Uchenna Izundu
International Editor
LONDON, Nov. 8 -- The UK plans to introduce an energy bill that will aim to deliver secure energy supplies and focus on improving development and decommissioning of oil and gas infrastructure. The bill will encourage private companies to invest in offshore gas supply infrastructure and carbon capture research and will contain provisions on decommissioning financing.
Queen Elizabeth II's speech at the state opening of Parliament Nov. 6, which outlined the government's proposed legislative program, confirmed plans that the government has previously floated. Major provisions include creating a regulatory framework that could cut carbon emissions from fossil fuel power stations by as much as 90%.
The proposed bill will strengthen statutory decommissioning provisions for oil and gas installations so the government faces a reduced liability risk and taxpayers are not required to foot the bill.
Changes in the commercial environment will be recognized in the bill and so the Department for Business, Enterprise, and Regulatory Reform will be empowered to administer its regulatory duties more effectively during offshore oil and gas licensing rounds.
Environmental groups were dismayed to learn that the government would pave the way for a fleet of nuclear power stations. Nuclear power is viewed as an appropriate means of ensuring that the UK lowers carbon emissions and maintains diversified energy supplies for the country.
Under the bill, the private sector would initiate, fund, construct, and operate nuclear power plants as well as handle decommissioning costs and waste management. These proposals are also supported by the Climate Change and Planning Reform Bills that the Queen announced. The climate change bill commits the government to exploring low carbon methods of producing energy.
Ministers, however, also emphasized that the energy bill provides incentives for renewable energy.
Law firm Herbert Smith said: "This energy bill [and] the planning reform bill are expected to clear away some of the regulatory hurdles and uncertainties that currently exist for major on and offshore infrastructure projects, including a new nuclear fleet and carbon capture and storage. The bill is expected to receive Royal Assent by summer 2008."
Contact Uchenna Izundu at [email protected].
