September 8, 2015

The UK Energy Bill 2015

The Energy Bill commenced the HL Committee Stage on Monday 7 September 2015.

Prior to Monday 7 September 2015, a number of government amendments were tabled for consideration and a Second Marshalled List of Amendments to be moved in Committee was tabled on 8 September which can be viewed here.

So far members of the Lords have discussed a range of areas covered by the Energy Bill including the role and powers of OGA and whether it should have carbon storage and transportation in its objectives, and the costs of decommissioning North Sea oil and gas infrastructure.

The Committee Stage continues on Wednesday 9 September.

We shall provide a more comprehensive update once the Committee Stage is completed. Further amendments are expected as the Bill moves through the Report stage.

Ahead of Dr Andy Samuel’s keynote speech at Offshore Europe in Aberdeen on 9 September, OGA has published its report “Call to Action: 6 Months On” which can be viewed here.

There is an accompanying “OGA Overview September 2015” which can be viewed here.

It contains the following slide headed “Draft MER UK Strategy”

1.     “MER UK Definition”:

  • Delivering the maximum overall value from the economic reserves in the UKCS”.

2.     “MER UK Principles”:

  • Maximise net value, not just volume
  • Investment will add overall net value to UK
  • May oblige companies to redistribute value
  • Companies to see satisfactory expected commercial return on investment
  • Balance extracting all economic reserves and achieving MER across the UK.

We shall provide an update on any further insight we can glean from Dr Samuel on 9 September. Meanwhile, we are being told that the MER UK Strategy will be drafted and put out for public consultation in mid-October 2015 and that there will be full constructive engagement with the industry with a view to laying MER UK Strategy before Parliament in December 2015.

The Government has also published the Delegated Powers and Regulatory Reform Committee – Seventh Report on 1 September 2015. The Government’s Response in relation to the Energy Bill is contained in Appendix 1 and can be viewed here.

The Government Response is to 3 recommendations made in the Delegated Powers and Regulatory Reform Committee Report relating to Clause 27(8) (Disclosure of Information), Clause 40(2) (OGA guidance on determining the amount of financial penalty) and Clause 57(3) (Powers to charge fees). The Response was made before the Bill was considered at the Committee Stage “in order to inform that debate”. On the whole the Government accepts the Committee Report recommendations and, where possible, these will be reflected in amendments to the Bill presently being debated at Committee Stage. They are intended to provide further Parliamentary oversight of the use of OGA’s delegated powers.

The third day of Committee Stage took place on 14 September 2015. The amendments to the Bill discussed included, clauses 9 (levy) and 60/61 (Sanctions). The Committee Stage continues on 14 October 2015, when further amendments will be discussed.

The Bill as amended in Committee can be found here.

This update is the fourth in our series on the UK Energy Bill 2015. To read the previous updates in the series please click here.