powers to take
equity participation in oil-related coastal undertakings, which would
be financed from oil revenues.
C. ENVIRONMENTAL IMPACT
Shetlanders are aware of the fact that environmental pollution is
likely to increase with petroleum development. In order to minimize
damage to the environment, industrial facilities will be concentrated
in one area, Sullom Voe (Figure 6). Although, Sullom Voe is relatively
small, a concentration of industrial facilities in the area should cause
little interference with traditional industries. It has a natural deep-
water harbor capable of handling tankers up to 720,000 dead weight
tons (dwt). This could also turn into a port for transshipment of
PAGENO="0062"
33
Middle Eastern oil to Western European harbors which lack such
facilities for large supertankers.
The Zetland County Council expects companies to share
onshore facilities in order to ensure orderly development of oil related
industries, and to contain development to one area. Consequently,
the Council is also conducting a study (paid in part with oil company
funds) to investigate the possibility of underground storage facilities
for crude oil. As there are virtually no trees on the Island to hide on-
shore facilities, underground storage, if technologically possible, would
limit the visual effects of petroleum related development on the
Islands. But the main purpose of underground storage is not environ-
mental. The County Council is mindful of increased development in
the future. Their reasoning, therefore, is that if present facilities are
built on the surface, future expansion would demand more land areas.
If, however, facilities are initially built underground, extra facilities
can be built in the future directly above the underground facilities,
thus eliminating, or reducing, the use of more acreage.
FIGURE 6. Zetland County Council map of the Sullom Voe area, showing proposed
tank farms, tanker terminals, industrial zones, and community developments.
PAGENO="0063"
34
D. MEETING THE CHALLENGE: CHRONOLOGY OF EVENTS
The development of oil and gas facilities on the Islands presents an
ironic contrast. Most Shetlanders do not feel they need the oil industry
since traditional industries (fishing and knitwear) have thrived, and
unemployment is low. Yet, the Shetland County Council recognized
that certain of these developments were almost inevitable given the
substantial national interest in the development of North Sea oil
resources and the strategic location of the Islands. The underlying
attitude on the part of the Island leadership from the beginning was,
"We don't need it; but if in the national good it must come, we want
to be fully in control of all of the important decisions that involve the
use of our land and water, the disruption of our communities, and
the long-term well-being of our people." Thus, every attempt has been
made from the beginning to control all of the important decisions that
involve the use of land and water resources, the disruption of commu-
nities, and the long-term well-being of the people.
The beginning came, interesting enough, in March, 1972, with an
experiment the British conducted during the fourth round of North
Sea licensing. Expe;imenting for the first time with U.S. style bonus
bidding, widespread attention was attracted to the (then) enormous
sum of about ~20 million ($50 million) paid by Shell/Esso for a block
due east of the Shetlands. This optimism was confirmed in August,
1972 by discovery of the large Brent field in a tract adjacent to that
block. Since then, additional discoveries in the East Shetland Basin
have brought the total recoverable oil reserve estimates up to over
10,000 million barrels. Production could well reach two million barrels
per day by 1980.
The Shetland County Council took careful note of the Shell/Esso
bid and adopted a policy position in April, 1972 that said, in effect,
if the oil industry proposes to use the Islands then the County Council
would control those uses by controlling the use of land and water.
The most apparent industry need was for a deepwater port and as-
sociated oil storage and loading facilities from which supertankers
could take the oil to refineries located closer to product markets. It
was clear that pipelines would probably be used to connect the larger
oil fields to an oil terLninal in the Shetlands.
Aware of its lack of information, the County Council immediately
commissioned a study by Transport Research Limited of Glasgow of
potential oil terminal sites in the Islands. In this report, completed in
July 1972, the consultants reviewed five sites and found one of them to
be fully acceptable-~Sul1om Voe. They looked at navigational ac-
ceptability (suitable for vessels up to 200,000 dwt without any signifi-
cant dredging), operational acceptability (weather, tides, etc.) and oil
storao~e potential.
It was clear that the County Council had to have much more de-
tailed information if it wished to be totally involved and fully in con-
trol of the landside impacts of the coming oil related development. It
therefore initiated two actions which have come to form the founda-
tion of the Shetland program. First, the Council carefully drafted a
statement of the additional powers that were required to put the
County in a position to control land use and to participate as partner
with the oil companies in the landside oil operations. Their request for
these additional powers, some quite extraordinary, was forwarded to
PAGENO="0064"
35
the Secretary of State for Scotland in November, 1972 and, in April,
1974 the Parliament awarded these powers.
The second action was to commission a major multidisciplinary
study of likely onshore requirements of the oil industry and how
best to meet them. This study cost £~72,000 ($175,000), half of which
was provided by the Highlands and Islands Development Board.
The Study was started in January 1973 and was completed in July
1973.
The study concentrated on the following: prediction of the nature
of oil industry onshore requirements; examination of the Sullom Voe
area, from marine and land use planning aspects; assessment of how
the required developments could be accommodated with least harm
to the environment; and determination of what provisions must be
made in the way of new housing, schools, and other facilities for the
enlarged communities.
While the study was under way, the county developed and dis-
seminated an Interim County Development Plan (March, 1972)
under the terms of the Town and Country Planning Act. The docu-
ment expanded the County Council's earlier oil related policy and put
it into a more comprehensive perspective. It spoke to both the ex-
ploration and the exploitation phases of oil industry requirements. It
contains the following statements with regard to the location of oil
service bases (coastal facilities needed to service the oil supply boats
that provide supplies and equipment to drill rigs, pipeline laying
barges, and the like).
"The County Council, whilst wishing to accommodate the
oil service bases in a number of locations in Shetland, do not
wish to see an excessive proliferation of service bases with
the consequent duplication of infrastructure and services in
places only a few miles apart and so permission will be granted
for specific areas only, the following areas being suitable for
this type of activity. (1) Lerwick Harbour. (2) Sullom Voe,
Swarbacks Minn and Baltasound subject to the~ County
Council's Planning Consultant's reports on actual
sites.* * *"
Similarly, the following is an excerpt concerning the County
Council policy on the exploitation phase:
"The exploitation stage of the oil industry may require
the creation on shore of terminal facilities. The siting of
these facilities will be determined by a number of criteria,
some of which can be quantified at the present moment;
some of which will depend upon decisions made by the oil
companies and upon the technical problems involved.
The two factors which can be determined are the need
for deep water with safe all-weather anchorage, together with
a certain acreage of flat land adj acent to the site or within a
reasonable distance from the deep water anchorage.
The Planning Authority, by careful survey, have identified
the Sullom Voe area as being most suitable for major develop-
ments arising out of the industries activities in the North
Sea. (In this context "major" includes the development of
tank farms, oil storage depots, terminal facilities, gas liquefac-
tion plant, gas storage complex, oil refinery and other
ancillary operations.)
PAGENO="0065"
36
To ensure the proper development of these sites the planning
authority is taking the following steps: (i) The zoning of this
area for major oil developments. (ii) The promotion of private
legislation to give port and harbour authority powers to the
County Council in the area. (iii) The purchase of land by
compulsory purchase if required, to ensure a controlled
development. (iv) A multi-disciplined study of the Sullom
Voe area and surrounding areas has been commissioned
which will result in a Master Plan and Report being produced
in the Autumn of 1973. No major development will be
allowed until the Master Plan has been adopted.* * *"
Beginning in September of 1973, with the results of the consultants'
study available, the County Council undertook a substantial public
mform ation program. Brochures describing the Sullom Voe Plan and
the likely changes it would bring to the affected communities were
prepared and widely distributed. A series of newspaper articles was
commissioned by the County Council and placed in the Shetland
Times, and exhibits depicting the consultants' recommendations were
displayed in the affected communities.
As a result of this public scrutiny and additional County Council
work, some modifications were made in the consultant's plan and an
official Sullom Voe District Plan was prepared. This plan is now
undergoing public hearing prior to its adoption as an "official"
document by the County Council.
As mentioned earlier, in April, 1974, the U.K. Parliament passed
the "Zetland County Council Act of 1974." This extraordinary piece
of legislation allows the County Council to do the following: to act
as a harbor and port authority, to license maiine activities out to
three miles, to obtain certain lands using condemnation if necessary
and to create a Reserve Fund with oil related revenues.
The Reserve Fund will provide, both during and after the oil era, the
means for the County Council to take any steps which they consider
to be in the long term interest of Shetland, the Shetland economy, or
the Shetland community. This would include, for example, promoting
the establishment of other industries which would diversify the
economy and survive the oil boom, or safeguarding the position of
Shetland's indigenous industries.
Ohser~vers in the Shetlands feel that two factors were responsible
for passage of this legislation-the Arab oil embargo and the discovery
N of still additional oil in the East Shetland Basin.
In addition to completing the official plan for the Sullom Voe
development, the County Council officials are also in the process of
forming a nonprofit association to be registered as a limited company,
to design, construct, and operate all of the facilities at Sullom `~Toe.
This enterprise is to be called the Sullom Voe Association. The
Shetland County Council will hold 50 percent of the shares and the oil
companies operating pipelines from off-shore fields to the terminal
will together hold the other 50 percent. It is likely that a levy on
teiminal throughput will be used by the County Council to create the
Reserve Fund mentioned above. Advance payments to help defray
initial public costs are now being negotiated. British Petroleum Co.,
Continental Oil Co., and Shell Oil Co. have accepted initial financial
responsibility for the Association.
PAGENO="0066"
37
The County Council is now in the process of discussing the detailed
development of Sullom Voe with the oil companies. A study funded
by the companies for £100,000 ($240,000) is now under way by the
County Council to determine the feasibility of underground cavern
storage at the site (as a possible alternative to the traditional above-
ground tanks). If underground storage is found to be technically
feasible, the County Council believes it will be in a position through its
50 per cent interest in the Association to require this. The County
Council will, of course, own the land involved in the Sullom Voe
development and will lease it back to the Association for construction
and operation.
E. CONCLUSIONS
The Shetland Islands appear to have made significant headway
toward resolving the onshore problems associated with North Sea oil
and gas development. While caution should be used in attempting to
apply the Shetland's experience to areas like the U.S. east coast, the
Shetland experience does provide a case study which U.S. decision-
makers should closely examine.
Yet, there are parts of New England, especially downeast Maine
that are as insular in character and tradition as the Shetland Islands;
there are also similarities in environmental and socioeconomic con-
ditions comparable to Alaska's. And one can think of a good many
communities along the Atlantic Coast where the construction of oil-
related facilities would be viewed with considerable alarm. The concern
of what happens to an impacted area, after all of the oil is produced and
the facilities are no longer needed, is, of course, a universal one.
The Shetlanders have faced many problems over a very short
period of time, and have done a remarkable job in planning the in-
corporation of oil activities into their Islands. They have developed
a program that carefully guides and controls the location and environ-
mental impact of needed new facilities that minimizes adverse social
and economic effects, and, at the same time, builds financial resources
for strengthening traditional industries, especially for the post-oil
era.
The following factors appear to have aided the success of the
Shetland approach:
1. Early adoption and articulation of a policy of control of
onshore development. /
2. Acquisition, on a timely basis, of a comprehensive mde-
pendent study of likely shoreside oil industry requirements and
impacts.
3. An effective public information and involvement program.
4. The acquisition of necessary planning and management
powers through new legislation.
5. The effective implementation of planning by local govern-
ment, with the aid and assistance of national legislation.
This last point is especially important since it is directly applicable
to the problems now being faced in the United States with the imple-
mentation of the Coastal Zone Management Act. As Mr. Ian Clark,
County Clerk and General Manager of Shetland County, stated, the
Shetland success has been due to the fact that the program was de-
veloped at the local level and was strongly tailored to the local situa-
PAGENO="0067"
38
tion. He felt that the role of the national government is to give local
government the confidence and support it needs to act in a timely and
effective manner.
However, in the end, the most essential tool for effective develop-
ment of offshore resources is the close cooperation between industry
and government. Mr. George Blance, Convener of the Shetland
County Council, found this to be an integral ingredient in the Shetland
experience:
"It is gratifying to find that international organizations are not
insensitive to the peculiar demands of a small and isolated com-
munity faced with enormous developments.
"The industry has found Shetland to be responsible, if uncom-
promising in its demand for ultimate control of its own destiny,
and has accepted not only that the county council must be re-
garded as a partner, but as a senior partner in the developments
which are inevitable.'0"
The challenge facing the Shetlands is, of course, to maintain this
cooperation so that the objectives of the companies and the Shetland
people are achieved simultaneously.
10 Petroleum Times, March 8, 1974.
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X. BIBLIOGRAPHY
"Annual Offshore Oil Review," Evening Express, July 2, 1974.
"Britain Places First North Sea Oil Rig," Christian Science Monitor,
July 9, 1974.
Committee on the Environment Report to the Oil Development
Council for Scotland. North Sea Oil and the Environment: A Report
to the Oil Development Council for Scotland, Edinburgh, Her Majesty's
Stationery Office, 1974.
Fasham, Douglas R. A Review of Oil Related Developments in the
United Kingdom Following the North Sea Discoveries With Particular
Reference to the Scottish Highlands and Islands, Highlands & Islands
Development Board, January 1974.
Friedenson, Stuart. "Oil and the People," The Shetland Times,
Lerwick, 1974.
"Methods to Solve Our Energy Problems," Congressional Record
(Daily Edition), July 9, 1974.
North East Scotland Development Authority. North East Scotland
and the Offshore Oil Industry: A Summary of the Main Developments,
1974.
"North Sea Report," Oil and Gas Journal, June 3, 1974.
Preliminary Evaluation of Potential Oil Terminal Areas in the Shetland
Islands, Prepared by Transport Research Ltd., Glasgow, July 1972.
The Press and Journal, August 25, 1972.
Scottish Development Department, North Sea Oil and Ga~: Pipeline
Landfalls, A Discussion Paper, May 1974.
The Scottish Office. "North Sea Oil." Scottish Economic Bulletin,
London, Her Majesty's Stationery Office, March 1973.
Standing Conference on North Sea Oil. Information Sheet, April 1974.
United Kingdom, Department of Energy. Production and Reserves of
Oil and Gas in the United Kingdom, A Report to Parliament by the
Secretary of State for Energy, London, Her Majesty's Stationery
Office, May 1974.
White, Irvin L., Kash, Don E., Chartock, Michael A., Devine,
Michael D., and Leonard, R. Leon. North Sea Oil and Gas: Impli-
cations for Future United States Development, Norman, Okla.,
University of Oklahoma Press, 1973.
Zetland Council Act of 1974, London, Her Majesty's Stationery Office,
1974.
Zetland County Council. A Plan for Sullom Voe: Draft, March 1974.
Zetland County Council. Interim County Development Plan, March
1973.
(39)
PAGENO="0069"
PAGENO="0070"
APPENDIX A
SCOTTISH INFORMATION OFFICE PROGRAMME OF ARRANGEMENTS MADE BY THE
SCOTTISH INFORMATION OFFICE ON BEHALF OF THE FOREIGN AND COMMONWEALTH
OFFICE AND THE CENTRAL OFFICE OF INFORMATION FOR U.S. CONGRESSIONAL
DELEGATION; JULY 1-5, 1974
Monday July 1: Scottish Office British Petroleum (Scotland) Ltd., Edinburgh-
Inverness
10.15: Party collected at the Carlton Hotel, North Bridge, Edinburgh.
10.30: Arrive Scottish Office North Sea Oil Support Group, 14 Waterloo Place,
Edinburgh; received by Mr J B Fleming, Assistant Secretary, Scottish Economic
Planning Department. Discussions on government policy in relation to North Sea
oil with Mr Fleming and Mr Amcotts and Mr Philip of Scottish Development
Department.
12.00: Leave Edinburgh.
12.45: Joined for lunch at the Hawes Inn, South Queensferry by Mr T M Junor,
Public Relations Officer, BP (Scotland) Ltd and Mr G Porter, BP Site Engineer,
Dalmeny Tank Farm Project.
14.15: Visit the British Petroleum Tank Farm Project.
15.00: Leave Dalmeny for Inverness.
Later: Arrive Inverness where accommodation has been arranged for two
nights at the Kingsmills Hotel, Damfield Road, Inverness.
Tuesday July 2: Highlands & Island Development Board, Oil Platform
Construction Site
9.45: Leave Hotel in mini coach.
10.00: Arrive Highlands and Islands Development Board, Bridge House,
Bank Street, Inverness, received by Mr. D. R. Fashman, C Eng, MICE, Head of
the Oil and Minerals Section and Mr. R. Storey, Social Research and Development
Officer; briefing on the effects of oil developments in the Highlands.
12.00: Lunch to be taken as convenient.
13.30: Leave Inverness for Ardesier.
14.00: Arrive at the oil platform building site of J. Ray McDermott Ltd.,
Ardersier. Received by Mr. A. Topsfield for discussion and a tour of the site.
Later: Return to Inverness.
Wednesday July 3: Inverness-Peterhead, Peterhead Services Bases, Peterhead-
Aberdeen
08.00: Leave Hotel (with luggage).
11.00: Arrive Peterhead Bay Management Co. Ltd, 1A Chapel Street, Peterhead,
received by Mr. S. K. Young, Harbour Manager. Short background talk on the
reclamation of land in Peterhead Bay for oil service bases followed by a visit
to the Aberdeen Service Company's base at South Inch.
12.30: Joined for lunch in the Palace Hotel, Princes Street, Peterhead by
Mr. Young.
15.00: Visit the service facility of Arunta (Scotland) Ltd., Keith Inch, Peterhead.
Received by Mr. John Sheriff, Operations Manager.
Later: Arrive Skean Dhu Hotel, Dyce where overnight accommodation has
been arranged.
Thursday July 4: Fish Market, North East Scotland Development Authority,
Aberdeen-Shetland, Zetland County Council, Dinner Engagement
07.00: Leave Skean Dhu Hotel in mini coach.
07.30: Visit Aberdeen Fish Market. Met by Mr. K. Harper, Inspector of Sea
Fisheries, Department of Agriculture and Mr. R. Allan, Secretary and Chief
Executive, Scottish Trawler's Association.
(41)
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08.15: Joined for breakfast in the Station Hotel, Guild Street by Mr. Harper
and Mr. Allan.
09.15: Leave Station Hotel.
09.30: Arrive Skean Dhu Hotel. Met by Mr. James A. Dinnes, MA, MRTPI,
Deputy Development Officer, North East Scotland Development Authority. Brief-
ing and discussion on the impact of North Sea oil developments in the North
East of Scotland.
11.15: Leave Skean Dhu Hotel (with luggage).
11.20: Arrive Aberdeen Airport (Dyce).
11.40: Depart Aberdeen on British Airways flight BE8434 for Zetland.
12.35: Arrive Sumburgh Airport, Zetland. Met by Mr. J. H. Manson, County
Clerk's Office. Lunch at Sumburgh Hotel.
14.00: Leave Sumburgh for visit to Sullom Voe, scene of proposed oil develop-
ments associated with deep water facilities.
17.30: Arrive Lerwick Hotel, Lerwick, where overnight accommodation has been
arranged.
19.00: Leave Lerwick Hotel in mini coach.
19.30: Informal dinner with senior officials of Zetland County Council in the
Grand Hotel, Lerwick. Attending will be Mr. I. R. Clark, County Clerk and Gen-
eral Manager; Mr. J. P. Moar, County Surveyor; Mr. J. M. Fenwick, County
Planning Officer; Mr. J. H. Manson, County Clerk's Department.
Later: Return to Lerwick Hotel.
Friday July 5: Zetland County Council, Oil Service Base, Zetland-Aberdeen,
Comex Diving, Aberdeen-London
09.00: Leave Lerwick Hotel (with luggage).
09.15: Arrive Zetland County Council, County Buildings, Lerwick. Meeting
with senior officials of the County Council to discuss impact on the Islands of
North Sea oil developments.
10.15: Leave County Buildings.
10.30: Visit Norscot Services a division of Fred Olsen Ltd.
11.30: Return to Lerwick for lunch.
13.45: Leave Lerwick by mini coach.
14.35: Arrive Sumburgh Airport. //
14.55: Depart Zetland on British Airways flight BE8431 for Aberdeen.
15.50: Arrive Aberdeen Airport and transferred by car to Comex Diving Co
Ltd, Farburn Industrial Estate, Dyce. Received by Mr. A. Redford, General
Manager, for discussions on the company's involvement in North Sea oil opera-
tions.
17.15: Leave Comex.
17.30: Arrive Aberdeen Airport (Dyce).
18.00: Depart Aberdeen on British Airways flight BE8437 for London.
PAGENO="0072"
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APPENDIX B
DEPARTMENT OF ENERGY
Production and reserves
of oil and gas in the
United Kingdom
A report to Parliament by the
Secretary of State for Energy
May 1974
LONDON
HER MAJESTY'S STATIONERY OFFICE
32p net
40-047 0 - 74 - 4
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45
A report to Parliament by the
Secretary of State for Energy
Introduction
The Department of Energy has now completed its annual review of
forecasts of oil and gas production from the United Kingdom Continental
Shelf. This report gives Parliament the outcome of the review and also
contains a detailed assessment for each field, of developments in 1973 and
prospects for the future. It is the second of the annual series begun by last
year's report.
2 Progress in developing our Continental Shelf continues to be
extraordinarily rapid. In 1973, 61 exploration or appraisal and 21
production wells were drilled. The total number of wells drilled by the end
of 1973 was 342 exploration or appraisal and 198 production. This high
level of activity has led to a very large number of finds. At the time of last
year's report, 6 gas fields and 5 oil fields had been established as
commercial. The past year, with a level of exploration higher than ever
before, has produced the most successful results so far. Another 5 oil
fields have been declared commercial, making 10 in all. Other significant
finds made during the past year will certainly be confirmed as commercial
by further appraisaL
3 Gas production is now well established, and a story of remarkable
success. It is only eight and a half years since gas was first discovered in our
sector of the North Sea. Since then, total consumption of gas has
increased threefold and 90% of this gas comes from the North Sea.
Production from the North Sea in 1973 averaged nearly 3000 million cubic
feet a day (mcfd) - equivalent to 27 million tons of oil a year. It will grow
substantially. Reserves of United Kingdom gas should support production
of 5000 mcfd in the later years of this decade. Supplies from the
Norwegian part of the giant Frigg field, for which British Gas have signed
a contract subject to the approval of the Norwegian Parliament, could
increase this figure to about 6000 mcfd. There will be more discoveries,
which will provide further production; reserves in the United Kingdom
part of the North Sea alone couki be significantly greater in 10 years'
time than at present and successful exploration of other parts of the
Continental Shelf could increase reserves still further. Although prospects
1
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are good, our reserves are finite and care should therefore be taken to
make the most efficient use of this high quality premium fuel.
4 Forecasts of future oil production must be subject to considerable
uncertainty, since so much exploration remains to be done and since
production has not even started. But the successes of 1973 now allow a
more optimistic view of the size of our reserves. Production in 1980,
allowing for discoveries not yet made, could be in the range of 100- 140
million tons. There is therefore now a very good chance that in 1980 we can
produce oil equivalent to our demand. The likelihood of further
discoveries, both in areas already licensed and in new areas to be licensed
later, opens up the prospect of reserves capable of sustaining production
at a rate of 100- 150 million tons a year, or even more, in the 1980s.
These prospects again raise the question of how our supplies can best be
used over time. Although the advantages from production at any level
within this range would confer enormous benefits and last for a
considerable time, they will not last for ever, and it is therefore
especially important to make the best possible use of them.
2
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I Progress and Prospects
Offshore Operations
5 The report published in May 1973 gave details of developments on
the United Kingdom Continental Shelf in 1972 and of prospects for 1973.
This section of the report does the same for 1973 and 1974. To provide an
historical perspective of events since exploration on the Shelf first started
in 1964, the charts at Appendices 1 -7 show drilling activity for each year
since 1964 and details of the significant oil and gas discoveries so far made.
General
6 As expected, exploration and appraisal drilling activity continued to
increase during 1973. The first of the new mobile semi-submersible drilling
rigs specially designed to remain on station throughout the year in the
severe weather of the northern North Sea had been delivered late in 1972,
and 11 more came into service during 1973. The total number of rigs used
rose from 19 in 1972 to 25 in 1973 and the maximum number of rigs in use
at any one time from 14 to 18. This resulted in an increase in the equivalent
total time spent in the area by all rigs (rig years activity) from 8.6 in 1972
to 13.3 in 1973. The total number of exploration and appraisal wells
begun and/or drilled therefore rose from 43 to 61. Details of all drilling
activity during the year are as follows:
Number of wells begun and/or drilled
Exploration, with
number of signz~1cant
new oil or gas shows
Area in brackets Appraisal Development
Eastof Shetland 16 (6) 7
East of Scotland 18 (2) 6 -
Southern North Sea 7 (0) 6 21
Other Designated Areas 1 (0) - -
Total 42 (8) 19 21
The tdtal number of exploration and appraisal wells drilled might have
been even higher, but some of the special new semi-submersible rigs were
late in being delivered and the weather was particularly bad for long
periods at the end of the year. Exploration and appra,isal activity should
3
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continue at a high level in 1974. Most of the semi-submersibles, drill-ships
and jack-ups used in 1973 should either remain on the United Kingdom
Shelf or return to it and a further 15 or more of the special new
semi-submersibles should arrive during the year. The number of rigs to be
employed during the year could therefore be as high as 40 (compared
with 25 in 1973) and the number of rig years of activity may approach 25
(compared with 13.3). The maximum number of rigs employed at any one
time could well reach 30- 35 (compared with 18).
The area East of Shetland
7 During 1973 this area emerged as one of highly exciting prospects. The
discovery of the Beryl, Cormorant and Thistle oilfields in September 1972
promoted a surge of exploration activity throughout 1973 which has
continued into this year. During 1973 there were six significant
new finds of oil and one of gas; these, together with the two oil
strikes made on the Ninian structure early this year, have increased the
total number of significant finds in the area so far to 13 of oil and 2 of gas.
However, in March 1973, the first well in the Shell/Esso block 211/21
failed to find oil, and later on preliminary reports of an oil discovery by the
Hamilton group in block 9/28 were disproved by testing. The new semi-
submersible rigs were widely used and should continue to be in great
demand for the rest of this year as operators appraise recent discoveries
and drill new exploration wells on neighbouring structures and other
licensed blocks.
8 A detailed assessment of the developments in and prospects for each of
the discoveries in the area is as follows:
i Brent (Shell/Esso, block 211/29, found July 1971)
* A southward extension into block 3/4 was confirmed by Texaco in October
1973. There will be appraisal driffing in both blocks during 1974.
Production is planned to start in 1976; orders have already been placed for
one steel platform and one concrete platform for installation in 1975 and
for a second concrete platform for installation in 1976. At first oil will
come ashore through a floating storage/tanker loading facility ("Spar")
moored on the field near the platforms and delivering into tankers, but
plans to build a pipeline to Sullom Voe in the Shetlands are well advanced
and negotiations are in progress with the Zetland County Council on the
development of a terminal there. Shell/Esso are negotiating with British
Gas for the sale of gas associated with oil production from the field. On
present estimates these gas reserves could exceed those from the United
Kingdom part of Frigg (see page 6).
ii Thistle (Signal group, block 211/18, found September 1972)
An appraisal well was drilled in 1973, the results of which led to the
4
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declaration that the field was commercial in August of that year. It is now
known that the field extends into block 21 1/19 held by the Conoco/Gulf/
National Coal Board (NCB) group. Firm development plans should be
announced shortly. Production should start in 1976/77, oil at first being
brought ashore by tanker. There is a longer-term possibility that a pipeline
will be laid to the Shetlands to serve both this and the Dunlin field.
iii Dunlin (Shell/Esso, block 211/23, found July 1973)
The first exploration well indicated an oil field of commercial size; it was
drilled close to the boundary of block 21 1/24 held by the Conoco/Gulf/
NCB group who contributed to the cost of the well, and the field is now
known to extend into that block. Another appraisal well was drilled in the
Shell/Esso block during 1973 and further drilling is expected to take
place in both blocks this year. Development plans are being drawn up and
will probably be announced later in 1974. Production should begin
in 1977; at first oil will come ashore by tanker, with the future prospect
of ajoint pipeline with the Thistle field.
iv Beryl(Mobil/Gas Council group, block 9/13, found September 1972)
A second well was drilled in 1973 and the field was confirmed as
commercial in July. There will be further appraisal drilling in 1974. A
concrete development platform has been ordered for installation in 1975
and present plans are for production to start later that year, with the oil
coming ashore in tankers loaded through a single point buoy mooring
system (SPBM).
v Cormorant (Shell/Esso, block 211/26, found September 1972)
The commercial viability of this discovery has so far not been proved. The
geological structure extends into block 211/21 and a well drilled in that
block in March 1973 to assess the prospects of the discovery proved to be
dry. It is planned to drill a second appraisal well in block 211/21 during
1974.
vi Hutton (Conoco/Gulf/NCB group, block 21 1/28, found September 1973)
Further drilling will establish the extent of the field, but preliminary
assessments indicate that the discovery is likely to be commercial.
vii Aiwyn (Total group, block 3/14a, found November 1973)
Further wells are to be drilled to assess the potential of the discovery
which, ifjudged by the results of the first well, could well prove to be
commercial.
viii Block 3/15
The Total group also made an oil discovery in block 3/15 in July 1973;
further work is necessary before its commercial significance can be
assessed. The Alwyn discovery, although clearly separate, does improve
5
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the prospects that this discovery will be commercial, since facilities to land
the oil from both fields could possibly be shared.
ix Ninian (BP/Ranger group, block 3/8, found January 1974; Burmah
group, block 3/3, found February 1974)
This discovery is on a single large geological structure which extends
northwards from block 3/8 into block 3/3. The indications are that the
BP/Ranger and Burmah finds are linked, and there are hopes that the
structure contains one of the largest oil fields yet discovered in the North
Sea. The Burmah group announced that it intended to develop its share of
the field in April of this year. Further drilling and testing will be carried
out to determine the size of the field. -
x Block 2/5
In November 1973 the Union Oil of California group (Unocal)
announced that they had found oil indications in block 2/5. They are
drilling wells to evaluate the commercial potential of the field.
xi The Frigg Gas Field
This was discovered in Norwegian waters in 1971 by the Petronord group
which includes Total. The field's extension into block 10/1 (Total group)
in United Kingdom waters was discovered and confirmed as commercial
in 1972. A production platform is due for installation on the United
Kingdom extension in 1974 and development drilling should start during
the year. A pipeline for the gas from block 10/1 with a booster platform is
scheduled to deliver gas to a terminal at St Fergus, near Peterhead in 1976.
The gas will then be piped southwards into the British Gas network.
British Gas has reached agreement on the terms for the purchase of the gas
from both the United Kingdom and Norwegian sectors; approval of the
Norwegian Parliament to the sale of Norwegian sector gas to the United
Kingdom is awaited.
xii Gasfindby the Total group
In July 1973 the Total group announced that a well drilled in block 3/19
had found indications of gas. Further work is to be carried out to find out
whether the discovery is commercial.
The area East of Scotland
9 The high potential of this area had been shown before 1973 by the
Forties, Auk, Argyll, Montrose and Josephine oil discoveries, and the gas
condensate finds in blocks 23/21 (Lomond) apd 30/2*. There was further
confirmation of this potential when two more significant oil finds, on the
Piper and Maureen structures, were made early in 1973 and these
discoveries helped to maintain drilling activity at a high level throughout
the year. With the increase in the number of rigs able to withstand the
6
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severe winter weather conditions, mobile rig activity, particularly on
exploration drilling, should continue to increase during 1974.A detailed
assessment of each of the discoveries in the area is as follows:
i Forties (BP, block 2 1/10, found November 1970)
The Forties field was declared commercial in December 1971-the first
such declaration in the United Kingdom sector. A small easterly extension
into the Shell/Esso block 22/6a has since been confirmed. Production
should begin in 1975 and buildup in two stages. The first stage will
involve the installation, planned for mid/late summer 1974, of two steel
production platforms. The installation of ancillary equipment and
drilling rigs is scheduled for later in the year and early in 1975, and
development drilling from one of the platforms should start towards the
end of this year. Installation of these first two platforms was originally
planned for 1973 but construction difficulties caused delay. The second
stage will involve the addition of two further steel production platforms;
these have already been ordered for installation in 1975. The oil will come
ashore through a 111-mile undersea pipeline to Cruden Bay, nearAberdeen,
whence it will be transferred by landline partially for refining at
Grangemouth and partially for onward transmission from a terminal
being built at Dalmeny on the Firth of Forth. The submarine pipeline and
the necessary terminal facilities should be ready during 1974 so that
production of the oil through the system can begin in 1975. A small
quantity of gas (20- 3Omcfd) in solution in the oil will also be delivered at
Grangemouth and BP are negotiating with British Gas for the sale of
this gas.
ii Auk (Shell/Esso, block 30/16, found February 1971)
Auk was confirmed as commercially viable in February 1972. Production
should begin early in 1975 and Shell/Esso plan to bring the oil ashore by
tanker through a SPBM system to Shell's refinery at Teesport. The
scheduled programme for 1974 involves the installation of a steel jacket
production platform (originally planned for 1973 but delayed by
construction difficulties), the drilling of development wells and the
installation of production equipment.
*Condensate consists of light liquid petroleum fractions similar in composition to
petrol which, when produced in association with gas, condenses to form a liquid. It is
then separated from the gas and after refining and blending can be used to produce
petrol and other products. The two discoveries mentioned above contain dispropor-
tionately large quantities of condensate in relation to gas. Th~ gas fields in the southern
basin of the North Sea produce a relatively small proportion of condensate, but because
of their size the actual amount ofcondensate is appreciable. Production of condensate
from this area was about 284,000 tons in 1973 and made a small but useful contribution
to United Kingdom needs.
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iii Argyll(Hamilton group, block 30/24, found August 1971)
The commercial viability of this field was announced in December 1972.
