In a recent judicial review appeal, the Inner House considered the application of Section 104 of the Community Empowerment (Scotland) Act, which deals with consultation in respect of disposing and changing the use of common good property. The petition was for judicial review of the Angus Council's decision to demolish a leisure centre which had been erected on common good land.
The Oil and Gas Authority (OGA) recently announced its offer for the award of 113 licences over 259 blocks or part-blocks to 65 companies. Licences were awarded in the OGA's 32nd offshore licensing round, which was launched on 11 July 2019 and closed for applications on 12 November 2019. The 32nd round saw the offer of 768 blocks or part-blocks, with acreage on offer in the Central North Sea, the Northern North Sea, the Southern North Sea and the West of Shetlands.
A recent Supreme Court case has clarified the law around challenges to covenants which seek to limit the use of land. The case involved an appeal by a retail anchor tenant against its landlord, which had sought to challenge a restrictive covenant in the lease which prevented it from letting space to businesses that competed with the tenant. The landlord sought to argue that the covenant was unenforceable as it fell within the doctrine of restraint of trade.
August 2020 saw the publication of two documents which will have a significant bearing on developments in the oil and gas industry in the next decade and are closely related. The Department for Business, Energy and Industrial Strategy published a response to its consultation on the reuse of oil and gas assets for carbon capture, usage and storage projects, while the Oil and Gas Authority published its final report on UK Continental Shelf energy integration.
The government recently published a draft Building Safety Bill as part of its commitment to overhaul fire safety regulation in the wake of the Grenfell Tower fire in 2017, which claimed 72 lives. The draft bill is the latest in a series of actions that the government has taken to improve fire safety in high-rise residential buildings, including the introduction of the Fire Safety Bill.
The Department for Business Energy and Industrial Strategy is consulting on the proposed Offshore Oil and Gas Exploration, Production, Unloading and Storage (Environmental Impact Assessment) Regulations 2020. The consultation proposes no radical reform to the current environmental impact assessment (EIA) procedures. That said, the consultation proposes detailed changes to the current regulations which, if and when in force, will need to be reflected in developers' EIA procedures.
The government considers that better data on land ownership and control is required to achieve its vision for the planning system, improve the development process and increase the public's understanding of who exercises control over land. The government's particular focus is on rights of pre-emption, options and conditional contracts, and it has published a consultation seeking views on how best to improve transparency around them and what additional data should be made public.
Her Majesty's Revenue and Customs has released helpful guidance confirming that it does not consider that a number of commonly agreed lease concessions should be classed as barter transactions for value added tax (VAT) purposes. During the COVID-19 outbreak, there has been a marked increase in lease concessions being given in exchange for landlord-favourable lease variations. The classification of such arrangements as barter transactions has had VAT implications for landlords and tenants.
A recent Technology and Construction Court decision has considered whether energy-from-waste plants fall within the power generation exemption in Section 105 of the Housing Grants, Construction and Regeneration Act 1998. Such plants have a dual purpose of disposing of waste and producing energy, but Section 105 requires a court to determine the "primary activity" on such sites.
The government has published legislation to bring sweeping changes to the Use Classes Order for England, which will take effect on 1 September 2020. References to uses and use classes in the General Permitted Development Order remain as currently defined until 1 August 2021. What will be the impact of these changes on existing and new leases of commercial property and their provisions governing what the premises can be used for?
Ofgem recently published guidance on its Energy Regulation Sandbox Service. The sandbox is a service that enables innovators to try out new ideas with guidance and support from Ofgem and industry bodies. The changes that Ofgem has announced in relation to the sandbox have widened its remit and provided more flexibility to innovators. The most significant change is that rather than having to meet strict window-based deadlines, innovators can now access the service and submit applications at any time.
Civil Procedure Rule (CPR) 55.29 came into force on 25 June 2020 and extended the stay on possession proceedings and enforcement proceedings by way of a writ or a warrant for possession until 23 August 2020. Now, the draft Civil Procedure (Amendment 4) (Coronavirus) Rules 2020 provide for a further amendment to CPR Part 55 to introduce a new temporary practice direction which sets out how claims under that part (including appeals) are to proceed following the expiry of the stay.
Energy Minister Kwasi Kwarteng recently announced a review into the existing offshore transmission regime to address the barriers that the current single radial connection approach presents to the further significant deployment of offshore wind. The review suggests that greater coordination between industry participants – particularly between electricity networks, offshore wind projects and interconnectors – may be possible from 2025 onwards.
The Law Commission recently published its reports on leasehold enfranchisement, right to manage and commonhold. The common theme in all three reports is to make each process simpler, quicker and more flexible and to reduce costs for leaseholders. While commonhold was introduced more than 15 years ago, it has hardly been used and the Law Commission seeks to make it a preferred alternative to residential leasehold.
The Department for Business, Energy and Industrial Strategy recently ran its Capacity Market consultation on future improvements. Following the consultation, the government will now seek to make the necessary amendments to the Electricity Capacity Regulations and the Capacity Market Rules, before the prequalification window for the T-4 2024/25 and T-1 2021/22 auctions open in Summer 2020.
A recent government consultation proposes a pivot towards support being made available to a wider set of renewable energy technologies – including established technologies such as onshore wind and solar photovoltaics and less established technologies such as floating offshore wind – together with an ongoing commitment to support conventional 'fixed-bottom' offshore wind. This article summarises the consultation's wider set of proposed changes.
The Department for Business, Energy and Industrial Strategy recently launched a consultation titled "Heat Networks – Building a Market Framework" alongside its report on "International heat networks: market frameworks review". The consultation is seeking views on various proposed policy options for the development of a heat networks regulatory framework. The outcome of the consultation remains an area of great interest for the United Kingdom's future development of low carbon heating.
The Oil and Gas Authority (OGA) recently launched a year-long UK Continental Shelf (UKCS) mediation pilot, which aims to test the extent to which mediation can assist in resolving disputes involving licences in the UKCS. The OGA has consistently emphasised that it would prefer to exercise its influencing rather than its regulatory role in assisting the industry to achieve the Maximising Economic Recovery Strategy for the United Kingdom, and sees mediation as a potentially helpful option.
The past 12 months have seen increased efforts by environmental activists to disrupt the business of oil and gas companies (or those associated with them) and draw attention to their campaigns against the use and production of fossil fuels. Public statements by groups such as Greenpeace and Extinction Rebellion suggest that this trend is likely to continue. Two recent cases provide some indication of the extent of any protection which may be sought from the courts in the event of disruption.
The Commercial Court recently decided that the right of non-operators to vote to remove an operator at will in a joint operating agreement (JOA) was not subject to any implied constraints, including good faith. As similar clauses are an option in the Association of International Petroleum Negotiators 2012 Model International JOA and continue to exist in a number of North Sea JOAs, this decision will be of wide commercial interest to operators and non-operators in the oil and gas industry.