Industrial island in the North Sea

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NORTH SEA

ISLAND GROUP

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2 21l

Report on the feasibility study

September 1976

Island

inthe

North

Sea

North Sea Island Group

Algemene Bank Nederland N.V. -The Netherlands

Bank Mees & Hope N.V. - The Netherlands

Bankers Trust Corporation - U.S.A.

Bos Kalis Westminster Group N.V. * -The Netherlands Van der Giessen de Noord N.V. * -The Netherlands

N.V. Heidemaatschappij Beheer - The Netherlands

Holland Amerika Lijn N.V. - The Netherlands

Hollandsche Seton Groep N.V. - The Netherlands

I.H.C. Holland N.V. * -The Netherlands

N.V. KEMA/SEP - The Netherlands

Kon. Adriaan Volker Groep B.V. * -The Netherlands KLM Noordzee Helicopters B.V. * -The Netherlands

N.V. Meneba -The Netherlands

Nationale Bank voor Middellang Kt·ediet/AMRO Bank N.V. Nationale lnvesterings Bank

N.V. Nederlandse Gasunie

Nya Asfalt A.B. (Axel Johnson Group) OGEM N.V.

Phs. Van Ommeren Nederland B.V. * Oranje-Nassau Mijnen B.V.

Overslagbedrijf 'Amsterdam' B.V.

Pakhoed Nederland B.V. Pechiney Ugine Kuhlmann S.A. Philips' Gloeilampenfabrieken N.V. * P & 0 Steam Navigation Company *

Rijn Scheide Verolme Machinefabrieken N.V. * Shell lnternationale Petroleum N.V.

N.V. Slavenburg's Bank Smit lnternationale Stevin Group N.V. *

Thyssen-Bornemisza Group N.V.

' Members of thastudy consortium at Iha data of foundation on February 22nd. 1973.

-The Netherlands -The Netherlands - The Netherlands -Sweden - The Netherlands -The Netherlands -The Netherlands -The Netherlands - The Netherlands -France -The Netherlands -Great Britain -The Netherlands -The Netherlands - The Netherlands -The Netherlands - The Netherlands -The Netherlands

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This report has been compiled by

Port and Waterway Engineers Project Development

34, Merwestraat

Sliedrecht - The Netherlands

n

I

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Preface

Island

inthe

North

Sea

The final report on the feasibility of an industry-island in the North Sea off the Dutch coast has been concluded and is hereby submitted to you. The group of over thirty enterprises which participated in this study, offer you their findings in the conviction that such an artificial island can be realized.

This study has not only taken into consideration the technical feasibility of the project, the place where a man-made island could be built and the cost involved. The international legal aspects were also dealt with, as well as the consequences which the construction of an island in the

sea could have on coastal defence, the fish resources and the marine

environment. Further subjects of study were the interrelation between the island, labour-potential and transport, the respects in which the island would affect its surroundings in a positive as well as in a negative sense, and several other important aspects.

It is clear that the man-made island, as approached in this study, is not the only possibility which presents itself. One' unique feature, however, is the fact that the report before you is the very first ever devoted to the problem in such a comprehensive manner. Nevertheless, it cannot be said that all the important factors were studied exhaustively.

The fact that the Dutch Government has already taken the initiative to study the matter more thoroughly, to seek a wider foundation, to formulate the situation more clearly and to gather missing information,

proves that it may offer a new perspective for the future of The Netherlands, that new possibilities for the future have been opened up, the consequences of which one wishes to know as far in advance as possible.

The Zuyder Zee has already been tamed. We have dared to realize new land for agriculture purposes, homes and recreation. The motto:

'A living nation builds for its future'

is still in force. But as our expectations with regard to that future alter,

our present efforts are altered too. The extension of our industrial potential, which we consider a necessity for our country's independence and which we have welcomed for the past few decades, is now felt to be onerous by the population in the Western part of The Netherlands. On the strength of an expected increase in pressure in the future, the construction of a man-made island in the North Sea can also be seen as a possibility to relieve this pressure by breaking new ground, in concerted action with industry.

Technically speaking, it can be done. The advantages amply outweigh the disadvantages. The question is whether we dare to engage in it,

whether we can think on a larger scale and dare to accept the consequences. But this much is certain! If we really want to and venture to tackle the project, The Netherlands will have a good deal of work on hand throughout the world.

NORTH SEA ISLAND GROUP

Prof. W. Langeraar

Chairman General Meeting W. H. Fockema Andreae (LLD.) Chairman Steering Committee

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PHOTO BY COURTESY OF THE RIJKSARCHIEF OF NOORO HOLLAND, HAARLEM

As long ago as 1592 the Dutch promoted a charter for the reclamation of one of the largest lakes north of Amsterdam, viz. the

Beemster, measuring 7,218 hectares, with a depth of 5 to 9 Rhineland feet. A start was made in 1608, with the initial dike construction.

The supervisor for the building of 43 windmills was Jan Adriaensz. Leeghwater (1575-1650) who a/so acted as a consultant in survey and hydraulic matters.

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... these are, to all intents and purposes, inseparable concepts. Age.

long unremitting struggle against the forces of nature has endowed the Dutch with a historic talent for wresting new land from the sea and protecting it against the renewed onslaughts of the elements.

In former times they actually built small artificial hills to safeguard their livestock and property against floods. Later, the inland lakes were drained and fertile polder land created. Now, in the present century,

skill, tradition, and the increasing mechanization of hydraulic plant have resulted in large scale projects like the reclamation of the Zuiderzee, flood protection in the Rhine-Maas delta, and the construction of a deep water port for Rotterdam on the Maasvlakte.

In the course of the centuries, thanks to its geographical position, The Netherlands has developed into a major seafaring nation, trading from its home ports to the far corners of the world. Moreover, the twentieth century has brought with it improvement and expansion of the

European inland navigation network and a vast increase in commercial traffic between the countries of Europe, particularly since World War II. Within the next decade the 3,400 kilometre Rhine-Main-Danube shipping route will be completed, and The Netherlands is ideally situated at the western end of this great transcontinental traffic artery.