Production should begin in autumn 1974, thus making this the first field
in the United Kingdom Continental Shelf to come on stream. The
geological structtire of the field is complex and, pending further appraisal,
an experimental production scheme will be employed using a semi-
submersible drilling rig suitably converted asa temporary production
platform. When extracted the oil will be transferred to tankers using a
SPBM loading system.
iv Montrose (Gas Council/Amoco group, block 22/18, found December
1969)
After the drilling of a fii~a1 appraisal well in 1973, the group announced
plans in November to develop this field which is now known to extend into
block 22/17 also held by the Gas Council/Amoco group. A steel
production platform has been ordered for installation in 1975, and
production is due to start in 1976. The oil will be brought ashore by
tankers loaded through a SPBM system.
v Piper (Occidental group, block 15/17, found January 1973)
Piper was established as commercial in March 1973 - only two months
after its discovery. A vigorous appraisal drilling programme was continued
andthe extent of the field was established by the end of the year. The
target date for the start of production is spring 1975, and a steel
production platform has been ordered for installation this summer. The
oil is to be brought ashore through a 125-mile submarine pipeline to a
terminal already under construction on the island of Flotta in the Orkneys
and transported from there by tanker.
vi Josephine (Phillips group, block 30/13, found September 1970)
Both exploration wells so far drilled have shown oil but not enough to
establish the find as commercial. Further drilling will be necessary to
determine whether production would be worthwhile..
vii Maureen (Phillips group, block 16/29, found February 1973)
At 5 April 1974, the first appraisal well was still being drilled.
viii The Lomond Gas Condensate Discovery* (Gas Council/Amoco group,
block 23/21, found May 1972)
At 5 April1974 appraisal drilling was being undertaken to determine
whether the discovery was commercial. If production does go ahead,
sophisticated production techniques using reinjection of gas may have to
*~ footnote on p.7.
8
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be used to get maximum recovery of both the valuable liquid condensate
and the gas.
ix Burmah/ Hamilton group Gas Condensate Discovery
The consortium made this discovery in block 30/2 in June, 1971. Further
appraisal will be necessary to establish whether the find is cOmmercial.
Should production go ahead, special techniques would probably be
necessary as for the Lomond field.
Southern North Sea area
10 With so much exploration activity concentrated in the northern waters
of the North Sea, 1973 was a year in which work in the main gas-
producing area in the southern basin concentrated on development and
production. The same is likely to be true of 1974.
11 During 1973, development drilling took place on all five main gas
producing fields (Leman Bank, West Sole, Indefatigable, Hewett and
Viking). Wells on one platform at Hewett were converted to produce gas
from a higher level reservoir and this gas was brought ashore through a
second pipeline from the field built in 1972. A 30-inch pipeline from the
Leman Bank field to Bacton was laid jointly by the Gas Council/Amoco
and the Shell/Esso groups. No significant new gas discoveries were made
in the area during the year, but an appraisal well drilled by the Arpet
group in block 49/28 near the Leman Bank field confirmed the extent of a
gas discovery made in that area in 1969.
12 On the Leman Bank field development drilling has continued into this
year on two existing platforms and two platforms are to be erected later in
the year on which compressors will be installed in 1975 to boost pressure
on the trunk pipeline system; this is to counteract a fall in field pressure
caused by the production of gas from the reservoir.
13 On the Indefatigable field development drilling is continuing on one
of the existing platforms, and a further production platform may be
installed later in the year.
14 Drilling will continue around the Viking field throughout 1974, and
it is planned to erect four satellite platforms to serve both existing
production platforms on the main field during the year. No drilling is
expected on the West Sole or Hewett fields during 1974.
15 On the Broken Bank area, the Conoco/NCB group are preparing to
carry out surveys with a view to siting development platforms during 1975.
16 Development of the Rough gas field is expected to begin in 1974, with
drilling scheduled to start in the Autumn. This field was discovered by
9
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Gulf in block 47/8 in May 1968, but the licence has now been assigned to
the Gas Council/Amoco group, which also holds the licence for block
47/3a into which the field extends. A pipeline from the field to a terminal
next to BP's at Easington will be built during the year. to allow production
of gas to start in 1975.
Other licensed areas
17 Although some 130 blocks have been licensed for the areas west of the
Shetlands and Orkneys and west of England and Wales, the high level of
activity in the northern North Sea, which has fully employed the mobile
drilling rigs available, has meant that licensees have not yet been able to
turn their attention to these regions to any significant extent.
18 The onlywell drilled in other licensed areas during 1973 was by Shell
in block 102/28 in the Celtic Sea. It proved to be unsuccessful. Activity will
increase during 1974. Exploration wells originally scheduled for 1973 but
delayed by adverse weather conditions were being drilled at 5 April by
the Arpet group in block 106/24 in Cardigan Bay and by Shell in block
205/21 west of the Shetlands. There are also plans for one rig to drill at
least two wells for British Gas in the Irish Sea, for about 6 wells to be
drilled west of the Shetlands, and for two further rigs to be employed to
drill up to six wells in the Celtic Sea. At 5 April the first of these was being
drilled for BP in block 93/2.
19 This present relatively low level of activity should not be taken to
mean, however, that these areas are unattractive. Licensees are using the
rigs which are available to explore fully those areas to the east of the
United Kingdom, which have already yielded such successful results,
before moving on to the relatively unexplored areas.
20 Although no discoveries have yet been made, experience in such areas
has been encouraging. There are indications that basins containing rock
types similar to those already found in the North Sea are likely to occur
generally in prospective areas elsewhere. The basins in such areas are
generally much smaller in area and sedimentary thickness than those in the
North Sea, but seismic surveys have shown that they contain structures in
which hydrocarbon deposits could occur. Whether they contain as much oil
and gas as the structures in the North Sea will only be known after further
drilling.
Land Operations
21 Exploration for oil and gas on land has been going on ih the United
Kingdom for at least 60 years. Recently it has been overshadowed by
offshore exploration, but there are now signs that over the next few years
there will be greater activity onshore.
10
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22 Appendix 8 shows that after a lull towards the end of the 1960s,
exploration activity on land has been increasing steadily as licensees have
started to fulifi their obligations under new production licences issued
from mid-1967. The East Yorkshire, Lincoinshire and East Midlands
areas are the areas of traditional interest. But more recently, interest has
extended also to the Hampshire/Dorset basin, which appears to be
particularly attractive with reservoir rocks possibly extending into the
English Channel; to the Cheshire basin which continues into the Irish Sea;
and to the Worcester basin.
23 Developments during 1973 were particularly promising. Two
discoveries of oil were announced, by Candecca at Axholme, near
Scunthorpe in Lincoinshire, and by British Gas, on behalf of itself and BP
at Wytch Farm in Dorset. BP also drilled four production wells onthe
Beckingham oil field in the East Midlands, the first important development
there since 1964.
24 The two new discoveries, coupled with the increases in crude oil prices
in 1973 should give a further stimulus to onshore activity in 1974. BP and
British Gas are planning further development drilling in the East Midlands
and at Wytch Farm respectively, and there should also be more
exploration drilling.
25 Although there are some geological connections between onshore and
offshore structures, it is misleading to make deductions about onshore
prospects from offshore experiences. Onshore structures in the United
Kingdom are generally far smaller than offshore structures and therefore
likely to contain much less oil or gas; but the relatively small scale of
production onshore is nevertheless worthwhile because it is much cheaper
to extract oil from the land than from the sea. In 1973 landward
production of oil was about 87,000 tons and made a useful, if small,
contribution to the nation's needs. The 1973 discoveries together with the
possibility of further successes in the next few years are therefore
important in their own right.
11
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II Estimates of Production
and Reserves
Oil: Production
26 Since the first finds of oil in the Norwegian and United Kingdom
sectors of the Continental Shelf in 1969 and 1970, there has been
a complete transformation in jhe prospects for oil production from the
United Kingdom Continental Shelf. Ten discoveries have now been
declared commercial, and many of the other promising finds already made
are also likely to be commercial.
27 Forecasting the level and time pattern of production remains, however,
very difficult, since it must take into account:
a) how much oil exists in the reservoirs already discovered;
b) what proportion of this oil it will be technically possible to recover (the
recovery factor);
c) how many further commercial discoveries will be made and what is
likely to be the extent of the recoverable reserves they contain;
d) how quickly the oil can be brought ashore, given the formidable
technical and financial problems.
28 No final estimates therefore can yet be given. The total reserves and
recovery factors of the discoveries already made cannot be finally known
until each discovery has been fully depleted, although reasonably realistic
estimates should be possible for most fields when they have been producing
for about two years. But meanwhile it should be remembered that the first
oil from the United Kingdom sector is not due to come ashore until later
this year. Estimates of the number and nature of future discoveries are
subject to a wide margin of error. As Section I shows, some promising
geological structures have been identified in the areas still to be explored,
but only drilling will tell whether they do in fact contain commercial oil
deposits; and the timing of any such finds will depend very much on the
scale of future exploration. The Government and industry are giving high
priority to all matters affecting the timing of production. There are,
however, many problems yet to be overcome; it takes time for instance to
provide the necessary infrastructure, particularly in the remoter areas.
Delays in building the production platforms for the first fields shortly to*
come on stream will probably delay the landing of oil in appreciable
12
PAGENO="0086"
57
quantities until 1976. Certainly production in 1975 will not be as high as
the level of 25 million tons forecast in the report published in May last
year. Although this slippage in the target for 1975 is disappointing, it is
unlikely to reduce the production levels expected towards the end of the
decade.
29 Any forecasts of future production made now must therefore be very
uncertain and the following diagram should be studied with this
uncertainty in mind. It has been prepared from information provided by
the oil companies for individual fields and shows the best estimates that
the Department can make now of possible total production for each year
between 1975 and 1990 from discoveries so far made. The lower portions
UNITED KINGDOM CONTINENTAL SHELF
FORECAST OIL PRODUCTION PROFILE i915~9O
COMMERCIAL DISCOVERIES AND OTHER SIGNIFICANT FINDS
130 UP TO 5th APRIL 1974
Estimated production from
~ the ten commercial fields
Estimated production from
other significant discoveries
C,,
=
C,,
=
0
I-
L)
=
C-
PAGENO="0087"
58
of each column in the diagram show the production expected from the ten
fields proved to be commercial at 5 April 1974 (Forties, Auk, Brent,
Argyll, Piper, Beryl, Dunlin, Thistle, Montrose and Ninian). (More
detailed infOrmation for each of these fields is given in Appendix 4.) The
upper portions of each column show the possible production from the
other significant discoveries which have been made. Since further appraisal
drilling is necessary to establish the size of these discoveries, these
estimates must be regarded as much less certain than those for the ten
commercial fields.
30 The diagram shows that on the evidence now available the significant
discoveries so far made should contain enough reserves to support a
* minimum annual production of about 100 million tons over the
period 1979 - 82. It is very difficult to forecast production exactly because
of the time needed to construct all the facilities necessary to bring fields up
to their peak production. The diagram also shows that production from
existing discoveries is expected to fall below this level after 1982 and
decline gradually thereafter as the peak production period of each field is
passed, and the reserves begin to decline.*
31 These estimates do not however allow for the possible increase in
reserves by uprating of existing discoveries, as they are further appraised,
or by new discoveries. It is reasonable to assume that there will be some
increase in reserves on these grounds, but obviously very difficult to say
exactly how big it will be. New discoveries are unlikely to make a large
contribution until the end of the decade or later, since it takes 3-5 years
to bring fields into production and a further 2-4 years forthem to reach
their peak. But production, allowing for uprating and new discoveries,
could reach 140 million tons in 1980 and could be sustained within a range
of 100- 150 million tons, or even more, during the l980s.
32 There is now the clear possibility that the United Kingdom will
produce as much oil as it uses by about 1980. Forecasts of United
Kingdom oil demand beyond that become increasingly uncertain and so
it is not possible to say with any reasonable certainty how long this
possibility of self-sufficiency might last.
Oil: Reserves
33 The new discoveries in the United Kingdom sector of the North Sea
during 1973, and the further appraisal of earlier discoveries have
significantly increased the nation's known offshore oil reserves; but as
*Jn most cases, the peak production level is maintained for 2 or 3 years, after which
annual production levels decline gradually until it is economically undesirable or tech-
nically impossible to extract more oil from the field.
14
PAGENO="0088"
59
many of the discoveries have not yet been fully appraised and because none
of them is yet producing, the reserve estimates given in the following
table are still very tentative. The table sets out the estimated reserves at
5 April 1974 of the ten fields declared commercial at that time and the
other significant discoveries so far made, in the following three categories:
i Proven - those which on the available evidence are virtually certain to be
technically and economically producible
ii Probable- those which are estimated to have a better than 50% ëhance
of being technically and economically producible
iii Possible - those which are estimated to have less than a 50% chance of
being producible.
34 The figures include the small amounts of liquid condensate at present
being produced with gas in the southern North Sea basin and those which
might be produced from the two gas condensate discoveries in the East of
Scotland area (see Section I).
Estimated United Kingdom North Sea Oil Reserves
Totals (in millions of tons)
Proven Probable Probable Possible Possible
Total Total
1 Ten fields declared
commercial 895 165 1060 100 1160
2 Other significant
discoveries not yet
appraised - 230 230 160 390
3 TOTAL from
existing finds 895 395 1290 260 1550
4 Future finds from
further work under
existing licences - 700 700 700 1400
5 TOTAL from all
finds under existing
licences 895 1095 1990 960 2950
The estimates made in the 1973 report for production in 1980 on
information then available are shown overleaf:
15
40-047 0 - 74 - 5
PAGENO="0089"
60
millions of tons
Production Reserves to be pro ved by
in 1980 l975tosustainforecast
production level
(i) the five fields then declared
commercial (Forties, Auk,
Argyll, Brent and Piper) 40-50 about 500
(ii) including other significant finds
then made (Montrose, Josephine,
Beryl, Cormorant, Thistle and
Maureen) 50-70 500-800
(iii) speculative estimate, allowing for
discoveries in 1973-75 at same rate
as in the recent past 70-120 800- 1300
35 The forecast range of 700- 1400 million tons for further reserves in
areas already licensed is based-on the success ratio sÔ far attained and on
the geology of the blocks which have not yet been tested. If the same
success ratio continued to apply to these blocks, further recoverable
reserves of 1400 million tons could be found. But since most of the more
promising areas have been explored first and no discoveries have yet been
made outside the North Sea, it is more reasonable to express the estimate
as a range of 700- 1400 million tons.
Gas -
36 Forecasts for gas are subject to broadly-the same qualifications and
assumptions as those for oil described in the first part of this section. -
Because gas has been produced in the southern basin of the North Sea for
several years, reasonably realistic estimates of the reserves remaining in
that area can now be given; but there is still great uncertainty about the
total reserves on the Continental Shelf as a whole. So much depends on the
extent to which further commercial discoveries may be made, from both
existing and future licences, and on the extent of reserves of gas
associated with oil discoveries.
37 The following table gives the best estimates that can be made now of
reserves.remaining at 31 December 1973 in discoveries so far made. No
estimates are given for reserves from future discoveries. As for oil, the
figures given have been placed in three categories, proven, probable, and
possible. Figures for discoveries in the southern basin are given separately
from those for the northern basin. The northern basin contains.
significant gas and gas/condensate discoveries, which, with the gas
associated with oil discoveries, means that this area will make a big
contribution to the nation's gas reserves. The table also shows details of
16
PAGENO="0090"
61
those reserves in the southern basin which have so far been regarded as too
small to justify commercial exploitation, but which may well prove to be
economic in due course.
Estimated United Kingdom North Sea Gas Reserves
(Remaining in known discoveries at 31 December 1973)
Totals in trillion (1012) cubic feet
Southern Basin Proven Probable Possible Total
Fields presently being produced 18.9* 1.0* 1.5 21.4
Other discoveries believed to be
commercial but not yet covered
by British Gas contract 3.0 0.2 0.2 3.4
Other discoveries which may
become commercial in due
course - 1.2 1.4 2.6
Total Southern Basin 21.9 2.4 3.1 27.4
Northern Basin
Significant gas discoveries
(including gas contained in
gas condensate finds) (a) 2.9 3.3 3.5 9.7
Gas associated with oil
discoveries 3.0 1.4 - 4.4
Total Northern Basin 5.9 4.7 3.5 14.1
Total UK North Sea 27.8 7.1 6.6 41.5
*Jndicates reserves covered by British Gas contract
(a) includes provisional allowance for Frigg gas field pending agreement on apportion-
ment of field between United Kingdom and Norwegian Continental Shelves.
38 These reserves are sufficient to support production of about 5,000
million cubic feet a day (mcfd) in the later years of the decade. The figures
do not, however, include the Norwegian part of the Frigg gas field, for
which British Gas have agreed a contract with the operators, subject to
approval by the Norwegian Parliament. With supplies from this source,
total supplies of gas to Britain could be increased to about 6,000 mcfd by
the late 1970s. Supplies of natural gas during 1973 averaged nearly
3000 mcfd.
39 These alternative production levels of 5000 mcfd from present
discoveries or 6000 mcfd with Norwegian Frigg added could be
17
PAGENO="0091"
62
sustained until the 1980s. With further commercial discoveries these
production levels couldbe sustained even longer, but otherwise a slow
decline in output must be expected. Big finds are unlikely in the
southern basin, which has now been extensively explored; the main hopes
for future discoveries therefore rest on the other areas of the Continental
Shelf. There is not yet enough information for a reliable assessment of the
prospects in these areas, but it is reasonable to assume that further
discoveries will be made over the next few years, and our hopes for more
finds in the northern basin are particularly high.
18
PAGENO="0092"
C,,
w
5
2
C,,
-J
2
2
DRILLING ACTIVITY
EAST OF SHETLANDS AREA 1964-73
63
Appendix 1
Mobile rig activity
~::~ Mobile rigs drilling with peak
number at any time inset
10
Total rig-time spent in each year
71 72
73
U,
CD
.~. Total mobile rig activity
5
/
64 65 66 67 68 69 70 71 72 73
Number of wells commenced and/Or drilled
20
Exploration
Appraisal
70 71 72 ,~73
19
PAGENO="0093"
DRILLING ACTIVITY
EAST OF SCOTLAND AREA 1964-73
Mobile rig activity
15
~:: Mobile rigs drilling with peak
number at any time inset
CD
64 65 66 [`1rriFH1I1iI~'~'~F1
Total rig-time spent in each. year.
i-i Total mobile rig activity
I It
64
Appendix 2
10
C,,
C,,
2
64 65 66 67 68 69 70 71 72 73
Number of wells commenced and/or drilled
Exploration
Appraisal
64 65 66 67 68 69 70 71 72 73
20
PAGENO="0094"
65
DRILLING ACTIVITY Appendix3
SOUTHERN BASIN OF THE NORTH SEA 1964-73
Mobile rig and fixed platform activity
Mobile rigs drilling
15 with peak number at
any time inset
ci, *:: :*:: Fixed platforms drilling
with peak number at
10 any timeinset
Total rig-time spent in each year
10 _______
* Total mobile rig activity
Total fixed platform activity
I I
64 65 66 67 68 69 70 71 72 73
Number of wells commenced and/or drilled
21
PAGENO="0095"
Appendix 4
Oil Discoveries
Proved Oil Fields
Extension into other UK Blocks
Field name Block Licewsees Company Block Licensees ~`ompany Date Operator's Operator's Operator's
number interest in number interest in declared estimated estimate of estimated
block (%) block (%) Commercial date of first year peak produc-
production of peak tion (million
start-up production tons/pe7 year)
Forties 21/10 BP Oil Development Ltd 100 22/6a Shell UK Ltd (Shell) 50 December 1975 1977 20
Esso Petroleum Co Ltd (Esso) 50 1971
Auk 30/16 Shell 50 - February 1975 1976 2
Esso 50 1972
Brent 211/29 Shell 50 3/4 Texaco North Sea UK Ltd 100 August 1972 1976 1980/1 22
Esso 50
Argyll 30/24 Hamilton Brothers Oil Co 48 - December 1974 Initial rate
(Great Britain) Ltd 1972 of 1.6
Hamilton Brothers Petroleum 12
Corporation
The Rio Tinto Zinc 25
Corporation Ltd
Blackfriars Oil Co Ltd 12.5
The Trans.European Co Ltd 2.5
Piper 15/17 Occidental Petroleum 36.5 - March 1973 1975 1976 10.6
(UK) Ltd
Getty Oil International 23.5
(England) Ltd
Allied Chemical (Great 20
Britain) Ltd
Thomson Scottish Petroleum 20
Ltd
Bçryl 9/13 Mobil Producing North 50 - July 1973 1975 1978 6
Sea Ltd
Amerada Exploration 20
Ltd (Amerada)
* Texas Eastern (UK) Ltd 20
(Texas Eastern)
* British Gas Corporation 10
* (BGC)
PAGENO="0096"
DL4nhin 211/23 Shell
Esso
30.77 November 1976 1979 2.3
30.77 1973
23.08
15.38
50 211/24 Conoco Ltd (Conoco) 334 July 1973 1977
50 Gulf Oil (Great Britain) 334
Ltd (Gulf)
National Coal Board
(Exploration) Ltd (NCB) 334
1980/1 6
Thistle 211/18 Signal Oil and Gas Co Ltd 24 211/19 Conoco 334 August 1973 1976/7 1978/9 10
Champlin Petroleum Co 22.5 Gulf 334
Ltd NCB 334
United Can~o Oil and Gas 20
(UK) Ltd
Sante Fe (UK) Ltd 22.5
Tricentrol North Sea Ltd 10
Chárterhouse Securities Ltd 1
Ninian 3/3
Montrose 22/18 BGC 30.77 22/17 BGC
Amoco UK Petroleum 30.77 Amoco
Ltd (Amoco) Amerada
Amerada 23.08 Texas Eastern
Texas Eastern 15.38
Burmah Oil (North Sea) Ltd 30
Imperial Chemical 26
Industries Ltd
Murphy Petroleum Ltd 10
Ocean Exploration Co Ltd 10
Chevron Petroleum Ltd 24
3/8 BP Petroleum Development 50 April 1974 1977/8 1981
Ltd
Ranger Oil (UK) Ltd 20
Scottish Canadian Oil and
Transportation Co Ltd 7
London and Scottish
Marine Oil Co Ltd 154
Cawoods Holdings Ltd 34
National Carbonising Co Ltd 34
20
PAGENO="0097"
Appendix 5
Gas Discoveries
Proved gas fields
Extension i/ito other UK Blocks
Field name Block Licensees Company Block Licensees Company Date Date of
number interest in number interest in dtscovered production
block(%) block (%) start-up
West Sole 48/6 BP Petroleum Development Ltd 100 - - October 1965 March 1967
Leman Bank 49/26 Shell UK Ltd (Shell) 50 49/27 llritish Gas Corporation (BGC) 30.77 April 1966 August 1969
Esso Petroleum Co Ltd (Esso 50 Amoco UK Petroleum Ltd (Amoco)30.77
Amerada Exploration Ltd
(Amerada) 23.08
Texas Eastern (UK) Ltd
(Texas Eastern) 15.38
49/28 Arpet Petroleum Ltd (Arpet) 33k
British Sun Oil Ltd 23k
North Sea Exploitation and
Research Co Ltd 10
Superior Oil (UK) Ltd 20
Canadian Superior Oil (UK) Ltd 3~
Sinclair (UK) Oil Co Ltd 10
53/2 Mobil Producing North Sea Ltd 100
Indefatigable 49/18 BGC 30.77 49/23 BGC 30.77 June 1966 October 1971
Amoco 30.77 Amoco 30.77
Amerada 23.08 Amerada 23.08
Texas Eastern 15.38 Texas Eastern 15.38
49/19 Shell so
Esso 50
49/24 Shell so
Esso 50
Hewett 48/29 Arpet 33k 48/30 Phillips Petroleum Exploration
British Sun Oil Ltd 23k UK Ltd 35 October 1966 July 1969
North Sea Exploitation and Fina Exploration Ltd 30
Research Co Ltd 10 AGIP (UK) Ltd 15
Superior Oil (UK) Ltd 20 Century Power and Light Ltd 7.22
Canadian Superior Oil (UK) Ltd 3~ Plascons (1909) Ltd 4.26
Sinclair (UK) Oil Co Ltd 10 Halkyn District United Mines Ltd 4.26
Oil Exploration Ltd 4.26
52/5a Phillips group as above
PAGENO="0098"
Viking 49/17 Conoco Ltd (Conoco)
National Coal Board
(Exploration) Ltd (NCB)
Rough 47/8* BGC
Amoco
Amerada
Texas Eastern
Frigg (UK) 10/1 Total Oil Marine Ltd
Aquitaine Oil (UK) Ltd
Elf Oil Exploration and
Production (UK) Ltd 44~
~Discovered by Gulf Oil (Great Britain) Ltd but licence now assigned to Gas Council/Amoco group
50 49/12a Conoco
NCB
50
69.23 47/3a BGC
13.68 Amoco
10.25 Amerada
6.84 Texas Eastern
33~ - -
22~
50 May 1968 July 1972
50
30.77 May 1968 1975
30.77 (planned)
23.08
15.38
- May 1972 early 1976
(planned)
PAGENO="0099"
70
Appendix 6
Oil discoveries
Other sign ~ficant finds
Field Name Block Number Discovered by Date discovered
Josephine 30/13 Phillips group September 1970
Cormorant 211/26 Shell/Esso group September 1972
Maureen 16/29 Phillips group February 1973
- 3/15 Total group July 1973
Hutton 211/28 Conoco/Gulf/NCB group September 1973
Aiwyn 3/14a Total group November 1973
- 2/5 Unoc,al group November 1973
Appendix 7
Other significant gas and gas condensate discoveries
Field Name Block Number Discovered by Date discovered
Ann 49/6a Phillips group May 1966
Dotty* 48/30 Phillips group May 1967
- 53/4a Signal group July 1967
- 48/21a Placid Oil (GB) Ltd August 1967
Deborah* 48/30 Phiffips group August 1968
- 49/28 Arpet group March 1969
Sean 49/25a Allied Chemical group April 1969
- 49/28 Arpet group May 1969
- 41/24A Total group June 1969
- 43/20a Hamilton group June 1969
- 43/8a Whitehall/Hamilton group January 1970
- 47/13a Tricentrol/Conoco/NCB April 1970
group
Broken Bank 49/21 Signal/Conoco group July 1970
Area
Broken Bank 49/16 Conoco/NCB January 1971
Area
- 30/2 Burmah/Hamilton group June 1971
(gas condensate)
- 48/18b Ranger/Sea Search group April 1972
Lomond 23/21 Gas Council/Amoco May 1972
(gas condensate) group
- 49/22 Mobil/Conocó/NCB May 1972
group
Amethyst 47/14a Burmah group October 1972
- 3/19 Total group July 1973
*Gas supplies from these discoveries are included in the contract for the sale of gas from
the Hewett field..
Printed in England for Her Majesty's Stationery Office by
H. 0. Lloyd Co. Ltd., 7/9 Effiotts Place, Islington Green, London Ni 8HX.
Dd 505031 K38 5/74.
26
PAGENO="0100"
71
3
C,,
>-
DRILUNG ACTIVITY
UNITED KINGDOM LANDWARD AREAS 1964- 73
Peak number of rigs at any time
nHHRHfl
68 69 70
Exploration
*
F:: ~j Appraisal I Development
* includes one well drilled offshore,
within a Mining licence Area
66 ~8'fl9~~l ~
Appendix B
5
C,,
=
Total rig-time spent in each year
I I I I
64 65 66 67 68 69 70 71 72 73
20
Number of wells commenced and/or drilled
C,,
~ 1~
D
=
2
27
PAGENO="0101"
PAGENO="0102"
73
APPENDIX C
PAGENO="0103"
NESDA
North East
Scotland
Freightliner Terminal
University
Colleges
Cargo Port
Airport
Railway
Major Road
Other link roads
County boundary
Area boundary
Distances between main towns
EL. ~j RA. ~ FR.
PAGENO="0104"
ESDA
THE INDUSTRIAL INFORMATION CENTRE
FOR NORTH EAST SCOTLAND
NESDA is the local government organisation set up to advise companies
in the Region and assist in their development For information on the
development potential in North East Scotland and Free advice on Sites,
Buildings, Grants, Loans and Business Opportunities contact:-
NESDA (North East of Scotland Development Authority)
at 15 Union Terrace, ABERDEEN AB1 1NJ Tel,: 55971/2
or 23A High Street, Elgin, MORAY, Tel.: 3461
ABERDEEN CITYAND THE COUNTIES OF ABERDEEN, BANFF, KINCARDINE, MORAY AND NAIRN.
40-047 0 - 74 - 6
PAGENO="0105"
76
City' of Aberdeen & Harbour
PAGENO="0106"
77
North East
Scotland
NESDA
Development
Authority
NESDA
15 Union Terrace
Aberdeen AB1 1NJ
Scotland
Telephone Aberdeen 55971
The North East Scotland region comprises
the City of Aberdeen and the Counties of
Aberdeen, Banff, Kincardine, Moray and Nairn.
North East Scotland and the Offshore Oil Industry
Drilling ship Glomar VenteringAberdeen Harbour
1974 No. 1
PAGENO="0107"
78
Contents
Introduction
A The Industry's growth
1 Exploration
2 Growth of onshore supply services
3 Equipment manufacturing
4 Oilfield development
5 Oil and North East Scotland
6 Education and Training
B The Future Prospects
1 Estimates of oil reserves
2 Production requirements
3 Industrial growth and marketing opportunities
4 Employment prospects
5 The future for North East Scotland
List of firms in North East Scotland involved in offshore oil industry
(A) as a principal activity
(B) as a partial activity
Introduction
NESDA - the North East Scotland Development Authority
was set up in May 1970 by the local planning authorities of
the City of Aberdeen and the Counties of Aberdeen, Banif,
Kincardine, Moray and Nairn, to promote economic develop-
ment throughout this Region, which covers an area of 3,600
square miles and contains a population of 450,000.
The Region's major industries are rooted in its high quality
resources. North East Scotland is one of Britain's leading
fishing Regions and of major importance to agriculture, being
the home of Aberdeen-Angus beef. Food processing is there-
fore a major growth industry.
But the Region is also the cradle of the whisky indUstry.
Speyside's Golden Rectangle contains the world's greatest
concentration of distilleries and produces many of the finest
single malt whiskies.
The Region is also strong in marine and general engineering
and has an important part in the British paper and textile
industries.
Aberdeen City is the Regional capital, a major university city,
the main administrative and service centre for the North of
Scotland and the hub of road, rail, sea and air
communications.
With its magnificent scenery and fine towns, North East
Scotland is also an important centre for tourism. There are
many buildings in the Region dating back to the Fifteenth
Century and beyond and the numerous inhabited castles,
including Balmoral, the Royal family's summer home, are a
major attraction.
With beautiful coastal, rural and mountain scenery, North
East Scotland offers a wide range of first class sporting and
recreational facilities.
The North Sea oil industry has now provided the Region with
new growth impetus and NESDA has been closely involved in
its development, by providing up to date information,
organising or participating in exhibitions and conferences to
promote the Region's growing economy, producing up-to-date
lists of the companies involved in the industry in North East
Scotland and a directory of the Region's manufacturers,
advising incoming firms on the availability of sites, housing
and the whole range of Government grants and financial
incentives. NESDA is also active in helping local and incoming
companies to make contact and expand their business to
mutual benefit.
NESDA's service is free and confidential.
PAGENO="0108"
79
A
The Industry's growth
1. Exploration
The past two years have witnessed the rapid build up of the
offshore oil industry in Britain, with Aberdeen emerging as
the major supply, service and administration centre for
North Sea oil exploration.
The total number of significant oil strikes in Scottish waters
has now reached fourteen. Ten of these have an estimated
peak production capability of 100,000 barrels per day.
A major gas find . the Frigg Field . has also been made. This
is believed to be the largest offshore gas field in the North
Sea and is expected to produce about 40% of the UK's total
natural gas.
Details of the discoveries are as follows:.
Field Company Discovery Location
Montrose Amoco/Gas Dec 1969 22/18
Council
Josephine Phillips Sept 1970 30/13
Forties BP Nov 1970 121/10
122/6
Auk Shell/Esso Feb 1971 30/16
Brent Shell/Esso July 1971 211/29
Argyll Hamilton Aug 1971 30/24
Beryl Mobil Sept 1972 9/13
Cormorant Shell/Esso Sept 1972 211/26
Thistle Signal Sept 1972 211/18
Piper Occidental Jan 1973 15/17
Maureen Phillips Feb 1973 16/29
Dunlin Shell/Esso July 1973 211/23
Alwyn Total Aug 1973 3/5
Hutton Conoco Sept 1973 211/27
Ninian BP/Ranger Jan 1974 3/8
Un-named Burmah Jan 1974 3/3
* barrels per day
a. probably commercial
b. Expectations of a major find. Speculation that these two
finds are related and may have combined production
potential as high as 1000,000 barrels per day.
The total estimated peak production of these fields excluding
the two most recent finds is around 2,500,000 barrels per
day. This is in excess of present UK consumption . and at
current prices represents a figure at peak output of £4,000-
£4,500m per annum to the UK economy.
If hopes for the last two finds prove well-founded this
would bring the total potential output to 3,500,000 barrels
per day 1175 million tons per annumi. This would be worth
a gross landed total at present prices of around £6,000
million per annum.
2. Growth of onshore supply services
Most of the rigs that operate in Scottish waters are being
serviced and supplied from Aberdeen which is becoming
internationally recognised as Europe's Offshore Capital.
In Aberdeen and District, there are now over 200 com-
panies directly involved in the offshore oil industry in the
following categories:
Oil exploration companies 17
Oil rig operators (excl. Shell & BP) 9
Shipping/Marine companies 13
Diving/diving services 11
Specialist service and supply companies 102
General service and supply companies 50
202
These companies employ directly about 4,000 people in
North East Scotland . at present mostly in the Aberdeen
area, although recruitment in the Peterhead area is
beginning to increase.
As a further indication of the breadth of the oil industry's
requirements, there are now well over 300 companies based in
North East Scotland supplying the industry (over and above
the 200 plus directly involved). They fall into atmost every -
industrial and commercial category and, in themselves, they
bear witness to the wide range of opportunities the oil industry
provides to small and medium~sized as well as larger companies..
It is very difficult to measure the number of jobs that has
been created as a spin-off from the growing offshore oil
industry. It is certainly considerable and accounts very largely
for the low unemployment rate in the extensive area covered
by Aberdeen Employment Exchange.
In addition, developments to date have already led to an
inward movement of population to the Aberdeen area, taking
in a commuting radius of over 30 miles. NESDA has had
contact with many people moving into the area seeking
accommodation and general information on living in North
East Scotland.
During the past two years Aberdeen Airport has had a con-
siderable increase in activity with passenger traffic increasing
at an annual rate of over 35 per cent. Well over a quarter of a
million passangers have used the airport during 1973.
Additional flights and new services are being introduced and
there are 18 operators using the airport with more planning to
move in.
A new arrivals lounge is currently under construction and the
British Airports Authority has stated its intention of taking
the airport over. Among other developments they propose a
major new terminal building to handle the continued
expansion anticipated.
