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On 27 August 2010 the Department of Energy & Climate Change (“DECC”) published a response to the September 2009 consultation on the proposed offshore carbon dioxide storage licensing regime. The aim of this consultation was to introduce a licensing regime for carbon capture and storage (“CCS”) under the powers of the Energy Act 2008, thus implementing Directive 2009/31/EC on the geological storage of carbon dioxide (the “Directive”).
In general, respondents were supportive of the broad structure of the proposed licensing system, including the proposal for a licence which would cover all phases of such developments (exploration/appraisal, operating and post-closure) and would convey an exclusive but time-limited right to apply for the storage permit required by the Directive.
A number of issues prompted particular interest or comment. These included the scope of the licence and its relationship to the lease. There was also interest, and some concern, about the possibility of closely adjacent developments, or even situations in which two relevant geological formations, though separated in depth, might overlap in plan. The relationship between carbon storage projects and existing petroleum developments also came under review from the respondents, which this article will go on to explain in more depth. Similarly, a umber of comments were received on the draft licensing regulations, and some changes have consequently been made to the draft.
The key elements of DECC’s response are as follows:
* DECC is considering whether allocating priority rights to an incumbent petroleum licensee for a carbon storage licence is appropriate. There were numerous responses to such priority ranking รข
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