[BBC News] Prices rise for Manx electricity

[Skeddan]

It looks like IoMG may have assumed the UK Secretary of State was the competent authority for authorising pipelines in Manx waters. John Shimmin, then Minister for Transport, made this statement in Jan 2003 in relation to the Submarines Cables Bill:

 

The authorisation mechanism is based on part 3 of the UK Petroleum Act 1998 which relates to submarine pipelines and applies to the Isle of Man.

Part 3 of the UK Petroleum Act 1998 deals with authorisation by the UK Secretary of State for submarine pipelines. If this Act did apply to IoM, then authority for the Irish pipelines in Manx waters would have to come from the UK Secretary of State. However this part of the Act does not apply or extend to the Isle of Man.

 

So possibly it was assumed the UK Secretary of State was responsible for authorising the UK-Irish pipelines in Manx waters when this was not actually the case. If that is so, then possibly given this mistaken assumption, proper authorisation was not given under authority of an Act of Tynwald. That would then mean the Irish pipelines are unlawfully running through the Isle of Man territorial sea.

 

Does it matter? Well, at the least IoM should get fair compensation in return for the right to run these pipelines through Manx waters. It could go a long way to balancing the books of the MEA fiasco.

[Chinahand]

Interesting - does the IOM have international relations? IE if a foreign government is involved can the Tynwald be the involved arm of the soverign ... even when what is being discussed with this foreign government is its access to domestic manx waters?

 

Skeddan seems to say yes. No idea if he's right. It looks like Shimmin, I presume on the advice of the Attorney General, disagrees.

 

Or am I confusing issues? It makes a fascinating issue of the separation of Tynwald's powers to the domestic and Westminster's to the international.

[Skeddan]

Interesting - does the IOM have international relations? IE if a foreign government is involved can the Tynwald be the involved arm of the soverign ... even when what is being discussed with this foreign government is its access to domestic manx waters?

 

Skeddan seems to say yes. No idea if he's right. It looks like Shimmin, I presume on the advice of the Attorney General, disagrees.

 

Or am I confusing issues? It makes a fascinating issue of the separation of Tynwald's powers to the domestic and Westminster's to the international.

Maybe I'm not understanding you, but I don't think it has anything to do with whether or not IoM can have international relations.

 

The UK sold IoM rights to territorial sea from 3nm to 12nm. With that went any rights the UK had to authorise pipelines in these waters. These rights belong to IoMG. If someone is infringing on those rights, then what course of action can IoMG take? Off top of my head, here are some possibilities:

 

a) take legal action in domestic courts perhaps in Ireland or UK or eventually European Court. That doesn't require one getting into the quesiton of whether or not IoM can have international relations.

 

b) stop paying for capacity being used in the pipeline - freeze these payments until the issue is resolved.

 

c) IoMG could ask the UK to intervene (since UK responsible for international relations).

Maybe the idea is that the UK could authorise the pipelines by means of a treaty by virtue of being responsible for international relations. (Is that the notion Chinahand?) Hmmm - maybe an argument might be made on that basis - but needn't get into that. Read the treaties themselves. The treaties state that any authorisations and consents needed where running in Manx jurisdiction have to be obtained from the Manx authorities (However it is easy to miss given the phrasing of the treaty - but the treaty interpretation takes 'UK' to include analog in IoM.).

 

It woudn't suprise me if advice of Attorney General was that the UK Secretary of State is responsible for authorising pipelines in Manx waters, presumably under Petroleum Act 1998 Part III. That seems to have been Shimmin's understanding. This assumption might well have developed out of the (mistaken) notion of authorisation being granted by the UK in the treaty. It's possible that this error was overlooked when doing due diligence in the various deals for these projects - after all it is a bit of a quirky jurisdictional issue, and authorisations from UK and Ireland could well seem sufficient.

 

So maybe these pipelines have not been authorised and are unlawfully running through Manx waters. It would be a big boo-boo, but it's just the kind of blind spot error that can happen in big projects. As I said before, this could mean that various contracts come unstuck (as not for a lawful purpose) and Barclays could well be on the line for a great deal more than £110m unless Tynwald give retrospective authorisation. IoMG could be in a very good negotiating position. So if these piplelines are not lawful, it would be a big can of worms that key players would rather keep a lid on - the UK, Ireland, Barclays, etc. - it's in no one's interest to open this up - except the Manx public.