Aberdeen Airport is also the base for helicopters ferrying
personnel to and from the oil rigs. The two operators,
Bristows and British Airways together have 20 helicopters,
making Aberdeen the biggest helicopter base in Britain. Both
companies have investment plans totalling almost £20 million
to expand their services in Scotland.
Industrial land and buildings
The offshore oil companies have moved into a variety of
premises and a considerable amount of investment is being
carried out in new offices, warehouses and factories. The total
Est Prod
Potential
b.p.d. *
100,000
50,000
400,000
50,000
450,000
50,000
150,000
150,000
200,000
250,000
100,000
250,000
200,000
PAGENO="0109"
amount runs into many millions of pounds. In addition, new
hotels are being built in and around Aberdeen to cater for the
increasing number of business visitors being attracted to the
area.
Local authorities have allocated over 150 acres in the past 18
months and industrial land has been rapidly taken up.
A 33 acre extension to Aberdeen Corporation's East Tullos
Estate attracted applications from 35 companies requiring a
total of 175 acres.
In response to this demand, the City of Aberdeen is planning
for major industrial developments on a 180 acre estate at
Altens on the south side of the city.
Aberdeen County Council's 28 acre Farburn Industrial Estate
was taken up at one meeting of the Planning Committee. The
88 acre Bridge of Don Estate is almost completely allocated
and has been extended.
Another 28 acre estate at Dyce, by the helicopter base is being
developed.
The County Council now have firm proposals for major
industrial developments on a total of 400 acres in the
immediate vicinity of Aberdeen Airport at Dyce.
Land is available further out of Aberdeen at Inverurie and a
substantial amount of land is being made available at
Peterhead.
In Kincardineshire, south of Aberdeen, land is available at
Stonehaven and Porclethen.
Private interests are also developing industrial land in the
Aberdeen and Peterhead areas and elsewhere in North East
Scotland.
Aberdeen Harbour
Developments proposed or in progress at Aberdeen Harbour
represent a capital investment well in excess of £10 million.
Major redevelopment is being carried out, both by the
Harbour Board and by private interests. The main scheme
is the conversion of Victoria Dock and Upper Dock to
tidal working due for completion in May 1974.
Four integrated oilfield supply bases are completed or under
construction by Shell, Amoco, Texaco and the Aberdeen~
based Wood Group. Agreement has been reached for similar
bases to be built by Total and by Seaforth Maritime.
Plans have been approved for the reconstruction of the fish
market and associated wharves at a cost of £1.7 million.
This is due for completion in 1976.
In the same year, a new roll on/roll off ferry terminal is
scheduled to start operation. This will be used by the Orkney
and Shetland boats but will also be available for other users
e.g. to Scandinavian or North European ports.
Aberdeen ship builders Hall Russell are constructing a new
graving dock for the repair and maintenance of supply boats.
This is due for completion in May and will accommodate
vessels of up to 370 feet in length and 60 feet beam.
80
A new plant for the manufacture of drilling and associated
chemicals is to be constructed on Blaikie's Quay by Oil
Base Limited.
Aberdeen Harbour Board are continually reviewing the needs
of the oil industry and other port users and are able to
consider further projects for the development of port
facilities by oil-related and other interests.
Peterhead
At Peterhead, 32 miles north of Aberdeen, major developments
are in hand for the Harbour of Refuge, a square mile of
relatively sheltered deep water enclosed by two massive
granite and concrete breakwaters.
North Side
Arunta (Scotland) have established an oil rig supply base on
the southern side of Keith Inch on the north side of the
Harbour of Refuge. The development includes warehousing, -
workshops, offices, helicopter pad, a new pier and berthing
facilities. Eventually the company hope to be able to supply
five rigs and plans include the construction of a graving dock
for supply boats.
The first phase is complete and is the base for the Forties
Field pipelaying operations.
A specially designed workshop for manufacturing wellhead
completion systems is nearing completion.
South Side
On the south side of the Harbour of Refuge a comprehensive
service base is under construction for the Government
(through the Department of Agriculture and Fisheries for
Scotland) at an estimated cost of £2,500,000. The base
facilities will be operated by Aberdeen Service Company
(North Sea) Ltd.
The development will include a finger jetty lying parallel to
the south breakwater and able to take tankers of up to
40,000 tons (which will be needed to supply the 1320
megawatt oil/gas field power station being built by the North
of Scotland Hydro Electric Board at Boddam to the south).
There will be quay space for service vessels with warehousing
back-up and a fabrication yard.
The two developments combined will enable Peterhead to
supply about 12 rigs and take semi-submersible rigs alongside
for commissioning or repair.
Extensive areas of land near these projects are being
scheduled for industrial and commercial development.
3. Equipment manufacturing
A particularly significant development is the decision by two
major manufacturers of oilfield equipment to set up factories
near Aberdeen.
The first to announce this were Vetco Offshore. Production
has already started at their factory on a nine acre site at
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The Baker Division of Baker Oil Tools have built an oilfield
equipment factory in Aberdeen. It has been erected for them
by the Lyon Group (Scotland) on a five acre site on the
Bridge of Don Estate and is likely also to employ about 200.
It is also significant that the new oil equipment factories will
be supplying a wider market than the North Sea. Baker Oil
Tools have specifically stated that they will supply the
Common Market, Eastern Europe and the Middle East as well
as the North Sea from their Bridge of Don factory.
Other oil tool manufacturers are interested in building
factories in North East Scotland and several already established
as service depots expect to start manufacturing in the fairly
near future.
4. Oilfield Development
Of all the oil companies. British Petroleum are the most
advanced with their programme for bringing oil ashore. Their
Forties Field, which is one of the largest oilfields so far proved
in the North Sea, should be producing oil by 1975.
So far, the Company have ordered four production platforms
two of which are being built by Brown and Root Wimpey,
Highland Fabricators at Nigg Bay. Easter Ross. The other two
are being built on Teesside by the Franco-British Consortium
Laing Construction/ETPM. The biggest of the four, being built
at Nigg Bay, will be the largest offshore platform ever built,
costing £40 million and weighing 57,000 tons when fully fitted
oat. It will be pile-driven into the sea bed in almost 400 feet of
water. The full height of the structure when complete is about
700 feet.
The oil will then be brought ashore by a submarine pipeline
115 miles long to a terminal on a 27 acre site at Cruden Bay.
Aberdeenshire. From there it will go underground 140 miles
to BP's refinery at Grangemouth, which it is planned to
increase in capacity. The surplus will be exported by a new
terminal in the Firth of Forth.
The total investment will be over £400 million. Exploration
and development of the company's North Sea blocks will be
controlled from the new administrative headquarters on
Aberdeen County Council's Farburn Industrial Estate, Dyce.
The Shell/Esso consortium have several major strikes in the
North Sea and are still working on their detailed plans for
bringing the oil ashore. However, platforms have been ordered
for the Auk and Brent fields from Redpath Dorman Long,
Methil, Fife.
The operations are headquartered in a new £900,000 office
block at TuIIos, Aberdeen.
Occidental Petroleum head the consortium which discovered
the major Piper field. Their plans include platforms and a
pipeline to the island of Flotta in the Orkney Islands. They
are proposing to operate from Peterhead.
Total Oil Marine and the Gas Council are currently considering
ways of bringing gas ashore from the Frigg Field. Outline
planning permission has already been given for a major
terminal at St Fergus, north of Peterhead, and it seems certain
that a pipeline will bring gas here from the Frigg Field and
thence underground to Armadale, West Lothian to
connect with the national grid.
Natural gas conversion in the North of Scotland will be
brought forward and the northern North Sea could provide
over 40 per cent of the UK's total natural gas requirements.
Total have applied for planning permission for their head-
quarters to be built at Altens, Aberdeen.
Several other operators, particularly Amoco and Mobil,
are known to be assessing production plans for their finds.
Amoco will be building their North Sea operations head-
quarters at Tullos, Aberdeen,
5. Oil and North East Scotland
It is clear that Aberdeen has emerged as the principal
administrative, service and supply centre of the North Sea oil
industry and Peterhead is now developing to provide major
complementary facilities.
The Cromarty and Inner Moray Firths are developing as the
major centres for fabrication and other heavy industrial
projects associated with the offshore oil industry.
The Industry has already had a broad impact both
geographically and in terms of business development.
The North East of Scotland has seen an influx of sales and
technical representatives from a variety of companies watching
the growth potential of North East Scotland.
Similarly there are a growing number of investment proposals
from firms who see North East Scotland as an area on the
brink of major growth and therefore offering an expanding
market for a wide range of goods and services. In total, these
run into tens of millions of pounds.
Although the most spectacular growth has been in Aberdeen,
Peterhead and the Cromarty/Moray Firths, a wide range of
firms throughout North East Scotland have already secured
business as a direct result of oil related developments. NESDA
has had contact with firms operating from townsthroughout
the Region from Forres to Stonehaven who have already won
business from the oil industry and its ancillaries.
As the Industry grows it is certain that opportunities for firms
throughout the Region will increase. It is also likely that new
firms will be attracted to various parts of the Region to supply
new markets. Already companies are looking seriously at
towns on the main rail and road connections between
Aberdeen and Inverness, as well as the communities close to
Aberdeen and Peterhead.
81
Aberdeen County Council's Bridge of Don industrial estate. The Hamilton group are currently working on plans for
Eventually, the company expect to employ 200 most of whom developing the Argyll field and a platform is being built by
will be skilled men. Ray McDermott at Ardersier, Inverness-shire.
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82
Small advance factories are being built at Forres, Morayshire; 6. Education and Training
Elgin, Morayshire; Aberlour, Banffshire. Others are proposed South East Drilling Services (SEDCO) have set up a school in
for Banff and Ellon and Huntly, Aberdeenshire, and Banchory, Aberdeen to train workers for the fleet of new rigs due over
Kincardineshire. Industrial land is also being made available at the next two years. Several other oil industry training centres
these and other towns. are proposed.
An important footnote must be added that North East Aberdeen University has established an M.Sc. course in
Scotland's indigenous resource-based industries arv currently Petroleum Geology and is setting up a third chair of geology
expanding in their own right with considerable investment in with specific responsibility for petroleum geology.
distilleries, food and fish processing plants and cold storage. Robert Gordon's Instute of Technology is running four
There have also been important developments in the
courses ranging from a one year full-time course in Offshore
engineering industries and in other diverse fields. Engineering to a one week course for Safety and Survival.
NESDA has been continuously promoting the development of Offshore companies operating out of Aberdeen have formed
the oil business. Towards the end of 1972, NESDA was the Scottish Offshore Training Association to serve the specific
sponsor and joint orguniser of the first British trade mission training needs of all companies engaged in exploration, drilling
specifically aimed at the offshore industry. The 10 day mission and service operations in the Region.
was based in Houston, Texas, and was the largest trade mission
ever to leave the UK with 72 members representing over 50
organisations. The members came from all over the UK but
there was particularly strong representation from North East
Scotland. Business gained is already several million pounds and
contacts made could lead to considerably more.
NESDA also sponsored the Offshore Scotland Exhibition in Other Aspects
Aberdeen in March 1973 and partiopated in the British stand A Petroleum Club for oil executives has been net up and has
of the Offshore Technology Conference in Houston in April! premises at Kippie Lodge, North Deeside Road, Miltimber,
May 1973. NESDA also exhibited at the Interocean Exhibition Aberdeen, Telephone 73 2677.
at Dusseldorf in November, 1973 and is co-promoter with
Offshore Services Magazine of Offshore Europe Exposition to Chairman - Mr. RWMcCleskey, 2 Balnagask Road,
be held in Aberdeen in 1975. Aberdeen.
Throughout 1973 NESDA has continued to work hard to help Vice Chairman - Mr. Frank James, SEDCO, Craigshaw
Road, West Tullos, Aberdeen.
increase British participation in the North Sea oil industry and
many companies and organisations continue to follow A very active and well supported Petroleum Wives' Club has
NESDA's lead. also been formed.
10
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83
B
The Future Prospects
1. Estimates of oil reserves 3. Industrial growth and Marketing Opportunities
Dr Jack Birks, a director of B P Trading, speaking at a It has been estimated that the oil industry will invest £1,500
Financial Times conference in September, 1972, suggested million in the North Sea over the next ten years, and spend a
that oil reserves in the British sector of the North Sea could, further £1,000 million on operating costs.
if present success rates were maintained, reach more than A more recent estimate, again by Dr. Jack Birks, points to a
20,000 million barrels by the early 1980's allowing for much higher figsre. Development of BP's Forties Field is now
production at over three million barrels a day. expected to cost over £500 million compared with the
Other forecasts suggest that an even higher figure may estimate of £460 million less than a year ago. On this basis
eventually be achieved. For example it is agreed that the Dr. Birks estimates that North Sea oil development projects
Ekofisk group of ollfields in Norwegian waters with outlying already announced might cost a total of £2,400 million. He
fields in UK waters, may be one of several in the North Sea further estimates that allowing for inflation, development of
with a production capability of over one million barrels a day. other discoveries in the period 1975-79 could amount to
£1,300 million, while the investment in producing from
It has also been pointed out that the finds so far made are
expected new discoveries could total between £4,000 million
from different geological periods and there may therefore be and £7,000 million between 1976-79.
more fields at greater depths.
This is a total investment of over £10,000 million.
A production capability of two and a half million barrels
of oil a day from UK waters seems certain. A higher figure These staggering figures are borne out by another estimate of
of between three of four million barrels a day looks likely, the world wide needs of the energy industry which suggests
Ultimately, an even higher figure may be achieved, partic- that it will require more investment during the next decade
ularly as exploration spreads northwards and westwards. than all other industries combined.
(Note. A production of one million barrels a day is the Recent events have further highlighted the importance of
equivalent of an annual output of 50 million tons, which is energy and, even if growth in demand is moderated, the
half the UK's current annual consumption. Consumption will need to invest heavily in energy industries world wide is
rise considerably over the next 10 - 15 years, but it is still now fully recogpised.
probably true that the UK will be producing from the North No industrial company can afford to ignore the market
Sea the equivalent of its annual consumption. It is very implications of this situation and in a more limited
likely that the UK may be net exporters of oil, context the importance of the North Sea indicates great
This is not to say the UK will be self sufficient. North Sea oil scope for British industry. Specialist or large companies
is very high quality and it is likely to be mixed with lower may be able to compete successfully by themselves, but
grade crudes for refining. Consequently Britain's demand for others will need to form consortia or joint ventures with
North Sea oil perse is likely to be far less than the total other British companies or with American, Japanese or
production and much will therefore be re-exported and low Continental companies with a complementary input.
grade crudes will be imported. The net effect will be very It is already clear that the development of the North Sea
beneficial on the UK Balance of Payments.) " oilfields is going to require vast quantities of equipment and
2. Production requirements supplies and, because of the conditions, a demand for new
and improved technology.
Exploration, and the development and production of oil
fields is likely to be spread over many years and be At present, about 18 per cent of the world's oil comes from
paralleled by changing technology. In the more immediate offshore sources. By the end of the century it is estimated that
future, platforms of varying design and materials will be this proportion will have risen to 40 per cent of a much larger
required. Although the first platforms ordered for the North total demand. It is certain too, that this oil will be sought
Sea were of steel, concrete platforms are gaining in popularity under increasingly difficult conditions, requiring major
amongst the industry. In the more distant future more developments in technique and technology. The North Sea is
sophisticated underwater production systems may be a major step for the offshore oil industry and pioneer
developed, companies in the North Sea could become world leaders in
the offshore field.
Firm estimates point to twenty platforms being required for
the Ekofisk group of oilfields including Josephine and The onshore investment and development is certain to affect
Hamilton Brothers' us-named find in Block 30/24. the whole of the North Sea Basin and beyond, but it already
seems certain that the greatest concentration of the industry
On the basis of estimates discussed above, it seems likely that will be in the North of Scotland. with heavy industry
at least forty platforms will be required for the British sector concentrated in the Cromarty/Moray Firths and the adminis-
of the North Sea, and an eventual figure of over 100 is likely tratior~supply and service and light/medium manufacturing
to be reached. This would probably indicate the need for four operations centre.in the Aberdeen area with major support
or five submarine pipelines and onshore terminals, tank farms bases in Peterhead, Montrose, Dundee, Orkney and Shetland.
and possibly gas liquefaction plants, and eventually increased
ref ining capacity. The first two oil equipment manufacturing plants are already
11
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84
established near Aberdeen. North East Scotland could become
the major workshop of the European offshore industry
supplying equipment to North Sea operators and also the
Common Market countries, Eastern Europe, the Middle East
and other world markets. As over 70% of the earth's surface is
under the ocean, the importance of offshore tethnology in
exploring and producing resources in the future is clearly
likely to increase.
Over and above this direst impact, North East Scotland is
certain to experience general economic growth which can
benefit the whole region.
4. Employment Prospects
It is extremely difficult to forecast with any degree of
accuracy the likely build up of employment in the offshore
industry.
Two years ago, NESDA estimated that the oil industry would
be directly employing 5,000 people by the end of 1975. It was
stated at the time that these were conservative estimates, but
a recent survey of 157 companies carried out by the Depart.
ment of Employment shows that the industry already employs
4,000 people in the North East of Scotland - mostly in the
Aberdeen area, although not all are resident in the area.
The companies estimate that this figure will have risen to
about 7,500 people by the end of 1974. This may be optimistic,
as a number of firms are looking for the some contracts. How-.
ever, allowing for a slightly longer time scale, and the influx
and expansion of other specialist firms, this figure could well
be reached during 1975/76.
Any estimate of the affect of this can only be a guess. It seems
likely, however, that for every 10 jobs treated in oil drilling
activity and direct support work (i.e. those employed by
companies on NESDA's A list), there will be between 5 and 10
new jabs created in all kinds of indirectly related work. These
include, construction, hotel and catering trades, transport,
financial, legal and professional services, retailing, local govern-
ment and administrative services etc.
This means, as the numbers employed in all activities directly
related to the oil industry rise to 7,500, then emp)pyment in
indirectly related areas will increase to between 3,750 and 7,500.
Forecasting beyond this period to, say 1985, is much more
difficult as so many variables have to be considered. Some
of the factors to be taken into account are listed below.
11) The number, size and extent of olifields discovered in
the North Sea.
(31 The time scale for exploration and development of
offshore ollfields.
(4) The world wide industry's view of the North Seam
relation to other prospective areas.
(5) The attitudes of British industry towards the new
industrial opportunities and the extent to which they
are prepared to invest.
(6) The continued ability of North East Scotland to
attract oil equipment manufacturers to the area.
(7) The extent to which local and central authorities in
North East Scotland are able to provide the land,
housing, water, power and general infrastructure to
support growing industry.
(8) The extent to which the growth of oil-related
activity in North East Scotland stimulates economic
growth.
In general, exploration activity is expected to intensify in
the next few years, particularly if present success rates
continue. As the level of exploration reaches its peak,
development and production of the fields will take over the
growth impetus. Exploration is expected to continue for
much longer than the ten years many people suggest, as
companies seek extensions to existing fields and improved
geophysical techniques and drilling experience add to the
knowledge of the geology of the North Sea basin. Also,
more areas will be opened for exploration in the North Sea
and northwards and westwards.
Development of and production from the oilfields is likely
to be spread over at least thirty years, and the industry may
well be a major part of the North of Scotland economy for
the next half century or more.
On the basis of this information, and estimates within the
industry, there will probably be about 100 rigs and plat.
forms operating in the North Sea in 12-15 years' time. The
equivalent of about 65 per cent of these may well be serviced
from North East Scotland. The logistics will be more complex
as some of the northernmost rigs will be obtaining some supplies
from the islands and some from the mainland,
It is estimated that each rig or platform needs a direct
support labour force onshore and offshore of 300. Rig
servicing, maintenance and repair and the manufacture of
offshore equipment in North East Scotland could produce
an even higher employee ratio. Conversely, of course, a
greater degree of automation and supply of equipment
from other bases could reduce this.
Assuming 65 rigs and platforms creating jobs directly for
300 people each, (and current figuret and forward
estimates support this), the numbers employed by the oil
industry in North East Scotland could have reached about
20,000 by 1985.
(2) The methods used for bringing the oil ashore.
12
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85
The improved facilities at Aberdeen Harbour and the major European fishing centre which has resulted in the availability
developments taking place at Peterhead could cope with the of many marine services and considerable expertise throughout
support for much of this. Further investment will probably the Region.
be needed as the build up approaches this figure. Building on this nucleus, the oil industry will certainly boost
A rapid build up such as this, coupled with the major Aberdeen as a centre for administration, service and light
developments to the west of the Region in the Cromarty industry. This growth will, in turn, stimulate an expansion
and Moray Firths, is likely to stimulate a considerable spin and enhancement of services already provided. Already several
off in other areas such as construction, distribution, new hotels are to be built and the City's central area is
services etc. This could bring the total number of new jobs expanding as a major shopping centre. This process will
created directly and indirectly by the impetus of the offshore continue and is likely to lead to the provision of more
oil industry to between 30,000 and 40,000. commercial facilities, an even wider selection of cultural and
It will always be possible to debate these figures. If the recreational facilities than at present provided with a
number of platforms and rigs operating by 1985 is lower consequent overall improvement in the already high quality of
life in the Aberdeen area.
and the multiplier is not significantly different from the past
then a lower figure would result, but still probably not much Developments in Peterhead will make the town a growing
less than 10,000. community with its prosperity founded on the diversity
provided by its growing importance as Scotland's second
Similarly, if the number of platforms served from North
largest fishing port (by value of landings), the site for a large
East Scotland is higher, as some estimates suggest, and if
the onshore build up is bigger than anticipated and the power station, the reception area for oil and gas pipelines and
as a major oil rig supply and servicing centre.
multiplier greater (as occurs in some other world oil
centres), then the figure would be much higher (perhaps Of particular advantage to the whole of North East Scotland
around 60.000) assuming, of course, that the Region was will be the accelerated improvement in communications
able to absorb an industrial build up on such a scale. which the industrial development will bring. Already major
An estimate of 30,000 to 40,000 jobs in 12~15 years' time improvements are being carried out to roads and harbour and
air services. It is certain that these are only the beginning of
seems realistic within the present knowledge and assumptions
outlined, and North East Scotland is capable of providing the major developments which will follow at a much faster rate
than could be achieved without the spin off of rapid industrial
services to support this growth.
development.
Other parts of the Region should clearly benefit directly from
the oil industry. Towns on the main road and rail route to
5. The Future for North East Scotland
- Inverness, such as Inverurie, Huntly, Keith, Elgin and Forres,
The developments outlined above will inevitably make North are already attracting the interest of companies, existing and
East Scotland one of Britain's most dynamic growth areas. new, wanting to serve the growth markets of Aberdeen!
As far as Aberdeen is concerned the kind of growth envisaged Peterhead and Nairn!lnverness!Invergordon from a base which
in making the City Europe's Offshore Capital is very much in offers relatively low land and operating costs and pools of
keeping with the City's past development. Oil and offshore adaptable labour.
specialist companies have been attracted to Aberdeen because The overall economic growth in the North of Scotland
- it is already established as the major administrative, medical, provides opportunities for firms throughout the Region to
communications, service and educational centre for the North expand their business, and, as expansion increases, the direct
of Scotland. and indirect impact of industry will spread even more
The Greater Aberdeen Area has a population of almost a widely.
quarter of a million with adiverse industrial and commercial Already, financial institutions, insurance and building societies
structure. Consequently many of the services needed by the are moving in to the City at an increasing rate. In addition,
oil industry are already provided. An added bonus for the new many of the city centre shops are planning major investments
-: offshore industries is the City's and Regiont importance as a and modernixations in the next few years.
13
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87
APPENDIX D
flORTH SEA Oil
AflD THE
EnviRonmEnT.
Edinburgh: Her Majesty's Stationery Office 1974
A report to the Oil Development Council for Scotland
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89
Foreword
The following Report by the Committee established by
the Oil Development Council for Scotland in August
1973 to considerthe possible effects of oil development
on the environment, and related matters, was presented
to the Council at its meeting in December 1 973.
Members of the Council generally endorsed its
recommendations and its assessment of the need for
action, and proposed that it should be published as a
contribution both to the debate on the environment
implications of oil developments and to the
development of Government policy.
The Report's recommendations are now being
considered bythe Government.
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90
Preface
Oil developments in Scotland raise questions of great
complexity. scale and urgency. We have within our
remit identified measures which can both improve the
consideration of environmental matters and safeguard
the physical environmentwhere oil developments take
place; and we commend them to the Council as a
contribution to the solution both of present problems
and.what is more important. ofproblernsandpressures
which will increasinglyarise in the future. But during
ourworkwe found it impossible to avoid making
observationswhich did notfall strictlywithin ourremit.
Recent events in the Middle East have increased the
pressure for development and re-emphasised the urgent
need to find solutions to the many problems of policy
and of provision. The exploitation of oil resources from
the UK Continental Shelf promisesto bring massive
returns to the producing companies and to Government.
Yet our impression is thatthe resources as yet committed
by central and local government are inadequate to meet
the immense demands which are being and which will
be made. We regard it as absoIutelyessentialthat
Government should make the decision to deploymore
manpowerto the solution of the problems endmore
resources to the pro vision of the attendant infrastructure
andotherservices required.
4
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Members
The Marquess of Bute Chairman
Mrs J.Balfour
P.B,Baxendell Esq. CBE
Dr.J.M,Francis
G.H.LairdEsq.
J.H.McGuinness Esq. CB
T.Nicolson Esq.
Assessors
W.D.C.Lyddon Esq. Scottish DevelopmentDepartment
G.F.Hendry Esq. Scottish DevelopmentDepartment
J.W.Anderson Esq. Department of Trade and Industry
Secretariat
H.Morison Esq. NorthSeaOllSupportGroup
S.C.Brown Esq. North Sea QilSupport Group
1.1 We were appointed bythe Oil Development Coun-
cil for Scotland in August1973 with the following remit
Having regard to the need to ensure a properbalance between
industrial development and preservation of the environment to
conniderthe possible effects of oil development on the
environment: the adequacy and effectiveness of the existing
planning machineryin dealing with proposaluforouch
development: the feasibility of publishing a national strategy
for coastal development: and to make recommendationsto the
Oil Development councilfor Scotland.
We have taken the word environment' in its broadest
sense to include what may be termed the social and
socio-economic environment. While oil developments
can have a major impact on the landscape, their social
and economic effects may be of equal, and in some
circumstances, greater impact.
1.2 We have met 4 times and have considered evidence
and memoranda submitted to us by the Scottish
Development Department. the Scottish Economic
Planning Departmentand the Department of Trade
and Industry, as welles papers by Jean Balfour (`Some
Environmental Aspects of Oil Developments") and
SirAndrew Gilchrist (`Oil and Scotland: Exploitation,
Infrastructure, Planning'2). Our members have had the
opportunity of examining oil developments on the
ground at first hand. We have made one interim report
to the Council,
1.3 It is the wish of our Committee to place on record
our gratitude to Mr H. Morison and MrS.C.Brown
of the North Sea Oil Support Group for having so ably
carried outtheirsecreterial duties, particularlyinthe
drafting of the report; to express our appreciation to our
assessors MrW,D.C.Lyddon (SDD), Mr G.F,Hendry
(SDD) and MrJ,W,Anderson (DTI) of their patience
and advice; and to thank the officers and staff of the
Scottish Development Department, the Scottish
Economic Planning Department, and the Department
of Trade and Industry for supplying us with a great deal
of detailed information to assist us in our deliberations.
`From a Paperdeliveredtothe Standing conference on North
Sea Oil.April 1973.
`Paper presented to the Oil Development councilfor Scotland.
September1973.
91
Committee on the
Environment Report to the 1
Oil Development Council for Scotland Introduction
4e-e47 0 - 74 - 7
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2
General Conclusions
92
2.1 Oil developments, as we note in our preface, raise
questions of great complexity. scale and urgency.
Recentevents in the Middle East have emphasised this.
We have examined the likely impact of oil developments
and the present machinery for control ; and we have
made a number of detailed suggestions which are
designed not merelyto improve matters at present, but
also lead to a more careful, sensitive and effective
anticipatory consideration of environmental impacts
during and after future licensing rounds. As the problems
are urgent, so is the need bract/on; and/n commending
our recommendations to the Council we emphasise
thisneed.
2.2 A major factor leading to our appointmentwas, we
believe, a widespread concern that a proper balance
was not being achieved between industrial develop-
ments and environmental and social considerations. In
ourview certain broad considerations on a proper
balancewould command general assent, and must be
applied in examining specific proposals. These would
recognise that due weight should be given to environ-
mental as well as to industrial considerations ; that the
environment should not heedlessly be sacrificed to
economic growth, and that priority should not always
be given to industrial development. It must too be borne
in mind that land is a limited resource of increasing value
to the community as a whole.
2.3 The environmental implications of decisions on
the scale and content of rounds of production licences
have only become fully apparent after the Fourth
Round in 1 971 ; and the mostfundamental of our
recommendations isthatthe Government should. in
considering the extent and content of future rounds of
licences. plan in advance forthe additional demands
which the resulting programme of exploration and
exploitation will make on the environment, and to
control the onshore impact of offshore developments.
2.4 Turning to planning on the ground, we endorse the
policy of zoning oil developments proposed in the
Interim Planning Framework1, and would oppose any
piecemeal proliferation of sites. We propose that the
Town and Country Planning (Scotland) Act 1972
should be amended to ensure the proper rehabilitation of
sites. We suggest that public ownership of sites might
be desirable in certain instances, both to ensure due
observance of planning conditions during operations
and proper rehabilitation thereafter and to provide a
continuity of use and local employment. We stress that
due attention must be given to the scale ofproposed
developments/n the context of the human andphysical
resources of the area in which theyare to be located.
2.5 We emphasise the need forthe most stringent
pollution and safety standards, and are glad to learn that
the DTI have made and are proposing further regulations
on this subject.
which we have identified. While it is not in our opinion
feasible to develop a detailed nationwide plan for such
development atthis stage, an overall indicative strategy
requires to be formulated. Close liaison between local
planning authorities and central government, and
between Government and the industry, is of prime
importance ; and there should in our view be continuous
informed discussion between them.
2.7 We have identified four areas in particular where we
think thatfurther study is required:
(a) First, while we recognise the benefits of
properly planned oil processing and refinery
developments in this country, we are concerned
atthe prospect of piecemeal developments: and
we emphasise the need forthe Governmentto
initiate urgently a study of oil processing needs
and sites and to publish its conclusions.
(b) Secondly, further study is required to determine
the best directions for social policy in the face of
large scale oil developments in a scattered rural
community; and we recommend thatthe
Secretary of State for Scotland should
commission such research.
(C) Thirdly, we considerthatthe Government
should study means towards streamlining
public inquiry procedures.
(d) Fourthly. bearing in mind the lack of suitable
sites from an environmental viewpointfor
fabrication of the designs of concrete platforms
at present in favour, we suggest that the
Governmentthrough the Ship and Marine
Technology Requirements Board, should give
a high priority to research into the next
generation of extraction systems, including
platforms of advanced design and sub-sea
systems.
2.8 In conclusion, we reiterate the urgency of the
present situation and the need for positive steps to be
taken to meet it. The rewards to be won from the
exploitation of North Sea oil are great; and we owe it to
future generations to ensure that we minimise any
detrimental effects upon the envfronment (in the wider
interpretation explained/n ourintroduction) in winning
them.
1'North Sea Oil and Gas: Interim coastal Planning Framework:
2.6 Improved forward planning for oil relatedde velop- A Discussion Paper' (Scontish Development Department,
mentsis. in ourview. themostpressingimmediate need Octoberl 973),
PAGENO="0122"
Summary of Recommendations
Licensing Policy
1 In considering the extent and content of future
rounds of licences in areas of the UK Continental Shelf
adjacentto Scotland the Government should take
account of the additional demandswhich the resulting
programme of exploration and exploitation will make
on the environment on planning services and on infra-
structural requirements and theyshould include
conditions in future licences enabling them to monitor
the production landing and overall distribution plans of
producing companies and to steer onshore develop-
mentsto particular sites if the need arises (5.4).
Planning Strategy
2 Discussion Papers on Oil Developments should be
continued and updated at regular intervals (6.7).
3 The Discussion Paper'An Interim Coastal Planning
Framework' is commended to local planning authorities
as a feasible and useful approach to the problem of
setting geographical priorities for oil developments.
having regard to the need to balance the quality of the
coast and its capacity to sustain development with the
technological requirements of oil developments (8.3).
4 Projects which are more locationally flexible should
be encouraged into areas where the capacity of the
environmentto sustain them is greater (4.2).
5 The Scottish Development Department should
undertake further analysis of the West Coast Zone as
rapidly as possible in the light of the comments we have
made in paragraphs 8.4 and 8.5 (8.6).
6 An examination should be made of the availability of
medium depth (25 fathoms) sites on the Clyde forthe
construction of gravity platforms. (We understand that
the Department of Energy have a preliminary study in
hand.) (5.8).
Rehabilitation of Land
7 Section 50 of theTown and Country Planning
(Scotland) Act 1 972 should be amended to empower
local planning authorities to require developers to enter
into financial agreements ensuring proper rehabilitation
of land as a condition of the granting of planning
approval (7.8).
8 The Government should examine the possibility of
public ownership of sites for major oil developments in
environmentally sensitive areas (7.11).
Planning Procedures
9 Local planning authorities should. where they have
not done so. update their Development Plans or produce
structure plans to take account of oil developments
(6.7).
10 The central government departments concerned
should provide for each authorityworking on a new
development plan specific advice on matterswhich it
would be in the national interestto take into account
(6.7).
11 The Secretary of State for Scotland should develop
a model form, for use throughout Scotland. specifying
the information which developers must provide when
submitting applications for permission to carry out oil
related developments (6.8).
12 The Secretary of State for Scotland should require
local planning authoritiesto inform him of all applica-
tions for major oil-related projects immediately they
have been received. (We understand that steps are
already being taken to implement this conclusion) (6.9).
Public Inquiries
1 3 The Government should examine the possibility of
streamlining public inquiries; and in particularshould
investigate the feasibility of introducing a system of
preliminary examinations to determine matters of fact
priorto public inquiries (6.5).
14 The Secretary of State for Scotland should examine
the possibility of issuing general guidance on the
documentation which he would expectto be provided
for a public inquiry convened to consider an application
fora major oil-related development (6.1 2).