Logical, really, that Europoort should have come into being here.

Europoort, that most aptly-named harbour and industrial complex which has made industry a cornerstone of Dutch prosperity. Under these circumstances, it was more or less inevitable that a plan for the construction of a large industrial island in the sea should have been developed in The Netherlands.

During the last decade it has become evident that industrial

development in densely populated areas, such as the countries grouped around the southern part of the North Sea and particularly the western part of The Netherlands, cannot continue upon the same basis and at the same rate as hitherto. The consequences of this industrial development for the environment and the living conditions of the inhabitants are becoming increasingly grave.

Some significant examples of problems now recognized as such by the public as a whole are:

-the nuisance caused by certain industries in the form of air and water

pollution, noise, and stench

- the increasing demand for cooling water, especially for electric power plants, a demand it may soon be impossible to meet

-the danger aspect

- the fact that attractive open country, rare enough in the vicinity of population centres, frequently has to be sacrificed for the

construction of ports and harbours to accommodate giant ships.

Notwithstanding the recent slow-down in economic growth and the increased endeavours of industry to alleviate environmental nuisance,

there is a growing awareness in all sectors that the well being of the population and the further industrial development so essential for the prosperity of us all can only be reconciled by constructing future ports and industrial sites outside densely populated areas. Unfortunately, as a glance at the map makes abundantly clear, the only suitable sites left are too far removed from the sources of labour and the consumption market. But the proximity of the relatively shallow North Sea and the spectacular advances in all fields of technology have led to acceptance of the idea that a realistic solution to the problem lies in the building of an offshore industrial island.

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Activity Approximate duration

Period of 10 years ±20 per cent

FEASIBILITY STUDY

Programme of requirements Possible users

Design

_'

Working island

-

.r.,

Construction of the island

Plants, buildings, etc. ·~

STUDY DUTCH GOVERNMENT

The birth of the Sea Island Project

In the early part of 1971 the Bos Kalis Westminster Group took the

initiative of investigating the possibility of building islands in the

North Sea at exposed locations and using them for various industrial

activities unfriendly to the environment. Two reports embodying the

results of this preliminary study were published in 1972. One related to a rather small, special purpose island which became known as the 'waste

processing island'. The size of this island, as projected, was about

50

hectares. A small harbour was envisaged for the unloading and handling of waste from the mainland, while on the island itself various processing plants and laboratories were planned. The other report

dealt with the engineering, construction, and cost of larger islands, up

to 1,000 -1,500 hectares in area, intended for industrial settlement of the

nature described above.

As a first approach, these reports made it clear that the building of islands should no longer be regarded as an engineer's daydream but as a practical proposition for the future and well worth further

investigation. In this connection it should be noted that small, single -purpose, offshore islands are already in the process of construction in

other parts of the world.

These reports received wide publicity far across the Dutch borders and ultimately resulted in the decision of a number of large industries to pursue the study of the North Sea industrial island project on a joint basis.

North Sea Island Group

I

•

Under this name a study consortium was formed in 1973, made up of representatives from 10 major industries. Today, this international

group consists of more than 30 members, drawn from practically every

sector of industry which might conceivably be involved in the construction and/or exploitation of a large industrial island. Their numbers include the oil and chemical industries, the metallurgical and energy sectors, shipyards, shipping companies and airlines, the construction sector, banks and the communications industry. Although

its participants are predominantly Dutch, the consortium includes

American, British, French, and Swedish partners. Right from the start moreover, meetings of the consortium at various levels have been attended by observers from the Dutch Ministries of Transport and Waterways, Economic Affairs. and Health, as well as representatives acting on behalf of the British Embassy in The Netherlands.

The reasons for their initiative

...

.. . originate in the main from their concern about the current slow-down

in industrial development near densely populated areas and the length

of time required-to develop alternative solutions such as the creation of offshore land by means of an island. An analysis made for the purpose of ascertaining the different development phases involved in

the ultimate realization of an island of about 1,000 hectares showed that it would take at least ten years before island sites of such considerable dimensions could be available for the establishment of

industries.

Three main phases were distinguished. During the first. the

attractiveness of the island concept from the point of further industrial development was to be reinvestigated from as many angles as possible.

In other words, a feasibility study must be carried out. Only after feasibility had been effectively demonstrated and the policy of the Government concerned become known would the second phase be

initiated. Its ramifications would include elaboration of the plans for the project, field measurements, and the laboratory studies which must precede the third phase - the construction of the island.

The main purpose of the North Sea Island Group was to organize the first phase of island development, the feasibility study. The following considerations lay at the root of their decision to investigate the

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GENERAL MEETING

of participating

industries and organizations

,I.

STEERING COMMITTEE OUTSIDE EXPERTS Representatives of the different

...

.,

Legal aspects

I

sectors of industry

L

Labour

PROJECT DEV! OPMENT TEAM~

Transport

l

WORKING COMMITTEES

Users: oil and gas (petro)chemicals metallurgy Utilities: transport infrastructure services Construction technique Financial aspects Environmental aspects

-the fact that the complex problems in densely populated areas and the interests of good industrial development concern the Government, the business world and the individual to such extent that a good solution can only be achieved by joint effort

-the fact that the feasibility of an island would depend to such a large extent on the viability of the industrial economics of the potential users, so that a major involvement on the part of the industrial sectors concerned would be desirable at this stage

- the time factor - once the attractions on the island concept had been established, it would still be many years before sufficient acreage would be available on the island for industries.

The main objective of this study was to discover whether an artificial island for industrial settlement would be feasible from a technical, legal,

environmental, social, and economic point of view. The investigation was not to be confined to the activities of NSIG participants, but was to include all possible industries.

