Bracewell & Giuliani



Powered by the attorneys of Bracewell & Giuliani, Energy Legal Blog® is your resource for updates and analysis on national and global energy issues.
WE KNOW ENERGY®
  1. The new Petroleum Law in Mozambique

    Friday, October 24, 2014 9:20 am by and

    Originally published in Petroleum Review in October 2014.

    On the 14th of August, the Parliament of the Republic of Mozambique approved a revised version of the Petroleum Law that revoked the existing Law nr. 3/2001, of 21 February.

    In the context of the significant discoveries and rapid growth of the Mozambican oil and gas industry, the emphasis of the new Petroleum Law has been to ensure that Mozambique and its population benefit from the exploration and production of these discoveries. However, Law nr. 21/2014 of 18 August was approved in a significantly different version than that which had been heavily discussed between industry players and regulating authorities and subsequently submitted to Parliament. Where the Ministry of Natural Resources in the initial draft law had hesitated to impose concrete measures and/or restrictions in relation to local content and domestic consumption requirements, Parliament showed a heavier hand. There is now a requirement for foreign operators to “associate” with local companies in the acquisition of goods and services, as well as a requirement for 25% of all oil and gas produced to be delivered to the market in Mozambique. (more…)


  2. One Further Step Towards UK Shale: Government Provides Underground Drilling Access for Developers

    Monday, October 6, 2014 8:25 am by , and

    In June this year we reported on the opening of the UK Government’s public consultation concerning its proposal for changes to the laws concerning underground drilling access in connection with projects involving shale drilling and fracking, as well as geothermal energy extraction.

    The existing UK legal framework dictates that mineral rights to petroleum belong to the Crown, with the Government issuing licences to operators to permit them to exploit those petroleum rights.  However, subject to those mineral rights in favour of the Crown, owners of freehold land have rights over their land both at surface level and down to the centre of the earth.  This means that after receiving a licence from the Government, an operator must also obtain the landowner’s permission in order to have access to and operate under privately owned land.  If an operator fails to obtain such permission it will be committing a trespass. Operators must therefore negotiate with individual landowners to secure underground access (usually in return for a payment).  These negotiations can be protracted and there is currently no standardised approach.

    The Government’s public consultation proposed underground access legislation, pursuant to which:

    (i) operators would be permitted to drill below private land without first having to negotiate access rights, provided such drilling would be at depths of at least 300 metres.  Operators would still need to obtain any necessary consent to commence drilling but the right of access would not be dependent on landowner permission, thereby removing the issues relating to the law of trespass;

    (ii) operators would make a voluntary payment to the relevant local community body in return for the automatic right of access, and the Government would retain the right to enforce payment through regulation if the proposed voluntary scheme was not followed; and

    (iii) a voluntary notification system would be introduced to enable operators to notify the public, in particular the affected communities, of details of the relevant areas of underground land that would be accessed by drilling and the payments made in return for such access.

    The public consultation was open from 23 May to 15 August 2014 and received over 40,000 responses with 99% of respondents being opposed the proposed legislative amendments.  The Government has indicated that 90% of the total responses received did not respond to the specific consultation questions but instead used the consultation to voice objections to fracking and shale gas operations (with nearly 29,000 of these responses submitting a template anti-fracking campaign text).

    With respect to the responses received from “stakeholder organisations” (being respondents with national or regional presence, representative bodies, public sector bodies, locally elected bodies and bodies operating in relevant sectors including oil and gas, energy and law), 55% supported the proposed underground access legislation and 24% opposed to the changes.  The full break-down, by respondent, of the responses received to the consultation question of “should the Government legislate to provide underground access to gas, oil and geothermal developers below 300 metres?” is set out below:

    Source: Government Response to the Consultation on Proposal for Underground Access for the Extraction of Gas, Oil or Geothermal Energy, 25 September 2014

    In the face of the significantly negative feedback, the Government has replied that it recognises “that there is opposition to hydraulic fracturing and the use of fossil fuels in general. The consultation was not intended to address this wider issue, and focussed specifically on underground access”. The Government concluded that “Having carefully considered the consultation responses, we believe that the proposed policy remains the right approach to underground access and that no issues have been identified that would mean that our overall policy approach is not the best available solution”.

    As was announced in the Queen’s Speech earlier this year (which presents the Government’s legislative agenda for the year ahead), the Government has already proposed draft legislation in the Infrastructure Bill to enable the proposals set out in the consultation to become law. Following conclusion of this consultation, the Government has announced that it will “put before Parliament primary legislation to implement the policy proposals set out in the consultation paper”.