1 5 Where impact analysis studies are commissioned
theirterms of reference should give emphasis to the
social and socio-economic impact of the proposal and
to its long-term effects on the community where it is
sited. Consultants should conferwidelywith local
bodies and interests, and in particularwith the
appropriate local authorities, on the effects of the
proposed development and the demands it will make
on local services (6.1 3).
Planning Conditions
16 The Secretary of State for Scotland should issue
guidance to local planning authorities on model
planning conditions which might be imposed in the case
of oil-related developments (7.1).
17 The application of planning conditions in the case
of offshore completions of platforms in close to shore or
esturial conditions should be clarified, and the local
planning authority or Secretary of State. as appropriate,
should have powers of enforcement (7.2).
18 The Scottish Development Department should
continue to encourage local planning authorities in
whose areas major oil-related developments are to take
placeto employ, either individually orjointly. suitably
qualified enforcement officers to ensure that developers
comply with planning conditions (7.3).
1 9 The Scottish Development Department should
ensure that steps are taken to monitorthe effects of
developments on the environment and ecology of the
area in which they are situated (7.10).
Safety
20 The Department of Energy's statutory powers to
control standards of undersea pipelines should be
extended beyond the three mile limit (7.14).
3
93
PAGENO="0123"
94
4
Impact of Oil Developments
Manpower
21 The Government should make an examination of
the supply and demand of qualified planners and take
appropriate steps to increase supply (6.1 6).
22 The training of planners should include reference to
the impact of oil developments, and have increased
emphasis on planning for rural areas (6.1 6).
23 Local planning authorities affected by oil
developments should be encouraged to recruit
additional planning staff so far as possible, and to
employ consultants where they lack the resources to
carryoutthe necessaryforward planning themselves
(6.17).
24 The Scottish Development Department should
continue to make grants to local planning authorities to
cover half of the cost of consultants retained to assist in
the preparation of development plans related to oil;
similar assistance should be granted where local
planning authorities employ consultants to assist in the
drawing up of planning conditions for oil-related
developments (6.1 8).
25 Where a local planning authority receives an
unforeseen application for a major oil development after
it has approved estimates for a particular financial year
and it is, as a result, required to employ during that
financial year additional planning or enforcement staff
for which it had not budgeted, the Scottish Development
Department should grant special financial assistance to
the authorityto cover half the salary cost (including
employer's superannuation and national insurance
contributions) of this additional staff to the end of that
financial year (6.1 9).
Further Work
26 The Government should examine in the light of total
requirements the demand for processing facilities,
including refineries; and they should publish their
findings (6.7).
27 The Secretary of State for Scotland should
commission research to determine directions for social
policy in connection with large scale industrial
developments in scattered ~ural communities (6.1 3).
28 The Government, through the Ship and Marine
Technology Requirements Board, should give a high
priority to research into the nextgeneration of extraction
systems (5.8).
4.1 Industrial developments related to North Sea oil
are neither homogeneous nor of uniform environmental
impact; and they raise environmental problems with
different degrees of scale and urgency. The principal
types of development having important planning
implications are service bases, landing points for
pipelines, fabrication sites and refineries. To the industry,
service bases are of first priority, because they are
needed forthe exploration phase. Forthe most part the
necessary work required for exploring and servicing the
areas at present licensed has been approved. Landing
points for pipelines, togetherwith the associated tank
farms, separation equipment and possibly terminals, are
important as an essential link in the production process
and can raise intricate local environmental problems.
Fabrication rangesfrom module and equipment
production to platform building. Sites for the production
of modules and otherequipment have generally been
found in the Central Belt and on the East coast. Steel
platform sites have been approved in a number of places
on the East Coast, though they have had considerable
environmental and socio-economic impact. The location
of sites forthe production of gravity production
platforms (concre~e or steel and concrete platforms) is
controlled to a great extent by technological require-
ments ; and forthe designs at presentfavoured bythe
oil companies, which require some 40 fathoms inshore
with 100 fathoms in sheltered conditions close by,
suitable sites are found only in a few places on the West
coastwhere they are likely to have a serious effect on
the environment. Finally, the extent to which a demand
for new refineries will develop as a result of North Sea
oil is unclear. A map showing the location of oil-related
developments in Scotland is given in Appendix I.
4.2 These different types of development have differing
environmental implications and differing site require-
ments depending on the activity involved and its
technological needs. They differ, too, in the extent to
which they are steerable to locations which, in terms of
pre-existing infrastructural support, labour availability,
and probable impact on the physical environment, are
prima facie more suitable for development. There are, for
example, no essential locational requirements for the
construction of valves. pumps and compressors.
Pipe-coating requires large areas of land well serviced
with roads or railways and adjacentto a strong quay;
but such developments can normally be accommodated
in localities, and there are many in Scotland, where
there are established industrial resources and skills. On
the other hand, the site requirements for constructing
production platforms are rigorous, and for some designs
are found only in a few parts of the country (although
they could conceivably be constructed abroad). And
the location of pipeline landing points, tank farms and
the associated equipment is dictated almost entirely by
the geography of the oil fields and the adjacent land.
Having regard to these different degrees of locational
flexibilitywe considerthatthose projects which are
more locationally flexible should ceterisparibus be
PAGENO="0124"
95
encouraged into areas where the capacity of the
environment to sustain them is greater.
4.3 The environmental impact of oil developments on
the physical landscape is not limited to the developments
themselves. The introduction into rural areas of labour
intensive industry, often operating underpressure in
difficult working conditions, requires a massive
in vestment in infrastructure. We are concernedthat the
speed at which this at present requires to be provided
might pre vent properplanning andcause the adoption
of standards of housing. roads and otherservices lower
than that ~vhich has nowbecome nationailyacceptable.
We recognise thatthe provision of the necessary
infrastructure is a priority need; butwe would emphasise
the need to maintain proper environmental and planning
standards in its provision.
4.4 The oil-related developments which we have
described will have an impact not only on the landscape.
but also on the social and economic fabric of the areas
where they are located. Indeed we regard the effect on
the community of some oil developments as of greater
importance than their intrusion on the landscape. The
fabrication of production platforms, for example. may be
a relatively short term project. perhaps lasting 10-1 5
years at most on a particular site ; and with the require-
ments for rehabilitation which we recommend in
Section VII the site is unlikely to prove an eyesore or a
twentieth century example of industrial dereliction. But
platform fabrication is labour intensive and there is little
guarantee of continuity of employment. We view with
great seriousness the prospect of the collapse of
indigenous industry in remote rural areas in the face of
competition from relativelyshort-term andnon-
continuous oil projects. We consider this point further
in our examination of Impact Analyses in Section~ (o
4.5 In short, we note that oil developments will have an
impact not only on the physical landscape, but also on
the ecology of the area, and on its social and economic
life. Examples of how great an impact this can be are to
be found in the Moray Firth. All of these aspects require
to be taken into account when proposals for oil
developments are to be considered. But they require to
be balanced by considerations of the national interest
and of the economic benefits which the development of
North Sea oil resources will bring ; and this aspectwe
consider in the following section.
5
Economic Benefits of Oil Develop-
ments and the National Interest
5.1 Our remit charged us `to have regard to the need to
ensure a proper balance between industrial develop-
ment and preservation of the environment'. We
concluded therefore that it would be necessary for us to
consider the economic benefits to be derived from the
development of our North Sea oil resources and the
desirability of such development in the national
interest so that we might form a view on what a proper
balance might be. Environmental quality is not.
however, quantifiable in the same terms as economic
benefits and thus a precise equation is unattainable.
5.2 The economic benefits to be derived from oil
developments are twofold. Firstthere is the value of the
product itself. Secondly there is the value of the market
created forthe goods and services needed to exploitthe
product. These benefits are separable. It would, for
example. betheoretically possible to exploit North Sea
oil using foreign goods, services and expertise (always
provided they were available) this would require
offshore installations, pipeline Iandfalls and tanker
terminals in this country but no sites forfabrication of
platforms, modules and the like. We make this point not
because we considerthatfabrication in the UK is
undesirable (and we note that reliance on foreign goods
and services would be contrarjto the Government's
expressed policy of seeking increased involvement by
UK industry), but in orderto emphasise thatthe
economic and national interest considerations to be
taken into account are differentwhere a decision notto
proceed would prevent oil coming ashore, and where it
would preventthe UK gaining business which would
create employment and added value.Thus the considera-
tions in relation to a pipeline landfall differfrom those in
relation to a platform fabrication site.
5.3 On the Government's present estimate of a
production of 70 to 100 million tons a year (1.4 to 2
million bbl per day) by 1980, production of North Sea
oil will have very considerable benefits for Exchequer
revenues and forthe balance of payments. In addition,
it will contribute markedly to security of supply: by 1980
the North Sea will provide, on present estimates. some
two-thirds of the U K's then demand for oil.
5.4 We have noted that many of the criticisms of the
planning system. both from those eagerto promote
industrial developments and those who seek
preservation of the environment, have arisen from
doubts asto its capacityto deal with, and the environ-
ment's capacity to absorb developments as rapid asthose
springing from the Fourth Round of licences in the
North Sea. We have, therefore, considered the
possibilitythatthe exploration and exploitation of the
oil resources of the UK Continental Shelf should be
retarded. Apart from the present oil supply situation we
understand that itwould not be possible to alterthe
conditions in present licences which govern the speed of
exploration. The increased pressure for speedy
exploitation to supplement Britain's energy supplies
makes the need for properforward planning and
PAGENO="0125"
96
advanced consideration of environmental impacts the
more imperative. We recommend, therefore, that in
considering the extent and content of future rounds of
licences in areas of the U K Continental Shelf adjacentto
Scotland, the Government should take account of the
demands which the resulting programme of exploration
and exploitation will make on the environment, on
planning services and on infrastructural requirements,
and that they should include conditions in future
licences enabling them to monitor the production,
landing and overall distribution plans of producing
companies, and to steer onshore developments to
particular sites if the need arises.
5.5 The International Management and Engineering
Group1 have estimated thatthevalue of the marketfor
offshore goods and services forthe UKsectorofthe
North Sea during the next 1 Oyears will be some £300m
a year. A major part of this expenditure will, we
understand, be on production platforms and associated
equipment. The market can provide substantial
employment and investment opportunities in itself; but
the technological knowledge developed during its
exploitation can, in addition, provide a springboard to
the worldwide offshore market, estimated by the
International Management and Engineering Group at
£1 ,300m a year. We recognise that the industrial
activity generated in Scotland as a result of this offshore
market can make a considerable contribution to
economic regeneration and to the restructuring of the
Scottish economy. In regional terms the opportunities
of increased investment and employment in the
Highlands and Islands Development Board area in
particular are to be welcomed, especially if they are
paralleled bythe establishment of longerterm
developments than those which are exclusively
oil-related.
5.6 Difficulties have arisen in the approval of sites for
steel production platforms, but far greater environmental
difficulties are presented by gravity structures (whose
fabrication on designs nowfavoured bythe oil
companies requires deep water of at least 40 fathoms
close inshore with 100 fathoms adjacent). Suitable sites
forthe present designs are restricted to a few areas on
the west coast of Scotland of high landscape value; and
the capacity of the local communityto absorb such
developments without shortterm distortion and long-
term adverse effects on its social and economic life
seems limited.
5.7 On the other hand we understand that gravity
production platforms are more suitable for the deep
water conditions of the northern North Sea where,
given appropriate seabed conditions, they present both
cost and technical advantages. Their production in this
country would provide a net gain to the economy to the
extent that it would employ resources thatwould
otherwiseeither be used less productively or not at all.
Theirfabrication here might moreover, produce a
psychological boost to the U K companies involved in
producing the equipment mounted on the platform,
which can produce work of up to the value of the
platform itself; and it might place them in a better
position to win orders than if deep water gravity
structures were built elsewhere, although they could, of
course, win orders for equipment to be used on
platforms constructed elsewhere on the continent of
Europe.
5.8 The economic benefits we have described apply
equally to any concrete gravity structure, while the
disbenefits may apply onlyto the designs at present
favoured. It is a matter of judgement whether UK
contractors could effectively break into the market if
they had no opportunity to produce structures of these
designs.2 Because, moreover, the provision of deep
water sites is at present the subject of a public local
inquiry we do not considerthat itwould be appropriate
for us to make recommendations on this question. We
would note in passing however that against the
economic benefits to be derived from such labour
intensive operations as platform construction in remote
rural areas must be setthe costs falling on the
community of the provision of infrastructure services
to support such developments. We emphasise,
moreover, that the west coast of Scotland is of high
scenic and envjronmental quality, representing a major
natural asset of international significance ; and we
considerthat labour intensive industrial operations
should be permitted here only if they are of overriding
national importance. It is our general viewthat it is
desirable for as much oil related work as possible to be
steered towards the Central Belt. We recommend
therefore thatthe Government, through the Ship and
Marine Technology Requirements Board, should give a
high priorityto research into the next generation of
extraction systems including platforms of advanced
design and subsea systems. We understand that the
industry are at present devoting a considerable research
effortto the design of concrete gravity platforms for deep
water which can be competitively constructed and
towed in medium depth (ie, 25 fathoms or less)
conditions and we suggest that an examination should
be made of the availability of sites on the Clyde forthe
construction of such platforms.3
1'Studyof Potential Benefitsto British Industryfrom Offshore
Oil and Gas Developments', International Managementand
Engineering Group of Britain Ltd. HMSO 1973.
2An order has subsequently been placed fore design of gravity
platform which iuto be constructed on the clyde.
3We understand that a sitesurvey is nowin hand.
10
PAGENO="0126"
6
Planning Procedures
97
Criticisms of procedures
6.1 The planning machinery has been underfire from
both flanks. On the one side are those who argue that it
is too cumbersome and too time consuming to deal
speedilywith applications related to an industrywhere
speed is of the essence, on the other are those who
suggest that it is of insufficient power to guide the
forces of developnient and that it is, of its nature.
incapable of taking account of the effect of develop-
ments on the social and economic life of the community.
We have therefore, devoted a considerable amount of
ourtime to an examination of the adequacy and
effectiveness of the existing planning machinery in
dealing with proposals for oil-related industrial
development.
6.2 In examining planning procedures we have
distinguished between the statutory machinery laid
down under the Town and Country Planning (Scotland)
Actl 972 and the operation of the machinery bythe
local planning authorities and the Scottish Development
Department. The machinery itself, which is described
in Appendix II, has been devised overthe years in order
to provide a balance between conflicting interests and to
ensure that everyone who would be affected by a
proposed development has an opportunityto have his
views on it taken into account. We recognise the many
advantages of this machinery and we concurwith Sir
Andrew Gilchrist's assessment of it:
`ltallowsfullconsultationwith all affected interests, it protects
the rights of individualsto be heard on applicationswhich
concern them, itlesvesthe great majorityof decisions in the
hands of locallyelected people, and it ensures a forum of those
increasing numbers of peop!ewho areworried aboutthe
effects of certain developments on theenvironmentand
wildlife. Even the relatively slow procedure can be seen as an
advantage since time is allowed for careful consideration and
forobjectionsto be formulated.'
6.3 On the other hand, SirAndrew notes that the
planning system is under stress, and that it is currently
being criticised for a number of reasons. Our own
examination has in particular identified the following
criticisms which have been made, although we have not
been able to establish that they are all justified; indeed
some, as is inevitable with a system designed to balance
different interests, are mutually contradictory.
(i) Development plans are out of date.
(ii) Planning applications for major oil related
developments orfor associated housing involve
therefore lengthy, cumbersome and costly
procedures of amendment and public inquiry.
(iii) Some planning applications are being decided
bythe Secretary of State too rapidly, in an ad
hocfashion, and without sufficient public
debate.
(iv) Local planning authorities have insufficient
staff to revise development plans quickly
enough orto make an adequate appraisal of
major applications.
(v) Public local inquiries into the objections to
individual applications are an inadequate
forum forthe consideration of applications
which can have a widespread regional impact,
for which an alternative site may be more
appropriate, and which may be of strategic
importance nationally.
(vi) Many oil related developments will impinge on
the social oreconomic life of the community
ratherthan on the physical environment. It is
said that the planning machinery cannot cope
with this.
(vii) The planning machinery does not provide
adequate control overthe siting of major
developments or over speculation in land.
(viii) The machinery does not afford sufficient
opportunityforthe publicto be informed of the
content of current planning applications.
The Statutory Machinery
6.4 We have not examined fully whether modification
of the statutory machinerywould lead to significant
improvements which were in the interest of the
community as a whole. The planning system has,
however, recently been the subject of rigorous
reappraisal followed by new legislation. We cannot rule
outthe possibilitythat shortcomings in operation may
disguise shortcomings in the statutory procedure itself,
butthe statutory planning machinery as such appears in
general to be adequate to meet the normal demands
created by oil related developments. In one area,
however, that of the public inquiry, considerable
advantage would in ourview accrue from a relatively
minor modification of the statutory machinery.
6.5 Public inquiries appear to us to be unnecessarily
lengthy, formal and expensive. A considerable amount
of time at public inquiries is moreover devoted to
eliciting matters of fact. This not only makes the
Reporter's task more difficult and delays proceedings
with prolonged quasi judicial question and answer: it
adds considerably to the costs to be borne by the parties
involved in the inquiry. It seems to us that there is much
to be said forthe introduction of a preliminary
examination solelyto establish the relevantfacts. While
this might delay the start of the inquiry proper, it would
in ourview, if properlytimetabled. significantly shorten
the total time to the announcement of the Secretary of
State's decision. It would moreover enable the Secretary
of State to identify major issues which the Reporter
should investigate atthe inquiry. We recommend that
the Secretary of State should examine the possibility of
streamlining public inquiries and in particular look at the
feasibility of a preliminary examination procedure such
as we have suggested.
1'Oil and Scotland': Reporttothe Oil Development Councilfor
Scotland: paragraph 40,
11
PAGENO="0127"
The Operation of the Machinery
6.6. Our examination of the operation of planning
procedures has led us to the conclusion that many of the
criticisms we have identified in paragraph 6.3 could be
answered by improvements or modification in the way
in which the procedures are operated. These improve-
ments involve betterforward planning, better and more
sensitive appraisal of applications and better staffing of
local planning authorities. We considerthem in detail in
the following paragraphs.
Forward Planning
6.7 Improvement in the speed and sensitivity with
which applications can be handled could be obtained
with more thorough forward planning at central and
local government levels. We note that local planning
authorites are already doing a good deal ofworkto
update their development plans ; and we consider in
Section VIII below the steps which are being taken by
the Scottish Development Departmentto devise a
Coastal Planning Frameworkto assist local planning
authorities in developing Structure Plans or revised
Development Plans. Difficulties in forward planning can
however arise where it is unclearwhat developments
are to be planned for: and such difficulties can be
particularly acute in the case of those oil-related
developments where site is dictated by technology, and
where technology is rapidly developing. Close liaison
and the provision of technical advice is, therefore, of
great importance. We considerthatthere is a need for
central governmentto issue to local planning
authorities and others as much information as possible
on likely oil developments, in terms both of geography
and of technological needs and we recommend that
the Discussion Papers on Oil should be continued and
updated at regular intervals1. Local planning authorities
are likely to experience difficulties in particular in
relation to applications for planning permission to
develop oil processing plants and refineries, and we are
concerned at the possibility of piecemeal refinery
development. We recommend, therefore, thatthe
Government should initiate a study of the requirements
for processing facilities, including refineries, and of
suitabe sites, having regard to the development of
North Sea oil resources in the context of the United
Kingdom's total needs in the foreseeable future and of
the export potentialfor refined products : and that they
should publish their findings. We recognise that planners
will experience difficulties because of the swift
development of oil technologies and needs we
recommend, nevertheless, that local planning
authorities, where they have not done so, should update
their development plans or produce structure plans to
take account of oil developments, though we recognise
`To date, 2 have been published: `Production Platform Towers:
construction Sites' (Scottish Development Department, April
1973) and `An Interim coastal Planning Framework' (Scottish
Development Department, October1973).
that this will take considerable time and effort. We
recommend, further, that the central government
departments concerned (primarilythe Scottish
Development Department, the Department of Energy
and the Scottish Economic Planning Department)
should provide for each authorityworking on a new
development plan specific advice on matters which it
would be in the national interestto take into account.
Appraisal of Applications
6.8 While development control involving the analysis of
planning applications is a normal function of local
planning authorities, they are faced with particular
problems when dealing with major oil-related
developments. The operation proposed may be
unfamiliar, may be set out in little detail, and yet may
have a widespread effect on the surrounding land and
community. The action we have recommended in the
previous paragraph should serve to provide local
planning authorities with necessary information on the
nature and technological requirement of proposals. We
note that the Scottish Development Department is
encouraging local planning authorities to mount a
rigorous appraisal of applications for major oil
developments and to elicit from the developer an
account of the alternative sites considered and we
commend this practice to local planning authorities. We
understand that some local planning authorities require
developers to submit with their planning application
details of their proposals in a standard form; and we
recommend that the Secretary of State should develop
a model form, for use throughout Scotland, specifying
the information which developers must provide when
submitting applications for permission to carry out oil
related developments. We believe that such would be of
benefitto local planning authorities and developers
alike (for the latter may not have extensive knowledge of
planning procedures) in saving time and in obviating
misunderstandings.
6.9 We have debated whetherthere would be an
advantage in the `calling in' by the Secretary of State of
all major oil-related planning applications immediately
they are received bythe local planning authority. While
such a procedure would in some cases lead to increases
in the speed with which the application is handled, we
do not recommend it as invariable practice. Local
planning authorities have an important part to play in
the consideration of proposals for major projects,
particularly in regard to their impact on the local
community, and we fear that, if the decision were taken
out of their hands at the outset, theywould not address
themselves to the issues involved in the detail and with
the thoroughness which we consider necessary. We
have concluded, however, that there would be
advantage if the Secretary of State were informed of all
major applications (ie, fabrication sites for major
offshore installations, installations and storage tanks
associated with the landing and transportation of oil and
98
12
PAGENO="0128"
99
gas, and processing installations such as refineries and
liquefaction plants) immediatelythey have been
received. This will enable the Departmentto assess at
the outset what assistance the local planning authority
may need in analysing the proposal and to ensure that,
at an appropriate stage, attention is directed to particu-
larly important aspects (the adoption of the standard
form of application proposed in the previous paragraph
would facilitate this assessment). It should, moreover,
lead to an improvement in the speed with which
applications for major projects are handled. We
understand that the Scottish Development Department
is alreadytaking steps to implementthis conclusion.
Public Inquiries
6.10 In paragraph 6.5 we make a recommendation for
modification of the procedure to be followed in cases
where it may be decided to hold a public inquiry. We
have in addition, identified three areas where we
considerthat improvements could be made in the
handling of applications at public inquiries, whether or
not the procedure is modified as we suggest.
6.11 The first of these areas concerns the availability of
reporters. It is, in our view, most undesirable that public
inquiries should be delayed because a reporter is
unavailable; and we are glad to learn that the
Department are taking steps to increase the number of
full-time reporters.
6.1 2 We note that the Scottish Development
Department are considering methods of improving the
quality of evidence given at public inquiries, and that
priorto the Drumbuie Inquiry the Secretary of State
wrote to the developers and objectors to indicate a
number of questions which he expected the inquiry to
consider. We are of the opinion that itwould be useful
for this practice to be more frequently employed ; and
we recommend that the Secretary of State should
examine the possibility of issuing general guidance on
the documentation (eg. Impact Analyses. Economic
Assessments) which he would expect to be provided
for a public inquiry convened to consider an application
for a major oil-related development. Such guidance
would, of course, require adaptation if our proposal for
a preliminary hearing were adopted.
6.13 We have considered ways in which the effect of
proposed developments on the community may be
examined, and we have concluded that ImpactAnalyses
such as the one commissioned from SPHERE forthe
Drumbuie inquiry1 might in some cases usefully be
prepared for inquiries into proposals for major oil-
related developments. The precise form of these would,
again, require modification if preliminary hearings were
adopted; and it is likely that something considerably
`ImpactAnalysis Oil Platform construction at Loch carron.
SPHERE Environmental Consultants Ltd. Scottish Development
Department.Auguntl 973.
less elaborate would suffice. We recommend the
desirability of consultants conferring widely with local
bodies and interests, and in particularwith the
appropriate local authorities, on the effects of the
proposed development and the demands it will make on
local services. We suggest that Impact Analyses should
examine not merely the likely short-term impact of
proposed developments on the community during the
period when operations are taking place, but also their
effect, whether beneficial or detrimental, on its
continuing life and the extent to which a development
might impose irreversible and possibly undesirable
changes. We recognise that an examination of such
implications will necessarily be less structured and less
quantified than an examination, for example. of the
infrastructural needs created by a proposed develop-
ment. The long-term effect of developments on the
community in which they are situated is, however, of
public concern ; and we recommend that the terms of
reference of ImpactAnalyses commissioned or prepared
in relation to proposals for major oil-related develop-
ments should give emphasis to the social and socio-
economic impact of the proposal and to its long-term
effects on the community where it is sited. We suggest,
moreover, that research is required to determine the
best directions for social policy in connection with large
scale indUstrial developments in scattered rural
communities.
Planning Inquiry Commission
6.14 It has been suggested that a Planning Inquiry
Commission established under Section 44 and 45 of
the Town and Country Planning (Scotland) Actl 972
might be an appropriate way of handling majorproposals
-particularly where alternative sites throughout
Scotland may be involved-and that a Commission
should be appointed to develop a planning strategyfor
oil developments. There has been no experience of a
Planning Inquiry Commission in Scotland; butwe can
envisage circumstances where a Commission would be
useful and desirable. The Commissron machinery
however could have~disadvantages in terms of delay and
cost; and in many cases most of the benefits of the
Planning Inquiry Commission might be obtained
withoutthe mounting of a separate operation. Afull
scale ImpactAnalysis carried out by independent
consultants, and modified as we suggest in paragraph
6.1 3, matches the work which a Commission's own
research team would undertake. A planning strategy for
oil developments may. aswe suggest in Section 8, be
developed withoutresorttoa Commission ;and guidance
by the Secretary of State on matters which should be
examined at an inquiry will ensure that sight is not lost
of broader issues. The dialogue we propose between
central and local government, and between Government
and the developers, can ventilate many of the issues
with which a Commission would be concerned. And
the Oil Development Council itself can play a major part
in the development of strategies for oil development.
13
PAGENO="0129"
100
Manpower
6.1 5 The effectiveness of the measures which the
Department is alreadytaking. and which we have
proposed, to speed-up and improve the operation of
planning procedures is limited by shortage of planners
in the areas concerned.
6.1 6 We understand that local planning authorities are
experiencing difficulty in recruiting suitably experienced
planners to deal with the increasing volume of work
associated with oil developments. This difficulty may be
aggravated by uncertainties because of local govern-
ment reform1 ; but there is also we understand an
absolute shortage of planners. We suggesttherefore
that the Government should make an examination of the
supply and demand of qualified planners and take
appropriate remedial action, for example by increasing
the number of post-graduate awards for planning
courses and the number of places in planning schools.
Moreover, the plannerwho has to deal with proposals
for oil developments in rural areas requires, in ourview,
different skills and a different body knowledge than the
planner concerned with the urban environment. We
suggest, therefore that it would be desirable to
incorporate into the training of planners reference to the
impact of oil developments and increased emphasis on
planning for rural areas.
6.17 We have considered whether problems arising
from the shortage of planners could be overcome in the
short-term bythe establishment of a roving planning
unit attached to the Scottish Development Department
which might be seconded to assist local planning
authorities. We do not however considerthatthe estab-
lishment of such a unitwould present any significant
advantages overthe employment of consultants
by local planning authorities orthe recruitment of
additional staff where these are available. It
would be equally difficultto recruit staff forthe unit; it
would be subject to a fluctuating workload; it would be
difficult to anticipate what skills would be necessary in
the unit; and, like consultants. itwould lack detailed
local knowledge and require careful briefing. We
consider, therefore, that local planning authorities in
the areas affected by oil developments should be
encouraged to recruit additional planning staff so far as
this is possible in the present shortage; and that they
should be encouraged to employ consultants
where they lack the resources to carry out necessary
forward planning themselves and find it impossible
to recruit additional staff.
6.18 Financial considerations may inhibit the adoption
of either of the solutions proposed in the previous
paragraph, particularlywhere needs have arisen
unexpectedly. We note thatthe Department has made
grants to some local authorities to cover half of the cost
of consultants retained to assist in the preparation of
development plans related to oil; and thatthis assistance
has enabled Zetland and Caithness to appoint
internationally known firms of planning consultants to
undertake such work. We hope that the Department will
continue to make such assistance available; and that
theywill grant similar assistance where local planning
authorities employ consultants to assist in the drawing
up of planning conditions for oil related developments.
6.19 We recognise that a precedentwould be
established by the granting of special financial
assistance to enable local planning authoritiesto
employ additional planning staff to deal with oil
developments. We understand, moreover, thatthe
Departmentwould preferto assist planning authorities
in financing consultancy appointments, since this
provides a means of distinguishing between genuine
need arising from North Sea oil and more routine
planning work that may have fallen behind hand.
Nevertheless, local planning authorities.can face acute
problems when an unexpected development is
proposed. and we considerthat oil developments may
be distinguished from most other industrial
developments both in their scale and in the speed with
which they require to be dealt. We recommend therefore,
thatwhere a local planning authority receives an
unforeseen application for a major oil development after
it has approved estimates for a particular financial year
and it is, as a result, required to employ during that
financial year additional planning staff forwhich it had
not budgeted, the Scottish Development Department
should grant special financial assistance to the authority
to cover half the salary cost (including employer's
superannuation and national insurance contributions) of
this additional staff to the end of that financial year.
We note, in addition,thatthe Local Government Staff
commission haswritten to all local authoritiesplacing considerable
limitations on the employment of more staff.
14
PAGENO="0130"
7
101
Planning Conditions, Rehabilitation
of Land, Pollution and Safety
Planning Conditions
7.1 Oil developments create unique environmental
problems and many are taking place in areas where
there is little relevant experience of large scale industrial
developments. We consider, therefore, that there would
be significant advantage if the Secretary of State were to
issue guidance to local planning authorities on model
planning conditions which might be imposed by them
in the case of oil related developments. We do not make
recommendations on what might be included in such
conditions, although noise, hours of operation. and
pollution (insofar as it is not covered in legislation) are
obvious candidates. We recommend thatthe Secretary
of State should consider the possibility of issuing such
guidance and we suggestthat. in doing so, he should
stress the need forprecision in the drafting of planning
conditions.
The application of planning law below
lowwater mark
7.2 The possibility that concrete production platforms
might be completed partly or wholly in deep water near
to the shore has raised the question whether planning
law can apply to such activities. It is, we understand, not
entirely clearthat planning lawwill apply. Platform
construction at sea could be controlled to a certain
extent both by conditions attached to the use of the
shore site from which supplies are made, and by the
conditions in the mooring lease which the contractor
requires to negotiate with the Crown Estates. Butwe
considerthat it is essential both that planning conditions
can be applied to the offshore fabrication site, and that
an appropriate body, whetherthe local planning
authority orthe Secretary of State, should be empowered
to enforce them. We understand that the Department
are examining the legal position further; and we
recommend that, if necessary, steps should be taken to
ensure that planning conditions may be applied to
offshore sites for the fabrication of production platforms
and the like and thatihe local planning authority or, if
appropriate, the Secretary of State should have powers
of enforcement.
Enforcement
7.3 We urge the Department positively to encourage
local planning authorities in whose areas major oil
developments are taking place to employ, either
individually orjointly, enforcement officers to ensure that
developers comply with planning conditions. We have
been informed that at leasttwo Highland authorities,
Ross and Cromarty and Inverness, have appointed their
own enforcement officers. We would emphasise that
enforcement officers should have appropriate
qualificationsfortheworkthey are to undertake. Where
local planning authorities are faced with an unexpected
and rapid developmentthey may experience financial
difficulties in relation to the appointment of enforcement
officers similarto those that arise in the case of planning
staff, We recommend thatthe Department should grant
special financial assistance to them on the lines proposed
in paragraph 6.1 9.
Rehabilitation of Land
7.4 There is widespread concern that oil-related
industrial developments which may be of a relatively
short life, such as platform fabrication sites, might be
abandoned in a derelict state. We have, therefore,
devoted a considerable amount of time to examining
how dereliction can be avoided and how a proper
rehabilitation of redundant sites can be achieved. We
would emphasise at the outset that by proper rehabilita-
tion we do not necessarily mean rehabilitation to the
site's former state : there may be opportunities for
facilities provided on the site to be putto an alternative
use; and we would welcome this where it led to
continuity of employment.
7.5 It is clear that planning law at present gives local
planning authorities adequate powers to require
contractors to rehabilitate sites to the authority's
satisfaction. Rehabilitation can, however, be very
expensive; and what is not clear is how rehabilitation
can be financed where a contractorfor any reason is
unable to meet his obligation. We have considered a
number of methods wherebyfinance can be made
available in such circumstances. In particularwe have
examined the possibility of a fund to be financed from
contributions by the developers and government, with
the latter contribution perhaps coming from oil royalties,
and the possibility of requiring developers to make
suitable insurance arrangements to ensure that
rehabilitation will be financed if theyfail.
7.6 We can see advantages in the establishment of a
fund. If it were partly financed from royalties itwould
ensure that some, at least, of the benefits of oil
developments were to be applied to overcoming the
drawbacks. Itwould enable rehabilitation of a more
positive nature to take place than if the developer
himself were required to finance rehabilitation : while,
for example, it would not perhaps be equitable forthe
developer to be required to convert a dock into a marina,
such a project could be financed from an Environmental
Restoration Fund. On the other hand, a fund would
present very real disadvantages. It would mean a
departure from the principle that developers should be
responsible for the consequences of their activities.
Individual developers might be tempted to evade their
responsibilities in the knowledge that the fund would
meet the cost. A Government contribution financed
from oil royalties would raise problems associated with
the hypothecation of taxes; and there would be a major
difficulty in assessing the contribution which individual
firms would make. The administration of a fund would
be complex. While there is a precedentfor a fund in the
Ironstone Restoration Fund, in the case of ironstone the
process of extraction and restoration is a continuous
one; the operations are geographically concentrated
and similar in method and scale; and the cost of
15
PAGENO="0131"
102
restoration depends to a large extent on the volume of
mineral extracted, so thatfinancing a levy on production
is quite appropriate. None of these considerations apply
in the case of major oil developments.