The feasibility study was divided into two phases: A and B. The objective of phase A was to determine the approximate size of the island based upon an evaluation of the industries, their processes and

products, and the size of plant that would be suitable for island settlement. In addition, a review had to be made of the possible building sites for such an island, bearing in mind the requirements of the island's possible users, existing interests in the North Sea, and international legal considerations.

During phase B the economic and technical feasibility of an industrial island at a certain selected location had to be investigated. This comprised the preliminary design, a cost comparison for each

individual industry considered for establishment on the island, and the calculation of the national economic aspects of island construction and plant establishment.

The study was begun in 1973 and the first interim report containing the

results of phase A was delivered in 1974. On the grounds of this interim report it was decided to continue the study. A report embodying the results of the studies carried out during phase B was presented in 1975.

Since the two interim reports are meant only for internal use within the NSIG and since many basic data have changed in the course of the study, the present summary has been drawn up and is intended as a final report providing a comprehensive insight into the whole study.

...

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. .

.

The participants of the NSIG and the government observers hold

regular General Meetings for the purpose of determining terms of

reference for the study and its various parts. The actual study has been carried out by the Project Development Team, the responsibility for whose work lies with HYDRONAMIC B.V. of Sliedrecht. This team is supervised by the Steering Committee equivalent to an executive committee, wherein each category of industry participating in the NSIG is represented by a delegate to the General Meeting.

With respect to special subjects, several Working Committees made up of experts nominated by the participants act as advisers to the Project Development Team. These subjects include construction aspects,

industrial aspects (processes, plant sizes, possible development), cost aspects, financial and economic aspects, transportation of personnel,

energy and environmental aspects.

Matters relating to international law were studied by an international commission of legal experts, a procedure also adopted in the case of the labour aspects. These outside experts were not members of the Project Development Team or the Working Committees.

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Main cost price elements Cost price components

· Land: . rent acreage

· Real properties: interest and depreciation maintenance

. Materials and services: . raw materials

. auxiliary materials

. Labour: labour

. Energy: fuel

. gas

. electricity

- Other utilities: . steam

. process water nitrogen

- Environmental-related elements: . cooling water

. waste management

(solid and liquid)

. emissions (air)

. Transport facilities: harbour dues

. ship transport

pipeline transport - Infrastructure on island: port infrastructure

roads

. heliport, illumination, etc.

- Insurance: insurance . premium . Taxes and grants: . assessments

. subsidies

. Imponderables, such as risk

The approach adopted

To determine which industrial activities come into consideration for

establishment on an island and how feasible their operation there will be, answers were sought to the following questions, since this will be what potential users will themselves want to know when deciding whether or not to settle on an offshore island:

. is there in the first instance a sufficient market for the industry concerned to justify new investments offshore as well as onshore in the countries grouped in the southern part of the North Sea? . does the island provide production factors essential for the

manufacturing process which are not available on the nearby

mainland, where such users would otherwise settle, thus more or less forcing the industry concerned to choose establishment on an island if it should decide to make new investments?

Examples of such conditions are the shortage of cooling water and the restricted availability of large areas of land suitable for indusfrial

settlement on the mainland, neither of which is a problem on the island .

- is the sum of all cost components - listed in the table next to this

text - determining the cost price of the product manufactured less on the island than on the mainland?

The cost components can roughly be divided into two categories:

- those which are independent of government policies and decisions - those which depend in whole or in part on government policies and

decisions, for instance, with regard to ownership and the legal status of land reclaimed offshore, government subs/dies, management of the island, labour conditions, energy, and environmental standards. The first type of costs can be determined fairly accurately, whereas this is difficult or impossible in the case of the second category. Every

endeavour has been made to estimate this second type of cost component as realistically as possible.

On the grounds of the above considerations attention has been paid in this study to the selection of the potential users, the determination of the island's location, lay-out, design, and method of construction, the relevant aspects of international law, the conditions regarding labour, environment, and transport, and, finally, the calculation of the industrial and the national economic feasibility of the project.

Possible users of an industrial island in the

North Sea

A great many industries were reviewed in the light of the available statistics on the situation in the 5 countries grouped around the southern part of the North Sea, viz. Belgium, France, Germany.The Netherlands, and Great Britain. This review also incorporated data obtained from an inquiry held among a large number of European concerns and governmental agencies.

The criteria used to arrive at a preliminary selection of possible users of an industrial island are closely related to the cost price components mentioned above. Factors stimulating the establishment of an industry on an island are operative in activities characterized by:

- large area occupation

- simple supply and dispatch pattern

- transport by means of deep draught carriers

- high cooling water consumption

- high costs incidental to environmental protection on a mainland site

- increasing costs incidental to emergency prevention in the case of high risk operation

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Possible users Specifications Area Labour Electr. ha number MW(e) Refineries 300 1000 100 (Petro)chemical industries 750 8850 650 LNG and air separation 75 95 50 Ferrous metals 550 12100 275

Non-ferrous metals 250 1800 750 Utilities 175 1100 100 Other users 725 155

-Infrastructure and

residential area 525 2300 -Total 3350 27400 1925 selected model Total 3000 31200 1975 maximum model Total 920 5000 1430 minimum model Cooling water 10' m3_/_h 19 307 -32 4 144 -506 Llt=14'C 965 Llt=7'C 644 Llt=7'C

Drawbacks to establishment of an industry on an island are, in general:

- the distance, separating the island from the mainland where the labour market actually lies, and, for many products, the consumption market as well. This will no doubt have an adverse effect on the cost of labour and transportation

- the lack of natural fresh process water on an island

- the undoubtedly higher cost of land reclaimed offshore.

