With Tanzania in the final stages of evaluating bids for oil and gas blocks offered in its latest bidding round which closed in Q2 2014, it was Mozambique’s turn to announce its latest round in London on 23 October. Uganda and Kenya are also expected to embark on fresh licensing next year to complete a busy period for East African block auctions. (more…)
WE KNOW ENERGY®
Ben James and Paul Jones
Tracy London and Matthew Mulqueen
Kenya is East Africa’s largest economy, yet it faces a power supply crisis. Per capita, it generates barely 4% of the power generated by South Africa. Only 18% of the population has access to electricity and, even for this fortunate minority, rationing and blackouts remain a daily reality.
The Kenyan Government has ambitious development goals for the country, seeking to achieve annual double-digit growth and to ‘create a prosperous and globally competitive nation with a high quality of life by the year 2030’. There is certainly plenty of cause for optimism. Politically, the country is relatively stable. The capital, Nairobi, is home to the regional offices of some of the world’s largest multinational corporations, including General Electric, Google and Coca Cola. These companies enjoy access to a labour force that is increasingly urbanised, professional, computer-literate and English-speaking. (more…)
Julian Nichol and Ana Becker-Weinberg
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…)
PJM Sets Out Framework For Continued Participation Of Demand Response In Wholesale Markets Following EPSAFriday, October 10, 2014 2:35 pm by Stephen Hug
On October 7, 2014, PJM Interconnection, L.L.C. (“PJM”) filed with the Federal Energy Regulatory Commission (“FERC”) a blueprint for the continued participation of demand response resources in its markets in the wake of the United States Court of Appeals for the D.C. Circuit’s decision in Electric Power Supply Ass’n v. Fed. Energy Reg. Comm’n, 753 F.3d 216 (D.C. Cir. 2014) (“EPSA”). In that case, the D.C. Circuit vacated Order No. 745, FERC’s rule governing the compensation of demand response resources in wholesale energy markets on the basis that the rule encroached upon state jurisdiction over retail sales. The court’s opinion casts significant doubt on FERC’s authority to require transmission providers to allow demand response to participate in their markets, with some wondering whether there is any room left for demand response in wholesale markets at all. (more…)
Darren Spalding, Olga Galin and Adam Waszkiewicz
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.
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…)