Energy Bill [HL]

Lord Bourne of Aberystwyth Excerpts

Wednesday 9th September 2015 Lords Chamber

Moved by

[Lord Bourne of Aberystwyth]

32: Clause 40, page 22, line 6, at end insert—
“( ) The OGA must lay any guidance issued under this section, and any revision of it, before each House of Parliament.”

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Moved by

[Lord Bourne of Aberystwyth]

33: After Clause 56, insert the following new Part—
““Part 2AInfrastructureRequirements to provide information
(1) The Energy Act 2011 is amended as follows.
(2) In section 87 (powers to require information), after subsection (5) insert—
“(5A) A notice under subsection (1), (2) or (3) that imposes a requirement on a person must specify when the requirement is to be complied with.”
(3) After that section insert—
“87A Appeals against requirements to provide information
(1) Any person on whom a requirement is imposed by a notice under section 87(1), (2) or (3) may appeal against the notice to the Tribunal on the grounds that—
(a) the information required by the notice is not relevant to the exercise by the OGA of its functions under this Chapter, or(b) the length of time given to comply with the notice is unreasonable.(2) On an appeal under this section the Tribunal may—
(a) confirm, vary or cancel the notice, or(b) remit the matter under appeal to the OGA for reconsideration with such directions (if any) as the Tribunal considers appropriate.(3) In this section “the Tribunal” means the First-tier Tribunal.
87B Sanctions for failure to provide information
(1) A requirement imposed by a notice under section 87(1), (2) or (3) is to be treated for the purposes of Chapter 5 of Part 2 of the Energy Act 2016 (power of the OGA to impose sanctions) as a petroleum-related requirement.
(2) But the OGA may not give a revocation notice or an operator removal notice under that Chapter by virtue of this section.””

[The Parliamentary Under-Secretary of State, Department of Energy and Climate Change and Wales Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, I will now speak to government Amendments 33 and 34. Amendment 33 inserts a new Part 2A into the Bill which amends the third-party access to upstream petroleum infrastructure regime found in the Energy Act 2011. Specifically, it amends Section 87 of the 2011 Act, which relates to powers to require information, and inserts new Sections 87A and 87B, which make provision for appeals and sanctions respectively. This amendment requires that where the Oil and Gas Authority issues a notice under Section 87 of the 2011 Act requiring information to be provided, it must specify a time for compliance with that notice.

The amendment also provides an appeal right to the First-tier Tribunal against the issuance of a notice on the grounds that the information required is not relevant to the Oil and Gas Authority’s functions relating to third-party access or that the length of time given to comply with the notice is unreasonable.

Amendment 34 also allows for any requirements imposed by such a notice to be treated as petroleum-related requirements and therefore to be sanctionable under Chapter 5 of the Bill. However, the Oil and Gas Authority will not be able to revoke a licence or terminate an operatorship in relation to such breaches.

Amendment 34 inserts two new sections into the Energy Act 2011, which established the third-party access to upstream petroleum infrastructure regime. New Section 89A allows for applications for access to upstream petroleum infrastructure made under Section 82 of the 2011 Act to be assigned to another party. New Section 89B allows for a new owner of infrastructure to which an application for access has been made to be treated as a party to that application. The amendment also ensures that where ownership of infrastructure in respect of which a notice under Section 82(11) imposing access rights has been issued is transferred, the obligations under the notice transfer as well.

Once such an assignment or transfer occurs, anything that was done by the original party is treated as having been done by the party to which the application was assigned or the ownership transferred. The provisions allow for the third-party access regime to continue rather than having to restart on a change of party, facilitate the transfer of non-commercially sensitive information already provided to the Oil and Gas Authority and ensure that all new parties are aware of the relevant history of the application.

The amendments will increase the utility of the third-party access to upstream petroleum infrastructure regime, which is an important tool in the Oil and Gas Authority's pursuit of maximising economic recovery for the United Kingdom. I beg to move.

[Lord Teverson (LD)]

I thank the Minister for his explanation of a somewhat technical new clause. I think that the Minister went through liability, but very quickly. Clearly, all sorts of liabilities are potentially incurred by someone who has these access rights. If there is a change of ownership or the rights are assigned to a further party, who takes any legal liabilities that may not have been resolved or may be found after the date of transfer that relate to the period before? I wonder whether that is clear, because I imagine that such liabilities could in certain circumstances be quite onerous. I would be interested to hear the Minister’s remarks on that.

