Report from Leo Corcoran on Corrib Pipeline Consents

30th June 2006
Press Release

Corrib Pipeline consents may be in breach of EU law

Corrib Pipeline Consents may be in Breach of EU law because the Minister failed to specify a Code of Practice.

The consents for the Corrib pipeline issued by the Minister of Communications, Marine and Natural Resources are unique because that they do not legally oblige the Developer to comply with a pipeline code of practice and as such may be in breach of EU law.

In September 2005 I was requested by An Taisce to review the design of this pipeline.
The main document produced by the regulator, the Department of Communications Marine and Natural Resources, is a 380 page report from the Marine Licensing Vetting Committee MLVC, which contained only one sentence regarding the mechanical integrity of the pipeline.

"The MLVC understands that the Minister has commissioned a study in relation to the onshore section of the pipeline system proposed by the developer to establish that the selection of the relevant design codes and standards is in accordance with best public safety considerations and is in accordance with best national and international industry practice and specifications ." The study referred to was produced by a consultant Andrew Johnston but to my surprise a code of practice was not specified in the list of recommendations. I was further surprised when I read the letter of consent issued by the Minister in 2002. It contained a number of the recommendations in the Johnston and MLVC reports but uniquely for a high pressure gas pipeline a code of practice was not specified. Likewise the consent given under the foreshore licence for the offshore section of the upstream pipeline does not specify a code of practice. The Gas Act is not prescriptive on this point, however for good reasons, it has always been the case in Ireland that the developer of a high pressure pipeline is obliged by law, under the letter of consent, to comply with a pipeline code of practice. In the UK all pipeline consents issued by the Department of Trade and Industry include a requirement to comply with a pipeline code of practice. Engineers required to operate a pipeline are very aware that the letter of consent imposes a legal obligation on a utility and its employees to operate the facility in accordance with the code. In the case of the Corrib pipeline the developer claimed to comply with BS 8010, however this document was not specified by the Minister in his consents for both sections of the upstream pipeline and he issued his approvals without an obligation in law for the pipeline to comply with a code of practice. This was a very serious omission as it could allow the developer to legally operate the facility in breach of the code. Clearly this is an option which would not be acceptable to the local community and the wider public and it indicates that the Minister was inadequately attentive to his regulatory duties and has not applied objective criteria in his consent for this pipeline.

Advantica, the independent safety consultants appointed by the Minister, recently published their report indicating that, as currently designed, the pipeline cannot comply with the code of practice BS 8010 or its replacement PD 8010.

They concluded that the Quantified Risk Assessment, QRA, carried out on behalf of the developer "fails to recognise the uncertainty in the risk modeling for such high design pressures as 345 bar" Consequently they have recommended that the pipeline should not operate at the maximum allowable design pressure of 345 bar and that it should be restricted to 144 bar and operate at a design factor no greater than 0.3.

By failing to apply objective and non-discriminatory criteria in granting his consents the Minister could be considered to be in breach of EU Directive 98/30 and its replacement 2003/55 which outlines common rules for the internal market in natural gas. Article 4 clause 2 of EU Directive 98/30 states that " Where Member States have a system of authorisation, they shall lay down objective and non-discriminatory criteria which shall be met by an undertaking applying for an authorisation to build and/or operate natural gas facilities or applying for an authorisation to supply natural gas. The non-discriminatory criteria and procedures for the granting of authorisations shall be made public."

The Minister now proposes that the Developer re-submit a new application for approval. This is clearly an attempt to overcome the dubious consents issued to date and to shift the focus of attention away from the Department and onto the Developer. The primary cause of the controversy is the site selected for the gas processing terminal. The Bellanaboy site is unacceptable because it lies within the catchment area for a major water supply and because the ground conditions are unsuitable.
Also it is located inland and there is no suitable route for the connecting pipeline that meets acceptable environmental and safety criteria.

It is evident that the Department has proved itself to be ineffective in the function of pipeline consent and approval, and has exposed the state to potential financial costs in its handling of the project. Were it not for the substantial windfall increase in value of the reserves, due to external factors, Shell could be expected to claim for its additional costs from the state due to the delay of the project directly attributable to the actions of the Department.

It is surprising that Shell and their partners have not yet reappraised the Bellanaboy site given the considerable design, legal and PR problems in routing an upstream high pressure pipeline through a populated inland location combined with the additional problems of removing peat from the site. The reluctance to seek an alternative more appropriate coastal location can be somewhat understood from the perception from Shell that they have a legal right under the letters of consent to develop the pipeline as currently authorised. However the value of the consents issued is suspect since the substantial matters on which they were granted are now in question.

The Gas Act 2002 was introduced to facilitate the granting of CPO powers to Shell for the Corrib Gas development almost as an afterthought. The chosen site for the terminal agreed between the Department and the Developer prior to 2002 is totally unsuitable and indicates that the necessary and appropriate planning, design and consultation for a project of this importance was not carried out.

Leo Corcoran