Energy Bill [HL] - Commons Amendments

Part of the debate – in the House of Lords at 6:00 pm on 12th April 2016.

Alert me about debates like this

Photo of Lord Bourne of Aberystwyth Lord Bourne of Aberystwyth The Parliamentary Under-Secretary of State for Energy and Climate Change, Lord in Waiting (HM Household) (Whip), The Parliamentary Under-Secretary of State for Wales 6:00 pm, 12th April 2016

My Lords, Commons Amendments 4 and 5 overturn amendments made at Lords Report stage. They reinstate the original wording of Clause 17, to require the Secretary of State to carry out reviews of the OGA’s performance and functions on a no more than a three-yearly, ongoing basis. There is broad consensus that measures are needed to ensure that the OGA remains well equipped to address the diverse challenges faced by the oil and gas industry. Its role and scope, including in relation to the storage of carbon dioxide, needs to be appropriate, sufficient and regularly evaluated. As such, the Government introduced provisions requiring review of the OGA’s effectiveness in exercising its functions, as well as review of the fitness for purpose and scope of such functions.

However, requiring an initial review to take place no later than one year after the Bill comes into force, and then annually for subsequent reviews thereafter, would be an incredibly onerous process for government, the OGA and industry. Moreover, it would likely have myriad unintended consequences. It would require the almost continuous evaluation of the effectiveness of the OGA, with very little time to implement the recommendations from each review. Reviews would be extensive, needing to cover both statutory and non-statutory functions, and an assessment of effectiveness against external factors, such as changes in the regulatory landscape, operational practices across the UK continental shelf and environmental and economic factors.

All this would be required as part of the review to enable the Secretary of State to produce a report setting out the findings of the review which is to be laid before Parliament. This would create significant resource burdens both for the OGA and government, and risk obstructing the work of the OGA. This process would be inefficient and likely to result in an ineffective review. It would weaken the OGA’s ability to act as an independent regulator free from government intervention. It would also create a review process significantly out of step with other regulators.

There will be other mechanisms in place to ensure that the OGA’s performance and functions are appropriate. The OGA will publish, on an annual basis, a refreshed five-year business plan and an annual report and accounts. The need for an arm’s-length body charged with effective stewardship and regulation of the UK continental shelf was a central recommendation of the Wood review. I believe that the original three-year review periods introduced by Government must be reinstated to avoid conflict with that recommendation. I beg to move.

Commons Amendments 4 and 5 agreed.