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[Baroness Maddock (LD)]

My Lords, I am delighted to hear that some noble Lords have received the impact assessment, but I wonder if the Minister can tell me how it was distributed, because it has not come my way yet.

[The Parliamentary Under-Secretary of State, Department of Energy and Climate Change and Wales Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, perhaps I may deal with the last point first. I certainly gave instructions that the impact assessment should be sent out in hard copy form and by email. I take the inference from what the noble Baroness says that she has not received a copy in one of those two ways. She should have done so, and I can only apologise for that. I hope that no one else is in that position.

I shall now deal with the issue of impact assessments. I apologised on Monday for the fact that the impact assessment had not been circulated earlier. It was held up through processes in government—documents are cleared by a particular Minister, but that is not the end of the process, as I am sure the noble Baroness is aware. I can only confirm that it is the case that the assessment was not cleared until Monday. I think I indicated then that that was when it was cleared, and it was only then that we were in a position to notify noble Lords. I hope that I can offer some reassurance because all morning I have been chasing the remaining impact assessments, and indeed a note was passed to me just as the debate opened that they have now been cleared and will be circulated, it is hoped, by the end of the day. However, I will add a word of caution by saying that we will ensure that they are sent around by tomorrow. Once again, I apologise.

I will focus on the general points made by the noble Baroness, Lady Worthington, in relation to carbon capture and storage. I thought, as she did, that on Monday we made considerable progress on this issue. There is a shared feeling across the parties that these issues are important and on Monday I gave an undertaking that we would be looking at them between Committee and Report. Letters are going out today to noble Lords who spoke on Monday, as well as to the noble Lord, Lord Judd, who indicated that he could not be here. I have asked that he should be sent a letter. Moreover, anyone who speaks today but who did not speak on Monday will also receive a letter asking about their availability between now and when the House returns on 12 October so that we are able to call a meeting, or potentially a series of meetings. We will ask everyone to the same meetings so that we can thrash these issues out.

My own feeling is that we want to do something; I have not changed my view and I hope that noble Lords will accept my good will on this matter. I am keen that we should move forward, but I do not think that this is the stage at which to talk about exactly how that is going to happen because it is not something that can easily be done. Carbon capture and storage is important to the Government. We committed a significant sum of money to it in our manifesto and that remains very much government policy. We have a good story to tell in that as a country we have the important potential of the North Sea for carbon capture and storage, so I am keen that it should be incorporated in the Bill in a way that it is not at the moment.

My next point will, I hope, address points quite rightly made by my noble friend Lord Howell, and I thank him for his thanks in relation to the impact assessment. Work has started but, in relation to the focus of the Oil and Gas Authority, it is important that we do not load too much work on the authority and diffuse what it seeks to do. There is a balancing act: we are very keen to ensure maximising economic recovery from the North Sea at the same time as realising the great potential that we have from carbon capture and storage. They remain very much our objectives.

I turn to the more technical points, quite validly raised by the noble Lord, Lord Teverson, and the noble Baroness, Lady Liddell, as to what this clause does and what these amendments seek to do to the clauses in the Bill. Although I am a lawyer, that does not mean that I perhaps have any greater insight. Therefore, I tread with trepidation and have spent some time on this. I believe these provisions seek to ensure that, on an assignment of ownership or rights by a party, there is no delay in them being able to take up the rights that were previously enjoyed by the transferor, if I can put it that way. We will have a look at that and I will write to noble Lords on this issue to ensure that it is not any more complicated than that and that it does not prejudice the issues that the noble Baroness, Lady Liddell, and the noble Lord, Lord Teverson, raised. That is certainly not the intention and I do not believe that it creates difficulties in the way that they indicated might be the case. But I will certainly confirm that.

I hope that that answers the points raised by noble Lords and therefore ask noble Lords to support these amendments.

Amendment 33 agreed.