Upon the basis of these criteria, the following categories, the so-called primary users, have been selected:

-a petroleum refinery, because of its large area requirements, high pollution abatement costs, cooling water consumption, and deep draught transport requirements

-chemical and petrochemical industries, making a variety of natural gas, ethylene, propylene, and benzene products mainly because of their large energy and cooling water consumption, high pollution abatement costs, more or less traditional use of sea transport and, sometimes, their high risk aspect. Furthermore, in the case of these products 'over the fence' deliveries between the various industries play an important role

- a terminal for liquid natural gas, because of the high risk aspect

- the ferrous sector, mainly consisting of a cryogenic scrapping plant and a blast furnace and steelworks, in view of the large area requirements, high pollution costs, and deep draught requirements

-the non-ferrous sector, comprising aluminium, magnesium, zinc,

manganese and ferro-manganese, since these plants consume enormous quantities of electricity and some of them have high environmental costs

-an emergency harbour and a tanker cleaning facility

-the storage and transhipment sector, for the storage of dangerous goods and the transhipment of oil and coal, because this sector has large area requirements, is sometimes highly polluting (dust, stench) and requires a deep draught harbour.

In addition to these possible primary users, the following categories also have to be taken into account:

- utilities, primarily required for the operation of the other activities on the island (power, steam, cooling and process water, etc.)

- infrastructure on the island (residential areas, roads, canals, etc.) and the port facilities.

-

.

Several island occupation models have been designed in order to investigate the various parts of this feasibility study. Who the final occupants will be naturally depends to a large extent on where the island is located. For certain activities a location far removed from population centres and close to deep water channels is preferable, whereas for other activities, in view of problems relating to the transportation of people and goods, a location nearer to the coast would be more suitable. Locations far offshore will mean the loss of labour intensive industries, e.g. blast furnaces and steelworks, as potential users, and this has resulted in the concept of the 'minimum

island occupation model' as opposed to a 'maximum island

occupation model', which will be applicable if the location is not too far from the mainland.

After the definite location of the island had been selected, it was decided to evaluate the 'maximum island occupation model' with a few minor modifications. This model has been called the 'selected island occupation model' and has been used for the definite design of the

island and the studies regarding labour, transport, and environment. For the calculation of the economic feasibility of the project another model has been used, differing slightly from the 'selected island occupation model', and subsequently referred to as the 'economy

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Available space in the North Sea

In addition to the part played by user interests in deciding the location

of the island, allowance must also be made for the limitations imposed

by the fact that certain areas in the sea are already reserved for other

users or contain interests which must be protected. Examples of such

situations include:

- navigational restrictions, in the form of shipping routes, anchorage and

waiting areas, and port approach lanes

- military restrictions, such as exercise areas, ammunition dumping

grounds, and minefields

- the use of the sea bed for cables and pipelines

- areas where oil and gas are found

- fishery interests, which means that for the southern part of the North Sea special attention must be paid to herring and plaice spawning grounds and to the fish nurseries near the coast.

For the final decision as to where the island is to be located attention

must also be paid to the availability of building materials, including

sand and gravel, in the vicinity, and to local currents and waves.

The map clearly shows which areas in the southern part of the North

Sea are, to a greater or less extent, inadmissible, due to the limitations

just mentioned. Parallel to these restrictions there is, of course, the·

problem of the legality of constructing and exploiting an island outside

territorial waters.

International legal aspects

It is essential that the principle of the freedom of the high seas

established by the Geneva High Seas Convention should not be

violated: the legality of constructing and exploiting an artificial island

was therefore made the subject of close investigation.

There are many uses of the high seas by States which involve the

establishment of permanent or semi-permanent structures in the high

seas, such as lighthouses and mining installations. These are

recognized as compatible with the freedom of the high seas, and in

particular with the principle that no State may extend its sovereignty to

any part of the high seas. They do not, however, constitute a closed

category: the types of permitted uses of the high seas change and

develop with new technologies and the new needs of mankind.

There is, therefore, no reason of principle why the construction and

exploitation of an artificial island should not be one of the permitted

uses of the high seas, subject of course to the establishment and

observance of proper safeguards concerning construction,

maintenance, operation, and safety devices. Furthermore, developments

indicate that the coastal state most closely involved in the project most

probably may extend its laws to the construction of the island and to

operations upon it, in order to be able to exercise a proper control

over these activities.

Selected location of the island

Taken in conjunction with the requirements of the potential users, there

are three fairly suitable areas where the building of an island could

be considered, namely an area 130 kilometres north of Brown Ridge

suitable for the 'minimum island occupation mode.I' and two areas for

the 'maximum island occupation model', one 30 kilometres east of

Great Yarmouth and one 50 kilometres west of Hook of Holland.

After a brief evaluation of the economic advantages and drawbacks, the

area near the Dutch coast was finally selected as the definite location.

It would seem that a site 50 kilometres west of Hook of Holland and just

north of the future 112 degrees deep draught route is most suitable,

mainly because the water there is 25 -30 metres deep, and the location

is just outside important fish-spawning grounds and sufficiently far

from the mainland in connection with air and water pollution.

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I II Ill IV V VI VII VIII IX s Crude oil (Petro)chemlcal Industries LNG and air separation Ferrous metals Non-ferrous metals

Emergency harbour and tanker-cleaning Storage

Utilities

Infrastructural and residential laciilt1es Spare area

The size of the island has been fixed at 3,330 hectares for the land

area, including all infrastructural provisions and the extensions to be

expected soon after construction, and at about 1,700 hectares for the

harbour. The island measures about 5

*

10 kilometres. Its longitudinal

axis runs in the direction of the currents, i.e. parallel to the coast. The

harbour entrance has been designed on the lee side of the island and

ships will therefore be able to enter in almost any weather conditions.

The various industries represented on the island have, for the greater

part, been allocated sites sector by sector, taking into account the

interdependency between them. The power plant, for instance, is

located very centrally, which allows for very short supply patterns. The

LNG plant must be located far from the other activities and requires a

separate harbour basin.

For reasons of safety, the emergency harbour also requires a separate

basin near the harbour entrance. It is necessary that this basin be

located as far as possible from the other activities and not less than

about 5 kilometres away from the LNG plant. If necessary, it must be

possible to seal off this basin at surface level to prevent oil or other

spills from penetrating into the main island harbour area. The air

separation plant and the cryogenic shredding facility are located close

to the LNG plant so as to be able to use the cold air from the LNG

regasification units. Since scrap metals are essential for the blast

furnace and steelworks, the ferro-sector is located close to this plant.