7.7 We have concluded because of the difficulties
outlined in the previous paragraph that the development
of an Environmental Restoration Fund would not be
immediately feasible. We consider, therefore, that local
planning authorities should be empowered to require
individual developers to make arrangements undera
system of bonds or guarantees to ensure that planning
conditions requiring rehabilitation will be complied with.
Individual arrangements of this kind could, in fact, be
more satisfactorythan a fund in the shortterm before a
fund had time to build up; and a system of bonds or
guarantees (unlike the assessment of contributions to a
fund) could probably be leftto the insurance market,
which would make a commercial assessment of the
viability of individual projects and of the reliability of
their parent companies and setthe premiums
accordingly.
7.8 We have been advised thatthe powers we have
proposed could be conferred on local planning
authorities by modification to Section 50 of the Town
and Country Planning (Scotland) Act 1 972.This
section empowers local planning authorities to enter
into agreements with landowners to regulate or restrict
the use of their land and to make incidental financial
agreements. Two modifications appear necessary. First,
the scope of the agreementswould require to be
widened to allow purely financial agreements to be
entered into, and it might be necessary to specify the
nature of these agreements including, perhaps,
guarantees or performance bonds. Secondly, it appears
to us necessaryto providethatin specified circum-
stances the local planning authority could make the
entry into such agreements forthe purpose of site
restoration a condition of planning permission. This
would involve a major departure from the principle that
no financial consideration should be required forthe
granting of a planning permission ; and we suggest,
therefore that such conditions should, at least initially, be
subjectto the approval of the Secretary of State. We
recommend that Section 50 of theTown and Country
Planning (Scotland) Act 1972 be amended accordingly.
7.9 The operations which we suggest should be
covered bythe arrangements proposed in the previous
paragraph are major oil-related developments of a
limited life, such as sites forthe fabrication of platforms
and other major offshore structures and installations and
storage tanks associated with the landing and transport-
ing of oil and gas. We note, however, that our
recommendations may have wider implications ; and
we do not therefore make recommendations on how
eligible projects should be defined beyond suggesting
that consideration might have to be given to identifying
in a more general waythe projectswhich we suggest
should be covered.
Monitoring of oil developments
7.10 Rehabilitation of sites used for oil developments
and the assessment of future proposals may be
facilitated by the monitoring of the environmental and
ecological impact of developments. This involves a
study both before operations begin, and during the
operational life of the development. We understand that
such monitoring hastaken place in relation to oil
developments at Milford Haven ; and we recommend
thatthe Secretary of State should take steps to ensure
that it takes place in the case of major oil developments
in Scotland.
Public ownership of sites
7.11 The specification of appropriate planning
conditions. employment of suitably qualified enforce-
ment officers and the arrangements we have proposed
to ensure proper rehabilitation of sites should, we
think, serve to meet many of the fears which have been
expressed on the adequacywith which oil develop-
ments, once they have been approved, can be controlled.
But they may still be inadequate in connection with
major developments in areas of great environmental
sensitivity; and even if they are adequate there may still
be public concern. We recommend, therefore, that the
Government should examine the possibility of public
ownership of sites for major oil developments, and in
particular sites for gravity platform construction in
environmentally sensitive areas such as the West coast,
which could be leased to contractors who obtain
orders. Such an arrangementwould serve not onlyto
allay public fears that planning conditions would not be
properly enforced or the land would not be adequately
restored; itwould also help to provide continuity of
employment and use at the site in question.
Pollution and Safety
7.12 We have received reports on pollution and safety.
An accident to an oil installation or a blowout at sea
could produce major environmental and ecological
damage in the short term and we wish to comment
briefly on this aspect. We understand that regulations
require offshore operators to carry out regular safety
drills and simulation exercises. thatthere are frequent
and regular tests of safety equipment. and that there are
elaborate procedures to prevent the occurrence of
blowouts. The northern basin of the North Sea presents
rigorous working conditions and geographical
difficulties; and a major accidentwould require
co-ordinated efforts and international collaboration.
We would emphasise therefore the importance of the
measures already being taken. We understand that the
companies operating offshore maintain supplies of
materials and equipmentfordealirtg with accidental oil
spills. and that the U K Offshore Operators Association
Ltd. are examining proposals for a blowout control and
firefighting barge to be stationed in the North Sea. We
commend thif proposal.
16
PAGENO="0132"
103
8
The Coastal Planning Framework
7.13 The human element cannot be divorced from
safety procedures; and we are glad to learn thatthe
Government are proposing to include in regulations
made underthe Mineral Workings (Offshore
Installations) Act 1 971 provisions as to hours and
standards of work for offshore operatives.
7.14 While the owners and operators of undersea
pipelines have a major interest in their engineering
standards and safety, we are perturbed to learn that the
Government have no powers to control the standards of
such pipelines beyond the 3 mile limit. We hope that
consideration will be given to the inclusion of such
statutory powers in any legislation which might be
proposed on pipelines.
8.1' Our remit asked us to consider `the feasibility of
publishing a national strategyfor coastal development'.
While we were sitting, however, the Scottish
Development Department published, as a Discussion
Paper, an Interim Coastal Planning Frameworkwhich,
in ourview, goes a long waytowards meeting demands
for the development of a national strategy for coastal
development, and (apart from its consideration of the
West Coast) perhaps as far as is possible given the
rapid development of the technology for the production
of offshore oil. In this section of our report, therefore, we
confine ourselves to commenting on particular aspects
of the Coastal Planning Framework. A summary of the
Framework and a map illustrating its proposals is given
in Appendix 3.
8.2 The Interim Coastal Planning Framework gives
effect to a suggestion in the White Paper on Land
Resource Use in Scotland1 thatthere should be greater
central government guidance on land use, It brings
together knowledge of the demand for sites and their
physical requirements on the one hand and the quality
of the coast and its capacity to sustain development on
the other, It makes recommendations for 14 Preferred
Major Development Zones, in which development
might in principle be acceptable and within which
developers should be encouraged to look for sites in the
first instance, for 23 Preferred Conservation Zones, in
which developers might be expected to encounter
difficulties in obtaining permission to develop sites, and
for a West Coast Zone of high environmental quality
between Thurso and Machrihanish where the
development of individual sites may be justified, but
where conservation, which does not of course preclude
smaller scale developments, should be the predominant
policy.
8.3 We consider that the Discussion Paper offers a
feasible and useful approach to the problem of setting
geographical priorities for oil developments and we
commend itto local planning authorities. We concur
with its general conclusions that, as far as possible, oil
developments should be sited in the Central Belt and
that there are likely to be significant benefits in grouping
oil developments, as far as is practicable, in orderto
minimise the environmental impact of schemes on the
coast and to facilitate economic provision of infra-
structure and supporting services. We considerthat
there would be advantage in identifying `priority
development zones' which are seen as more suitable
than other preferred development zones for oil
developments in terms of their capacity to absorb
developments, their supply of labour and their pre-
existing infrastructural support, and we understand that
the Scottish Development Department are already
holding discussions with local planning authorities in
order to identify such zones. We suggestthat local
planning authorities should draw up development and
"Land Resource use in Scotland' Cmnd 5428, September1973.
17
PAGENO="0133"
104
Chairman's Note
conservation plans in the light of the Report's recom-
mendations for development and conservation zones.
8.4 It is with the West CoastZone that we have found
most difficulty. The designation of the whole West
Coast as a Preferred Conservation Zone would not
perhaps be realistic in thatthe Zone contains some
sections of lower scenic quality. On the other hand, we
are of the viewthat the West Coast constitutes a special
case because of the high quality of the natural
environment; because of its value in European terms as
an unspoilt area and therefore as a scenic, recreational.
tourism, and wildlife resource; because of the delicate
socio-economic balance of the small communities and
their way of life, which could be irretrievably changed by
the impact, local and regional, of large scale labour
intensive developments ; and because of the general
sparcity of supporting infrastructure. Our observations
are underlined bythe findings of the SPHERE Impact
Analysis. We have, therefore, strong reservations about
the placing of large scale labour intensive developments
on the West Coast. We consider that such developments
should be permitted here onlywhere they are clearly in
the national interest and where, for geographical or
technological reasons, they are unable to be located
elsewhere. We would not have the same reservations
aboutsome otherforms of oil-related development being
located in the area ; and indeed we considerthat
developments such as service bases would integrate
well into the present economic pattern and could be of
lasting benefit. It is our hope that communities in the
West CoastZone will in fact as a result of oil-related
developments benefit by an enhanced standard of
living and a more diversified economic base our
concern is that this should be achieved with6ut undue
damage to the environment nortoo radical nor abrupt
description of the best features of the local way of life.
8.5 We consider in principle that growth points are to be
preferred to scattered developments, but further work
requires to be done on the implications of a West Coast
growth point or points before we could reach a
conclusion on whether this would be the right approach.
If, however, a growth point solution is to be adopted.
and if a site is approved for platform fabrication in the
West CoastZone,then we suggestthatthe possibility of
centring the growth point on the fabrication site should
be examined, since this could mitigate the adverse
effects on the local community of the end of platform
fabrication operations.
8.6 We note thatthe Scottish Development Depart-
ment are undertaking further analysis of the West Coast
Zone ; and we recommend thatthey should proceed as
rapidly as possible with this analysis in the light of the
comments we have made in paragraphs 8.4 and 8.5.
The complexity of the Committee's brief needs
no emphasis to those who have read so far. This
Reportwas presented to the Council in December 1 973
not so much on the assumption that it constitutes a
final answer but rather in the hope that it may make a
useful contribution towards the evolution of a balanced
national policy and be of some assistance to those
involved in taking decisions that will affect Scotland
for long to come.
18
PAGENO="0134"
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PAGENO="0135"
Appendix 2 (section 6)
106
Outline of Scottish planning procedures
1 The Town and Country Planning (Scotland) Acts
since 1947 have established machineryfor the making
of plans for the land use and forthe control of
developmentthrough planning permissions granted by
local planning authorities. Development Plans are
prepared by the local planning authorities after a process
of extensive consultation with interested bodies and
after due public participation. Development Plans are
submitted to the Secretary of State for Scotland for
approval, and before approving the Plan, with or
without modifications, there is an opportunity for
objections to be made and for a public local inquiry to be
held if necessary. The process of amending Development
Plans to keep them up to date is a continuing one, and
amendments are subject to a similar process of
consideration, and objection and inquiry if necessary,
before their approval by the Secretary of State.
2 In general the Development Plan for an area zones
land for the major known and foreseeable uses, housing,
industry, commerce, recreation, etc. If the site chosen
by a developer is already appropriately zoned a decision
on his application can be taken bythe local planning
authoritywithoutfurther ado. Most planning decisions
in Scotland are taken in this way. If planning permission
is refused or granted subject to conditions which the
applicantfinds unacceptable, or if the local planning
authority does not reach a decision within a prescribed
period, normallytwo months (which is held to constitute
a deemed refusal unless the applicant consents to a
postponement), the applicant may appeal to the
Secretary of State and in that event the normal procedure
is for a public local inquiry to be held before the
Secretary of State issues a decision on the appeal.
3 Where the site chosen by a developer is not
appropriatelyzoned, and the local planning authority
wish to approve the development, the normal procedure
is forthe authority eitherto prepare a development plan
amendment orto apply to the Secretary of State for a
Direction underArticle 8 oftheTown and Country
Planning (General Development) (Scotland) Order
1 950 enabling the authorityto grant planning permission
notwithstanding thatthe proposed development is not
in accordance with the provisions of their development
plan. In either casethere would be the opportunity for
objections and a public local inquirywould be held if
necessary before the Secretary of State reached his
decision.
4 Certain developments raise issues which go well
beyond the boundaries of an individual local planning
authority and in these cases there is power in the
Planning Acts forthe Secreta4' of Stateto `call in' the
application for decision by himself. Once again the
normal procedure is for a public local inquiry to be held
before the Secretary of State reaches his decision.
5 TheTown and Country Planning (Scotland) Act
1969 established the framework for a new Development
Plan system. The essential difference is the introduction
of `structure plans' setting outthe local planning
authority's policy and general proposals for the use and
development of land in its area, and the relationship of
that use and development to similar plans for
neighbouring areas. In preparing their structure plans,
local planning authorities are required to have regard in
particular to current policies with respect to the
economic planning and development of the region as a
whole, and to the resources likelyto be available for
carrying out the proposals forthe structure plan. These
provisions of the 1969 Act (which has now been
consolidated with earlier planning legislation in the
Town and Country Planning (Scotland) Act 1972) are
notyet in force in Scotland. It is declared policy to
implementthem gradually, and to complete this process
overthe country as a whole only after local government
reorganisation. This does not, of course, imply that the
content of development plans under the present system
cannot be updated until the new statutory procedures
are adopted : there is nothing in the present system
to prevent local planning authorities from taking into
accountthe matters mentioned above, and many of
them have done so in preparing amendments to their
Development Plans.
20
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107
Appendix 3 (section 8)
NORTH SEA OIL
COASTAL PLANNING FRAMEWORK
ISS SDD SEPT 73
21
40-047 0 - 74 -
PAGENO="0137"
108
The Interim Coastal Planning Framework
Againstthe background of the national economic
importance of North Sea Oil developments, and the
land use planning problems which they have created,
the report summarises the results so far of current work
being undertaken in the Scottish Office on land-based
operations associated with the discovery of oil and gas
in the Scottish waters of the North Sea, The work is
incomplete in some respects, particularly in relation to
the west coast and islands; but it provides for
discussion a broad framework within which forward
planning and project location may take place. The main
points are as follows:
1 The coast of Scotland has for much of its length
scenic and environmental qualities of national
significance. These significant stretches include areas
which may, in the national economic interest, be
required for development.
2 Oil developments occupy a relativelysmall
proportion of the land and coastline, butthe implica-
tions of the developments go much widerthan the land
that is actually occupied.
3 There are likely to be significant benefits in grouping
oil developments, as far as is practicable, in order to
minimise the environmental impact of schemes on the
coast, and to facilitate economic provision of supporting
infrastructure and services.
Central Belt
4 As far as possible, oil developments should be sited in
the central belt.
East and South-west Coasts
5 Fourteen coastal zones are suggested in which
development might in principle be acceptable and
within which developers are encouraged to look for
sites in the first instance. They are referred to as
Preferred DevelopmentZones and are as follows:
Forth Estuary; LowerTay Estuary ;Aberdeen ; Peterhead;
Fraserburgh; Buckie; Moray and Cromarty Firths;
Wick/Thurso; part of Shetland ; part of Orkney;
Stornoway; Clyde ; Campbeltown ; Stranraer.
6 Twenty-three sections of the mainland coast are
suggested in which conservation considerations are
particularly strong. These are referred to as Preferred
Conservation Zones and are:
St Abb's-Cockburnspath; Dunbar-Longniddrj; Lundin
Links-Tentsmuir; North of Arbroath-South of
Montrose; North Esk-Dunnottar; North of River Don-
Boddam : St Fergus-St Combs; Rosehearty-Cullen;
Port Gordon-Fort George; Black Isle; North Sutor
Cliffs; Tain-Dornoch: Helmsdale-South Head;
Brough Head-Dunnet Head; North of Campbeltown-
Ardyne Pt; Loch Goil and Loch Long ; Cloch Pt-North
of Largs ; South of Ayr-Dipple ; Woodlands Bay-
Finnart Bay; North of Stranraer-Kirkcolm; Craiglaggan-
Glenluce; Fort William-Eggerness Pt; Carsluith-
Blackshaw.
In these areas, developers may expect to encounter
difficulties in obtaining permission to develop sites.
7 Agreement in principle to zones of this nature does
notof course imply eitherthat no development should
take place at any location in a zone where conservation
is given priority, orthat stretches of coast cannot be
protected from development in areas where develop-
ment is generally acceptable.
8 Forthe Preferred Development Zones which are
agreed by the local planning authorities concerned, it is
suggested that as a matter of urgency forward looking
development policies and plans for the specific areas in
which development might be acceptable should be
drawn up, if this has not already been done.
9 Equally, for the Preferred Conservation Zones which
are agreed, it is suggested that local planning authorities,
in conjunction with the Countryside Commission and
the Nature Conservancy, should draw up appropriate
development plan conservation policies.
West Coast Zone
10 A West Coast Zone is identified where there are
areas of considerable scenic quality, and where
conservation considerations are of particular
importance. It possesses no potential development area
clearly able to support a concentration of major new
developments. On the other hand, this zone is very
extensive, and contains some sections of lower scenic
quality. There is a possible need for fabrication sites
requiring the deep water facilities found on this coast,
and the development of individual sites within this zone
may be justified. Further analysis is being carried out,
pending which the discussion paper adopts a different
approach forthis area than forthe East Coast and
elsewhere.
11 The evolution of a coastal planning framework for
the accommodation of oil-related developments will be
a continuing task as information changes and techno-
logy develops. Further work can be distinguished as
being immediately necessary on the following fronts,
amongst others:
(a) Investigation into demand for an availability of
appropriate sitef for the changing requirements
of platform fabrication.
(b) Continuing analysis of the location of landing
points for oil and gas in association with storage
areas and tankerterminals.
(c) Analysis of the infrastructure requirements of
supply and service bases together with the
relationship between mainland and island bases
and the effect of the movement of exploration to
westerly areas.
(d) Environmental and ecological analysis of the
coast in general, particularly on the west, and of
the sites of individual proposals as they arise.
It is emphasised that the Report is a discussion paper out
of which policy guidelines may emerge. Its contents are
22
PAGENO="0138"
109
without prejudice to the duties and responsibilities
either of the local planning authorities or of the Secretary
of State. In particular. it is forthe local planning
authorities to translate general policy guidance. if found
acceptable, into specific land zoning, while individual
planning applications for particular sites will each have
to be considered on their merits in the normal way.
The Scottish Development Department are holding
discussions on the~aperwith coastal planning
authorities and other interested bodies.
PAGENO="0139"
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111
APPENDIX E
NORTH SEA OIL AND GAS
PIPELINE LANDFALLS
A DISCUSSION PAPER
Scot-t~ish Development Department
May 1974
PAGENO="0141"
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113
PREFACE
This paper has been prepared to provide information about
and facilitate discussion of some of the issues involved
in the development of North Sea Oil resources.
None of -cne views expressed should be taken to imply that
a policy has been decided, or as prejudging any particular
planning application which may be made for a specific site,
and which will, of course, fall to be considered on its
merits.
RE 29831 TBCL(3)
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NORTH SEA OIL AND GAS
Pipeline Landfalls Discussion Paper
INTRODUCTION Paras 1-4
LIKELY AREAS OF DEMAND FOR PIPELINE LANDFALLS Paras 5-10
INSTALLATIONS, ASSOCIATED WITH OIL AND GAS Paras 11-16
CRITERIA FOR SELECTING LANDFALL SITES WITHIN A GENERAL AREA Paras 17-19
CONCLUSIONS Paras 20-25
TABLE 1: COMNERCIALLY PROVEN FINDS WITH KNOWN OR PROPOSED PRODUCTION PLANS
TABLE 2: COMMERCIALLY PROVEN FINDS WRERE PRODUCTION AND DISTRIBUTION PLANS
ARE NOT KNOWN
TABLE 3: OINER SIGNIFICANT DISCOVERIES
PLAN: NORTH SEA OIL AND GAS - FIELDS, DISCOVERIES AND PIPELINES
PAGENO="0144"
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NORi~H SEA OIL: PIPELINE LABDFALLS DISCUSSION PARER
INTRODUCTION
It is a licence condition that petroleum (oil and natural gas) found in the UK
sector of the Continental Shelf must be brought ashore to the UK. In most cases
producers operating in the northern basin of the North Sea are likely to bring
their petroleum to land by pipe where it can be loaded into tankers in the
relative safety of the shore, or whence it can be piped to some suitable market
or refinery. Because of the immense cost of laying an undersea pipeline
(currently about £~m per mile) the company will be anxious to keep it as short
as possible - that is to bring the pipeline ashore at the point nearest to the
wellhead. Generally, bringing the pipeline ashore does not cause much damage
to the environment nor are suitable sites very difficult to find. However there
are certain activities and installations which may necessarily be associated
with the pipeline landfalls, and it is in finding puitable sites to accommodate
these that the main problems lie.
2. These installations may include plant for gas treatment, and gas and oil
separation, crude oil storage tanks and terminals capable of taking 250,000 ton
tankers. Naturally the general public fear that if each producing company is
allowed to develop on its chosen site there will be a proliferation of such
installations around the coast. On the other hand if there were a limited
number of suitable sites for these developments some companies may fear being
pushed out of the market for them by monopoly land holding.
3. The purpose of this paper is accordingly to identify the areas in which
sites suitable for both landing pipelines and for the associated development
are likely to be required, and to promote discussion of the steps which might
be taken to encourage companies to concentrate pipeline landfalls and
associated development within these areas.
4. The paper is arranged in 3 sections. The first identifies the areas where
companies are most likely to wish to bring oil or gas ashore (based on known
fields and discoveries), the second outlines the nature and scale of the develop-
ment associated with landfalls sites, and the third describes the criteria
likely to be important in selecting landfall sites.
LIKELY AREAS OF DEMAND FOR PIPELINE LANDFALLS
5. Nhere oil is delivered onshore by pipeline, whether from the UK sector or
elsewhere, the preferred landfall for the line is likely to be the nearest
possible suitable site to the field. Natural gas from the UK sector which
is to be supplied through pipes in Great Britain must first be offered to the
British Gas Corporation at a reasonable price and, if the BGC accept the gas,
they are likely to require the producer to deliver it to the mainland.
Before a producer can use or supply gas through pipes to any other than the
BGC, he must obtain the consent of the Secretary of State for Energy.
6. Presently known discoveries of oil and gas which are likely to be brought
to Scotland lie in 3 main groups. Tables 1, 2 and 3 are schedules giving
the location of finds, planned and possible landfalls and production plans,
where these are known.
7. The most northerly group is the cluster around Brent, some 90 miles east
of the northernmost islands of Shetland. This includes Shell/Esso's Brent
field their Cormorant and Dunlin discoveries, Mobile's Beryl field, Signal's
Thisle field, Total's Alwyn field, the Hutton field of Conoco/National Coal
RE 29831 TBCL(7) 1
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Board/Gulf, BP/Ranger'sNiniari field and other recent discoveries. *The nearest
approachable land in the UK to this concentration lies in the Shetlands. The
nearest mainland landfall is the Duncansby Head area of Caithness, but this is
about 150 miles further away. Within this concentration of fields lies also the
Frigg gas field (Total Oil Marine Group) but the pipeline from this is to be
taken, not to Shetland, but to St Fergus (Aberdeenshire) which, being on the
mainland, enables a link to be made with the existing gas grid system, currently
terminating at Glenmavis (Coatbridge).
8. The second group of field is rather more widely scattered and extends from
about 125 miles east of Wick to about 135 miles east of Aberdeen. It includes
Occidental's Piper field, BP's Forties field, BGC/Amoco's Montrose field and
Phillip's discovery Maureen. There are 3 areas almost equally near this group;
the Orkneys, the north-east coast of Caithness and the Rattray Head area of
Aberdeenshire. Of these the north-east coast of Caithness is likely to be the
least attractive landfall area as it is a relatively remote part of the mainland
and it does not provide sheltered deep water suitable for tanker terminal sites.
The Orkneys have already been selected by Occidental, who propose to lay a 135
mile pipeline from the Piper Field to a tank farm and a tanker terminal at Flotta,
and the Rattray Head area has been selected by BP who are building a 110 mile
pipeline from the Forties Field to Cruden Bay, whence the crude oil will be
piped under land to their refinery at Grangemouth. Apart from Orkney and Rattray
Head companies may be interested in bringing oil to the Inner Moray Firth area.
It is certainly farther from known fields (65 miles farther from Piper than is
Flotta), and would involve laying additional costly submarine pipeline, but it
could provide both several soft pipeline landfall sites and either an easy
pipeline route south and west or tank farm and tanker terminal sites.
9. The third group of fields is that around Ekofisk, some 250 miles east of
the Firth of Forth. This group includes the Norwegian Ekofisk complex of
Ekofisk, West Ekofisk, Eldfisk and Tor, Hamilton's Ar~rll and Shell/Esso's Auk
fields, and Philips' Josephine discovery. The group lies equally near Teesside
and Emdon (Germany) and it is planned to take oil from the Ekofisk complex to
existing refineries at Teesside and gas to Emden. Oil from Ar~ril and Auk will
be taken by tanker to various destinations in the UK. No plans are known for
Josephine which has not been commercially proven.
10. Thus, on the assumption that the demand will be for pipelines along the
shortest route from the well to land, the area where there is most likely to be
a demand for oil pipelines landfall sites is Shetland. There may be some demand
for landing oil in Orkney, in addition to Occidental's proposal, and there may
be some additional demand for oil or gas landfalls in the Rattray Head area.
Taking other important factors into account, the Inner Moray Firth may also
attract a demand for landfall sites.
INSTALLATIONS ASSOCIATED WITH OIL AND GAS
11. The installations associated with landing gas are quite different from those
associated with landing oil.
12. Gas producers who sell their product to the BGC treat the gas to bring it
to BGC specification at their terminal and then pipe it to the adjacent BGC
terminal. Because of the greater risk inherent in piping untreated gas, and
because of the greater expense involved, the BOG prefer producing companies to
locate their treatment plant as near the landfall as possible. In order to
prevent proliferation of terminal sites along the coast the BGC prefer to select
a landfall point and terminal area which can be used by, say, 3 producers as well
as themselves. This concentrated plant may well take an area of about 100-150
hectares, giving approximately 20 hectares for each producer and 60 hectares for
the BGC. Much of this land will be used for security spacing of equipment and
RE 29831 TBCL(8) 2
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will not be built over. The equipment in the concentration will include a
radio mast, a flare stack, fire fighting equipment, office accommodation and
perimeter security fencing. It may also include sulphur removal plant.
Depending upon the pressure at which the gas reaches the treatment plant it
may be necessary to add compressors.
13. Oil producing companies, on the other hand, sell and refine their pro-
ducts independently. The installations required by them will depend on their
marketing and oil treatment plans, and will vary from a small booster station
or pump house (as is planned at Cruden Bay, Aberdeen), serving the pipeline as
it passes inland from the landfall, to a maximum of a tank farm and tanker
terminal in and from which oil can be stored and transported by tankers of up
to 250,000 tons (as are being built at Dalmeny and Hound Point, West Lothian)
with associated treatment works, where necessary for gas separation and ballast
water cleaning. A tank farm and tanker terminal will certainly be required
where oil is landed at island or at remote mainland locations from which it is
not feasible to pipe oil inland. The amount of land needed for the tank farm
will depend on the volume of oil to be stored which in turn will depend both
on the volume of oil being received from the field and on the number of days
supply it may be necessary to hold in case of difficulty in feeding into
tankers for onward transmission. Probably the maximum area needed for one
company's field would be about 60 hectares, which could accommodate 6 tanks,
each holding about half a million barrels, (representing about 10 days' supply
from a field yielding quarter million barrels per day or about 12 million tons
per year). The tank farm site will include tanks of up to 100 metres diameter
and 20 metres height, normally arranged in pairs with surrounding safety bunds,
fire fighting equipment, a site office and perimeter security fence. Normally
tanks are above sea level so that oil can be fed into waiting tankers by
gravity. There may be considerable visual advantage (and possibly extra
safety) in concealing the tanks underground. This can be done by complete
or partial burial of the metal tank, but it may also be possible to create
underground caverns which can be used unlined for oil storage. The Institute
* of Geological Science has surveyed the coast and considers that some areas
may have suitable rock formation for the creation of unlined cavern storage.
There may however be problems in loading tankers from a below-sea-level
situation which makes the exercise impracticable but, assuming there are
no risks of polluting underground water supply, this method of storage might
make the development more acceptable locally and clearly needs to be investi-
gated further.
14. The tanker terminal will require sheltered water of at least 20 metres
depth and will comprise a pier or single-point mooring for perhaps 2 or 3
tankers, with fire fighting equipment, loading gantries and site office on
land.
15. Normally companies will look for a tank farm site adjacent to the tanker
terminal, as this makes it easier to load the tanker and obviates the need for
duplicate site offices and safety equipment. A tank farm which is based
higher than sea level will allow the waiting tanker to be loaded by gravity.
It has been possible to agree to the tank farm being 3 miles away from the
terminal (Dalmeny and Hound Point) but this is believed to be about the maximum
separation acceptable. It may also be relevant that it may be more easy to
carry the concrete and large steel plates required for the tank farm t~j ~ea to
a site near the terminal than to take them even short distances by road from
the terminal inland.
16. It is unlikely that companies will choose to refine oil at the landfall.
Normally the choice of refinery site depends more on the location of markets
than on the availability of nearby sources of crude oil which is very much
cheaper to transport than products. This is likely to hold good even where very
large quantities of crude oil are brought ashore in one place.
RH 29831 TBCL(9)
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CRITERIA FOR SELECTING LANDFALL SITES WITHIN A GENERAL AREA
17. Once the general location for landing a pipeline has been selected the choice
of landfall site will depend partly on the physical. characteristics of the shore
and partly on the companies' production plans.
18. For landing gas if a mainland location is required the main physical criteria
will be:-
Onshore
a. A flat approach or reasonably gentle transition from marine, to land
environment. Cliffs of up to 30 metres can be accommodated if the rock is
soft.
b. Sufficient land for the treatment works - ie about 100 to 150 hectares
of flat land.
c. A non-urban area.
Off-shore
a. A gently sloping approach from the sea with sufficient depth of sand or
shingle to give not less than 3 metres of cover over the pipeline down to low
water. mark, and 2 metres cover out to a 15 metre depth of water.
b. A sea bed not subject to shifting of scour.
c. A sea not subject to currents or to strong tidal flows.
d. Areas not used for anchorage or mooring.
e. An approach free from obstacles.
19. For an oil producing company wishing to transport oil from the landfall by
tanker the main physical criterion will be the selection of a suitable tanker
terminal site plus sufficient land nearby for a tank farm. The company will
also be looking for an easy landfall for the pipe, and their requirements in this
respect are very similar to those for a gas pipeline landfall. If the company
is landing on a mainland site and sending the oil landward by pipeline, then the
shortest distance between the field and the ultimate destination may assume
greater importance in the selection of landfall site.
CONCLUSIONS
20. It may be necessary to carry out a detailed analysis of the effect of such
developments on the local environment and it is proposed to issue a separate
technical memorandum shortly giving guidance about the nature and timing of
such investigations.
21. Four general areas are likely to be selected for landfall sites by oil and
gas producing companies. These are Shetland, Orkney, the Inner Moray Firth area
and the Rattray Head area. If adequate suitable sites can be found there, there
would be advantage in the landfalls and associated developments being confined
to them.
22. It is unlikely that substantial amounts of gas will be brought to Shetland.
It cannot be used there in commercial quantities and would therefore need to be
liquefied for transport by tanker; so where gas is available in commercial quan-
tities it is more likely to be separated at the production platform and piped
direct to the mainland. But it is very likely that a considerable amount of oil
will be landed on the islands and it will be necessary for this subsequently to
SE 29831 TBCL(1O) 4
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be moved by tanker, unless as seems unlikely, it is refined first and transported
as products. It is not possible to estimate at present how many pipelines
(or more relevant, how many pipe trenches) would land here. This will depend
on the yield from the fields, the amount of duplication of pipes required by
companies and. the amount of trench sharing which is possible. It seems possible
that there are several suitable sites but the Interim Development Plan of
Zetland County Council identifies Sullom Voe as the most suitable for major
developments arising out of the industrial activities of the North Sea and
their consultants' report confirms this assessment. According to a survey by
the Institute of Geological Sciences the rock formation of the Sullom Voe area
may well be suitable for underground cavern storage.
23. In Orkney again, any oil landed must subsequently be moved by tanker.
Scapa Flow provides ample sheltered deep water suitable for tanker terminals
and this may attract companies wishing to transport by tanker in preference
-to the nearest mainland sites at Duncansby Head and Rattray Head which have no
sheltered deep water. The overall scheme proposed by Occidental on Flotta for
a tank farm covers an area of land that could well be much greater than is
needed to take the expected yield from Piper. There are in addition sites on
the mainland of Orkney both around Scapa Flow and on the northern side of the
mainland which are potentially suitable for tank farms and adjacent to possible
tanker terminal sites. According to the Institute of Geological Sciences the
rock formation of the Orkneys may be suitable for underground cavern storage,
although there may be local geological difficulties.
24. The Caithness area from Duncansby Head to Wick is relatively near some
fields but as no tanker terminal sites are available the area could only be
used by a company wishing to land its pipe on the mainland and to continue it
south under land. This does not seem likely unless petroleum is discovered
nearer to this coast, and the area has already been bypassed by the BGC in
favour of the St Fergus area.
25. More than one firm has already expressed interest in the Inner Moray Firth
area, which could provide both soft pipeline landfalls and an easy land route
south and west or a tank farm and tanker terminal site. It would seem that land-
fall development could take place here in accordance with the approved develop-
ment plans for the area. However further interest in this area by gas and oil
producing companies is likely only to result from new oil or gas discoveries.
26. The Rattray Head area has already attracted one gas and one oil pipeline
and it is assumed that the BOO will wish to attract other gas pipelines to
St Fergus. No sheltered deep water anchorage is available round the Head and
any oil must be distributed by underland pipeline. The route southwards for
the gas pipeline will run for most of its length in fairly close proximity to
the BP oil line currently under construction. There may well be a limit to
the capacity of this route to take further pipelines. Before further landings
in this area are allowed this will need to be taken into account.
5
PAGENO="0149"
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TABLE 1 COMMERCIALLY PROVEN FlN~ WITH KNOWN OR PROPOSED PRODUCTION PLANS
Name of Operator
amd FIELD
Approx. Location
(in statute miles)
Operator's UK
Refineries
Method of production amd dix-
tribution ~
RP
FORIIES*
110 miles
ENE Peterhead
Isle of Grain,
Kent
Llandarcy, Glen
Grangemsuth
Belfast
Production expected to commence
in 1975 from first two (of four
planned) platforms. Oil to be
transported by under-sea pipeline
from field to Cruden Bay (110
miles) thence by land to
Grangemouth.
Shell
190 miles
Stanlow, Cheshire
Production using tankers through
ARK
E of Dundee
Shell Huven, Essex
Teesport, Yorks
Heysham, Lancs
Single Point Buoy Mooring
system (SPBM).
Ardrossan
Shell
110 miles
As for Auk
*
Initially production using
BRENT*
ENE of
Sullsm Voe
floating storage/tanker loading
facility (°Spur") is proposed.
Pipeline to Sullom Voe under
active consi derati on.