Moved by

[Lord Bourne of Aberystwyth]

34: After Clause 56, insert the following new Clause—
“Applications to use infrastructure: changes of applicant and owner
(1) The Energy Act 2011 is amended as follows.
(2) In section 82(13) (contents of notice securing rights to use infrastructure), omit paragraph (b).
(3) In section 87(6) (circumstances in which information may be disclosed)—
(a) omit the “or” at the end of paragraph (a), and(b) after paragraph (b) insert “or(c) the disclosure is made under section 89A or 89B.”(4) After section 89 insert—
“89A Assignments and assignations of applications
(1) This section applies where—
(a) there is an assignment or assignation of an application made under section 82 from one person (“A”) to another (“B”), and (b) the following are notified of the assignment or assignation—(i) the owner of the pipeline or facility that is the subject of the application, and(ii) the OGA.(2) A notice under subsection (1)(b) must—
(a) be in writing, and(b) specify the date of the assignment or assignation.(3) For the purposes of this Chapter, anything done (or treated as done) by or in relation to A in connection with the application is treated after the assignment or assignation as having been done by or in relation to B.
This subsection is subject to subsections (4) and (5) and does not apply for the purposes of subsections (6) and (7).(4) Any provision of this Chapter that requires the OGA to give the applicant an opportunity to be heard has effect after the assignment or assignation as requiring the OGA to give B an opportunity to be heard (whether or not the applicant was heard under that provision before the assignment or assignation).
(5) Subsection (3) does not apply in relation to any notice given under section 87 before the assignment or assignation (and, accordingly, the person to whom the notice was given remains under an obligation to comply with it).
(6) Any information relating to the application obtained by the OGA before the assignment or assignation from any person who at the time was the applicant may be disclosed to B.
(7) Before disclosing any such information to B, the OGA must remove any information which the OGA considers may prejudice the commercial interests of the person from whom the information was obtained.
89B Transfers of ownership
(1) This section applies where the ownership of a pipeline or facility that is the subject of an application under section 82, or to which a notice under subsection (11) of that section relates, is transferred from one person (“C”) to another (“D”).
(2) For the purposes of this Chapter—
(a) anything done (or treated as done) by or in relation to C in connection with C’s ownership of the pipeline or facility is treated after the transfer as having been done by or in relation to D, and(b) any obligations imposed or rights conferred (or treated as imposed or conferred) by or under this Chapter on C in connection with C’s ownership of the pipeline or facility are treated after the transfer as imposed or conferred on D.This subsection is subject to subsections (3) and (4) and does not apply for the purposes of subsections (5) and (6).(3) Any provision of this Chapter that requires the OGA to give the owner of the pipeline or facility an opportunity to be heard has effect after the transfer as requiring the OGA to give D an opportunity to be heard (whether or not the owner was heard under that provision before the transfer).
(4) Subsection (2) does not affect the obligation to comply with any notice given under section 87 before the transfer (and, accordingly, the person to whom the notice was given remains under an obligation to comply with it).
(5) Any information relating to the application obtained by the OGA before the transfer from any person who at the time was the owner may be disclosed to D.
(6) Before disclosing any such information to D, the OGA must remove any information which the OGA considers may prejudice the commercial interests of the person from whom the information was obtained.””

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[Baroness Maddock]

I was going to congratulate the noble Lord, Lord Oxburgh, on introducing an amendment that has actually brought together both sides of the climate change argument. Unfortunately, that was rather spoilt by the latest comment of the noble Viscount, Lord Ridley. We were spared that on Monday, when we debated carbon capture and storage. However, I do hope that the Minister will take this proposal and this amendment seriously.

The final point I want to make, which I made on Monday, is that I am concerned that, in our rush to make sure that we keep the oil and gas industry as profitable as it can be in the circumstances, we do not put anything in the Bill that will prevent us developing carbon capture and storage. We have heard how slow and difficult progress has been, so I welcome these proposals, which we should look at. I hope we can have a good discussion of the issue, but I point out that, other than next week, it is very difficult for me to get together here in London to discuss it before we return in October.

[Lord Bourne of Aberystwyth]

My Lords, we have been treated to a veritable tour d’horizon on this amendment, going far beyond the amendment itself. I certainly do not criticise that; I think that in a sense it is important, and it has been a very good debate. I shall try to pick up the points that were made.

To echo what the noble Baroness, Lady Maddock, has just said, there is an attraction in getting everybody on the same side, including my noble friend Lord Deben, who is not in his place today—he is just in his place; I am sorry. Getting everybody on the same side of the argument as my noble friend Lord Ridley in relation to CCS is indeed seductive, if for no other reason than that this matter certainly demands close attention, although it demands close attention for many other reasons.

