Energy Bill (HC Bill 128)

A

BILL

[AS AMENDED IN PUBLIC BILL COMMITTEE]

TO

Make provision about the Oil and Gas Authority and its functions; to make
provision about rights to use upstream petroleum infrastructure; to make
provision about the abandonment of offshore installations, submarine
pipelines and upstream petroleum infrastructure; to extend Part 1A of the
Petroleum Act 1998 to Northern Ireland; to make provision about the
disclosure of information for the purposes of international agreements; to
make provision about fees in respect of activities relating to oil, gas, carbon
dioxide and pipelines; to make provision about wind power; to make
provision about the crediting to and debiting from the net UK carbon account
of carbon units; and for connected purposes.

Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and
consent of the Lords Spiritual and Temporal, and Commons, in this present
Parliament assembled, and by the authority of the same, as follows:—

Part 1 The OGA

The OGA and its core functions

1 The OGA

(1) 5The company originally incorporated under the Companies Act 2006 as the Oil
and Gas Authority Limited is renamed as the Oil and Gas Authority.

(2) In relation to any of its functions—

(a) the Oil and Gas Authority is not to be regarded as acting on behalf of
the Crown, and

(b) 10its members, officers and staff are not to be regarded as Crown
servants.

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(3) The Oil and Gas Authority is exempt from the requirements of the Companies
Act 2006 relating to the use of “limited” as part of its name.

(4) In this Act “the OGA” means the Oil and Gas Authority.

2 Transfer of functions to the OGA

(1) 5Schedule 1 transfers certain functions of the Secretary of State to the OGA.

(2) The Secretary of State may by regulations provide—

(a) for the transfer to the OGA of any relevant functions exercisable by a
Minister of the Crown, or

(b) for any such functions that are to be transferred to the Scottish
10Ministers or the Welsh Ministers to be exercisable by the OGA until the
transfer to those Ministers takes effect.

(3) The Secretary of State may by regulations make such provision as the Secretary
of State considers appropriate in consequence of, or in connection with, any
provision contained in—

(a) 15Schedule 1, or

(b) regulations under subsection (2).

(4) The provision that may be made under subsection (3) includes provision—

(a) amending, repealing or revoking any enactment,

(b) amending any relevant authorisation (including any model clause
20incorporated, or having effect as if incorporated, in it) granted or given
before the date when the regulations take effect,

(c) for anything done by or in relation to a Minister of the Crown in
connection with any functions transferred to be treated as done, or to
be continued, by or in relation to the OGA, and

(d) 25about the continuation of legal proceedings.

(5) Regulations under this section may not provide for the transfer to, or exercise
by, the OGA of any power to legislate by means of orders, rules, regulations or
other subordinate instrument.

(6) In this section and section 3—

  • 30“enactment” includes an enactment comprised in subordinate legislation,
    within the meaning of the Interpretation Act 1978;

  • “Minister of the Crown” has the same meaning as in the Ministers of the
    Crown Act 1975, and includes such Ministers acting jointly;

  • “relevant authorisation” means—

    (a)

    35a licence, authorisation or notice granted or given by a Minister
    of the Crown in the exercise of a relevant function, or

    (b)

    a licence granted under section 2 of the Petroleum (Production)
    Act 1934 (searching for and getting petroleum);

  • “relevant function” means a function conferred by or under—

    (a)

    40the Petroleum Act 1998 (except Part 4),

    (b)

    Chapter 2 or 3 of Part 1 of the Energy Act 2008,

    (c)

    Chapter 3 of Part 2 of the Energy Act 2011,

    (d)

    the Hydrocarbons Licensing Directive Regulations 1995 (S.I.
    1995/1434),

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    (e)

    any regulations amended or modified by the Energy Act 2008
    (Consequential Modifications) (Offshore Environmental
    Protection) Order 2010 (S.I. 2010/1513S.I. 2010/1513),

    (f)

    the Storage of Carbon Dioxide (Licensing etc) Regulations 2010
    5(S.I. 2010/2221S.I. 2010/2221),

    (g)

    the Storage of Carbon Dioxide (Termination of Licences)
    Regulations 2011 (S.I. 2011/1483S.I. 2011/1483),

    (h)

    the Storage of Carbon Dioxide (Access to Infrastructure)
    Regulations 2011 (S.I. 2011/2305S.I. 2011/2305), or

    (i)

    10any other enactment that relates to matters similar to those to
    which an enactment mentioned in any of the preceding
    paragraphs relates.

