The key provisions of the Energy Act 2016 are coming into force

United Kingdom

The Energy Act 2016 (Commencement No.2 and Transitional Provisions) Regulations 2016 (the “Regulations”) were made on 7 September 2016. The Regulations will bring into force the majority of oil & gas related sections of the Energy Act 2016 (the “Act”) on 1 October 2016.

Since the Act received Royal Assent on 12 May 2016, only certain sections have been brought into force, being provisions relating to the levy on licence holders funding the operations of the Oil & Gas Authority (the “OGA”) and provisions relating to onshore wind power.

On 1 October 2016, Parts 1 to 3 of the Act, with a few exceptions, will become law (to the extent not already in force) meaning that:

  • there will be a formal transfer of certain functions of the Secretary of State to the OGA as set out in Schedule 1 of the Act;
  • the provisions relating to Disputes, Meetings and Sanctions as set out in Part 2 of the Act will be brought into force; and
  • the provisions relating to Infrastructure and Decommissioning set out in Part 3 of the Act (and Schedule 3) will be brought into force.

Following enactment of these provisions, the provisions which remain to be brought into force at a later date relate to the OGA’s power to request information and samples (sections 30-36, Part 2 of the Act). It is not clear why the enactment of these provisions has been delayed.

For more detailed information on these powers and on the consequences of the Act for the industry more generally please see our previous Law Now.