 

Now, let's try and disconfirm and try to show that the pipelines are lawful. Who gave authorisation, when and how, and what right did they have to give this? I'm stumped - any answers or even suggestions would be very welcome. (Without authority under an Act of Tynwald, it doesn't look promising - one has to resort to notions such as the UK legislation extending Manx territorial waters was not valid).

[QLD-Bloke]

This is the second Irish pipeline that went through our waters and the Island got adsolutely sod-all from the last one.

 

The Government got it wrong the first time (mainly because the Irish flat out lied) and let the Irish away with a payment only while the second time round we got wayleave money and the right to connect.

QLD-Bloke – given your knowledge about these pipelines and the deals made over these, can you shed any light on the granting of the rights to run these pipelines through Manx waters?

 

From what I can gather, an Act of Tynwald would be needed to either authorise the pipelines or to delegate authority for authorising pipelines in Manx waters (e.g. as delegated to DoT for cables in Manx waters). I can't find any Act of Tynwald doing this for the UK-Irish gas pipelines.

 

The IoM Electricity Amendment Act 2001 gave MEA authority for onshore pipelines which MEA otherwise would not have had.

 

The IoM Electricity Act 2003 (October 2003) gave MEA additional authority to construct and maintain gas pipelines. By that time the spur had already been built and tested (Erm…). In any case, the UK-Irish pipelines were not constructed and sited in Manx waters under this authority.

 

The UK Irish treaties (even with an explanatory note saying IoMG was 'consulted') is not by itself sufficient to authorise pipelines in Manx waters.

 

QLD-Bloke – do you have any info on whatever authorisations and consents were given for these UK-Irish pipelines to be in Manx waters? If you can, please could you point me to the relevant Act of Tynwald authorising, or delegating authority to authorise such pipelines.

 

BTW: if you think the island could have said 'no' to a pipeline that was, effectively, a symbol of NI-ROI unity of purpose then you over-estimate the power of Tynwald to impose its will on the UK which had just finalised the Good Friday Agreement and wanted to show its benefits.

You may be right there in terms of the politics. It may also be that in these circumstances Tynwald was ‘unassertive’ about its rights to control pipelines in Manx waters. Given the 2001 Electricity Amendment Act S.1 7(a) it's even possible Tynwald assumed the UK Secretary of State was a competent authority for authorising pipelines in Manx waters (which is not the case). Be all that as it may, it doesn’t change the fact that proper authorisation could only be given under an Act of Tynwald in order for the pipelines to be lawfully sited in Manx waters.

 

The issue is not could they have said ‘no’ , but did they say ‘yes’?

 

It’s a basic question – when and how was the proper authorisation given that would be needed for the UK-Irish pipelines to be lawfully running through Manx waters?

 

There’s a whole heap of difference in the situation if proper authorisation hasn’t been given for these pipelines.

 

Both SIPS I (1993-ish) and SIPS II (2002) are subject to alease of easement between BGE (Irish gas co) and the DOT. This, as far as the other parties are concerned, would be proof positive that the Island had agreed to the presence of the pipelines in Manx waters. It may not be sufficient for our constitutional purposes of course but I think both documents can be obtained from the Tynwald library (they do have access to the two relevant treaties for sure).

 

The copy of both leases I have include the claim that the DOT is the "owner of the seabed of the territorial sea adjacent to the Isle of Man" and I assume therefore that this claim is supported by Manx Law and might either be found in the Act that set up the various Government departments or is a grandfather right from whatever Government Board became the DOT. The Lease is from the AG's office so I suppose that this particular claim is probably accurate. On that basis there is no overt constiutional need for further approvals but it is unlikely that CoMin did not discuss the terms agreed. Hansard may record the documents being laid before Tynwald (or even debated) but I don't have those to hand.

 

We got a one-off payment of £1.8 million (99 year lease) for SIPS I in 1993 and will get £121,000 per year for SIPS II from 2002 (as adjusted for inflation).

