UK: Marine Bill White Paper: Consequences For The Offshore Energy Industry

Defra (Department for Environment, Food and Rural Affairs) has recently published and opened consultation on a Marine Bill White Paper entitled ‘A Sea Change’. The aim of the Bill is to encourage ‘holistic management of the seas’ by drawing together existing strands of legislation relating to the marine environment, including offshore energy production. Although the proposals for the Bill currently leave oil and gas largely untouched, entities involved in offshore renewable energy installations will be affected by proposed changes which are aimed at streamlining the licensing regime.

At the centre of the Bill is the desire to gather together the UK’s existing objectives to create a coherent vision for its marine activities. This approach would be embodied in a UK Marine Policy Statement, which will serve as a benchmark against which UK marine policy is to be measured. Defra aims to have the statement in place within two years of the Bill acquiring Royal Assent, and will discuss its formulation with industry members.

The Bill would also introduce the concept of the ‘Marine Plan’: a long-term strategy taking into account all of the relevant activities in an area and their impact on each other. It would address both the current situation, and also emerging and future marine uses and technologies, such as carbon capture and storage in the sub-seabed, and tidal and wave energy initiatives. The Marine Plan would be prepared and delivered by a new body, the Marine Management Organisation (‘MMO’), which would seek advice from industry advisers on the scope of the plan, following which there would be public consultation on the draft plan.

All decisions by public bodies concerned with the marine environment would then be made by reference to the UK Marine Policy Statement and the Marine Plan. Defra seems keen not to make this unduly restrictive; the decision maker would be able to take other factors into account, such as new discoveries of oil and gas.

The Bill would seek to rationalise the existing licensing regime in respect of offshore renewable energy developments. The aim is ‘one project: one licence.’ The White Paper points out that currently both a Food and Environment Protection Act 1985 (FEPA) licence and consent under Section 36 of the Electricity Act 1989 are required before a marine wind farm can be built. Separate consent is also needed under the Coastal Protection Act 1949 (CPA) for laying associated cables. Each system has a different purpose and the factors for consideration are limited by those purposes. Defra wants to replace this with a single regime that asks "On balance, do the benefits (social, environmental and economic) of this project outweigh the costs?"

The White Paper therefore proposes a single licensing regime for both offshore renewable energy installations in the territorial sea with a capacity of over 1MW and for those in the offshore area with a capacity of over 50MW. When the licensing authority grants consent under the Electricity Act, it will also grant any environmental permission concurrently, so removing the need for separate CPA consent. Defra are also considering how to simplify the process under the Electricity Act under which consent and planning permission are granted to avoid separate public inquiries on the same project. The MMO would be the consenting authority for offshore renewable installations up to a certain size, and would have the authority to direct that planning permission is also given to any associated development.

Defra has so far reached the view that oil and gas licensing will continue to be governed by the Petroleum Act 1998 and the DTI. However, the oil and gas sector will feature in and take account of Marine Plans, for example in considerations whether to create a new ‘Marine Conservation Zone’ (MCZ). If an Environmental Impact Assessment reveals that an activity could damage an MCZ, the licensing authority (in this case, the DTI) would require applicants to mitigate this, for example by adjusting the design or location of the works. If the projects cannot be mitigated but it is in the public interest for it to go ahead, the applicant may have to take compensatory steps such as funding marine conservation work of equivalent value to the damage caused.

The underlying objectives behind the White Paper have been broadly welcomed by the industry, although UKOOA has expressed concerns that the new system would introduce delays for new offshore oil and gas exploration and production projects. The Government will want to minimise the possibility of any such delay: the streamlined regime is designed to enable the UK to meet its target of 10% electricity generated by renewable sources by 2010 and 20% by 2020. Defra also makes reference to the ‘urgent need’ to increase the UK’s reserves of gas, and the fact that the DTI is currently working on proposals for legislation to increase the sub-seabed storage of natural gas.

Those that are concerned about the effects of this White Paper have until 8 June 2007 to respond to the consultation. To view the consultation paper, please Click Here .

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

The original publication date for this article was 30/03/2007.