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Petroleum Act

Volume 447: debated on Friday 16 June 2006

To ask the Secretary of State for Trade and Industry if he will make a statement on the operation of (a) the Petroleum Act 1998 and (b) the Fossil Fuel Levy Act 1998; and what recent representations he has received about the operation of each Act. (77802)

The Petroleum Act 1998 consolidated previous enactments about petroleum, offshore installations and submarine pipelines. In brief, part I of the Petroleum Act 1998 empowers the Secretary of State for Trade and Industry to grant to such persons as he thinks fit licences to explore for, drill for and extract petroleum; Part II applies criminal law to offshore activities; Part III empowers the Secretary of State to control the construction and use of offshore pipelines; and Part IV deals with the abandonment of offshore installations.

The Petroleum Act 1998 is a key part of the regulatory regime that allows the Government to manage the UK’s oil and gas resources, with the overall aim of maximising economic recovery. The Government continue to work closely with industry in PILOT, the oil and gas taskforce that I chair, to ensure that we have the licensing, environmental and business frameworks that will attract the investment needed to deliver the North sea’s full potential. The operation of the Petroleum Act 1998 naturally forms part of that wider picture, alongside a range of positive initiatives.

The Fossil Fuel Levy Act 1998 (which amended section 33 of the Electricity Act in its original form) was repealed by the Utilities Act 2000, which introduced the renewables obligation. However, provisions dealing with the Fossil Fuel Levy continue in a modified form by virtue of the Electricity from Non-Fossil Fuel Sources Savings Arrangements Orders made in 2000 and 2001. The fossil fuel levy is currently set at zero. The contractual arrangements made under the non-fossil fuel obligation also remain in place by virtue of the NFFO Savings Order. I have received no recent representations about the fossil fuel levy.