3 Transfer of property, rights and liabilities to the OGA

(1) The Secretary of State may make one or more transfer schemes transferring
15qualifying property, rights and liabilities of a Minister of the Crown to the
OGA.

(2) A scheme made under this section may, in particular, make provision—

(a) for anything done by or in relation to a Minister of the Crown in
connection with any property, rights or liabilities transferred by the
20scheme to be treated as done, or to be continued, by or in relation to the
OGA;

(b) for references to a Minister of the Crown in any agreement (whether
written or not), instrument or other document relating to property,
rights or liabilities transferred by the scheme to be treated as references
25to the OGA;

(c) about the continuation of legal proceedings;

(d) for transferring property, rights or liabilities which could not otherwise
be transferred or assigned;

(e) for transferring property, rights or liabilities irrespective of any
30requirement for consent which would otherwise apply;

(f) for preventing a right of pre-emption, right of reverter, right of
forfeiture, right to compensation or other similar right from arising or
becoming exercisable as a result of the transfer of property, rights or
liabilities;

(g) 35for dispensing with any formality in relation to the transfer of property,
rights or liabilities by the scheme;

(h) for transferring property acquired, or rights or liabilities arising, after
the scheme is made but before it takes effect;

(i) for apportioning property, rights or liabilities;

(j) 40for creating rights, or imposing liabilities, in connection with property,
rights or liabilities transferred by the scheme;

(k) for requiring the OGA to enter into any agreement of any kind, or for a
purpose, specified in or determined in accordance with the scheme.

(3) Subsection (2)(b) does not apply to references in an enactment or a relevant
45authorisation.

(4) In this section—

  • “property” includes interests of any description, and

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  • “qualifying property, rights and liabilities” means property held, and
    rights and liabilities arising, in connection with functions which were
    functions of a Minister of the Crown and as a result of this Act have or
    are to become functions of the OGA, but does not include rights and
    5liabilities relating to an individual’s employment in the civil service of
    the State.

4 Transfer of staff to the OGA

5 Transfer schemes: supplementary

(1) A scheme made under section 3 or 4 may—

(a) 10contain incidental, supplementary and consequential provision;

(b) make transitory or transitional provision or savings;

(c) make different provision for different purposes;

(d) make provision subject to exceptions.

(2) Subject to subsection (3), the Secretary of State may modify a scheme made
15under section 3 or 4.

(3) If a transfer under the scheme has taken effect, any modification under
subsection (2) that relates to the transfer may be made only with the agreement
of the person (or persons) affected by the modification.

(4) A modification takes effect from such date as the Secretary of State may
20specify; and that date may be the date when the original scheme came into
effect.

6 Pensions

(1) The persons to whom section 1 of the Superannuation Act 1972 (persons to or
in respect of whom benefits may be provided by schemes under that section)
25applies are to include the employees of the OGA.

(2) Accordingly, in Schedule 1 to that Act (employment to which superannuation
schemes may extend), in the list of other bodies, at the appropriate place
insert—

  • “The Oil and Gas Authority.”

(3) 30The employees of the OGA are to be treated for the purposes of paragraph
(1)(b) of regulation 3 of the Public Service (Civil Servants and Others) Pensions
Regulations 2014 (S.I. 2014/1964S.I. 2014/1964) as persons—

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(a) to whom the scheme established under that regulation may potentially
relate by virtue of paragraph (2) of that regulation, and

(b) in respect of whom the Minister for the Civil Service has made a
determination under section 25(5) of the Public Service Pensions Act
52013.

(4) The OGA must pay to the Minister for the Civil Service, at such times as the
Minister may direct, such sums as the Minister may determine in respect of any
increase attributable to this section in the sums payable out of money provided
by Parliament under the Superannuation Act 1972 and the Public Service
10Pensions Act 2013.

7 Contracting out of functions to the OGA

(1) Subsection (2) applies if, under section 69 of the Deregulation and Contracting
Out Act 1994, the OGA is, or employees of the OGA are, authorised to exercise
a function to which that section applies.

(2) 15Subsection (5)(a) of that section applies in relation to the authorisation as if the
words “, not exceeding 10 years,” were omitted.

(3) The Welsh Ministers may enter into an agreement with the OGA authorising
the OGA to exercise any functions of the Welsh Ministers.

(4) The reference in subsection (3) to functions does not include functions of
20making, confirming or approving subordinate legislation contained in a
statutory instrument.

(5) An agreement under subsection (3) does not affect the responsibility of the
Welsh Ministers.

(6) An agreement under subsection (3) does not prevent the Welsh Ministers from
25exercising a function to which the agreement relates.

