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07 September 2020
The Department for Business Energy & Industrial Strategy (BEIS) is consulting on the proposed Offshore Oil and Gas Exploration, Production, Unloading and Storage (Environmental Impact Assessment) Regulations 2020 (the proposed Regulations). The proposed Regulations would replace the existing Offshore Petroleum Production and Pipe-lines (Assessment of Environmental Effects) Regulations 1999 (as amended) (the current Regulations). The consultation documents can be found here.
Both the current and proposed Regulations are concerned with environmental impact assessment (EIA) as part of the consenting process for relevant offshore oil and gas, gas unloading and storage, and storage of carbon dioxide projects. EIA is a process for identifying and assessing the likely significant effects on the environment of a proposed development. It is a structured procedure which results in the production, submission and publicity of an Environmental Statement setting out the likely significant effects of a project and measures to mitigate such effects. The decision-maker can then make an informed decision whether to grant consent and on the terms of any such consent. Both the current and proposed Regulations transpose a European Directive which sets out the requirements of the EIA process. Among other requirements, the process must ensure effective public participation in the decision-making process and provide a meaningful procedure to challenge the legality of decisions.
The immediate impetus for the consultation comes from two recent judicial review cases. The Seahorse Trust challenged the issue of consent for the Colter appraisal well off the Dorset coast and Greenpeace challenged the issue of a drilling consent for the Vorlich oilfield in the North Sea. Following the permission to proceed stage of these cases, BEIS accepted that the current Regulations failed to fully transpose the Directive. In particular, EIA procedures to inform and consult the public were inadequate and the current Regulations did not provide a sufficiently clear route to challenge consent decisions. The proposed Regulations seek to rectify these deficiencies. Other proposed changes include powers to undertake inspections and investigation of offences committed by a developer and provision for civil sanctions for breaches of the proposed Regulations.
It should be noted that under the current Brexit transitional arrangements, the UK is still required to ensure, where appropriate, that EU Directives are fully transposed. Notwithstanding, the 2020 Regulations and the well-established EIA procedures are to continue in domestic law when the transitional period ends on 31 December 2020, as provided for in the European Union (Withdrawal) Act 2018.
Effective public participation depends, to a substantial degree, on EIA information being notified and publicised. The consultation proposes changes to align EIA procedures with the detailed requirements of the Directive. Various changes are proposed, but essentially the purpose is to make environmental information and the decisions based upon such information more accessible to interested members of the public. Existing notification requirements placed on the developer are supplemented by requiring the Secretary of State to provide notices on a government website (expected to be GOV.UK). Developers and the Secretary of State must also make EIA documents available on their websites. The current requirement to make the EIA documentation physically available at a UK address would be removed but developers must provide the documents by post or email to any person who requests the documents.
Consents for offshore projects are granted (or refused) by the Oil and Gas Authority (OGA), but OGA consent cannot be granted without a prior agreement to grant issued by the Secretary of State. The proposed Regulations reflect these split functions. Under the proposed Regulations, the content of the Secretary of State's decision to agree or refuse the grant of consent would be published. This is because the Secretary of State (acting through the Offshore Petroleum Regulator for Environment and Decommissioning) is responsible for environmental decision-making relating to a proposed development. The OGA's decision is based on other commercial, technical and operational considerations. As the OGA is not involved in environmental decision-making, only the outcome, but not the content, of the OGA decision would be published.
The current Regulations include provision for a statutory appeal to the courts. The consultation proposes two alternative mechanisms for legal challenge to decisions taken under the proposed Regulations. The first is an amended right of statutory appeal, setting out the grounds upon which a challenge may be brought. Any ground of challenge not falling within these grounds would have to be brought through judicial review. The second option is to omit the statutory appeal procedure from the proposed Regulations, requiring that all challenges must be brought by judicial review. The consultation highlights pros and cons to both options. For example, statutory appeal tends to have greater certainty in terms of timing and, if successful, the remedy granted. However, where there are multiple grounds of challenge, it is possible that additional judicial review proceedings might have to be raised to address any issues not encompassed within the available grounds of statutory appeal.
The proposed Regulations would carry over existing offences, but some new offences are proposed. The proposed Regulations expressly permit the Secretary of State to attach environmental conditions to an agreement to the grant of consent (although this is already done in practice). Breach of such a condition would be an offence. The proposed Regulations also permit the Secretary of State to appoint inspectors to monitor compliance with the Regulations and with any conditions to the agreement to the grant of consent. Inspectors would have powers to require information, and non-compliance or obstruction would be offences. In addition to existing and new criminal offences, the proposed Regulations provide for civil (monetary) sanctions through amendment to the Offshore Environmental Civil Sanctions Regulations 2018. Lastly, the proposed Regulations include an express power for the Secretary of State to revoke agreement to the grant of consent where the developer has carried out, or is carrying out, a project in breach of a condition attached to the agreement to the grant of consent or has submitted to the Secretary of State relevant information which is false or misleading in a material way. The consultation notes that the offshore oil and gas industry has a good compliance record and it anticipated that the revocation provision would be rarely utilised.
The consultation proposes a range of other amendments to the current Regulations. For example, it is proposed that three schedules will list offshore projects where EIA is mandatory, projects that must be screened to determine whether EIA is required, and projects not subject to screening or EIA. The intent is to more accurately reflect Annex I and Annex II of the Directive, which list projects for which EIA must be undertaken and those where EIA may be required following consideration of their likely significant environmental effects.
The consultation does not propose any radical reform to the current EIA procedures. The purpose is rather to ensure compliance with the detailed requirements of the Directive and update the EIA monitoring and enforcement regime. That said, the consultation proposes detailed changes to the current Regulations which, if and when in force, will require to be reflected in a developer's EIA procedures.
The consultation runs until 2 October 2020, with the intent that the new Regulations will come into force on 31 December 2020.
For further information on this topic please contact Judith Aldersey-Williams at CMS Cameron McKenna Nabarro Olswang LLP's Aberdeen office by telephone (+44 1224 62 20 02) or email (firstname.lastname@example.org). Alternatively, contact Robin Hutchinson or Keith Campbell at CMS Cameron McKenna Nabarro Olswang LLP's Edinburgh office by telephone (+44 131 228 8000) or email (email@example.com or firstname.lastname@example.org). The CMS Cameron McKenna Nabarro Olswang LLP website can be accessed at cms.law.
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