The large energy and steam consumers, such as the metallurgic sector,

the refinery, and the chemical sector, are located close to the power

and steam supply units. The storage facilities are located farther away.

In view of the prevailing winds, the residential area is positioned in the

southwesternmost part of the island.

In designing the island, 'sand fill' has been preferred to the 'polder'

solution. The island surface level chosen is 4 metres above Mean Sea

Level, which corresponds to an excess frequency of approximately

once in 500 years. For the sea defence around the island, preference

has been given, for the time being, to a so-called 'hard' defence

construction consisting of concrete blocks and quarry stone

penetrated with asphalt, which is calculated to withstand design waves

of approximately 10 metres. Along the southeast side of the island,

where wave attack is least, an artificial beach is envisaged, partly

with a view to future extensions to the island.

In order to avoid later inconvenience, the harbour has already been

designed to accommodate vessels up to 500,000 dwt. The curved

approach channel running from the future 112 degrees deep draught

route to the harbour entrance can, in the first instance, be dredged to a

depth sufficient for ships of 325,000 dwt and very easily deepened when

required. The infrastructure on the island includes roads, bridges, a

heliport, cooling water channels, sewage systems, and outfall basins.

To begin with, the working harbour and adjacent sites for storage must

be constructed at the future island location. Trailing hopper dredgers

and large capacity reclamation dredgers, specially adapted for

operating at sea will be used for thi~ purpose. The total quantity of

sand to be won from the sea bottom is approximately 1,050 million

cubic metres some of which can be dredged from the future 112 degrees deep draught route to Europoort and from the curved approach channel leading from this route to the island harbour. The

greater part of the sand, however, will be dredged from a circular-shaped

area around the island. The average layer thickness to be dredged here

is approximately 5 metres. About 20 dredgers of different types will be

involved in this work. The island can be completed in about 8 years.

The total cost of the island construction (price basis 1973) is

approximately Dfl. 7,800 106_,_viz_._{Dfl. 5}_,_{800 10}6 _{for the sandfill, the sea}

defence and the harbour moles, Dfl. 500 106 _{for the residential area}_,

Dfl. 600 106 _{for the infrastructure}_,_{and Dfl. 900 10}6 _{for quays}_,_piers_,_and

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!-=_

~--/~

-Labour aspects

The feasibility of the project will depend to a large extent on the labour supply. The combination of working hours, duration and conditions of stay on the island, travelling times, and wages, must be such as to attract and retain a sufficient number of employees. The total number of employees working on the island in the case of the 'selected island occupation model' is approximately 27,000, part of them working on continuous operation processes in a 5-shift system, and part on non-continuous processes in a 2-shift system. Inasmuch as the travelling time between home and work is considered too much for

daily travel, a three-day stay on the island with 12 hour shift system is envisaged for the workers working on continuous operation, in order to keep the off-duty time at home as long as possible.

The number of employees that will have to be housed on the island at any one time is estimated at 12,000. Besides, about 12,000 rooms, recreational facilities, restaurants and sports accommodation have also been incorporated in the plan.

Investigations into possible developments in various sectors of the labour market in The Netherlands and Belgium during the next decade reveal that most of the labour force will probably have to be drawn

from the province of South-Holland, the western part of North-Brabant,

and East-Flanders in Belgium.

Environmental aspects

Studies have been carried out, on the basis of the existing standards

and regulations, into the possible economics of an island in respect of water treatment, cooling water, air pollution, and noise.

On the island there is an extensive waste water management system, consisting of several sewers for the conveyance of the different categories of polluted water. This polluted water is treated in a general water treatment centre, where the water will also be subjected to a biological treatment, in order to comply in every respect with the regulations laid down by the conventions of Oslo, London and Paris. The 10 cubic metres per second of effluent and 140 cubic metres per second of cooling water first pass through an outfall lake and are then discharged into the sea by way of a diffusor 1,000 metres in length. Due to the considerable water depth and a small residual northbound current of 4 kilometres per day, the temperature of the receiving sea water is gradually increased by approximately 2 degrees centigrade. This temperature rise has already decreased to less than 0.5 degrees centigrade at a distance of 20 kilometres north of the point of discharge. The emissions into the air from low sources are: dust, odours, and noxious vapours, and from high sources: S02 and NOx. It

has bee·n assumed that a primary anti-dust system will be necessary on the island. The emissions from low sources are no special problem since employee safeguards are stringent enough to prevent mainland standards being exceeded. For the emissions from high sources a cost advantage may be expected, because so much dilution takes place between island and mainland that it may be possible to use heavy fuel oil on the island during 10 or 11 months of the year, whereas on the mainland the probably more expensive low sulphur fuel oil will be legally obligatory in the not-too-distant future.

Furthermore, in the noise sector it is expected that noise abatement costs on the mainland, especially for the prevention of low frequency noise in residential areas, will increase considerably in the next few decades.

Passenger traffic between mainland and island

For the transportation of the personnel, helicopters capable of carrying 90 passengers and with a cruising speed of 420 kilometres per hour have been selected. This means of conveyance ensures quick and reliable transport to the island from a landing place in the immediate vicinity of the workers' homes. Such helicopters give a relatively short travelling time - approximately 45 minutes - and are very flexible as to landing requirements. Appropriate division of the working shifts into several groups will mean that only a few helicopters will be

necessary. Making allowance for maintenance and overhaul requirements and the fact that night flights are likely to be prohibited, the entire

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Most relevant comparlaon l1land-m1lnland

-as part of the iritegrated industrial complex on the island, the so-called 'island cluster'

-as part of a similar but hypothetical complex on the Maasvlakte, the so -called 'Maasvlakte cluster'

-as an individual, likewise hypothetical, industry in the Europoort area, the so-called 'stand-alone plant'.