(7) The Welsh Ministers must arrange for a copy of any agreement under
subsection (3) to be published in such manner as the Welsh Ministers consider
appropriate for bringing it to the attention of the persons who, in the Welsh
Ministers’ opinion, are likely to be affected by it.

30Exercise of functions

8 Matters to which the OGA must have regard

(1) The matters to which the OGA must have regard when exercising its functions
include the following, so far as relevant—

Minimising future public expenditure

35The need to minimise public expenditure relating to, or arising from, relevant
activities.

Security of supply

The need for the United Kingdom to have a secure supply of energy.

Storage of carbon dioxide

40The development and use of facilities for the storage of carbon dioxide, and of
anything else (including, in particular, pipelines) needed in connection with
the development and use of such facilities, and how that may assist the
Secretary of State to meet the target in section 1 of the Climate Change Act 2008.

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Collaboration

The need for the OGA to work collaboratively with the government of the
United Kingdom and with persons who carry on, or wish to carry on, relevant
5activities.

Innovation

The need to encourage innovation in technology and working practices in
relation to relevant activities.

System of regulation

10The need to maintain a stable and predictable system of regulation which
encourages investment in relevant activities.

(2) In this section and section 9—

  • “function” means any function of the OGA, including any function under
    Chapter 3 of Part 1 of the Energy Act 2008 (storage of carbon dioxide),
    15other than a function which the OGA is authorised to exercise by virtue
    of—

    (a)

    an order under section 69 of the Deregulation and Contracting
    Out Act 1994, or

    (b)

    an agreement under section 7(3);

  • 20“relevant activity” means any activity in relation to which the OGA has
    functions.

9 Directions: national security and public interest

(1) The Secretary of State may give directions to the OGA as to the exercise by it of
any of its functions if the Secretary of State considers that the directions—

(a) 25are necessary in the interests of national security, or

(b) are otherwise in the public interest.

(2) Directions may be given under subsection (1)(b) in relation to the exercise of a
regulatory function in a particular case only if the Secretary of State considers
that the circumstances are exceptional.

(3) 30Directions given under this section may be varied or revoked by further
directions given under this section.

(4) The Secretary of State must lay before Parliament a copy of any directions
given under this section.

(5) The Secretary of State may exclude from any directions laid before Parliament
35under subsection (4) any material the publication of which the Secretary of
State considers would—

(a) be contrary to the interests of national security, or

(b) otherwise not be in the public interest.

(6) If the Secretary of State considers that publication of the directions (whether
40with or without the exclusion of material under subsection (5)) would fall
within paragraph (a) or (b) of that subsection, the Secretary of State may,
instead of laying the directions, lay before Parliament a memorandum
stating—

(a) that the directions have been given, and

(b) 45the date on which they were given.

(7) The OGA must notify the Secretary of State of any cases, matters or
circumstances which have arisen, or which the OGA considers are likely to

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arise, in respect of which the OGA considers that the power to give directions
under this section should be exercised by the Secretary of State.

(8) In this section “regulatory function” means—

(a) a function of granting or revoking a licence or other authorisation in
5relation to any relevant activity;

(b) a function of imposing conditions or requirements in relation to any
relevant activity;

(c) a function that relates to securing, monitoring or investigating
compliance with conditions or requirements in relation to any relevant
10activity.

10 Directions: requirements to notify Secretary of State

(1) The Secretary of State may give directions to the OGA specifying cases, matters
or circumstances of which the OGA must notify the Secretary of State—

(a) when they arise, or

(b) 15if the OGA considers that they are likely to arise.

(2) Directions given under this section may be varied or revoked by further
directions given under this section.

Information and samples

11 Power of Secretary of State to require information and samples

(1) 20The Secretary of State may require the OGA to provide the Secretary of State
with such information or samples held by or on behalf of the OGA as the
Secretary of State may require for the purpose of—

(a) carrying out any function conferred by or under any Act,

(b) monitoring the OGA’s performance of its functions, or

(c) 25any Parliamentary proceedings.

(2) In this section—

(a) references to “protected material” are references to information or
samples acquired by the Secretary of State under subsection (1), and

(b) references to disclosing protected material include references to
30making the protected material available to other persons (in a case
where the protected material includes samples).

(3) The Secretary of State may use protected material only for the purpose for
which it is provided.

(4) Protected material must not be disclosed—

(a) 35by the Secretary of State, or

(b) by a subsequent holder,

except in accordance with this section.