The noble Lord, Lord Oxburgh, introduced his amendment with great authority. He spoke widely about something being in the air and the challenges that we are facing as a global community, as well as the Conference of the Parties that is taking place in Paris at the end of this year. I associate myself entirely with what he says about the challenge there and the fact that there are positive moves and ambition in the air. However, I would not want anybody to think that this is a done deal. There is a lot of hard work going on. Our own Secretary of State, my right honourable friend Amber Rudd, is spending most of her time on this, working around the clock. She has been given a major role on finance by the French President to try to bring countries together. That, again, is a good thing for us as a country and for all concerned, as she is the right person to do that. It is important to try to keep the 2 degrees centigrade increase in sight, and that is a real challenge. However, it is right that there is ambition in the air and many positive things are happening.

The noble Lord, Lord Oxburgh, was right when he said that this is a germ of an idea, and the noble Lord, Lord Teverson, said that it was the start of an idea. I agree with that. This is very much a nascent amendment and it certainly deserves attention in the broader context of looking at carbon capture and storage, which, I repeat, we are very happy to do within the context of this Bill.

The noble Baroness, Lady Worthington, spoke with great passion—and understandably so—about the narrow focus of this legislation. It is narrow in many ways but I understand that we have the support of the Opposition in ensuring that the Wood review becomes law. That is important. I am very aware that we do not want to lose sight of the central focus, which I think my noble friend Lord Howell referred to with words of caution. The jobs are important, as is gas, in our move to a carbon-free environment. Maximising the economic return in getting gas and oil from the North Sea is vital and we do not want to lose sight of that.

That said, we are very keen to ensure that CCS features centrally within the legislation. The Government have in place one of the most comprehensive programmes in the world on CCS, as recognised recently by the Global Carbon Capture and Storage Institute. This includes a carbon capture and storage competition, with up to £1 billion capital, plus operational support for up to two commercial-scale carbon capture support projects and a £125 million research, development and innovation programme. That said, my noble friend Lord Ridley is absolutely right that it is only Canada that we can look to as somewhere where this is working commercially. DECC officials have spent a lot of time looking at that. They have visited Canada on many occasions and will continue to do so.

I am keen that CCS remains very central to what we are thinking about. I repeat the undertaking that all Peers are invited to join in this process, and all Peers who have spoken will receive a letter inviting them to indicate their availability. If it is difficult to get one meeting because of lack of availability then we will put on two, but we will not be splitting them on a party basis, because I think that there is a genuine cross-party feel on this issue. I do not think that there is any real difference between people on this, which is a very good thing.

I am very keen that we should move forward in relation to this carbon capture and storage issue. I appreciate the debate that we have just had. It has been very helpful, although, as I said, it was much more wide-ranging than the amendment. However, I respectfully ask the noble Lord to withdraw the amendment on the basis that the Government have given an undertaking to look at carbon capture and storage in relation to the Oil and Gas Authority and to do so between Committee and Report.

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[Lord Wallace of Tankerness (LD)]

My Lords, when we return on Monday for the third day of Committee, we know that we will be dealing with some of the more controversial parts of the Bill, not least on Clause 60. The Government have announced that a grace period will be incorporated into the legislation, and have been seeking views on the draft proposals. Can the Minister indicate to the Committee that, before the next Motion that the House do resolve itself into a Committee upon the Bill, we will have an opportunity to see the amendments? They are important, of course, not only to the industry but to your Lordships’ House if we are to carry out our proper job of scrutiny.

[Lord Bourne of Aberystwyth]

I am grateful for prior notice of this question from the noble and learned Lord, Lord Wallace. I can update the Committee on this. I have been chasing the impact assessments over the last period. As things stand, and I think I probably indicated this in passing in the debate on Monday, we are carefully reviewing the feedback and evidence provided during the engagement exercise to ensure that the final policy strikes the right balance between public interest and the interests of developers and the wider industry. I am sure noble Lords appreciate the importance of that. I will aim to bring forward any government amendments in relation to this policy as soon as possible. If I have any more information on the dates when that will happen, I will share it with noble Lords, but I do not think that that will be ahead of the debate on Monday.

House resumed.