The cost price differences for the 'island cluster - Maasvlakte cluster'

comparison emphasize the explicit advantages and drawbacks of the island. In the case of the 'Maasvlakte cluster - stand-alone plant'

- -- - - -.... ---.... -.;....-... -.... -'-":. ____________ -_-:_-_-~- comparison the (dis)advantages of the industry forming part of an integrated industrial complex or cluster become apparent. However, it is clear that the 'island cluster -stand-alone plant' comparison is the most relevant. +(- ) Indicates higher (l&BB) coate on the Island rl ₊₁₅

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deliveries raw materials Harbour dues Annual turnover in Dfl. 109 5 5 1.5 15 c:- .; 0

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Because prices for utilities may vary, maximum and minimum cost

differences have been calculated for each of the three intersite comparisons. For these analyses the 1973 price level has been used,

whilst the cost differences per ton product have been determined by

means of the discounting method.

For nearly all potential island users the cost prices per unit product are considerably higher (even as much as 10 to 20 per cent higher) on the island as compared with the 'Maasvlakte cluster'. On the other hand,

however, the cost price differences between 'stand-alone plants and Maasvlakte cluster' are even larger. This means that the 'island cluster -stand -alone plant' comparison frequently indicates lower cost prices for the island. The higher land costs on the island (Dfl. 150 per sq.m.) as compared with the mainland (Dfl. 60 per sq.m.) represents only a few per cent to most users.

The summary in the figure opposite the text shows that for the most relevant 'island-mainland' comparison the cost price on the island increases slightly for the crude refinery and the blast furnaces and steelworks, and considerably for the non -ferrous sector. However, in this sector 1 Dutch cent per kWh represents more than 10 per cent of the total cost price, so that the energy policy adopted will be decisive for this sector. For the cost price of products in the chemical sector as a whole on the island a decrease of 2.5 to 3 per cent may be expected whereas the island LNG terminal shows 10 per cent lower costs as compared with a stand-alone terminal on a separate island. The specification of these results in the figure shows to what extent each cost price component is responsible for the total cost price difference.

The direct investments In and on the Island itself total approximately Dfl. 35,000 106_•_{Taking the total direct and indirect effects on all}

national economic sectors into account, this figure will finally rise to Dfl. 60,000 106 _•_{Based upon a share of 65 per cent for the effect on the}

Dutch economy alone, the contribution to the Dutch national income as a consequence of island construction and plant establishment may be estimated at Dfl. 12,000 106 -13,000 106 _._{The yearly contribution during}

a period of, say, 10 -15 years is estimated at about Dfl. 1,400 106 _or

approximately 0.9 per cent of the Dutch national income.

The total employment induced by the project is estimated for The Netherlands alone at approximately 180,000 man-years, taking into account all direct and indirect effects. This means an annual

employment of 20,000-30,000 man-years or 0.50-0.85 per cent of the total labour force of The Netherlands, a percentage which is indeed considerable when viewed against the background of the total national unemployment. The total of all direct and indirect taxes accruing to the Dutch Treasury as a consequence of island construction and plant establishment is estimated at approximately Dfl. 1,900 106 _•

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The present situation of the project

With the presentation of the report on this feasibility study only a first phase has been completed in the total development of this rather complex project. The results show that on the information now available the project looks feasible. A good all-round impression has been obtained as to the identity of the potential users of such an

industrial island, where it could be located, what the present state of

affairs is regarding International Law and its probable interpretation, how the island could be constructed, which means of transport for persons and goods would be the most attractive, where the necessary

labour could be recruited, and what - in general terms - are the

environmental consequences of such a project. Figures have even

been produced regarding the industrial and national economic

consequences based on certain assumptions and existing standards

and regulations. However, definite decisions as to the feasibility of the project can only be made after government policy on various aspects is known.

Governmental involvement

In the first place, for the building and use of an isiand as envisaged in this study approval and authorization must be obtained from the Government. In this connection the legal status of the island must be known.

With respect to the industrial economic feasibility of the various categories of users - and their consequent readiness to settle on the

island - a factor of importance is government policy with regard to

the environmental and safety standards industhes must comply with

both on the island and on the mainland, and the financial

consequences. For decisions about the economic feasibility of the

project it is also essential to know whether, and how, the Government

may translate national economic advantages into possible grants or other special facilities.

The ultimate decision as to feasibility will also depend in part on government policy with regard to energy and labour.

Further development of the project

Simultaneously with - but also subsequent to - the elaboration and preparation of the above-indicated policies, a number of additional studies, surveys, and laboratory investigations will be necessary in

order to check assumptions and adapt designs and calculations.

These investigations mainly concern environmental, and civil hydraulic and marine engineering aspects, in which the North Sea

Island .Group is ready to participate if so desired. At the present

moment further studies are already being carried out by the North

Sea Island Group and its participants into the question of 'integrated

energy on the island' and the application of the likewise integrated aspects of the accommodation and well being of the temporary

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int

North

Sea

6. Labour aspects page

6.1. Introduction . . . 115

6.2. The labour force required on the island . . . 115

6.3. Availability of labour on the mainland . . . 116

6.4. The preferred working schedule on the island . . . 118

6.5. Estimate of possible labour costs on the island . . . 120

7. Transport aspects 7.1. Transport of personnel .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. . 123

7.2. Transport of goods . . . 126

8. Environmental aspects 8.1. Introduction . . . 131

8.2. Waste water management and liquid effluent discharges from the island . . . 132

8.3. Cooling water and heat emissions . . . 136

8.4. Emissions in the air . . . 137

8.5. Visual aspects and noise . . . 139

8.6. Waste processing . . . 140

8. 7. Costs aspects . . . 141

9. Analysis of industrial economic feasibility 9.1. Method adopted to determine the in<:lustrial economic feasibility . . . 145

9.2. The cost differences relating to acreage, labour, energy, utilities, and cooling water . . . 149

9.3. Calculation of cost differences for the categories crude oil refinery, (petro) chemical sector and LNG terminal . . . 155