Hamilton
220 miles
-
Production by semi-submersible
ARGYLL
F of
Edinburgh
drilling rig fitted with
production equipment; trans.
.
.
portution by tankers using
SPBM system.
Occidental
135 miles
Convey Island
Proposed to produce by plot-
PIPER*
ESE nf Flstta
(projected)
form and transport by pipe-
line to Flottu.
Mobil
125 miles
Coryton,
Proposals to produce using
BERYL
SE of
Leroick
Essex
concrete platform and tankers
through a SPBM system.
Amoco
125 miles
Milford Huven
Proposals to produce using
MONTROSE
E of
Peterhead
platform and tankers through
a SPBM system.
Total
220 NIlE
.
Production planned by under-sea
FRIGG (Gas)*
Peterhead
pipeline to terminal at St
Fergus near Peterhead.
Phillips
215 NE
Billingham,
Production at present using
EKOFISK
Teesside
leesside
tankers. Pipeline to Teesside
(Oil/Norwegian)*
currently under construction
* indicates where offshore pipeline is either under construction or projected or could well be laid.
It should not be assumed that output from any given field will automatically be processed by the operator.
For example Amoco, as operator for the Msntrsse field holds only a 3O.77~ interest in the licence. The other
licenses and their respective share are as follows: British Gas Corporation 30.77%, Amerada 23.08% and
Texas Eastern 15.38%.
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TABLE 2 COMMERCIALLY PROVEN FINDS WHERE PRODUOTION AND DISTRIBUTION PLANS ARE NOT
KNOWN
Name of Operator
and FIELD
Approx.
Location
Operator's UK
Refineries
Shell
125 miles NE
see AUK
DUNLIN
of Lerwick.
table 1
Signal
145 miles NE
-
THISTLE
of Ler~iick
TABLE 3 OTHER SIGNIFICANT
DISCOVERIES
Name of Operator
Approx.
.
Operator's UK
and FIELD
Location
Refineries
Phillips
210 miles E
see EKOFISK in
JOSEPHINE
of Dundee
Table 1
Shell
110 miles NE
see AUK in
CORMORANT
of Lerwick
Table 1
Phillips
140 miles ENE
see EKOFISK in
MAUREEN
of Peterhead
Table 1
Total
3/15 (un-named)
125 miles ENE
of Lerwick
-
Conco
120 miles NE
South
HUTTON
of Lerwick
Killingholme,
Lincolnshire
Total
120 miles ENE
ALWYN
of Lerwick
Unocal
100 miles NE
2/5 (un-named)
of Lerwick
`
BP/Burmah
110 miles NE
*
see FORTIES Table
NINIAN
of Lerwick
1 Burmab has
refinery at
Ellesmere Port,
.
Cheshire.
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NORTH SEA OIL & GAS:
fields discoveries and pipelines
GAS Oil
O~tovenes ~O 0
Commerthly piwen mW ~
GeMmprnducAon * *
PIPEliNES
Opee~n~ a~
~r wnthz~
GAS OIL
I.
9
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APPENDIX F
t
40-047 0 - 74 - 9
PAGENO="0153"
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125
FOREWORD BY THE RT. HON. GORDON CAMPBELL
Secretary of State for Scotland
This issue of the Economic Bulletin is devoted to the new offshore oll industry and
it outlines the main effects on Scotland and on the work of the Scottish Office
Departments.
The discovery of oil fields off the shores of Scotland following earlier discoveries
of gas off the English coast, is probably the most important event for the Scottish
economy during this century. It has all happened within the last two years. Indeed
if speedy and expensive drilling exploration northwards had not been encouraged,
we should even now be unaware, in 1973, of the existence of this oil.
So much has been written and said about the new discoveries in a short space of
time that misconceptions abound. There seem even to be some who think the oil is a
few feet below Aberdeen haibour and is already flowing! The facts are that it is
about 2 miles below the sea bed and as much as 100 miles or more out to sea. Deep
water and stormy weather demand new and modern technology to find and extract
the oil, and it is likely to be about a year before the first oil is landed.
This hidden hoard of precious energy has lain in the Continental Sheff for centuries.
The advanced technology needed to extract it is such that man has set foot on the
moon before being in a position to win this oil. There is no reason why Scottish
industry should not become a focus for the new ~expertise required, taking part in
under-sea operations elsewhere in the world as well.
The launching of this new industry now is a boon for Scotland as it has brought
development and welcome new jobs of the kinds at which Scots excel. In the past
two years, when unemployment has been regrettably high, the Government have
helped the winning of new jobs for Scotland as this Bulletin describes.
In the Scottish Office we have taken very swift action ourselves when this could
help. In particular, as an Appendix on the Peterhead developments records, / was
able to take an important initiative in an unusual situation where historical events
had placed responsibilities upon the Secretary of State. The successful results will
enable oil rigs to be serviced from Peterhead this year with benefits in employment
and other ways for that area.
At the same time, as Planning Minister for Scotland, I have been keeping a balance
between desirable development and the protection of our environment, with
flexible and vigilant application of the planning procedures laid down by Parliament.
For example, within these procedures I enabled planning permission to be given
very quickly for a platform fabrication complex to be established in the Cromarty
Firth. Within 4 months the largest graving dock in Europe had been scooped out;
and within 8months work hadstarted on building what will be the largest production
platform in the world. The complex emits no pollution andsho uld not, when its tasks
are completed, leave scars or dereliction. Such projects produce hundreds of
valuable jobs. Serious delays could have caused them to have been abandoned or
started outside Scotland.
Because of the many new developments in the North, there is afready a movement
of labour northwards within Scotland. This movement presents a challenge for all
engaged in planning and in building the essential services in the areas affected.
Special measures are being taken, as this Bulletin reports, to meet this challenge.
At the same time the Government are incurring expenditure for Scotland, in
anticipation of the benefits which the oil will bring to the economy when it starts
to flow. Thus large sums have been authorised to be spent now on accelerating the
construction and improvement of roads, harbours, housing and other services in
Scotland. This is of immediate benefit to Scotland, by improving and creating
valuable assets for the community as a whole, besides being of timely help to the
new industry and its related developments.
The new industry is posing problems and requiring difficult decisions, some of
which need to be taken quickly. But its potential and promise for Scotland are great,
if we accept the challenges and the leading part which is open to us.
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SCOTTISH ECONOMIC BULLETIN
SPECIAL NUMBER: NORTH SEA OIL
INTRODUCTION
This special issue of the Scottish Economic Bulletin
is devoted to information on the discoveries of
under-sea oil and gas and the developments
rapidly ensuing from these discoveries, especially
insofar as they affect the Scottish economy. It does
not consider broad issues of licensing or fuel
policy. These were discussed in North Sea Oil and
Gas: A Report to Parliament (Department of Trade
and Industry) published in January. This Bulletin
concentrates on providing a picture mainly of the
onshore activities, an area in which the Departments
of the Scottish Office are in various ways involved,
including:
* activity in the Scottish economy, including
industrial, port, and infrastructure develop.
ments;
* planning procedures under which develop'
ments take place and are controlled; and
* Government organisations and initiatives
designed to co-ordinate industrial and local
developments.
The situation is continually changing, with new
discoveries and projects being announced almost
weekly. This Bulletin outlines the stage reached at
the end of March 1973.
CONTENTS
Foreword by the Rt Hon Gordon Campbell,
Secretary of State for Scotland
Map on Oil Related Developments
1. Exploration and Production
2. Onshore Industrial and Economic Activity
3. Government Organisation and Initiatives
4. The Provision of Infrastructure and Services
5. Planning, The Environment and Pollution Control
6. Conclusion
Appendix. Development of Peterhead Harbour of Refuge
Charts
1. Number of Wells drilled in the United Kingdom Continental Shelf
2. Average Rig Years and Peak Rig Activity
3. Expenditure on drilling by a petroleum company-an example of phasing
4. Estimated number of operational fixed drilling platforms, and
Estimated number of supply boats operating from mainland and islands
Page
4
5
8
10
12
16
20
21
23
23
24
24
3
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Note: Finnart-Grangemouth Pipeline is in existence
4
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1. EXPLORATION AND PRODUCTION
With oil imports costing £1,000 million a year and with a growing demand for energy in a
world in which energy supplies are far from secure, major domestic oil and gas resources are
clearly of the greatest value. For Scotland the discoveries in the northern part of the North Sea
are of immense importance.
THE LOCATION OF THE OILFIELDS
As a result of exploratory work so far, about eleven finds of oil have been announced in the
British sector. Most of these have to be further assessed, but five have been established as
propositions for early commercial use; oil is unlikely to begin coming ashore until next year.
The following annual peak production figures are expected:
* The BP `Forties' field off Aberdeen, the largest find-about 20 million tons a year;
* The Shell/Esso `Brent' field, to the east of Shetland-15 million tons;
* The Shell/Esso `Auk' field, to the east of Dundee-2 million tons;
* The Hamilton `Argyll' field, also east of Dundee-3 million tons,
* The fifth commercially viable find is Occidental's `Piper' field, east of Wick. Recently
announced development plans include facilities for landing up to 10-12 million tons a
year,
In addition mention should be made of two relevant finds in the Norwegian sector-oil in the
Ekofisk area; and gas in the Frigg field, which also extends into the British sector, These
developments are shown in the map on page 4.
THE EXTENT OF THE OIL RESERVES
One great difficulty in assessing the significance of under-sea oil is to estimate the potential
scale of discoveries in the next 30 to 40 years. Exploration and development are still at an
early stage and many areas round the coast remain to be tested and assessed. Until this is done
it is impossible even to begin to estimate with any claim to accuracy the full extent of the
commercially productive reserves. The Government have not tried to estimate more than seven
years ahead and present estimates are that by 1980 production of oil from the British Continental
Shelf could possibly supply about half of the United Kingdom's requirements of oil at that
time. These Government estimates, which are periodically reviewed and updated, have to
allow for production from finds which have shown positive results, but whose extent and
viability have not yet been assessed, and for new discoveries. It is even more difficult to forecast
output after 1980, as exploration continues and extends to waters beyond the North Sea,
Other estimates of production and reserves have also been made. The report of the International
Management and Engineering Group (IMEG), published earlier this year, gave an estimate of
production of 103 million tons-higher than the earlier Government figure, because of
different assumptions about the speed of production build-up-with production rising to
135 million tons in 1 985. Other unofficial estimates go above this, but no firm assessment can
be made of the total amount of oil likely to exist in the British offshore waters. Even where
promising geological structures exist, there is no certainty of oil or gas. Only extensive
exploration and appraisal drilling can reveal what actually lies beneath the sea bed. Indeed,
some of the geologically interesting structures west of the British Isles are prospective only in
the longer term, since the depth of waters puts them beyond the limits of existing production
technology.
The technical aspects of sea-bed exploration and production are very complex, The various
stages which occur, namely survey work, exploration, development and production are
outlined briefly below.
THE SURVEY METHODS USED
There are three principal methods of surveying the sea-bed to determine the existence of
structures that might be petroleum-bearing-magnetic, gravimetric and seismic. The last of
these gives the most detailed information and operates through the different responses of rock
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strata to shock waves. In general, this work is carried out by specialist contractors on behalf of
licensees, but a Governmental agency is also active in this field. This is the Institute of Geological
Sciences, formerly the Geological Survey, operating under the aegis of the Natural Environment
Research Council. It is partly based in Edinburgh, where its activities include the Scottish
headquarters for conventional geological survey work, the Seismology Unit, and one of the
Continental Shelf Units. This Continental Shelf Unit is one of two in the UK and, with the other
Unit at Leeds, helps to provide full assessments of the geological and geophysical information
available about the Shelf, including the data which the licensees are required to provide to the
Government under their work programmes. These confidential assessments are available to
the Government's professional oil advisers.
A preliminary detailed map of the geology of the southern part of the North Sea has been
produced, identifying the potential hydro-carbon-bearing areas of the Shelf. More maps of
other areas, including Scottish waters, are now in hand. As a result of this work by the Institute
the UK is likely to become one of the world leaders in the provision of comprehensive offshore
geological surveys.
THE EXPLORATION AND APPRAISAL STAGES
If the geological and geophysical evidence is favourable, the licensee will conduct exploration
drilling to determine whether oil or gas exists in the rock structure. Where the water is more than
about 200 feet deep-as it is in a large part of Scottish offshore waters-drilling is usually
carried out from semi-submersible drilling rigs or from drilling ships. The weather conditions
in the North Sea are among the worst of any offshore exploration area in the world. This has
required the design of large new rigs, costing up to £10 million, more of which will be operating
in the next few years.
Once a discovery has been made it must be appraised by the drilling of further wells. This helps
to determine the extent of the structure and whether the find is commercially viable. Chart 1 on
page 23 shows the number of wells drilled in the UK Sector since 1964/65. The number of
exploration and production wells has been increasing since 1970/71 as the search for oil
builds up. Chart 2 shows the estimated pattern of rig activity up to 1977, which suggests
a continuing rapid rate of exploration.
DEVELOPMENT AND PRODUCTION
Once a find has been proved to be commercial, the company has to make plans to develop the
field. The development stage generally involves the drilling of directional production wells
from fixed platforms firmly secured to the seabed and projecting well above the surface of the
sea.
The climatic conditions and the depth of water in the North Sea cause difficulties for all phases
of the production process. For example, the development of the `Forties' field calls for four
production platforms, each of which will drill about 27 directional wells to tap the field. These
platforms will be sited in 400 feet of water and must be able safely to withstand 94 foot waves
with a simultaneous wind velocity of 130 mph. In tptal, each structure will be 700 feet tall,
higher than London's Post Office Tower, and will use about 50,000 tons of steel, about the
same as was used on construction of the Forth railway bridge. Chart 4 on page 24 shows the
number of platforms likely to be in operation over the next few years. The largest in the world
is at present being built in the North of Scotland, at Nigg Bay in the Cromarty Firth.
TRANSPORTATION
The transport of oil from field to shore depends on such factors as the rate of production,
distance from shore and water depths. In the case of the large Forties field it is planned to pipe
the oil ashore through a 32 inch diameter line with a 2~ inch reinforced concrete coating.
In the case of the relatively small Auk field, the flow rate is not large enough to justify the high
capital cost of a pipeline, and Shell propose to load the oil direct into tankers from a single-
point buoy mooring. This method will also be used initially at least for Shell's Brent field.
Neither of these transportation methods is trouble-free. The laying of such a large diameter line
from the Forties field in about 400 feet of water has never before been attempted and is
something of a record in itself. Pipe-laying in deeper waters will be even more difficult-so
difficult that a new generation of dynamically positioned semi-submersible pipelaying barges
is being designed for the purpose. Once successfully laid, however, pipeline transport is very
reliable.
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Loading tankers at sea by single-point buoy mooring requires reasonable weather conditions
and this method is liable to be interrupted by bad weather, often for several days at a time.
Consequently, to ensure that oil production continues, consideration has been given to storing
the oil in floating or underwater tanks until tanker loading can resume. This arrangement is
being introduced in connection with production from the Ekofisk field, involving the con-
struction of a 1 million barrel concrete tank.
The stages of development following the exploration and discovery of oil are accordingly
technically demanding and expensive. Chart 3 on page 24 gives an example of how the timing
and phasing of expenditure on an oil discovery might proceed.
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2. ONSHORE INDUSTRIAL AND ECONOMIC
ACTIVITY
During the past eighteen months, the pace of developments associated with the exploration
and production of oil has been remarkable, especially on the east coast. Just as exploration
itself has proceeded rapidly, so have the various industrial and service projects stimulated by
the oil industry. It is estimated that North Sea oil activities have already given rise to some
3,600 jobs in Scotland and that projects so far announced can potentially give rise to a further
8,600 over the next few years. A sizeable drop in unemployment in the Cromarty Firth area has
already been brought about and unemployment in Aberdeen is now well below both the
Scottish and United Kingdom average. Besides these industrial and service activities, the
discovery of oil has also influenced port developments, transport, and infrastructure plans.
THE INDUSTRIAL OPPORTUNITIES
The present pattern of development indicates two main centres for the manufacture of heavy
equipment for the oil industry.
In the Moray and Cromarty Firths:
* Brown and Root are building production platforms for the BP Forties field and for the
Indefatigable gas field;
* J. Ray M~Dermoff are preparing to undertake similar work at Ardersier;
* M. K. Shand have established a pipe-coating plant for BP's underwater pipeline.
In the Firth of Forth area:
* Redpath Dorman Long (North Sea) Ltd are building platforms for the Auk and Brent
fields at Methil;
* Robb Caledon and Motherwell Bridge are undertaking steel fabrication at Burntisland;
* Bredero Price are establishing a pipe-coating plant at Leith, where the land pipeline from
Cruden Bay to Grangemouth will be coated.
Numerous other developments ranging from the inquiry stage to firm projects are in process
and the map on page 4 shows existing yards, and those for which planning applications are
approved or pending. On the West Coast McAlpines are to build concrete platforms using the
deep water at Ardyne Point.
PLATFORM CONSTRUCTION SITES
Site requirements for this kind of activity vary according to the character of the structure to be
built. The platforms at present under construction at Nigg Bay, Ardersier and Methil are steel
structures which will be fixed to the seabed by piles. Steel platforms require coastal sites with
access to water up to about 60 feet in depth. Such sites can be found in a number of areas
where existing communications and infrastructure services already exist to a greater or lesser
extent.
In future some platforms seem likely to be manufactured wholly or in part in reinforced concrete,
relying on their weight to keep them in position. The construction of these structures, sub-
stantial parts of which may be built while the structure is afloat, will in most cases require sites
with access to much deeper sheltered water. These deep water sites can be found only in a
few places on the West coast. Such sites are liable to be remote from existing communities and
infrastructure, to have difficult communications and to be in areas of high landscape value.
In view of these factors, the Government has been assessing the demand for facilities for
platform assembly likely to arise and the possibility of meeting it. While it is impossible at this
stage to make precise forecasts, the oil discoveries so far made suggest that for at least the
next 10 years the demand will be very substantial.
8
40-047 0 - 74 - 10
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The fabrication sites for which planning permission has been given in Scotland are capable of
accommodating some 12 structures at a time, of which 8 would be steel structures. Given the
fact that it takes 18 months to 2 years to build each structure there would appear to be a need
for at least double this capacity. The Secretary of State has made clear that in dealing with this
demand he will ensure that coastline of exceptional value is not damaged. His planning
controls will be exercised in such a way that the number of sites is limited and that full
advantage is taken of sites which have the particular characteristics required.
OTHER INDUSTRIAL DEVELOPMENTS
Many companies throughout Scotland are sharing in the task of supplying the oil industry, and
others are equipping themselves to do so. Orders connected with North Sea oil equipment
have been won by some well established Scottish firms; for example, cranes are being manu-
factured by Carruthers in East Kilbride, compressors by Howdens in Glasgow, pumps in
Glasgow by G. & J. Weir, generators by Parsons Peebles in Edinburgh, and deck modules by
Foster Wheeler John Brown in Dumbarton. Companies based in the United Kingdom are
supplying some 50 per cent of the oil industry's requirements. It is hoped to increase this
substantially and in Scotland it is especially important that industries in the west of Scotland,
many of which have appropriate skills and experience not currently being fully employed,
should benefit by winning orders. The steps the Government are taking to encourage the fullest
participation by industry in Scotland and in the UK generally are described in the next section.
The supply and servicing operation for oil exploration rigs and production platforms is generally
undertaken by purpose-built supply boats at the rate of two or three for each rig. The vessels
operating in UK waters have been developed from those used in calmer sea conditions in other
parts of the world. Originally concerned mainly with the supply task, their nature and function
have been extended to provide anchor handling and towing capability The dimensions of
vessels currently available range in length up to 200 ft. in beam up to 42 ft and in draught
to 1 5~ ft. and maximum power on forward thrust units is about 7,000 bhp. Some of the latest
boats have more than one bank of power units to provide extra thrust for towing. (Chart 4 on
page 24 estimates the scale of supply vessel operations needed up to 1977.)
Supply boats are of a size and type which would make them suitable for building in some of the
smaller Scottish shipbuilding yards, where they would be a welcome sou!ce of employment.
Hall Russell of Aberdeen, who originally built a vessel of this type on spec, are the only Scottish
company so far which has been able to break into this market for which they seem well suited.
But there are other Scottish companies who should be able to play an important part and it is
greatly to be hoped that they will benefit from the opportunity.
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3. GOVERNMENT ORGANISATION AND
INITIATIVES
Rapid arrival and growth of the under-sea oil industry, following the earlier discoveries of
under-sea gas, have led to a number of important changes in Government organisation which
are designed to stimulate development and provide co-ordination and control.
THE SCOTTISH ECONOMIC PLANNING BOARD AND NORTH SEA OIL
DEVELOPMENT COMMITTEE
The Scottish Economic Planning Board is the body principally responsible for planning and
co-ordinating the provision of infrastructure and services required for economic development.
All the main Government Departments in Scotland are represented on the Board and its
chairman is the head of the Regional Development Division in the Scottish Office. From the
start the Board has been closely concerned with the infrastructure required for the North Sea
oil developments; but during 1972, in response to the increasing pace of development, the
Board set up a special North Sea Oil Development Committee to ensure that the planning
provision of infrastructure for North Sea oil was given maximum priority. The Departments
most closely concerned in the oil operation are represented on the Committee which works
under Scottish Office chairmanship. Other Departments and public bodies may be consulted
and called in as required.
The Committee~s remit requires it to maintain close contact with local organisations, and to
provide advice and assistance to local authorities on the planning aspects of oil rel~ted
developments. Because the Cromarty Firth and Inner Moray Firth areas have been suddenly
and acutely affected by new industrial activity on an unprecedented scale, there are special
co-ordinating arrangements with the local authorities in that area.
One of the Committee's immediate tasks is to estimate the growth of employment and related
population in the areas most likely to be affected over the next few years. This involves contact
with the companies concerned and the collection and processing of information from a wide
variety of sources. The results of this work are being made available as quickly as possible to
Departments, local authorities and other bodies responsible for planning and the provision of
services.
STANDING CONFERENCE ON NORTH SEA OIL
Because of the quickening pace of the oil developments and the wide range of interests involved
who needed to be kept well informed, the Parliamentary Under-Secretary for Development,
Mr GeoTge Younger, presided on 14 February 1972 at a meeting between representatives of
the oil companies, Government Departments, local authorities and other parties concerned
with the oil developments. The meeting established itself as a Standing Conference on North
Sea Oil and will meet twice yearly under the chairmanship of a Scottish Office Minister. The
second meeting of the Conference was held at Inverness on 3 October and the third in Dundee
on 27 April.
The Conference provides a forum for discussion of matters of common concern relating to the
development of the industry. Among the subjects which it has discussed are land requirements
and environmental problems, the impact of oil developments on the Highlands, and business
opportunities for Scottish industry. Periodic information sheets on the progress of the North
Sea developments are issued to members of the Conference between meetings and are also
made available to a wider public. The Regional Development Division of the Scottish Office
acts as a central point of reference for information and enquiries.
RESEARCH STUDY ON THE IMPACT ON SCOTLAND OF OIL RELATED
DEVELOPMENT
The Scottish Office has commissioned a research study into the impact on Scotland of the
discovery of North Sea oil. The study will be carried out by the Department of Political
Economy at Aberdeen University under the joint direction of Professor Maxwell Gaskin and
Professor Donald MacKay. It is expected to cost £37,500 and will take about three years to
complete. Interim results will be available as the work proceeds.
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The aim of the study is to examine the present and future impact of petroleum exploration,
extraction and processing, together with their related services and activities on the areas of
Scotland most affected. The main subjects examined will be:
* The impact of new and prospective developments on local labour markets.
* The effects on. existing industries and services.
* An assessment of the overall infrastructure requirements for the future.
The areas to which particular attention will initially be paid include Aberdeen, Dundee,
Orkney and Shetland, the Cromarty Firth area, and the Firth of Forth.
The research staff will work closely with Government Departments and the study will be
controlled by a Steering Group chaired by the Senior Economic Adviser in the Scottish Office.
The results of this work will be available as it proceeds to the North Sea Oil Development
Committee and will be communicated where appropriate to local planning authorities.
OFFSHORE SUPPLIES OFFICE AND SCOTTISH PETROLEUM OFFICE
In order that the role of British companies in supplying the needs of the oil industry should be
properly assessed, the Government commissioned a study from the International Management
and Engineering Group in the spring of 1972. Their terms of reference required them to look
especially at the contribution which could be made from firms in Development Areas including
Scotland. Their Report has been published, and gives a detailed account of the forms of
activity in which British companies may be expected to participate.
In response to the consultants' recommendations the Government have set up within the
Department of Trade and Industry an Offshore Supplies Office in London and a new Scottish
Petroleum Office in Glasgow. These will be responsible for promoting the maximum participa-
tion from British and Scottish industry. The Scottish Petroleum Office will work with the
Scottish Industrial Development Office (SIDO), established a year ago in Glasgow, to promote
the development of Scottish industry. The new office will, through SIDO, be in a position to
keep in touch with all parts of Scottish industry. It will be able to make use of the powers to
provide selective financial assistance which were delegated to SIDO under the Industry Act
and will draw on the skills and expertise of SIDO staff as well as on their contacts with Scottish
industry.
The new Office will have alongside it a branch of the Petroleum Division of the DTI, staffed
largely by expert petroleum production engineers. This new organisation will therefore form a
strong Scottish centre for all industrial matters arising from oil and related activities.
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4. THE PROVISION OF INFRASTRUCTURE AND
SERVICES
The steadily increasing activity in the wake of the discovery of oil has meant demands for
additional investment in the areas affected. Many Scottish ports and harbours in the north and
north-east are preparing forthe present and future servicing of rigs and platforms, and additional
infrastructure investment and services are necessary to meet the requirements of the new oil
industry and of the expanding population in particular areas. In this way the construction of
ports, harbours, roads, housing and other facilities and services are being accelerated some
time before the first oil from the North Sea is landed.
PORTS AND HARBOURS
Ports or harbours must meet a number of requirements for them to be suitahle for the establish-
ment of service bases. They must be capable of round-the-clock operation at all states of the
tide and, within the limits of acceptable cost, water depths alongside berths should be as great
as possible as this enables them to be put to several kinds of use. This is particularly important
if incoming cargo is to be brought in by general cargo vessels. The length of berthage required
varies from 100 ft to 250 ft and the quay will normally have to accommodate heavy and lengthy
loads; most servicing companies need warehousing and open storage facilities, either adjoining
the quay or within a relatively short distance.
During exploration drillings, a single rig might need 1,000 tons of supplies per month, mostly
fuel, chemicals and tubular steel. Later development drilling calls for a larger volume of supplies
and a single production platform might then use 25,000 tons of supplies in a year. Of this
50 per cent would be liquid (water and fuel), 25 per cent powder (cement etc.) and 15 per
cent tubular steel.
The National Ports Council have recently undertaken a study of the demand for, and supply of,
berth facilities at bases in Scotland for oil rig servicing in the UK sector of the North Sea. The
findings and conclusions of this study will be made available for guidance in the formulation
and appraisal of proposals for the development of oil service bases. Meanwhile, many port and
harbour developments presently exist or are under way, as is shown in the following paragraphs
and on the map on page 4. The main centres of activity for the industry are at present Aberdeen
and Dundee.
ABERDEEN: Work is in progress on a £1 3 million scheme to convert the Victoria and Upper
Docks to tidal working and will result in about 2,250 ft of quayside being available for service
vessels at all states of the tide.
In addition to existing facilities at Pocra Quay:
* Amoco are building a 350 ft quay and supply base for their operations;
* Shell are operating out of Torry and are awaiting approval for expanding their base.
(Other operators are using adjacent facilities);
* Texaco with six acres of land leased are to construct their own base on the south bank of
the River Dee;
* SEDCO are also based in Aberdeen, as are other major drilling contractors.
DUNDEE: The Harbour Trust have reached agreement with Dundee Petrosea Ltd for the
exclusive use of the new facilities at the Eastern Wharf, currently under reconstruction at a cost
of £450,000. This development, which will provide an additional 540 ft of quay space, is
primarily for service vessels (3 berths) and also incorporates facilities for roll-on/roll-off ferries.
* BP's supply operations are based on Queen Elizabeth quay with comprehensive facilities
available.
* Conoco, who have signed a contract with Dundee Petrosea Ltd, are now operating from
this base.
* Ocean lnchcape, who own and operate supply vessels, have announced plans for a base
in the vicinity of the Robb Caledon yard.
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PETERHEAD: Several developments are under way or planned by Arunta and the Aberdeen
Service Co. The last of these is associated with the development of the south side of the Bay
undertaken directly by the Secretary of State following parliamentary authorisation. This swift
Government initiative and action are outlined in the Appendix on page 21.
MONTROSE: A major development is being undertaken jointly by P & 0 and the Montrose
HarbourTrust at an estimated cost of £25 million. The project will involve extensive reclamation
to provide land for storage facilities. The berthage is designed to accommodate up to 12
supply vessels. The base will be operated by a subsidiary of the P & 0 group-Sea Oil Services
Ltd of Aberdeen. The first stage of the development, on the north side of the harbour, is expected
to be operational by the Spring of 1973.
LEITH: Continental Shelf Supply Services Limited have taken options on 70,000 sq ft of
warehousing on the quayside at Victoria Dock with a view to providing a 24 hour supply
service. Other quay facilities are available for further oil-related activity. The new entrance lock
provides a constant depth of 37 ft of water in the Western Harbour.
HOUND POINT; near Dalmeny: The Forth Ports Authority and BP are negotiating about the
proposed development of an island terminal in the Forth, which would be able to take 250,000
ton tankers. Planning permission for the terminal has already been granted.
WICK: There are three separate proposals by potential developers for oil service bases in the
existing harbour. One of these developers also has plans for a development at Scrabster
Harbour.
SHETLAND ISLANDS: At Lerwick, the Harbour Trustees have plans for an extension of the
North Harbour to accommodate the Aberdeen/Lerwick ferry roll-on/roll-off terminal and
facilities for ShelI/BP. Sea Oil Services Ltd and Fred Olsen Ltd also plan to establish oil service
bases north of the existing harbour area at Lerwick. Hudsons Service Co are developing a
service base on a 25 acre site at Sandwick. The County Council recently applied for a Scottish
Provisional Order giving them powers to control port and other developments in Shetland and
to undertake certain developments at their own hand. Parliament has decided that these
proposals must be promoted in the form of a Private Bill and this is now being done.
ORKNEY: Hudsons Service Co have announced plans for a £1 million base at Carness covering
160 acres with 3,000 ft of quay space. A consortium of Shell, BP and SEDCO have expressed
an interest in the use of facilities at the former RN Store Depot at Lyness, Scapa Flow, for an
oil service base, and negotiations between MOD and the consortium on the terms of a lease
for part of the facilities are well advanced. The County Council have sought and have been
granted leave to promote a draft Provisional Order on similar lines to that applied for by
Zetland.
ROADS
The highest priority is being given to the improvement of the A9 between Central Scotland,
Inverness and Invergordon at a cost of some £60 million. A limited amount of improvement
work between Perth and Inverness has already been carried out or is in progress. In May 1972
details of 8 schemes on which preparation work was being started were announced and the
preparation of a further 9 schemes was announced in September. Apart from a difficult section
through the Pass of Killiecrankie where further studies are being undertaken, the entire A9
between Perth and Inverness is included in the comprehensive preparation now under way.
The schemes will provide for an extensive realignment of the A9 and for by-passes of Perth
and Inverness in addition to towns such as Dunkeld, Aviemore, Newtonmore and Kingussie.
These schemes require the solution of major engineering problems in very difficult country,
but preparatory work is being pressed forward vigorously and several schemes have now been
developed to the stage of indicating the preferred route of the road.
The section of the road on which work will start first is the stretch from Inverness to Invergordon
across the Black Isle. Statutory trunk road orders for this were made in September 1972. This
part of the scheme involves 20 miles of new road at an estimated cost of £17 million. It is hoped
to start work on the foundations of the Kessock Bridge this year, which itself is a major under-
taking costing £6 million and similar in scale to the Erskine Bridge over the Clyde. It is hoped
to have the whole section ready for traffic on the completion of the bridge in 1977. This will
reduce the distance to Invergordon by about 12 miles.
13
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The virtual reconstruction of the A9 and the completion of the M90 motorway from Edinburgh
to Perth at an estimated cost of £20 million will provide a modern strategic route from North
Scotland to the central industrial belt and the South. To this the North East will be linked by a
fast feeder route achieved by general improvement of the existing roads including the provision
of dual-carriageways between Perth and Dundee and between Stonehaven and Aberdeen;
the improvement of both the inland and coastal routes between Dundee and Stonehaven;
improvements at Peterhead; and the reconstruction of bridges and bypassing of various
communities on the route. This programme envisages expenditure of some £11 million.
The motorway programme from Glasgow to Stirling and the completion of a `motorway
standard' route between Edinburgh, Glasgow and Greenock are also proceeding.
AIR SERVICES
The need for fast personal communications underlines the important part that will be played
by air services in the development of the North Sea oil industry. Already traffic is growing
rapidly; Aberdeen had 190,000 terminal passengers in 1972, 40 per cent above 1971, while
at Sumburgh, Shetland, the increase was even more dramatic, at 60 per cent. A number
of improvements have been introduced or are under discussion, including:
* jet services direct from Aberdeen to London;
* proposals for a new terminal at Aberdeen;
* new terminals are in operation at Inverness and Sumburgh and improved airport facilities
are planned.
Aberdeen and Sumburgh have become the major bases for helicopter servicing oil rigs of the
Scottish coast, and BEA moved their United Kingdom Administrative headquarters for heli-
copters to Aberdeen last year. Private companies also operate helicopter services from Aberdeen,
Sumburgh and Inverness (see map).
The Civil Aviation Authority has set up a Working Group to consider the future of Highland air
services (including Aberdeen) and the longer-term implications of the growth in traffic due to
North Sea oil developments. Part of this Group's work will be to quantify the demand for air
travel by the oil industry and associated developments in order to assess what further improve-
ments of ground facilities will be required.
RAILWAYS
British Rail have also responded to the activity generated by oil developments, Improved
passenger services to Aberdeen have been introduced and much of the steel, cement and pipes
for North Sea oil has been carried by rail, The first of a new design of small freightliner terminals
is to be constructed at Dundee, with a capacity of 60 containers per day and provision for
future expansion. British Rail are paying close attention to the need for rail links required for
oil-related developments. This has resulted in the construction (in one week) of a quarter-mile
spur from the Inverness to Wick/Thurso line to serve the pipe coating yard of M. K. Shand Ltd
at Invergordon, and the reopening of the passenger station at Alness (closed since 1960) to
cater for the greatly increased population in the district.
