Environment: Britain to lose out over Brent Spar

Shell's Brent Spar oil storage tank is likely to be scrapped on shore in Norway. The oil giant is now close to deciding on the preferred alternative to dumping the Spar at sea. But Nicholas Schoon, Environment Correspondent, says British yards will be the losers.

Shell will finally tell the Government what it wants to do with the Spar within the next two or three months, more than two years after Greenpeace's campaign forced the company to abandon its plans to sink the skyscraper-sized structure in the north Atlantic.

Soon after that traumatic event - Shell changed its corporate mind only a couple of hours before the Spar was meant to be scuppered - it began an exhaustive procedure to find a more acceptable alternative. The 14,500-tonne tank had spent two decades storing crude oil in a North Sea field.

At the beginning of this year Shell short-listed six engineering consortia which had put in a variety of bids for bringing the floating structure to shore and re-using or re-cycling it. Each was given pounds 250,000 to carry out detailed planning.

Now each scheme has been analysed for its technical and safety risks, environmental impacts and "societal effects" by the independent Norwegian foundation Det Norsk Veritas, a world leader in assessing marine risks. Each has been ranked under these different headings. The likely cost of each option has also been weighed up independently.

The results show how expensive recycling is compared with deep-sea dumping, which had been approved by the Government. That would have cost just under pounds 5m.

The cheapest of the consortia's schemes comes in at pounds 11.4m whilst the most expensive would cost pounds 48m. Under that proposal the Brent Spar, currently moored in a Norwegian fjord, would be towed across the North Sea to a yard at Nigg in north-east Scotland, for scrapping.

Heinz Rothermund, managing director of Shell UK exploration and production said: "We are now entering the home straight." The aim was "to find a solution that on balance is at least as good as, or better than, deep- sea disposal".

He gave no clue as to what Shell's final preference would be. But from an analysis of the rankings under safety, risk, environmental impact and cost, it appears that one short-listed scheme to cut up the Brent Spar to build an offshore reef, protecting the East Anglian coastline, has little chance.

The highly ranked options with relatively low costs all involve Norwegian locations. The final choice will probably be between a consortium formed by the Scottish energy company John Wood, based in Aberdeen, and the Norwegian GMC group, and another Norwegian consortium, Kvaerner Seaway Spar Alliance.

Wood-GMC proposes using the Spar cables, then cutting its cylindrical hull into rings to extend a quay in Norway. Kvaerner Seaway plan to cut it up, either for metal scrap or to be used as a fish farm. Whatever Shell chooses will have to be approved by the government.