9.4. Calculation of cost differences for users belonging in the categories of ferrous and non-ferrous metals . . . 164

9.5. Calculation of cost differences for users in the category of servicing enterprises . . . 168

9.6. The results of the industrial economic feasibility calculations . . . 171

10. Considerations regarding the national economic consequences 10.1. Preamble: Aspects of public interest . . . 179

10.2. The island activities in relation to the Dutch industrial structure . . . 180

10.3. The investment aspect and its national economic consequences . . . 180

10.4. The income aspect . . . 181

10.5. The consumption aspect . . . 181

10.6. The employment aspect . . . 182

10. 7. Government tax receipts due to island and plant construction . . . 182

10.8. The impact of the national economic effects . . . 182

10.9. Review of the considered national economic effects of the island project . . . 183

11. Review of the results, conclusions and considerations on the further development of the project 11.1. Potential island users . . . 185

11.2. International law aspects . . . 186

11.3. Selected island location . . . 186

11.4. Technical feasibility of the island . . . 187

11.5. The project considered from various non-engineering angles . . . 189

11.6. Economic feasibility of North Sea Island Project . . . 191

11. 7. Considerations concerning the further development of the project . . . 193

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I !I

I

©

1976 by the North Sea Island Group Papendrecht, The Netherlands

No part of this work may be reproduced or utilized in any form by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without permission in writing from the North Sea Island Group I.S.B.N.: 90 90000 30 5

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1.1 Objectives of the feasibility study

As a result of the study on artificial islands carried out by the Bos Kalis Westminster Dredging Group N.V. and published in 1972 under the name 'Sea Island Project' a group of 10 industries, interested in further development of the project, formed ·in the spring of 1973 the study consortium North Sea Island Group. This consortium was formed to carry out a common feasibility study, the major objective of which is - as then formulated - to examine whether an artificial island for settlement of industrial and port activities would be feasible from an economic, technical, and legal point of view. Within the framework of this concept the first phase of the study was started mid 1973. Meanwhile the study consortium has developed into a group of over 30 participants representing more or less every branch of industry likely to be involved in the building and operation of the i~land and the installations on it. As well as a majority of Dutch-based industries, the North Sea Island Group also includes members from France, Sweden, Great Britain and the United States of America. General meetings and meetings of Working Committees of the North Sea Island Group were attended by observers of the Dutch Ministries of Public Works, Economic Affairs and Public Health and Environmental Control and of the Britisch Embassy in The Netherlands.

1.2 Phasing of the study

The study was divided into three phases, viz. phase A, phase B and the phase of the preparation of the present report. At the end of phases A and B interim reports were submitted to the members of the North Sea Island Group and the above-mentioned government observers. This report, which is mainly based upon these interim results, is meant to provide, in condensed form, an almost complete picture of the study results and the motivations behind it. In this respect it should be regarded as the final report of the study.

An analysis of the relevant factors has shown which industries would be more suitably placed on an island settlement than on a mainland settlement.

Upon this basis a first selection of industries for which island settlement would be favourable, referred to as 'possible island users', could be made in phase A. In addition a prognosis

concerning the possible sizes of these plants was

made. From this prognosis 'island occupation models' could be constructed and from then further detailed studies could be made.

Furthermore, during this phase the international law aspects were studied, an island location was selected, and first studies were made on the design and building of such an island. During phase B the complete economic and technical feasibility was investigated on the basis of the 'island occupation models' mentioned above, at the locations of the island selected in phase A. In addition special studies were carried out in phase B regarding the labour, transport, and environmental aspects.

1.3 Scope of the study

It has to be stressed at the outset that the study, or perhaps one could better say the research, presented in this report should be regarded as showing the main aspects influencing the complicated choice of whether or not to use islands for industrial settlement as well as the degree of influence, rather than providing a package of blue-prints from which the building of the island could be started.

A large number of choices had to be made during this study in order to make a final economic cost price comparison between industries settled on the island and similar industries on the mainland. These choices relate for instance to the selection of the industries and the models chosen for evaluation, the size of the island and its harbour and the lay-out of island and harbour, the shift system for the employees and the ensuing costs, the system chosen for transport, many aspects concerning the environment, such as the use of high or low sulphur fuel oil, the necessity of biological treatment of the island waste, the permissible rise in temperature due to heating of the cooling water and of the receiving sea water, etc.

It must be realized that many aspects relating to the present project are completely new and have never played a role in former projects. Therefore, it is of paramount importance that certain aspects should be studied in much greater detail, rules should be established in certain fields and that, where necessary, decisions should be taken by the Government in order to determine more definitely the feasibility for each separate industry at a later stage.

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1. GENERAL INTRODUCTION

The authors of this report are well aware that in some respects their choices are preliminary, and that the final project may differ considerably from the project at present envisaged. On the other hand, they are also of the opinion that as a first feasibility study the present study is a good starting point. The authors feel that in making these many preliminary decisions, they have, from the point of view of island settlement, kept on the safe side.

The data used for this study have been gathered from literature surveys, visits to several institutions in Belgium, France, Germany, and Great Britain and to Dutch Government agencies. About forty enterprises were also visited to introduce a specially prepared industrial inquiry for this study. However, just after the study had begun the oil crisis occurred and this cou Id, at that time, have several possible consequences. Since in particular the long-term consequences of this oil crisis could not be overseen at the time of the study and in view of the scope of this feasibility study it was decided to base it on economic data prior to this crisis, which means that the 1973 price level has mostly been used.

1.4 Organization of the study

The Steering Committee, in which each group of participants of the North Sea Island Group is represented, has been formed to supervise on behalf of the General Meeting of the consortium the feasibility study.

The actual study was commissioned to and performed by Hydronamic B.V. - Port and Waterway Engineers - Sliedrecht, Holland. Several parts of the study were carried out with the assistance of experts outside the North Sea Island Group, viz.:

- the study of the international law aspects, carried out by an international commission chaired by Dr. Mr. L.

J.

