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An international comparative perspective on CCS regulations: Australia and the UK

An international comparative perspective on CCS regulations: Australia and the UK. Mosun Togun CCS Regulation Seminar U.I.O Oslo LLM Environmental Law 15 th May, 2009. Agenda. Introduction Overview on the legislations Australia CCS Legislation U.K. Energy Act

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An international comparative perspective on CCS regulations: Australia and the UK

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  1. An international comparative perspective on CCS regulations:Australia and the UK Mosun Togun CCS Regulation Seminar U.I.O Oslo LLM Environmental Law 15th May, 2009

  2. Agenda Introduction Overview on the legislations Australia CCS Legislation U.K. Energy Act Comparative analysis Licensing Financial security Site closure Long term liability Compensation Protection of existing interest Penalties Other international activities EU directive London convention and OSPAR Kyoto protocol Conclusion

  3. Introduction Various legislative trends have evolved worldwide in order to give validity to CCS Modifications to International Marine Conventions (London and OSPAR) to accommodate CCS Adoption of EU directive on the storage of carbon dioxide Australian Federal and State government CCS laws U.K. Energy Act 2008 Wyoming State CCS bills Japan’s CCS regulation Debates on inclusion of CCS in the Kyoto Protocol’s CDM

  4. Overview of the legislations Australian CCS legislation- Federal & State laws: Australia (Federal) Offshore Petroleum (Greenhouse gas storage) Act 2008, An amendment to the Offshore Petroleum Act 2006- Very detailed; Includes offshore and onshore storage Western Australian State - Barrow Island Act 2003 Victorian State Greenhouse Gas Geological Sequestration Act 2008 (Australia’s first standalone legislation on carbon storage) Queensland Greenhouse Gas Storage Act 2009 Amended South Australia Petroleum Act 2000 United Kingdom (UK) CCS legislation; U.K. Energy Act 2008- Received Royal Assent became Act Nov. 2006 Very broadly worded. Framework is limited to the offshore area.

  5. Overview of the legislations Does not deal with CO2 capture or transportation or onshore storage

  6. Comparative Analysis Analysis based on how the Australia and UK CCS deal with the following issues: Licensing Risk assessment and management Financial Security Site selection, closure and monitoring Long-term liabilities Property rights and Compensation to affected parties Protection of existing interests Penalties

  7. U.K. • Same • Same • More general approach but Crown lease may be required • Operator can enter into Crown lease Analysis - Licensing Australia For exploration, site preparation and storage activities Permits are granted for different stages Federal Act & Victorian injection-licence Queensland Act- injection and storage activities- under lease Fed Act & Victoria-Operator can hold potential site dormant between exploration and injection (15 years max.) until becoming viable Queensland-Preservation of interest (max. 10 years)

  8. U.K. • Operators must provide adequate information to SoS Analysis – Long-term Liabilities Australia Federal Act - express indemnity provision for licence-holder Victoria Act & Queensland Act- silent Barrow Island Act (Western Australia)-indemnity from JV

  9. U.K. • Operators must provide proposed security in relation to carrying out the programme Analysis – Financial Security Australia Financial security required from operators of a site to ensure all obligations under permit can be met until point at which responsibility is transferred to relevant authorities. Includes closure and post closure requirements. Securities are expected to be long-term in nature.

  10. U.K. • Breach - imprisonment of max. 2 years and /or fines Analysis – Penalties Australia Non-compliance/unauthorised activities Fed - imprisonment 5 years State - varying monetary penalties. Queensland- max A$750,000

  11. U.K. • Same • Onshore underground gas storage-compensation to landowners if land is compulsorily acquired i.e. If action is brought under the Planning Act 2008 or the Gas Act 1965 for smaller schemes Analysis – Compensation Australia Offshore storage-Crown lease-no compensation Onshore storage-compensation.

  12. U.K. • Vaguely dealt with Protection of other interests Australia Safeguards for existing Petroleum interests. Agreement between operators or “Significant risk of a significant impact” test where no agreement. (Minister to determine outcome)

  13. U.K. • Ambiguous Site Closure and Monitoring Australia Federal Act- Prescriptive requirements- licence-holder to undertake various activities to eliminate or mitigate GHG leakage. Victoria Act & Queensland Act-Reduction of storage leakage to as low as is reasonable practicable (?)

  14. Other international activities EU Directive U.S. State of Wyoming CCS Bills Japan’s CCS regulation CCS in the Kyotol Protocol’s CDM

  15. Conclusion Emerging legal framework for CCS regulation must be seen as a step in the right direction Workable licensing regimes and protection of the environment as well as human health and safety are imperative. More work is required on site closure, long-term liabilities and protection of other interests and in particular in the U.K. Legislation Allowance must be made for unforeseen legal issues in order for legislation to be holistic.

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