Clause 80 - Acquisition of rights to use upstream petroleum infrastructure

Part of Energy Bill [Lords] – in a Public Bill Committee at 5:00 pm on 16th June 2011.

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Photo of Charles Hendry Charles Hendry The Minister of State, Department of Energy and Climate Change 5:00 pm, 16th June 2011

The group is fairly straightforward and brief. New clause 11 will make a number of amendments to section 12 of the Gas Act 1995, which at present covers third-party access both upstream and downstream. We think that it will be desirable to have different regimes governing access to upstream and downstream gas facilities, and we propose to do so by amending section 12 so that the provision will apply only to downstream facilities, leaving the new regime set out in clauses 80 to 89 and schedule 2 to cover upstream petroleum infrastructure.

The new clause will effect the necessary changes to section 12 so that the section applies only to downstream gas processing facilities. The new clause will also amend a number of relevant definitions and remove the Secretary of State from any involvement in access applications to those facilities. They will instead be considered by the Gas and Electricity Markets Authority.

The new clause will also impose new requirements on owners of such facilities to publish a draft of new main commercial conditions or modifications to existing ones  and to take into account any representations made before publishing final versions. They reflect a new consultation requirement in the new European Union gas directive, which forms part of the EU third energy package of legislation. The new clause will also change the enforcement mechanism for a failure to comply with the requirements of section 12 to align it with other requirements that will stem from the EU third energy package. It is convenient to effect the changes here because the introduction of the new upstream regime will in any case require amendments to section 12. The rest of the transposition of the EU gas directive will be effected by regulations that will be laid before Parliament shortly.

The other amendments in the group are related to the new clause. Amendment 54 will amend chapter 3 for consistency with the new scope of section 12. Amendment 73 will remove the present provision in schedule 2 relating to section 12, which will be overtaken by the new provision set out in new clause 11. Amendment 76 will amend the long title to clarify that downstream gas processing facilities are covered by the Bill.

I hope that that has been a useful clarification of the issues involved, and that the Committee is satisfied with the explanation of the amendments and will be prepared to adopt them.