Bouchez, Utrecht {chapter 3)

the study of the labour aspects by Prof. Dr. W. Albeda, Rotterdam

the study of the transport aspects by Prof. lr. W. A. Koumans, Eindhoven.

During the study the Project Development Team

of Hydronamic was assisted by several Working Committees formed by experts of the participating industries, viz. the Committees 'Users of the island', 'Transport and Services', 'Infrastructural facilities and Public Services', 'Construction technique', 'Environmental aspects', and 'Financing'.

1.5 The report

The contents of this report are as follows: In chapter 2 a description is given of the considerations which have led to the 'island occupation models' selected for further study; this chapter contains mainly the results of the study work performed during phase A.

Chapter 3 contains a summary of the international law aspects regarding building and operation of an industrial island. As well as this summary, the complete study on legal aspects has been published by the North Sea Island Group as a separate volume.

In chapter 4 the reasons are stated for the selection of the island location finally chosen. Chapter 5 contains a description of the design and the building aspects of the island and its infrastructure and the cost calculations thereof. Chapter 6 gives a review of all considerations respecting labour, both as regards the potential labour market and the costs of this labour; it is already observed that the prospects as regards the potential labour market may have changed considerably since the time of study.

Chapter 7 embodies an evaluation of the transportation aspects, both as regards personnel and goods.

The environmental aspects are dealt with in chapter 8.

Upon the basis of all cost differences between island settlement and mainland settlement a final evaluation of the industrial economic feasibility for the various industries is given in chapter 9.

Chapter 10 contains the national-economic effect of island construction and plant establishment related to the Dutch national economy.

In chapter 11 a short summary is given of the results and conclusions, as well as some considerations regarding the further development of the project.

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the North Sea

One of the first and, in fact, one of the most difficult problems was to decide upon the potential users of such an island. In order to draw up a provisional list further study was devoted to the reasons and developments which might encourage an industry to consider settlement on an island, as well as to the possible objections. The advantages and drawbacks thus analysed already provided a general indication of the sort of industries suitable for establishment on an island. To narrow down the field still further some essential criteria have been formulated which every undertaking will adopt when deciding whether to consider settlement on an island. Within this framework various groups of potential activities have been considered in greater detail in order to compile the lists of possible users for various so-called island occupation models.

2.1 Developments leading to the need for

man-made islands

Basically the idea of using artificial islands in the sea for the establishment of industries originated from the conflict situations regarding the use of available space in densely populated coastal areas where rapid industrial developments have been taking place in recent decades. Such situations are particularly prevalent in the countries surrounding the southern part of the North Sea, namely Belgium, France, West-Germany, The Netherlands, and Great Britain, but can also be observed in certain coastal zones of the U.S.A. and Japan.

Most of the conflict situations concern environmental problems caused by various industrial activities. Such problems include air and water pollution, the loss of often attractive coastal districts due to expansion of industrial and port areas, thermal pollution brought about by the increased use of cooling water by a number of industries and power stations, as well as the problem of hazardous operations. In order to get an overall impression of the extent to which the use of artificial islands may contribute to the solution of these problems, further attention will be paid in this section to the following aspects:

industrial developments in general

required and available areas for industrial development in the above-mentioned countries

deep draught sea transport

developments as regards the anticipated future use of the various energy carriers and the need for power in particular; the latter has been considered mainly in relation to the kind and quantity of fuel to be supplied to power stations

and the need of cooling water

developments as regards the use of metals mainly in view of deep draught sea transport

environmental considerations

.- hazardous operations.

The need for an island will be made the object of further consideration in the light of the above-listed aspects.

2.1.1 Industrial developments in the countries surrounding the southern part of the North Sea

Entering into consideration of something that does not yet exist, of something that will not be

completed before the end of the eighties, is not a sinecure, especially not in our time since, as yet, practically no long term development plans have been made. Only one thing is already evident, namely, that the project concerns a man-made island somewhere in the southern part of the North Sea.

For that reason it is considered best to start with the economic developments in the countries around this part of the North Sea. The characteristics of these countries which, to us, are the most

important, are given in Fjgure 2.1 . The data in this figure show that in many fields Belgium,

West-Germany, The Netherlands and Great Britain bear a close resemblance to one another. France often differs in that it has a lower degree of industrialization or, in other words, it is a country embodying potentially more growth possibilities. Its present energy consumption per capita is the lowest of all the countries mentioned, but the investment ratio equals that of, for instance, West-Germany. Undoubtedly Belgium and The Netherlands show the highest density in the field of population and gross national product.

In the sixties, the industrial climate in countries such as Belgium and The Netherlands was founded on a predominating desire for expansion by many foreign investors, who had almost a blind faith in

growth-economics.

However, at the present moment this optimism is seriously affected by world-wide changes. In its study The Growth of Output 1960-1980' the Organization for Economic Co-operation and Development postulated (p. 166):

'Governments need to frame their policies on the assumption that the forces making for rapid economic growth are likely to continue and that

potential Gross Domestic Product for the

Industrial island in the North Sea

NORTH SEA

ISLAND GROUP

2 21l

Island

inthe

North

Sea

North Sea Island Group

n

Preface

Island

inthe

North

Sea

'

-

.r.,

The birth of the Sea Island Project

50

North Sea Island Group

The reasons for their initiative

...

,I.

...

.,

L

l

...

-.~-

. .

.

The approach adopted

Possible users of an industrial island in the

North Sea

-

.

Available space in the North Sea

International legal aspects

Selected location of the island

*

!-=_

-Labour aspects

Environmental aspects

Passenger traffic between mainland and island

f

i

.

e

J

"'

§

!

.,

.,

.,

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..,

The present situation of the project

Governmental involvement

Further development of the project

Table of contents

int

North

Sea

I

I

©

1.1

Objectives of the feasibility study

1.2

Phasing of the study

1.3 Scope of the study

1. GENERAL INTRODUCTION

1.4 Organization of the study

J.

1.5 The report

_'