(5) For the purposes of subsection (4)(b), “subsequent holder”, in relation to
protected material, means a person who receives protected material directly or
40indirectly from the Secretary of State by virtue of a disclosure, or disclosures,
in accordance with this section.

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(6) Subsection (4) does not prohibit the Secretary of State from disclosing
protected material so far as necessary for the purpose for which it was
provided.

(7) Subsection (4) does not prohibit a disclosure of protected material if—

(a) 5the disclosure is required by virtue of an obligation imposed by or
under any Act, or

(b) the OGA consents to the disclosure and, in a case where the protected
material in question was provided to the OGA by or on behalf of
another person, confirms that that person also consents to the
10disclosure.

Funding

12 Powers of the OGA to charge fees

(1) The OGA may charge fees—

(a) for making a determination under Schedule 1 to the Oil Taxation Act
151975;

(b) on an application made to it under section 12A of the Energy Act 1976;

(c) on an application made to it under section 3, 15, 16 or 17 of the
Petroleum Act 1998;

(d) on an application of a prescribed description made to it by the holder
20of a licence granted under—

(i) section 3 of that Act (searching for, boring and getting
petroleum), or

(ii) section 2 of the Petroleum (Production) Act 1934 (licences to
search for and get petroleum);

(e) 25on an application of a prescribed description made to it by the holder
of an authorisation issued under section 15 of the Petroleum Act 1998;

(f) for carrying out or attending any test, examination or inspection of a
prescribed description;

(g) on an application made to it under section 4 or 18 of the Energy Act
302008;

(h) on an application of a prescribed description made to it by the holder
of a licence granted under section 4 or 18 of that Act;

(i) for the storage by it of samples or information in accordance with an
information and samples plan (see section 33(4) of this Act).

(2) 35The fees—

(a) are to be determined by or in accordance with regulations made by the
Secretary of State, and

(b) are to be payable by such persons as the regulations may provide.

(3) The OGA must pay into the Consolidated Fund any amount which it receives
40in respect of fees charged by it under this section.

(4) Subsection (3) does not apply where the Secretary of State, with the consent of
the Treasury, otherwise directs.

(5) Where in relation to any matter the OGA has a function mentioned in
subsection (6), that function is treated for the purposes of this section as carried
45out pursuant to an application made to the OGA (whether or not there is any
requirement to make such an application).

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(6) The functions are—

(a) extending the term of a licence;

(b) giving its consent or approval in relation to any matter;

(c) objecting in relation to any matter.

(7) 5The OGA may not charge fees under this section for the exercise of any
function which it is authorised to exercise by virtue of—

(a) an order under section 69 of the Deregulation and Contracting Out Act
1994, or

(b) an agreement under section 7(3).

(8) 10The Secretary of State must consult the OGA before making regulations under
this section.

(9) In this section “prescribed” means prescribed by regulations made by the
Secretary of State.

13 Levy on licence holders

(1) 15The Secretary of State may, by regulations, provide for a levy to be imposed on,
and be payable by, one or more of the following kinds of persons—

(a) persons who hold licences (other than excluded licences) granted
under section 3 of the Petroleum Act 1998 (searching for, boring and
getting petroleum);

(b) 20persons who hold licences (other than excluded licences) granted
under section 2 of the Petroleum (Production) Act 1934 (licences to
search for and get petroleum);

(c) persons who hold licences granted under section 4 of the Energy Act
2008 (unloading and storing gas);

(d) 25persons who hold licences granted under section 18 of the Energy Act
2008 by the Secretary of State or the OGA (storage of carbon dioxide).

(2) The Secretary of State must exercise the power conferred by subsection (1) so
as to secure—

(a) that the total amount of licensing levy which is payable in respect of a
30charging period does not exceed the sum of—

(i) the costs incurred by the OGA in exercising its functions in
respect of that period, and

(ii) the costs incurred in respect of that period by the Lord
Chancellor in connection with the provision of Tribunals to
35consider appeals against decisions of the OGA, and

(b) that no levy is payable in respect of costs incurred in the exercise of
functions—

(i) for which fees are charged under section 12, or

(ii) which the OGA is authorised to exercise by virtue of an order
40under section 69 of the Deregulation and Contracting Out Act
1994 or an agreement under section 7(3) of this Act.

(3) In determining for the purposes of subsection (2)(a) the total amount of
licensing levy payable in respect of a charging period, an amount of levy
payable in respect of that period may be ignored if (during that period or
45subsequently)—

(a) having been paid, it is repaid or credit for it is given against other
licensing levy that is payable, or