    The Government’s consultation evidences that the issue of hydraulic fracking continues to polarise public opinion and that the anti-fracking campaign remains highly active.  Nonetheless, the Government’s response to this consultation shows that it remains committed to the development of the UK’s indigenous shale resources.  Coming shortly after the “No” vote in the Scottish referendum, this development will further enhance certainty for the UK oil and gas industry and its key project developers and investors.

     


  3. Sackett Two Years Later: Wetland Jurisdictional Determinations Still Not Appealable

    Thursday, September 25, 2014 10:35 am by

    When the U.S. Supreme Court decided in Sackett v. EPA that Environmental Protection Agency (EPA) wetland compliance orders were appealable, one question was how far would other courts extend the Supreme Court’s reasoning? Two years later, the answer is becoming clear on at least one front: courts continue to hold that wetland jurisdictional determinations are not appealable.  In Belle Company v. U.S. Army Corps of Engineers, the Fifth Circuit was the latest court to say so. (more…)


  4. BOEM Seeking to Overhaul OCS Offshore Financial Assurance Requirements

    Wednesday, August 27, 2014 1:22 pm by and

    On Tuesday August 19, 2014 the Bureau of Ocean Energy Management (BOEM) provided an advance notice of proposed rulemaking (ANPR) in the Federal Register. BOEM is seeking to update its regulations and program oversight for Outer Continental Shelf (OCS) financial assurance requirements, and has solicited comments from stakeholders to assist its efforts.  A full copy of the ANPR can be found at http://federalregister.gov/a/2014-19380.

    Based on the assumption that existing bonding regulations are outdated and fail to adequately deal with the changed business landscape in which organizations now conduct offshore activities, the BOEM is seeking public input as it seeks to overhaul the current program encompassing risk management, financial assurance, and loss prevention requirements. (more…)


  5. Mexican President Signs Historic Energy Reform Into Law

    Monday, August 18, 2014 2:45 pm by and

    On Monday, August 11, 2014, Mexican President Enrique Pena Nieto signed a package of energy secondary laws passed by the Mexican Congress (the “Legislation”) that will overhaul the Mexican oil and natural gas, petrochemical, and power generation industries[1].  The Legislation includes nine new laws and amendments to several current laws.

    The cornerstones of the Mexican oil and gas reforms are the Hydrocarbons Law (Ley de Hidrocarburos) and the Hydrocarbons Revenue Tax Law (Ley de Ingresos Sobre Hidrocarburos). These new statutes regulate, among other items: (i) “entitlements” (asignaciones) granted to state-owned entities, such as Pemex; (ii) the types of exploration and production contracts that will be granted to Mexican and foreign operators as well as joint ventures between certain state-owned companies such as Pemex and private parties; (ii) the rules for the granting of such contracts and execution by the National Hydrocarbons Commission (Comisión Nacional de Hidrocarburos or “CNH”) through a public bid process; and (iv) the regulations for midstream and downstream activities, which will be overseen by the Ministry of Energy (Secretaría de Energía or “SENER”) and the Energy Regulatory Commission (Comisión Reguladora de Energía or “CRE”). (more…)


  6. 9th Circuit Appeals Court: Clean Air Act Permits Must Address Latest EPA Requirements

    Wednesday, August 13, 2014 2:58 pm by , , and

    On August 12, 2014, the 9th Circuit Court of Appeals overturned a Prevention of Significant Deterioration (PSD) permit issued under the Clean Air Act (CAA) by EPA to the Avenal Power Center.  Sierra Club v. EPA, No. 11-73342 (9th Cir. Aug. 12, 2014).  The PSD permit authorized the construction of a 600 MW natural gas-fired plant located in California’s San Joaquin Valley.  The plant was required to install state-of-the-art pollution controls for all traditionally regulated pollutants, such as nitrogen oxides, particulate matter, and carbon monoxide.  The Court vacated the PSD permit because it found it was improper for EPA to issue a PSD permit that did not address new CAA requirements that were promulgated by EPA after the application was submitted.

    Although EPA has the authority to grandfather pending applications, it must exercise that authority through regulation by setting an effective date for the new regulation which would make the regulation applicable to permit applications submitted after a given date.  When EPA does not address grandfathering in its regulations, the court stated that all PSD permits that are not final prior to the effective date of the new rule must be revised to address any new regulatory requirement, even if the permit had already been through the public comment process.  The Court implied that any new assessment would likely need to go through a separate public comment process.  (more…)


Recent Posts

Archives

Sign Up For Updates

Enter your email address:

Delivered by FeedBurner