 

The first pipeline in the early 1990s was laid at a time when we weren't ready for natural gas and there was therefore no associated agreement for taking a connection for the Island although a maximum capacity for the island was included within the pipe design (in accordance with the lease). Politicians advise that BGE did promise that a 'hot-tap' connection could be made at a later date in order that this capacity could be used; however, when we were investigating our own gas supply, BGE pretty much denied this and claimed that a hot-tap connection was too much of a risk on what was the only source of supply for Ireland. They must have known at the time of the agreement that a hot-tap was never a possibility and that's what I accused them of lying to us.

 

Glossing over the DTI's work in trying to get a natural gas supply from other sources (for time only, no criticism intended), the next opportunity to connect to a pipeline crossing our waters came in 2001 when the Irish decided to go ahead with SIPS II (this was a knife-edge decision for the BGE Board weighing up the cost of a new pipeline against the expected production from their atlantic fields) and this time, our politicians weren't going to miss out. We were ready for natural gas and we needed a better supply than the sour gas from the East Irish Sea fields that was the only real alternative.

 

For whatever reason, Tynwald/CoMin thought that Mikey Proffitt was the best man to negotiate on our behalf - make of that what you will - and he duly agreed a contract with BGE that fulfilled the desired Manx capacity at a fixed price not tied to the regulated tariff. This decision not to be on the regulated tariff has proven to be a bad one but that is with the benefit of hind-sight. The regulated tariff fell against its expected levels for 2002-2008 as the Irish Atlantic fields did not come on stream as planned as so our tariff ended up higher than it might otherwise have been and we were also paying for capacity that the Island chose not to use. The rest is history; including the fact that Tynwald did not debate, review or approve the contract with BGE.

 

You should note that BGE's chief executive at that time is a man highly regarded as a fierce negotiator and we should really have used a team of experts and not just relied on one man who, it seems, did not keep good records of the decisions made and approvals granted for those decisions. It is easy therefore to blame Mike for the cost problems but we can never know who else was involved in approving this contract as they aren't saying and he hasn't yet spoken - an interesting issue for the Select Committee that may worry a few highly placed Tynwald members or departmental officers.

 

QLD

[Skeddan]

Ace! Thanks QLD-Bloke.

 

Both SIPS I (1993-ish) and SIPS II (2002) are subject to alease of easement between BGE (Irish gas co) and the DOT. This, as far as the other parties are concerned, would be proof positive that the Island had agreed to the presence of the pipelines in Manx waters. It may not be sufficient for our constitutional purposes of course but I think both documents can be obtained from the Tynwald library (they do have access to the two relevant treaties for sure).

 

The copy of both leases I have include the claim that the DOT is the "owner of the seabed of the territorial sea adjacent to the Isle of Man" and I assume therefore that this claim is supported by Manx Law and might either be found in the Act that set up the various Government departments or is a grandfather right from whatever Government Board became the DOT. The Lease is from the AG's office so I suppose that this particular claim is probably accurate. On that basis there is no overt constiutional need for further approvals but it is unlikely that CoMin did not discuss the terms agreed. Hansard may record the documents being laid before Tynwald (or even debated) but I don't have those to hand.

 

We got a one-off payment of £1.8 million (99 year lease) for SIPS I in 1993 and will get £121,000 per year for SIPS II from 2002 (as adjusted for inflation).

 

Leases of easement were granted to BGE by DoT in which they represent they own the seabed in Manx waters.

 

The claim DoT own the seabed is very dodgy - for reasons needn't go into. Also I still have a question over DoT being given this authority by Tynwald - there is the Undersea Cables Act that does this for cables, but I don't know what the counterpart legislation is for pipelines. It may also have provisions about approval of leases over certain value etc.

 

Nevertheless DoT make this claim. Even if wrong and they have no power to grant the lease, or were acting ultra vires, they are a dept of IoMG representing they have this authority. That's good enough. And DoT could be sued if all came unstuck. So if ownership of seabed in Manx waters is iffy, and the whole chain of title fell apart, then IoMG carry the can.

 

Very interesting it is from the AG's office.

 

Do you know if easements or authorisation from DoT were given for the electricity cable and spur? (i.e. granted to MCC and MEA). If so, how were these accounted and paid for? (e.g. did MEA/MCC borrow from Barclays to pay DoT?).

[ai_Droid]

OFT have revised the comparative heating cost chart:

 

http://www.gov.im/lib/docs/oft/15thsept2008.pdf