HOUSING
Housing in the areas affected by North Sea oil developments may be provided by the local
authorities, by the Scottish Special Housing Association, or by private developers.
* Local authorities in the areas directly affected by North Sea oil activity face a variety of
problems and uncertainties in providing new houses. In particular there has been
uncertainty about the precise extent and timing of the new demands; and because of
overload on the building industry, there is an acute shortage of labour which adversely
affects the competitive pricing of contracts, These problems are being tackled in a
number of ways, including in the Moray Firth area joint discussions between the
Government and the authorities concerned, directed towards co-ordinating demands and
organising better methods of meeting them.
* A direct Government contribution is being made through the Scottish Special Housing
Association with a total programme of 2,300 houses for ~ompIetion in the period
1973-77. The Association are already building 200 houses in Inverness the first of which
will be completed towards the end of 1973 and the remainder in 1974. They will also be
building 200 in Nairn, 200 in Dingwall and 250 elsewhere in Easter Ross. In the North
East they are engaged on a programme of 1,350 houses and they will be building 100 in
Shetland.
14
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* Private housing developments are much more difficult to forecast depending as they do
on independent assessments of population movements and on the supply of available
land. From information provided by the local planning authorities in the North and North
East, some 1,700 acres are zoned for development for owner occupation, of which some
800 acres have accessible services.
These housing developments and the associated population movements will of course give
rise in many cases to a need for additional school provision. The Scottish Education Department
are keeping under review, with the education authorities concerned, the scale and timing of the
new building required.
15
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5. PLANNING, THE ENVIRONMENT AND
POLLUTION CONTROL
There is no doubt that North Sea oil developments can bring economic benefits to the Scottish
economy in terms of employment and higher incomes. But fears have sometimes been
expressed about the ability of the planning system to cope with them. On the one hand it is
suggested that planning procedures are so time consuming that developments may be lost or
only be realised on a smaller scale than would otherwise be possible. On the other hand, there
are anxieties lest the environment may be damaged either because the speed of developments
outpaces the controls available under the existing planning machinery or because that
machinery simply proves unequal to the task. It is clear that these anxieties are to some extent
contradictory and that some at least of the fears in the popular mind arise from an imperfect
understanding of the planning system. But in fact the system has worked well so far despite
the considerable strain which major new developments have imposed upon it. As earlier
sections of this Bulletin have shown, several valuable projects have been able to get under
way with a speed which few thought possible, yet any environmental damage has been kept
to a minimum.
PROJECT REQUIREMENTS
The wide variety of activities associated with under-sea oil and gas have already been
described. This diversity applies particularly to the operations on land and their site requirements.
For example:
* Well-head platforms are of many different types and sizes and the particular design
may determine depth of water required and other features of the site.
* The fabrication of certain types of concrete platforms is limited to a small range of possible
sites because of the great depths of water required close inland.
o The servicing of both exploration rigs and platforms requires harbour bases with a wide
range of supplies and services, as the last section has shown.
* Pipelines can only be brought ashore where the landfall is suitable, and the rocky
conditions which prevail on much of the coastline of North and North-East Scotland
make such sites hard to find.
* Storage and processing points on land will be needed.
* Refineries and other industrial developments may be required.
Thus, each one of these operations will have different requirements, different time-scales and
a different impact on the area and its communities. Of equal importance are the housing and
infrastructure requirements of communities whose population may increase rapidly with new
employment. The planning authorities must therefore look forward over as long a period as
possible in preparing their development plans.
THE PLANNING SYSTEM
The objective of planning control is to determine the best use of land from the point of view of
the community as a whole. Developments must take place with the least possible damage to
the physical environment and in such a way that they strengthen rather than weaken the social
fabric of the areas affected. This means that a difficult middle course must be followed between
the extreme attitude which would have nothing stand in the way of industrial development
in Scotland and the contrasting view which opposes virtually any change in the existing
environment.
The development planning and control machinery is laid down in the Town and Country
Planning (Scotland) Act 1972. Local planning authorities have a statutory duty to prepare
development plans which indicate the areas zoned for particular uses such as industry and
housing. These plans are submitted to the Secretary of State for his approval.
In most cases development proposals lie within the appropriately zoned areas of existing
development plans. Each proposal for development however must be the subject of a planning
application to the local planning authority, which may approve it, with or without conditions,
or reject it. If it is rejected the applicant may appeal to the Secretary of State.
16
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140
The application may however not conform with the current development plan. A prudent local
authority will attempt to anticipate new forms of development by keeping its plan up to date,
amending or revising it as necessary. But such revisions take time, since they must be under-
takenin great detail to show the citizens who may be affected, and ultimately the Secretary of
State, that the revised plan is well founded. It is hardly surprising that the early on-shore
developments associated with North Sea oil have required amendments of development
plans, most of which were drawn up before oil discoveries could be forecast. Where a proposed
development is significant and does not conform with the development plan, the authority may
have to ask the Secretary of State for a direction authorising them either to approve the
planning application or to submit a development plan amendment.
The Secretary of State may call in any proposal for his own consideration if the application is
of national significance or affects more than one local planning authority. In all three cases-
appeal against rejection, applications for a direction or development plan amendment, or
called in planning application-the Secretary of State may order a public inquiry. The report
of this inquiry is submitted to him and subsequently published. He may then approve the
proposal or amendment if he is satisfied that it is well founded.
In view of the importance of reaching quick decisions on major projects, the Secretary of State
asked local planning authorities in March 1972 to give priority to the consideration of projects
for new industrial building of 15,000 sq ft or more. This has allowed a number of major on-shore
developments, notably the fabrication yards at Nigg Bay and Ardersier to be handled swiftly
and effectively.
Up to February 1973 just under 1,000 acres of land in Scotland had been allocated for major
oil-related developments (with about 250 acres actually in operation) and of this about half
had required development plan amendments. A further 1,800 acres are now under considera-
tion. When these figures are compared with the 6,000 acres of land which on average are
taken annually for all development purposes in Scotland, they emphasise both the importance
of the new industry and the need for good advice in considering possible sites and in taking
planning decisions.
Now that on-shore developments have started and the scale of exploration and future oil
production are becoming clear, it is necessary for local planning authorities to get ahead with
the updating of their development plans. Government departments are doing all they can to
assess future demands. The situation may be expected to change constantly as new oil fields
are discovered and as advances are made in a rapidly emerging technology. But a substantial
amount of knowledge and expertise is now available and Government departments are making
this available to local planning authorities through the North Sea Oil Development Committee.
In addition the Scottish Office bring parties together on individual projects where there may
be an impact on the environment. Meetings are held where appropriate with representatives
of the local planning authority and of the Nature Conservancy and Countryside Commission.
Of particular interest from the environmental point of view are the Environmental Forum and the
Coastal Survey.
Environmental Forum
This Forum is held regularly under the chairmanship of the Director of the Countryside
Commission for Scotland, to bring together representatives of many voluntary bodies concerned
with the environment. Bodies represented are:
Countryside Commission for Scotland
Nature Conservancy
Scottish Landowners' Federation
National Trust for Scotland
Scottish Civic Trust
Scottish Wildlife Trust
Royal Society for the Protection of Birds
Association for the Preservation of Rural Scotland
Scottish Council of Social Service
Council for British Archaeology (Scottish Regional Group)
Conservation Society
17
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Not only are the voluntary bodies kept informed of the developing oil scene, but there is also
a valuable exchange of views between the various bodies and ~hè Scottish Development
Department, both on general matters concerning oil and on particular projects as they are
likely to affect the environment. The Forum can be a useful source of information about what
is being said, thought and feared locally in areas concerned.
Coastal Survey
The on-shore developments in Scotland have built up rapidly in the last two years, and as has
been explained applications for planning permission have been given urgent consideration
with the minimum delay. The pressure for development is, however, expected to continue and
many difficult planning decisions will have to be taken. To enable the best use to be made of
the available sites the Scottish Office, a consultant landscape architect retained by the Depart-
ment, the Countryside Commission for Scotland and the Nature Conservancy are now under-
taking a coastal survey, in order to guide local authorities which have to deal with problems
raised by applications for industrial sites.
Existing information about the Scottish coast has been assembled, and special investigations
of three main kinds are now being undertaken:
(a) A study of the coast and the availability of sites suitable for current industrial demands.
(b) A study of the main industrial uses to establish the flexibility that exists in siting
requirements.
(c) An inspection of the coast in detail to establish its current appearance and use.
POLLUTION CONTROL
Controls exist to minimise the possibility of oil leaks which might damage beaches or fishing
grounds. Any offshore operations-seismic surveys, well drilling or the installation of production
platforms-require the approval of the Department of Trade and Industry, and the DTI consult
Scottish Office Departments as appropriate before consent is given to proceed. The consent
of DTI is also required for the routing of pipelines anywhere in the designated areas of the UK
Continental Shelf. A condition of such consent is that, wherever possible, pipelines must be
buried to remove the risk of damage. The DTI is empowered by Pipelines Act 1962 to prescribe
the technical standards of pipelines in territorial waters, which determines the standards for
the whole of the line.
Deliberate discharge into the sea of oil from offshore operations is prohibited under Section 3
of the Prevention of Pollution Act 1971 under heavy penalties.
The UK has taken steps to ensure that the necessary preventive measures are taken by all
licensees:
* good oilfield working practices must be observed;
* specific requirements for well-drilling methods, equipment and procedures must be
followed to prevent and detect blow-outs;
* control and fail-safe equipment must be used in production arrangements.
In addition, legislation now being prepared under the Mineral Workings (Offshore Installations)
Act 1971 will also have an anti-pollution effect, insisting that:
* installations and equipment are properly constructed;
* all suitable precautions are taken at sea;
* all operations are properly supervised.
Both licence provisions and safety regulations are enforced by the Petroleum Production
Inspectorate of the DTI.
On the basis of experience elsewhere in the world,with these precautions and safeguards the
risk of accidental pollutions from offshore oil operations is slight. But it is nonetheless necessary
to establish procedures for dealing with pollution, however small the risk may be. Apart from
major shipping accidents involving tankers, most oil slicks have hitherto been caused by
sea-going vessels cleaning fuel tanks, though this nuisance should be reduced by recent
international agreement. Local authorities have schemes for dealing with oil pollution on their
shores or on inshore waters, and grants of 50 per cent are available towards the cost of clearance
18
PAGENO="0171"
142
and the purchase of materials and equipment. The Department of Trade and Industry
are responsible for treating oil spills at sea and have the following standing emergency
arrangements:
* The Fisheries' patrol vessel `Switha' of the Department of Agriculture and Fisheries for
Scotland is based on Leith. It patrols northern areas including the waters around
Orkney and Shetland, and carries on behalf of DTI spraying equipment and over 5,000
gallons of dispersant. DAFS expect to take delivery later in 1973 of another patrol vessel
fitted to carry and spray a similar amount of dispersant and, in 1 974 of a third such
vessel,
* At Invergordon, one dispersant spraying kit is available for use on the tug `Kestrel'
taking 3,000 gallons of dispersant.
* At Aberdeen there are two dispersant spraying kits for use on Aberdeen Harbour
Commission tugs carrying about 6,000 gallons of dispersant.
* The oil companies' UK Offshore Operators' Emergency Action Group have agreed plans
for co-operation with DTI in the event of serious leakage from a pipeline or oil rig.
This group have on Scalloway, Shetland, 7,200 gallons of dispersant with spraying
equipment for fitting to an oil rig supply vessel; and at Aberdeen 14,400 gallons of
spraying sets for fitting to two similar vessels. It is understood that BP Ltd manufacture
up to 10,000 gallons daily of a suitable dispersant at Pumpherston so that additional
supplies can be available at short notice.
19
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143
6. CONCLUSION
This Bulletin has shown that in the short space of two years since the discoveries of North Sea
oil became a commercial reality, major industrial and service developments are taking place in
Scotland. Much of this is happening in areas which were previously little affected by industry.
Scotland's recent economic history gives no parallel to this situation; only by going back to
the spread of industrialisation in the Central Belt a hundred years ago can one find one.
Scotland needs the employment and prosperity that these new activities can bring. Some areas
which previously suffered from inexorable population decline are rapidly acquiring a new
dynamism. Scotland's labour force has the skills and training to meet these new demands
whether it be engineering, metal working, shipbuilding or seafaring. Opportunities such as
those now appearing are rare; and it is essential that Scottish industry and labour should
respond if the opportunity is not to be lost to others. In particular, the industries of the Clyde
valley and of Lanarkshire have both the need and the opportunity to gain. The Government
will assist and are already doing so, but the initiative should also come from firms themselves.
The spread of development to new areas creates problems as well as opportunities. Scotland
has suffered much from the social and physical legacy of unplanned growth in the nineteenth
century: and it is vital therefore to avoid repeating the mistakes of the past in the areas which
are now becoming industrialised. It would be foolish to claim that industrial growth can take
place without environmental disturbance. But it is the purpose of planning to ensure that
environmental damage is kept to the minimum and that when it does occur the social and
economic gains are substantial enough to justify it. Scotland is fortunate in having more space
for development than most European nations; but the physical requirements of some of the
heavy industry, notably platform construction, are likely to impose severe limits on the number
of possible sites. Where these are of high landscape value, difficult planning decisions are
inevitable.
The planning machinery has so far stood up well to the test which these developments have
imposed upon it. As this Bulletin shows, the Government have taken speedy action to initiate a
whole range of major infrastructure projects, and have set up machinery to assist the local
authorities and to co-ordinate planning generally. There will of course be some short-term
problems, since some types of infrastructure by their nature cannot be provided as quickly as
industrial projects can be set up, and in some areas labour resources are already overstretched.
The Government will try to identify the areas of need as far in advance as possible and give
priority to the provision of necessary infrastructure. But companies too have a part to play, for
orderly and successful development requires full and early consultation between the Govern-
ment, local authorities and those involved in industrial and commercial development.
20
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144
DEVELOPMENT OF PETERHEAD HARBOUR OF REFUGE
The Bay at Peterhead has for many years been a refuge from storms. Because the Secretary of
State for Scotland was the harbour authority there, with very limited powers under a local Act
of 1886, the Government were able to take swift action when the Bay's suitability as a servicing
base became evident last year. As a result the Scottish Office are now directly involved in
providing harbour facilities for the oil industry. The Department of Agriculture and Fisheries are
building the basic quay structure for a service base on the south shore of the Harbour at an
estimated cost of £2 million. On the north side Arunta (Scotland) Ltd are developing a similar
but smaller base.
Peterhead Harbour of Refuge was formed by the building of two massive stone breakwaters
enclosing the South Bay of Peterhead, This has enabled the Bay in the past to be used simply
as a sheltered anchorage. The construction work, for which Peterhead Prison was originally
established, was authorised by the Peterhead Harbour of Refuge Act of 1886. But it was not
finally completed until the 1 950s. The Harbour was then transferred to the Secretary of State
for Scotland in view of his responsibilities for the Prison and his general interest in harbour
facilities.
The Department of Agriculture and Fisheries assumed financial responsibility for the mainten-
ance of the breakwaters and the general upkeep of the Harbour although day-to-day work was
carried out on their behalf by the Peterhead Harbour Trust. The Trust are statutorily responsible
for the Fishery Harbours of Peterhead which are entered through the Harbour of Refuge. In
recent years Peterhead has become established as the second fishing port in Scotland in terms
of the value of landings.
~During 1971 the increasing pressure on harbour facilities at Aberdeen forced companies
servicing the offshoi'e developments to look elsewhere if they were to expand their activities. -
Two main factors attracted them to Peterhead:
1. The Bay provides the only deep, sheltered water between the Cromarty Firth and the Tay
which is accessible in all weather conditions.
2. Peterhead is situated at virtually the most easterly point of the Scottish mainland. The
steaming time to the main areas of exploration is accordingly less than from Aberdeen.
The impetus for developing the Bay gained momentum during 1972. The Scottish Office
became closely involved in industry's efforts to take advantage of the Harbour's industrial
potential. At the same time it was keeping a watchful eye on the possible effects of industrial
activity on the amenity of the Bay and on the lives of the local community.
Events then moved rapidly:
Spring 1972 It became evident that development of any kind in the Bay, other than
purely as a haven of refuge from storms, was prohibited under the terms of
the 1886 Act.
May 1972 Because of the urgent demand for harbour facilities and despite the heavy
Parliamentary programme, the Secretary of State introduced an amending
Bill into Parliament enabling him to undertake developments of the
Harbour or authorise others to do so.
June 1972 Babtie, Shaw & Morton, a Glasgow firm of consulting engineers were
engaged to evaluate the various proposals for the south side of the Bay,
and to advise on the best overall scheme for the development of the Bay.
July 1972 The final committee stage of the Bill in the Commons was completed.
21
PAGENO="0174"
145
August 1972 The Harbours Development (Scotland) Act 1972 received the Royal
Assent.
The consulting engineers completed their report, recommending that a
1,500 foot quay should be built and some 22~ acres of land reclaimed to
provide six servicing berths.
The Secretary of State accepted the recommendations and decided to
directly undertake the development of the basic quay structure for lease
to one or more operators.
An explanatory memorandum based on the Report was circulated to all
firms which had expressed interest in operating out of Peterhead. It was
given wide circulation in the town and was published in full in the local
newspaper.
September 1972 It was made clear to prospective leasees and in Parliament that the Govern-
ment would expect a full commercial return on their investment.
A public meeting was convened in the town at which officials of the
Department explained the developments and answered questions on them.
The meeting was well attended and the Government's proposals received
a general welcome.
October 1972 Detailed negotiations took place with companies interested in using the
Harbour as a servicing base,
Aberdeen County Council started work on a temporary access road to the
development site to facilitate the construction work.
November 1972 A small committee was appointed to advise the Secretary of State on the
development of the Harbour of Refuge. Its members were chosen for their
wide experience of business, management shipping and local authority
administration.
Agreement was reached between the Secretary of State and the Aberdeen
Service Company (North Sea) Ltd, a subsidiary of Sidlaw Industries, the
important Dundee group, for the lease of the full quay and back-up land.
January 1973 Dredging work began bringing the sand infill for the reclamation work from
Rattray Bay, 4 miles to the north,
February 1973 A full-time Harbour manager was appointed to supervise the developments.
March 1973 The Aberdeen Service Company announced a £500,000 investment
programme of warehouses, offices and storage tanks to develop a fully
integrated service base at Peterhead. It is expected that the base will be
largely completed by October 1973.
22
PAGENO="0175"
I Number of wells drilled in the United Kingdom Continental Shelf
Source Dept. of Trade and Industry North Sea Oil and Gas
A Report to Parliament
Eli Production Wells I
Exploration or Appraisal
2 Average rig years (based on average number of rigs operating
per week throughout the year) and peak rig activity
Average Rig Years I ~j.] Dependant on successes
~ and licencing during the
Peak Rig Activity ~ period 1973-77
U)
0
z
months
only
FINANCIAL YEAR (Apr. 1-Mar.31)
YEAR
PAGENO="0176"
z
0
2
`4'
w
I-
0
z.
0.
>(
U)
~ 7.
m 6-
2
z
0 4
3-
2
I-.
U)
uJ
4 Supply boats operating from mainland and islands
3 Expenditure on drilling by a petroleum company: an example of phasing
Source IMEG Report
140- _________
Exploration I
Feasibility Studies, etc., _________
130- for Project Development
Capital Construction Phase I ~
120- Capital Construction Phase E ________
Development Drilling
110
100-
90
80'
70
80
50
40
30
20
10-
U)
2
z
0
YEAR
/ERY
-2. -1 0
1 2 3
YEARS RELATIVE TO DISCOVERY
Pristed in Scetland fur Her Majestys Statiesery Office by Hewie & Seath Ltd., Edinburgh Dd. 953957/3229 KG 9/73
Operational fixed drilling platforms
1973 1974 1975
YEAR
5 6 7
1976
1977
PAGENO="0177"
PAGENO="0178"
149
APPENDIX G
ZETLAN D
COUNTY COUNCIL
INTERIM COUNTY
DEVELOPMENT
/
PLAN
County Development Office,~
~a Market Street,
Lerwick.
28th March, 1973.
PAGENO="0179"
150
ZL~LkI~D ~Y) ~T COUNCIL
flTL IM C~'1ThT~ DE'~ ~ I OPI~ E'~T PT ~"
PREM BLI~
Plans for the development of any community must take
account of two factors (a) the aims and ideals of that
community and (b) the practical steps~ for the implementat~.on
of these aims. The County Council. accepts that continuing
industrial develop:~ent is likely to affect the~ social fabric
of the islands. It realises that in any case the social
pattern is s~bject to consta~it change
However, as the elements involved in mOdern industry are
so different from the nature hitherto of lire in Shetland, the
County Council feels it appropriate to set forth the
characteristics of present island society and that an attempt
should be made to identify the qualities of Shetland life o~
which many Shetlanders are only intuitively aware. The
County Council believes that in so doing it will help the
asnimilation and happy settle:~ent of the relatively large
influx of people who will have to make their homes in Shetland.
Life in Shetlar!d has been affected by various factors.
1. The integration - the homogeneity -imposed by the sea
boundary. The high proportion of the population born
and bred in Shetland. Only a small changing population.
2. The small size of the population - broken into small
communities.
3. Difficulties in communications.
Characteristics emerging from these have bee:n:
a. Communities where the individual feels he matters,
has a sense of belonging.
b. Strong family ties.
c. A tolerance through not having been exposed to or
confronted by strong social pressures.
d. An absence of serious crime - little parental fear
for the safety of young ones.
e. Religious tolerance.
f. The realisation that the continitance of a nat~e
dialect affords an enriched means oa eommunication.
This Interim Development Plan is by nature a planning
instrument, having to do with the physical and material. It
is fit and proper that Zetland County Council should highlight
the human background against which it~ proceeds to meet what is
probably the greatest challenge and o~portun~ty in its history.
PAGENO="0180"
151
CONTENTS
Introduction 1
Problems and Pressures for Developn~en~~ 2
Aims and Objectives 2
Employment 4
Develo~5i~ë~fi~ D~N,tricts 4
Industry 5
Communications 11
Housing 14
Education and Health Services 15
Public Utilities and Public Services 16
Tourism and Use of the Countryside 18
Areas of Landscape Value 19
Development Control 21
Population Appendix A
Employment Appendix B
Future Programme Appendix C
PAGENO="0181"
152
COUNTY NRITTEN DiVELCP~ISNT PI~~N
Written Statement
INTEODUCTION:
In the early 1950s a considerable amount of preparatory
work was carried out on a Coürty Development Plan; howev~r
this material never reached submission stage. The only
part of Zetland County to be covered by a statutory plan is
the Burgh of Lerwick, the Town Map being approved in t64.
The following year in accordance with S.D.D. Circulai
No. 2/62 the county submitted tourist development proposals
and these were noted by the Scottish Dove: opment Department.
More recently renewed attention has been given to the County
Development Plan and in the late 1960s a considerable amount
of survey information was collected, but again this work did
not reach the formal submission stage.
1.2 With the recent expansion of the local economy and the
emergent pressures related to North Sea Oil development,
urgent action is rec'uired to meet the new situation. It
is the county~s firm intention to follow this Interim
County Development Plan with surveys in preparation for a
County Development Plan, taking cognisance of the Town and
Country Planning (Scotland) Act 1969, and in particular
the S.D.D. Circular. No. 52/1971 and related Advice Notes.
1.3 The purpose of this Plan is to
(1) establish a planning control framework to guide
proposals for development throughout the county
area.
(2)' identify priority areas for detailed survey work.
It should be pointed out that this Plan while not fully
supported by up-to-date information, is based on a wealth
of knowledge gathered over a number of years and on
recently accumulated practical information collected by
various officials of the County çcurcu. and on the guiding
principles laid down in various Cir~u1ars and Advice Notes
issued by the Scottish Development-Department.
1.5 The Interim County Development Plan consists of:
I A written statement which is intended as a policy
document covering the relevant topics for
development planning in Shetland.
ii A County Man in the scale 1 t~ lO~,OOO (1 centimetre
equals 1 kilometre). This will provide a
comprehensive presentation of the county?s proposals
and policies.
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2
2 PROBLEMS AND PRESSURES FOR DEVE OPPT}NT
2.1 Development of the county to date has largely been
confined to that of the county's natural resources, and
the scale o~' these developments has been small by mainland
comparisons. As a result pressures by conflicting
interests have been small and eas resolvec
2.2 With the advent of the development of another of the
county's natural resources, n~mely oil, planning
pressures ha'e increased Oil- ~elated inctustries tend
to be highly technological, highly mobile, and.where
* shore-based inst~.lations. are concerned, highly land
intensive
2.3 The extent and scale of the changes taking place
inevitably give rise to conflict. The cxofter and.
fisherman have to get on with their work and want as
little interference as possible. At the same time the
oil ~ncIustry must have bases from which to dperate and
facilities with which to get on with their jobs, and the
investment of hundreds of millions of pounds in capital
and operating costs results in time ~eing of great value.
2.4 New workers will come to the islands. More houses must
be built, industrial facilities must be provided, the
tourist industry must be catered for, attractive scenery
must be preserved. Yet the full enjoyment of the beauty
* of the landscape which is the essential backcloth to the
islandst activities depends on the development of a healthy
* industrial economy which alone can create the opportunities
for people to live in the isiands
It is not practical to try to preserve the countryside as
it is at present. Change will occur and it must be
* planned for.
3 AIMS AND OBJECTIVES:
3.1 The County Council's general aims for the development of
Shetland have been set out~in various documents during the
past ten years, consequent to a visit to Faroe by members
of the County Council in 1962.
* The policy can be broadly summarised in the following
paragraphs:
(1) Havin; achievcd the stabilisation of Shetland's
popul'~ti'n. tc progress towards an increase in
* population.
(2) The diversification of the economy of the islands.
* (3) Development throughout the islands in order to
* .. retain viable communities in the landward areas of
* the county.
(4) The co-ordination of public investment in order to
achieve a pattern of focal points in the landward
area where some return in terms of population *
* development can be achieved on the public investment~
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(5) The ninimising of the probl~is associated with the
uhysical isolation of the c~~unty.
(6) The retention of Shetlandts regional identity.
3.2 To tho3e ge~eral aims need to be added a number of more
specific planning objectives which define some of the
ways by which the primary ohjectfios would he achieved.
Devel opment
(a) The diversification of the existing industrialbase
by the development of indigenous industries and the
attraction of new industries from outwith Shotland.
(b) Development in the countryside which is suitably
located and carefully designed.
(c) The use of landscaring technlc~ues to enhance the
visual impact of rural development.
(d) The provision of development opportunities throughout
the county and of selected sites for developments.
(e) The improvement of external and internal communications.
Conservation
(a) The conservation of good agricultural land and the
encouragement of the full development of its
potential.
(b) The conservation of mineral resources and the
ensurance of their efficient working and
restoration.
(c) The efficient use of water resources commensurate
~with needs for industry, domestic purposes and
conservation.
(d) The conservation of areas of particular value for
their landscape quality, their recreational
significance or their natural history interest.
(e) The conservation of village character and buildings
of significant architectural or historic value.
(f) The efficient use of land.
(g) Experimental tree planting.
(Ii) The reimstatemrnt of derelict land for beneficial
use.
(i) An adequate and convenient distribution of
recreetion~~J lacilities.
3.4 Implementation
The County Council will try to achieve these objectives
in four ways; by the
(a) adoption of policies especially those relating to
development and conservation
(h) promotion of smecif Ic schemes
(c)/
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ii The Mainland
Five geographical
(a) Northmavine
155
4
(c) dissemination of advice and fuller public
participation
(d) control it exercises over all development as
plann~.ng authority.
4 EMPLOYMENT:
4,1 The aim of the County Council is to maintain a healthy
economy by encouraging the development of existing local
industries and by promoting new ventures based on the
indigenous material resources and innate skills of the
people E~plo~,ment in oil and associated developme~ts
will rely largely On imported, labour but the return of
native Shetlanders will be actively encouraged and this
source of employment will also be used to provide jobs
for retention of ~population which would otherwise be
lost by emigration.
5 DEVELOPMENT DISTRICTS:
5.1 Developme~r~ districts will be established throughout
Shetland in areas where some return in terms of population
retentiàn, and indeed population growth, can be envisaged.
Each development district will form a natural geographical
and economic unit which has one or two to~/nships~which can
be designated as focal or nodal points. To avoid,
ineffectual scattering of scarce resources throughout the
district County Council irvestnent will he coneen~rated
at these points. This policy should issist the building
up qf vital communities within each district `whiQh should
be capable of supporting the social, educational, Chopping
and other services necessary for their wellbeing and
should have a potential for-attracting the small
industries needed to provide local employment.
5.2 The districts are defined as follows:-
i The Islands "
Each of the island communities fall naturally into
one development district. Baltasound, Mid Yell and
Symbister will form the focal point for each of their
respective island communities. The other smaller
islands will be treated as an entity in themselves
where development would.not be concentrated on one
particular centre but couId~be envisaged as taking
place anywhere on the island. "The exception to
this island policy is Bressay, which is considO~red,,,as
part of the central mainland area associated with
Lerwick. `
districts are defined:
(b) The West Mainland
(c)/
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(c) The South Mainland
(d) The Central Mainland
(e) Nes~ing, Lunnasting and Deiting.
5.3 The focal points of these districts are:
(a) No~'thmavjne
Here there is no well-defined centre. On balance.
*Hi].1s~ick is the most suitable focal point hut
development at Ollaberry will also be encouraged.
(b) The Uest Mainland
Walls and Aith are the 2 main focal points.
(c) The South_Mainland
The 2 focal points of this district are Sandwick/
Cunnin~sburgh~ and Sumhurgh. In the case of
-Sandwich and Cunningsburgh it is not desirable or
realistic to senarate these 2 communities because
of their proximity. Current proposals for housing
and industrial development indicate that Sandwick
is the area lib-el y to attract the greater share of
development but Cunningsburgh will also be required
to contribute to and benefit from new infrastructural
provision.
(d) The Central Mainland
Lerwick and Scalloway form the key foci for
development on the mainland. However both require
to be planned in theirwider context, thus Scalloway,
Troodra and Burra (Hamnavoe) form a dispersed but
interrelated unit for planning purposes. Similarly
Lerwick, Bressay, Cunningsburgh, Gulberwick and Quarff,
Whiteness, Weisdale and Tingwall form another area for
which an overall plan is required.
(e) Nesting._Lunnastinc and Telting
Brae is the main focal point for this district.
Voe is a secondary centre which on account of its
character should develop as a residential/tourist
centre.
6 INDUSTRY:
6.1 Agriculture
At the present time it is not pos~:ible to develop a
full policy for agriculture. This will be made at a
later date. in the meantime, however, there are three
areas in which a contribution can be made to a policy
statement.
(1)/
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(1) The intention is to improve and ro~ ote the development
of the agricultural industry generally as part of the
overall economy in Shetland. This could include moyi'-~
towards a greater degree of self-sufficiency.
(2) The policy is to conserve areas of high quality
agricultural land, and in particular to retain gor.d
quality farms as effective units, even when these cau
very often occur in close proximity to built-up areas.
Close contact will be kept with the Dc~artMent of
Agxiculture and Fishe~ies for Scotland on this matter
(3) New agricultural buildings can give cause for concern
from an amenity point of view though in most instances
they do not come within the scope 5o1 planning control.
Consideration will therefore be given to the use of an
Article 4 Direction under the.Town and Country Planning
(General Development)(Scotland) Order, 1950 to take
agricultural buildings out of permitted development to
ensure that where possible new buildings of more than
* 5,000 square feet or more than 40 feet ~n height are
grouped with existing buildings and their design,
* colour, materials and siting are carefully treated so
that they fit into the landscape or enhance it.
6 2 Forestry
The policy is to encourage the use of shelter belts,
initially on an experimental basis. This can help
create new amenity settings for developnent.
6.3 Fishin~ and Fish Processi~
(a) The County Council's policy is to give full support for
the development of a modern and `~fficient fishing fleet.
For this document it is not possible to give firm
proposals by which the County Council would seek to
achieve this ~ but it is essntial that detailed
research be undertaken into the fishing and fish
processing industries.
(b) Provision of small fish processing factories in many
localities within the islands has provided locai job
opportunities and a valuable land based nxtension to
the fishing industry.
The success of these local uni~ ca~ be measured by the
dramatic increase in proces.sin~ ca~~ity from 3,200
boxes per day in 1970 to 5,500boxes in 1973.
It is important. to ensure that development of the
processing side of the industry keep in step with
developments in other parts of the industry. Unless
this occurs th~re are dangers of' over or under provision
in either fishing or processing capacity which could
have serious repercussions on the econo~iy of the islands
(c) In association with the fishing industry within. Shetland
the County Couc.~5il shall assist wherever possible in
finding a solution to th~is prohieth, which will involve:
(1) /
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An examination of marketing and buying systems.
An examination of the need for diversificatjoh in
the fish processing industry and ways of achieving
diversi.~ica~ioc.
(5)
6 4 tnit~ ear aoe `} x e ~iR ufactj~~
The County Council ~s policy i~; to support the existing
textile manufacturing industry in Shetland. The County
Council will determine its policy on the following
particular problems:-
(a) The present pattern and distribution of knitwear units.
(b) The need for a Sb.etland Trade Mark, not only as.socia~ed
with th~ knitwear industry but industry in general.
(c) The repercussions of the iiitroftiction of powered
knitwear units.
(d) The recruitment and training of labour for the industry.
(e) The feasibility and desirahility of~estahlishing a
Spinning Mill on the Islands.
Oil Developments
(1) The adver~t of North Sea Oil propesals has brought to the
fore the need for a short term outline plan in order to
control these developments and safeguard the creation of
a full Development Plan.
(2) Policy
The stated policy of the County Council in dealing with
North Sea Oil is as follows; to:-
(a) Keep abreast of developments.
(b) Influence developments for the good of Shetland.
(c) Provide themselves with safeguards so that the
basic interests of the Shetland Community are
protected.
(d) `Provide the facilitins and services which are
necessary to ensure that the ecOnomy and the
Community adjust to changing circumstances with
the minimum distress or inconvenience.
In additiou to these overall policy objectives the
following paragraphs indicate some s~eans by which the
County~ Council hope to achieve the aims stated above:
(i) Since the County Cou~icil's resoUrces in respect of
infrastructure!
158
(1) An ~xarn~iat~o~ of the scng ii~hing mcthoJs,
size and structure of the fishing~fleet,
reco~uriend~tio s for fituie ~ ~
(2) Au examination of the fish processing capacity,
together with recommendations for the future size
and organisation of this industry.
(3)
(4)
Further reports will he prepared by the County
Development Office in collaboration with the W.F.A.,
H.I.D.B. and the H.I.B.
6.5
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infrastructure provision are limited they must as a
first priority be devoted to t~ie support of indigenous
industries.
(ii) The County Council will endeavour to ensure that
all areas ~n Shetlai~d benefit from any oil based
service activities in the Islands.
(iii) Where possible the policy of Development Districts
with designated focal points will be adhered to.
(iv) Where it appears that oil development infrastructure
could secure imrjroved facilities for the long-term
development of the economy of the County, in the period
subsequent to the cessation of oil developments, this
factor will influence the siting of the proposed
development.
(3) Areas of Oil Activity
Thc~ce are two phases to the oil industry in which
Shetland will be involved:
(a) Exploration
(b) Exploitation
In both phases there will be a need to develop
specialised facilities together with ancillary
infrastructure and it is essential that these
developments be properly controlled by allocating
areas for various developments.
(a) ~çp~oration Areas
(1) The Coun~:y Council, whilst wishing to accommodate
the oil service bases in a number of locations in
Shetland, do not wish to see an excessive
pr~liferation of service bases with the
co~~sequent duplication of infrastructure and
services in places only a few miles apart and
so permission will be granted for specific areas
only, the following areas being suitable for
this type of activity.
(1) Lerwick Harbour.
(2) Sullo'~ Voe, Svarbacks Minn and Baltasound
subject to the County Council?s Planning
Consuitant~s reports on actual sites.
Development h~s already taken place at Broonies Taing
and consider~ion will be given to any application to
improve and expand these facilities.
(ii) Siting for housing both public and private -
hotels, associated industry, schools, water,
electricity supplies, roads, shops and general
communi ty/
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community services sufficient for each stage of
the development of oil service facilities will
be identified
Loc~.l Plans will be renuired for areas arfeeted
by these developments and will be submitted as
detailed submissions.
(i.~i) The cuild uo of oil service facilities in
Shetland is likely to involve an influx of
population. It is difficult at this stage to
quan-c:' fy the numbers of people involved in such
an operation, but it is important that in
planning new infrastructure, allowance is made
for expected expansion of population.
(b) E~ç~oitation
The exploitation stage of the oil indu~t:~y may
require the creation on shore of ter:riinal facilities.
The siting of these facilities will be determined by
a number of criteria, some of which can he quantified
at the pre~.ent `~onent; somu of which will depend
upon decisions made by the oil companies and upon
the technical problems involved.
The two factors which can be determined are the
need for deep water with safe all weather anchorage,
together with a certain acreage of flat land
adjacent to the site or within a reasonable distance
from the deep water anchorage.
The Planning Authority by careful survey have
identified the Sullom Voe area as being most
suitable for major developments arising out of the
industries activities in the North Sea. (In this
context "major" includes the development of tank
farms, oil s~:orage depots, terminal facilities, gas
liquefaction plant, gas storage complex, oil
refinery and other ancillary operations.) -
To ensure the proper development of these sites the
planning authority is taking the following steps:
i. The zorW:g of this area for major oil developments.
The promotion of private legislation to give port
and harlour authority powers to the County Council
in the area.
iii. The purchase of land by compulsory purchase if
required, to ensure a controlled development.
iv. A multi-disciplined study of the Sullom Voe area
and surrounding areas has been commissioned which
will result in a Master Plan and Report being.
prc~uce~ ic~ the ~utumn of 1973. No major
development will be allowed-until the Master Plan
has been adopted.
ii.
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Deelonme~t cgj~ol_of Oil and As ociated Deve~m~ii~
(a) The County Councilare determined to prevent the
proliferation of. major oil instal1atio~is throu~,hout
the County and will direct potential developers towards
the 9ne industrial complexat Sullom Voe.
(b) In conjunction with the devnlopers the County C~ncii
wil' se~ tne de~iel `sent of s~,aTed basic service
facilities on the industrial site at Sullom.Voe by a
number of levelopers and by so doing will ensure
i ~er~~e us~ cf ~he a~ai1ab1e sites
(c) To pie eit the wasteful sterilisation of valuable Ia d
the C uni C~ ci i I m~ce iine reet-~ictio s fo th~.
submission of detailed p1ar~s and for the carrying out of
`~ ork
(d) In the de~elooment u a~ ~nc.ust..ial c~niple~ with ~ a
predominaItly rural area the County Council will not
normally permit development unless it satisfies the
fo]low~. ig generat e~' iii ~ti
i V~sua1 Effect
Shetland has few trees by which to obscure prominent
developments. D~.ie regard must be made to the
landscape setting, siting, scale, design, height and
colour of all builLngs Miere possiole .ful~ use
must be made of contours and breaks in slope. L~rgs
`i~1dti~gs, tanks, etc must be contouied into the
landscape and where possible their outline softened
oy the provisior of artificial bank
In co-operation with the developers and the Forestry
Commission, the County Council will encourage the
planting of shelter belts within the industrial area
and in most cases the plaPting of experimental shelte
belts will be a condition of planning permission.
ii. Effect on People Living Nearh~
* When considering planning applications, the planning
authority will pay due regard to nuisance which is
* likely to ariso froni noise, light, smell, smoke, dust
unneighbourliness or effect on public health.
iii Avai'aoth of PuDlic Services
The concentration of major developments at Sullom Vc~
is in the interests of economy in the provision of
services.
iv. Residential Developsieut
Residential developsient will not be permitted within
the industrial zons at Sullom Voe unless it can be
th~monstrated that i; is necessary for the safety or
security of the industrial complex
Consultation will take place between Central
Governme~~n, Lon~al Government and the private
developers to ensure that adequate housing is
provided tiiscuus_
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1~~
v Poll;riov
It shall be a requirement of planning permission that
developers undertake to provide effective control on
pollution, both of the air, land and sea. The Cour~ty
Council intend to pursue with central government and
with other agencies proble~is arising in this field.
6.6 ~xtraction Industries
Sand and Gravel. The aim is to strictly control the
extractio;~ of ~nd from b~'aches which are under threat of
serious erosio~. However, there is an ui'gont need for
builaing purposes and foi the agricultural industry to
suprl s2nd This ~il ntdll ~ identifiuatio of r
sites if we are to be successfi~il in conserving the beaches
of Shetland. Aberdeen University at the :req~IEst of the
County Council have proth:ced a report on the ~eaches in the
South Mainland and action will be taken on the basis of this
report.~ In addition, the County Council have asked their
Consultants to identify and report on alternative sources of
sand.
Major developers will be required to satisfy the planning
authority that they will obtain t~~eir supplies of sand and
aggregate without affecting Shetland's environment.
Limestone. The County Council are proposing to undertake
the c~mmercia1 ~xploitation of limestone from the north end
of T ondr
As part of the County Council's policy on the preservation
of i~ts beaches it will seek to restrictS th~ use of beach
deposits of shell sand for agricultural use, and will
endeavour to provide alternative source of material at a
reasonable cost.
Peat and Seaweed. The County Cour~cil will seek to find
ways of exploiting the resources of peat and seaweed on a
commercial basis.
6.7 Industrial_Promotions.
The County Council are anxious to create the best pc'ssible
conditions for the diversi2ication of the islands' economy.
The C~unty Development Department are at prosent identifying
small areas of land within each of the focal points which
will be purchased by the County C:uncii with the intention
of supporting any new or existing indu;try. These areas of
land will be used either to provide sites for small
industrial development or to support industrial development
within the area by providing housing, etc.
7 COMriu'rI A ior~s
7.1 Internal Ferries
The present proposals are for an overland vehicle ferry
route linking the mainland to Whaisay, Yell, Just and Fetlaf
and from Lerwick to Bressay. These proposals are now being
implemented/
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implemented Ii the longer terni t1~ f~tuie poL.cy wi~ ~e
to provide a ser~vice to Skerries. Private ferry links
betwe n the Mainland and FoLla, yair Isle and Pa) Sic r
exist and these ~to~.dd be continued in the future
7 2 Boads
The more heavily trafficked principal roads hould e
improved to 5.5 metres wide t~o way roads and a road line
should )e ieserved to cor A~Ct ~th a ~iid ~ fro~ orti of
~rwi~k to Bresva3
Project deve_~pii~ ts i dic'ite that a higher degree of
activit~ than aoxnal ~iill be reju~red on minor icad
* ipro ie~tn in cc~rtain arta~
7 3 Ha~ o~ and Jefties
The piel~inar~ report on piers give'~ by the Cc~nty
Dovelo nt O( ~ce~ on 29ti D~ceiiber lT~l `es guide
lines on the County Courcil Piers Policy. Broadly, piers
in Shetland can be classified into thice Classes
(a) Tho~e reiui ci fot f_s'xexies de elo3me'
(b) Those required foi tra'is ~rt
(c) Chos~~ for other com~iercial developments
Where new piers are constructed by the Co nty Co~ncii at
attempt i~ill be ma e to site and design tnem so ti~at ai
hre~' uses can oe catered for at the same pier or harooLr
The Council will see1~. the de~elopme~ of piers in the
exist_ fccai ~`~nts s~nce this ia~~litj ~s of
ancill'i o otriel activities which are best developed in
the focal points
Priority will be given to the cot' let or of the ehicl-~
* ferry terminals and bearing in mind the changing transport
pattern and the rapid changes being brought about by the
oil exploration activity; an endeavour will be made to
establish a programme for the period 1974-1979.
(a) Fisheries Piers
Priorities will be discussed with the S~ietland
Fishermen?s 4ssociation
(b) Oil S~p~ Piers
The joint use of facilities where feasible for oil and
fish use will be encouraged so that benefits will
renai ~th the community in the 1org~r term
7 4 Pur~l B~s Sei'~i~s
Man~ iural bus ,ervices have declined in tece~t ears and
are uneconomic.
The C~~untj C~uriCil now have poi~ers to s~bsidise inprofitable
services where these are considered to be essential to the
com~~urtity and a basic pattern of rural bus services must be
maintained
Before!
40-047 0 - 74 - 12
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Before considering the use of its subsidising powers it would
take the following criteria into consid ration:
(1) Basic Service
This to provide at least one return trip per week
from each rural district into Lerwick. Service to be
looked at in conjunction with school contracts.
(2) ~licat±o~
DupJ~cai~ion o.C uneconomic services will be eliminated
and the County Council would not support applications
from competing services for the same areas.
(3) ~~ati~ç~sts
Every effort he made to reduce operating costs.
(4) Fares
Fares will be adjusted to balance revenue provided
this can be done without putting service beyond means
of peopln it is meant to serve.
(5) D3/e]~;ments
Ideas for combining fornis of service should be exa~~iined,
i.e. Post Office, small parcels, etc.
7.5 Internal Air Serv&ce
This is at present provided by Loganair who in conjunction
with the H. I.D.B. have devnloped an internal service with
gra~s landing strips to serve the following locations:
Scheduled - Lerwick, Fet1a~, W~ialsay
Charten - Fair Isle, Foula, Papa Stour
The service operates from Sumburgh airport and also uses
the 2,100 ft. long tarmacadsn strip at Baftasound which is
owned by the County Council.
The County Council will seek the prnvision of a surfaced
airstrip in the Ler.~ick area of nufficient capacity to be
used by light aircraft other than those operated by Loganair.
This could be provided in Tingwall Valley, Rova Hess or
Bressay or some other suitable location. The existence of
a surfaced airstrip in the Sullom area is likely to become
of increasing inportance.
Existing helicopter pads exis~ at Sum1n~gh - Baltasound,
but the need exists for the provision of a new pad in the
Lerwick area.
7.6 External Air Servin~s
The present policy is to concentrate on Sumburgh and in this
connection the improvement of facilities at the airport for
nav~gationi.l aids, ;~.ircraft parking, and passenger han~ling
will be encouraged but other alternatives should be examined
in the full Development Plan. -
At!
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At presett 3hetla~'d's link wth the r~inl'rnd is tiuough
Aberdeen and the aim of external v serv~ces is to build
up this direct link, but recent cevolopments in the North
of Scotland have made an examination of this policy urgent,
and in this respect a full report will be prepared at an
early stage both for the ful.L Development Plan and, the Civil
Aviation Authority.
The County Council will encourage any pr~posals to link
Shetland by air with other North Atlantic countries.
Whilst examining the question of Shetland's air route to
the mainland, the County Council do reject the thesis of
feeder air services based on smaller aircraft, and maintain
that a modern short take-ofi aircraft capable of carrying
in e::cess of 50 passengers into and out of Sumburgh should
be sought as a replace~uent to the Viscount.
7.7 External Sea Links
The County Council support the proposed introduction of a
modern roll-on roll-off ferry to link Shetland with Aberdeen
to be provided by the North of Scotland, Orkney and Shetland
Shipping Company. Whilst supporting this move by the
North of Scotland, Orkney and Shetland Shipping Company, the
County Council will examine the possibilities of other sea
services to Shetiand both fro~s the Scottish mainland and
other ~oitI~ Atlantic cou'~trics in thc light of developments
8 HOUSING
8.1 The County Council will meet their housing requirements
within the focal points of the Development Districts,
seeking to identify sites and decide the optimum
settlement form for each locality. For example, nucleated
small clusters, linear or dispersed pattern, density and
scale of development, and also the balance between private.
and local authority housing will be specified.
8.2 In settlements not scheduled as focal point~ residential
develQpment will ho allowe~t provided that:
(a) It is located in existing clusters or existing
scatters of housing or in an approved area.
(b) It will not be exce~sively expensive to provide
* other ess~htial services - water, drainage, electricity,
etc
8.3 In the case of other isolated development in the country
the County Council will allow the renovation or rebuilding
on existing croft sites. Such developments will be
allowed on the understanding that the cost of the provision
of services to these sites will b~ boine by the developer
8 4 The County Council will discourage the provision of chalets
and caiasas~s for permanent dwellings
8 5/
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8.5 Conversion of ~
The convers~on of buildings such as chapels, schools, etc;
will only be allowed if
(1) It is a means of preserving a building of cultural or
historic interest or one of architectural interest.
(2) It will not create a building out of character with
its surroundings.
9 EDUCATION AND HE~ .~TH SE~VICES
9.1 The Authority is coxmnittel to a policy of reasonable
rationalisation which balances the need to provide
efficient education against the social neoci to maintain
small co~ncunities. Primary schools are ~naintained
wherever a. reasonable roll can be maintained. In some
case.- orinary schools are maintained with a very small
roll because the effect of comparative isolation is thought
to be less disadvantageous than the alternatives available.
Secondary Education is provided in `seven Junior High
Schools established at strategic places from Baltasound in
Unst to Sandwick in Dunrossness, Aith in the West to
Symbister in the East. These schools offer a common
course in Secondary Classes I and II and work based courses
in Secondary Classes III and IV. All pupils in the
Primary Schools transfer to the Junior High School for their
own area. Pupils may proceed purely at their parentst
request from Secondary II in the Junior High School to the
County's only six year all-through Comprehensive School -
the `Anderson High School - in Lorwick. Exceptionally,
pupils attending Junior High Schools may be presented in
one or two subjects in the Scottish Certificate of Education
on the ?0t grade.
The Authority provided comfortable Hostels which offer free
board and lodging to pupils attending the Anderson High
School in Lerwick who are unable to travel daily between
home and school.
The pattern of Primary and Secondary Education may change
with changing circumstances. New schools will replace old
as necessary and it seems quite possible that one or two of
the present Junior High Schools could attain "Senior"
status.
The Autho~ity has modest. facilities for Day Further
Education within the County and these will shortly be
expanded. It makes use of the extensive facilities
offered in the Technical Colleges in Inverness, Aberdeen
and elsewhere.
9.2 Health
Hospital and Health Centre facilities exist in Lerwick, and
country practices serve the rural areas.
No policy can he determined at present but should any build
up of population occur at otiler points in the county an
increase!
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16
increase in hosoital pro~ision will be necessary, together
with a fuller range of medical services throughout the
county
10 PUBLIC UIILITIFS MD PUBLIC SERVICES
10 1 The (Thii ty Development Depirtmen~ is currently engageJ in
a re~ie~ of all public serviees in Shetland
It is ouite apparent that services designed to serve a
smail population (17,000) which ~s predominai~tly ural in
character are inadequate to serve new industry on a large
sciie and a large increase in tI'e population
It is accepted by the County Council that the development
of the county calls for a programme of improvement in
existing servicesto meet the new demands and the new
opooitu~ities cieated by the b~oadening of the isla ds
econonic base
In some cases these needs miist be met by other public bodies
and every support will be given by the County Council to
these bo~ies
The County Council will seek financial help from central
government and industry for any programme of extension of
public services beyond the needs of that of the present
population. A full policy statement on public services is
not possible for th3s interim report
10 2 Elec~tri2ja
The availabilit; of electxicity for domestic use is
virtually universal in Shetland. Three phase power
supplies for industrial undertakings is also available and
there is at present sufficient capacity within the Lerwick
generating station to cope with present demand.
Any dramatic increase in the islands' population or the
advent of industry which made a high use of electrical energ~
would necessitate a careful examination of the islandst
generating capacity. In general the present distribution
system is adequate to cope with most demand.
With the advent of large scale industrial undertakings it
is expected that these would need new electrical generating
stations which, unless developed by the North of Scotland
Hydro-Electric Board, would be expected to sell surplus
procuci ion to the H E B
10 3 Woter
* With the exception of a survey done by the County Surveyor's
depai~tment in 1946, no hydrological survey of Shetland water
resources has been undertaken.
* The County Council adopted a policy of progressive supply
and improvement of water services in the rural areas of the
County which policy has been continued by the North of
Scotland Water Board who have virtually completed a
program:~e of the supply of mains water to all areas of the
county. *
The!
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10.5 Drainag~nd Sewage
10.6 Community Services
168
The present policy~ of the County `Council is to attempt to
provide people li-ving in the rural areas access to as wide
a range of co:nrnunity services as those living ui the towns.
These services are very wide ranging, each having a
slightly different pattern of provision. Some, like home
nursing must come to the country, but many others involve
travel to a special building to receive the service; for
example the hospital, and thus can only be provided in the
main centres of population.
The County Council have two aims:-
(b) To ensure adequate transport throughout the county to
enable non car owners to travel to Lei'wick to receive
services.
17
The quantity of water available in particulal' parts of the
County is limited and the recent revival of industrial
activity has produced crises situations in certain areas.
The likely future demands for both domestic water supply
and water !or industrial use are large, and as an interim
policy pending a hydrological survey, the County Council
will permit the winning of water for industrial use
provided:
(a) The Water Board corroborates that it cannot provide the
water supply timeously and at an economic rate.
(b) The developer is prepared to install the supply at his
own expense
Cc) The proposal is acceptable to the North of Scotland
Water~ Board.
10.4 Gas
The only supply of gas at present available in Shetland is
in the form of bottled supplies.
The County Council should consider carefully a policy
towards the use of gas as a form of energy in Shetland if
and when supplies of natural gas are available on the
islands.
The County Council have adopted a policy of progressive
provision of main drainage to most parts of the county.
Wheie the cost of this provision has been excessively high
compared to the numbers of houses served, septic tanks have
been pro~].ded
The County Council will cont±nue with this policy for the
provision of drainage facilities in step with demand.
(a) To increase where
services provided
the use of mobile
economically possible the range of
throughout the country districts by
units.
The!
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18
The limited funds availabie for ne; facilities and the
cost of maintaining bus serv~c~s se s~.vere limitat~ons
on the improvements which can be achieved and the
following factors must be taken into accoumt in trying
to augment the existing faciiiti~s
Locatioa. The County Council will group any new
facilities within the fiai~ework of the focal poi~ts rolicy
Sit~Gr~~ Where~r..r possiole, buildings foi comiunity
services will oe oro\'i~ed on a single s.t , sinc~e tnis givcs
scope f or economies in constructiom and maintenance, For
example a school may also contain facilities for a part-
* time library, health clinic, public meetings, adult
* education, etc. Wherever possible buildings will he sited
and planned for use by societies, etc
11 TOURISM AND USE OF THE COUNThYSIDE
11 1 The County Dnvelopme'~t 0 ticer nas already prepared a paper
on the feasibility o a country park provision in the Walls
area and at Clickimin. In general te:ms the county is not
in the position to prepare a detailed policy statement. for
tourism. It feels that the county is on the threshold of
a significant change in the pattern of tourism in Shetland
because of the introduction of roll-on roll-off ferry
services. The influx of mobile tourists will create a
need f or bed and breakfast facilities, possibly new hotels,
roadside facilities, camping sites, caravan sites.
Full consultation will be made between ~the County Council,
Scottish Development Department, the Countryside Commission
for Scotland, the Scottish Tourist Board, the Shetland
Tourist Organisation and the H.I.D.B. to consider a joint
strategy f or tourist development in the county.
11.2 Countr de Leisure Facilities
The County Council is examining sch?nes for countryside
leisure facilities and these will be the *subject of further
reports.
11.3 Derelict Land
The County Council will examine schemes for the reclamation
of derelict land, basing their recommendaticns on:
(a) Financial aids available
(b) Degree of unpleasantness of derelict sites
(C) Impact o:f of fensiveness of the sites which is of
more than local significance, i.e. on tourism, town,
areas of special countryside value
(d) After use potential
11.4 Advice
An attractive environment cannot be produced by controls
and the County Council action alone. It is necessary to
have/
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19
have the co-operation, enthusiasm and understanding of
those who.o;rn, use, live in or visit the countryside and
of relevant organisat'ions.
The County Council believes it can also help by providing
guidance and advisory services or informing people where
advice can be obtained.
The County Council in an efft~rt to'help potential developers
receive the benefit of timely advice have published a notice
asking potential developers to give as much notice as
possible of their intentions to the Development Officer.
The County Council will endeavour to provide helpful
guidance on some of the following fields:
la!idscaping
building design
building conservation
natural history
archaeology
sport and countryside recreation
The County Council will also direct enquiries to those
specialist agencies where fuller advice can be found.
12 AREAS OF T.~rnSrADE VALUE
12.1 In each designated area of landscape value the County
Council's policy is to:
(1) protect the surroundings of the area so that views
~out of it and into it are nob spoilt;
(2) ensth'e that development or redevelopment blends
with the surroundings and does not impair the
character of the area;
(3) take positive steps to improve the character and
visual appearance of the area.
12.2 To achieve these objectives:
(1) Planning applicants will be required to show proposed
development in relation to surrounding areas.
(2) A high standard of design will be expected for any
development anc must be sympathetic to their
surroundings in materials, form and scale.
(3) There shalL be no advertising except for well
designed informative signs..
(4) Detailed studies of each area will be made and plans
submitted dealing with improvement of each area.
(5) Industrial development will not normally be permitted
unless the development is compatible with the
traditional economy of the area.
12.3 Areas
`Certainareas of Shetland have already been designated as
nature reserves or as sites of special scientific interest
by the Nature Conservancy. The Department of the
Environment! .
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20
Environment through the Ancient Non unent Commission has
also identified certain ancient monuments and sites of
archaeological interest worthy of preservation.
(a) Nature Reserves
Moss Island Island of Haaf Gruney
Hermaness, linst
(b) ~
All sites listed or to be listed by the Nature
Conservancy. (An updated list will be held
by all p:Lanning staff of the County Council)
(c) Ancient Monuments
All buildings listed or to be listed by the
Commission for Ancient Monuments. (Ac updated
list wil. be held by all planning staff of the
County Council)
(d) In addition to these areas the County Council
dtsignate as areas of Great Landscape Value under
SDD Circular No. 2/1962, the whole of :he County of
Zetland excepting:-
(1) South Mainland: the area to the south and east of e
line running due east from West Point of Hestingot.
(384119) to the A970, thence north along the road
to 398193, thence due east to the coast.
(2) Sandwick: the area to the south of a line running
due north from Ness of Hoswi~k (413223) to the A970
thenóe east along that roac~ to 427256, thence in a
straight line to the coast at 437237.
(3) Central Mainland: the area to the north of a straight
line running from the west coast at 406380 to the
east coast at 447370 and south of a straight line
running from Mac Ness (394388) to 402405, thence to
414404, thence along the watershed of Hill of
Steinswall to 435442, thence to the coast 1 432440
Also the island of Bressay north a::d west of a
straight line from 492407 to 50340~, thence north
along the watershed of Hill of Sett~c to the coast
at 497441.
(4) Catfirth: the area to tI:&e soLi~h of a line running
due north from the coast at 439539 to 440560, thencE
due east to 453560, thence due south-east to 46054?
thence to the coast at 450530.
(5) Aith: the area to the east of a line running due
south from the coast at 315523 to 315518, thence 4w
west to 308518, thence due north to 306530, thence
due north-east to 322453, thence north a~Long the
unclassified road to 314570, thence due north-east
to 322576, thence in a straight ltne to the coast at
Stead oi ~i~11ess :2~~3 ~ to the wes~ f a
from/
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21
from the coast at 358504 to Leaskie Knowe (372499),
thence north along the watershed of Weisdale Hill and
West Hill of Weisdale to the Hag Mark Stone, thence in
a straight line to the coast at 378640. Also the
island of Linga (3563).
(6) Whalsav: the area to the west of a line from the coast
at Breiwick (557610) due north to 354627, thence due
north-east to 570647, thence to the coast at 56665~.
(7) Lunnastin~: the area to the east of line from the
`coast at 460677 to Cunnigill Hill (430675), thence south
along the watershed to the B9071 at 422630, thence along
that road due west to its junction:with the A970, thence
to'the top of East Hill of Voe (408623), thence south to
410602, thence due east to the coast at Ayre of Atler
(457610), and to the west of a line from the coast at
480654 to the coast at 4T5632.
(8) Sullom Voe: the area to the north and west of a line
from the coast at 400637, north along the watershed of
Souther Hill, Hill of Dale, Hill of Oxñaboel and Hill
of Swinister to the coast at 457736, east of a line from
the coast at 352678 to the coast at 352685, and south and
east of a line from Houb of Lunni~ter (351719) to the
A970 at 333728, thence north along that road to 363850,
thence to the coast at Long Taing (377855), also the
islands of Little Roe and Lamba.
(9) Yell: the area to the east of a line from the coast at
533900 to 500900, thence due north bo 500000, thence
`due east to 520000, thence to the coast at 550963.
(10) Unst: the area to the east of a line from the coast at
-Nuda (623040) to the A968 to 595046, thence north along
that road to 608085, thence north to 610105, thence to
the coast at The Punds (645110).
(e) Villages or townships worthy of conservation will be
designated under the Civic Amenities Act 1967:
(1) Lerwick Town Centre
(2) Lower Sound
(3) Voe
(4) Hamnavoe
(5) Tresta
(6) Ireland
(7) Fladdabister
13 DEVELOPMENT CONTROL
The Development Control Policies to be adopted by the County
Council have been outlined in the various sections of this
* statement and development will not be permitted unless it
satisfies the general requirements contained in the
statement.
In/
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22
In addition permission for development which would
normally be allowed may sometimes have to be refused
for reasons which over-ride the considerations set out
in tiiis tement for example, pol.icies adopted as
interim ~e~sures may need to he adapted in the light of
survey wor1~ undertaken for the full Development Plan.
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APPENDIX A
POPULATION
1.1 The population of -Shetland was at its maximum about 100
years ago; at the time of the 1861 census about 31,J00
persons lived in the County. Since then the population
has fallen continuously, particularly after the First
World War. The county report of ti'e 1971 census gave a
resident population of 17,327 persons, almost one half of
the population a century previously.
1 2 Population Change 1951-71
(a) Since 1951 t1~re has been a fall in population of 2,025
persons; between 1951 and 1966 the rate of decline was
fairly steady at about 140 persons per year, but between
1966~ and 1971 this has changed to a small increase of
about 15 persons pei year
(b) Within the County there has been varied pattern of
population change. Over the decade 1961-71, the decline
~;f 485 persons in the County as a whole was made up of a
marginal increase in Lerwick Small Burgh, with decline
of nearly 500 persons in the 1a~c1ward areas. The
increasein Lerwick's population has taken place since
1966 and in the landward areas the rapid decline of
1961-66 has been replaced in the 1966-71 period with a
slight population increase, although this masks the fact.
that in some districts there was considerable growth
(e.g. Tingwall and Whalsay) while in others the decline
is still rapid (e g Fetlar5)
(c) The population decline in the County has been the result
of both net migration losses and a low rate of natural
`increase. Between 1961 and 1970 *the Registrar General's
estima~te indicates a net migration loss from the County
of almbst -1,200, all of the local authorities sharing
in this net loss except Gulberwick and Quarff. The
annual rate of net migration from the County fell from
about -150 per year 1961-66 to less than -100 per year
1966-70. This reduction was largely due to the change
in Lerw.&ck Small Burgh, from experiencing a net loss
1961-66 to a small net gain 1966-70 and a net gain in
Gulberwick and Quarff.
(d) The total natural incrc:~ise between 1961 and 1970 in
Sh'etland was ÷150, i.e. +0.9 per 1,000 population per
year. The annual rate of natural increase is very low.
and compares wi~Cn +3.2 per .1,000 population for the
High1a~ids Planning region as a whole and ÷5.5 per 1,000
populLti.o:~ ~n the North East planning region. These low
rates of natural increase are the result of the very
heavy net migration losses of the last century which have
"weakened" the age structure of the County, so that a high
proportion of the population is in the retired age groups.
(e) Shetland at the 1971 Census had over 3,500 persons in the
retired age groups, over 20% of the County's population,
and this contrasts with the proportion with Scotland as
.a whole of 15%. Shetland also had,, a lo\qer proportion of
its popu1ation~in t,he younger age g~'oup (under 15);
23.1% compared to 26.5% in Scotland. In the, working age
group! . ` . . .
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2
group S1'etl~nd has loi~ei piopo~tion than Scot'L'ind
(56.3% compared to 58.6%) and the difference is
entirely in +he you ieer woiking ~,e group i e 15-44
years
1 3 Future~~p~ation
In view of the uncertainty about the effects of oil
development on thc countjts popula~ion it has been dec .led
to examine only the base population at this stage
If one assumes that the net migration balnt~ce reduced to
zero between 1966 and 1971 then the very low rate of natural
increase ÷0.9 per 1,000 population per year indicate a
popula'~ion of 17,700 in 1981 ard 17 900 in 199±
However immigration is now taking place and one can no.
longer assume a net migration of zero. This trend which
~as established duiing tl'. period 9Cb-71 has continues
beyond that date. Estimates oi the population of Shetland
for 1972 have been made using the National Health Scheme
registrations for the pex~od May 1971 to September 1972
These figures have produced a positive nigration balance. of
367 together with an excess of births over deaths of 46;
a total population increase of 413
This' gives an estimated population of 17,740, already in
excess of the 1981 projection arrived at from census figures
alone.
The effect of immigration will not only affect the total
population figures but because most immigrants are young
married couples could signuficantly affect .~he rate of
natural increase.of the population.' Taking 1971-72 estimatd
the natural.rate of increase has risen to 2.2 pe~ 1,000 but
this cannot possibly be used to calculate future population,
only indicate a trend during a short period.
The Council realis~s that these increases in population are
of a rather dramatic nature and, sub~equent to this, have
introduced policies to provide houses for incoming workers.
It is considered to be premature to estimate the effect of
these factors on population trends.
These~jj~gures do not iticlude the effects of oil developments
which may be very significant.
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APPENDIX B
EMPLOYMENT
An important feature of the Shetland economy is the small
size of the total-labour force. According to Department of
Employment sta~stics the total number of employees registered in
the Lerwick En:pioyment Exchange in June 1971 was 5,433. Because
this figure is derived from an estimated base- on a sample check
i~t is subject to a comparatively wide margin of error. The
numbers involved are small and exclude the self-employed workers-
who are relatively numerous in some key industries in Shetland. -
Working on the alternative premise of the Census definition of
economically active people one can arrive at a work force of some
6,000 males listed as economically active, compared with an
employee total of 3,400 (1966 Census). Even if we only add the
female employees to this figure we obtain a work force of 7, 770,
and it is likely that the true measure of economically active
population of Shetland is in the region of 8,000.
- The present unemployment situation in Shetland, again ~aking
into account the approxinate nature of the statistics available,
would seem to he running at a figure of about 4.5% which is
below the Scottish average and is only just over the present
national average. At this level it shows a remarkable narrowing
on what is usually- a much wider gap. In terms of people, the
wholly unemployed at the end of 1972 numbered under 200 compared
with well over 400 in 1965. -
In looking at the distribution of employees alone, the-
present structure of Shetland employment gives the appearance that
over 66% of the Shetland work force live by rendering services.
(In the broad sense of the term). This is misleading because of
the uncertainty of the employment figures and the non-recording
of the self-employed, and also because major primary and
manufacturing industries in the islands ~contain an appreciable
number of workers who are not recorded as employees. However,
making allowance for this element, it remains that service
activities are the largest element in the Shetland economy. The
-size of this service element may be surprising if services are
thought on as typically sold or provided for local inhabitants,
but the economy is a self-contained one, and must obtain sonic of
its income from outside - in fact it must export. Some of the
`~ervice~ are in fact exported by being sold to non-residents -
tourism and the servicing of non-native vessels are prime
examples, and as oil exploration develops, another important one
will be added.
Secondly, some major services in the -public sector (educatic~
and health) are largely supported by income from outside the
Islands, viz: -from Central Government grants.
Despite the large numbers of people living by rendering
services, the export sector of the economy., which is largely
accounted for by primary industries (by food processing and
textile manufacturing) is of crucial importance to the economy
as a whole, and it is through exports that the pace of all
economic life is influenced. -
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APPENDIX C
Future Programme
The County Council are determined that the prod~Mon of
a full County Structure Plan will be submitted within the next
two years
To achieve this aim the Council have agreed to appoint
consultants to undertake this study which must be completec~
within 18 months from the date of their engagement.
In addition to the County Structure Plan iie~County Council
have already appointed consultants to produce a master plan for
the Sullom.. Voe/Swarbacks Minn area and have agreed to commission
additional ~ocal plans for
(a) Lerwick and its environs
(b) The Island of Unst
On their completion, these studies will be submitted as
amendments to this document.
The County Council have agreed to strengthen their present
planning staff to enable them to better implement Development
Control Policies and produce Local Plans for other areas of the
County not covered by consultants sur~eys.
0
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