Details of Provisions
Reservation
Competence to legislate about oil and gas is reserved. The specific list of subjects included in the reservation indicates its scope in more detail. The specific subjects listed are:
the ownership of, exploration for and exploitation of deposits of oil and natural gas. This covers the subject-matter of the Petroleum (Production) Act 1934 and related legislation, which vests ownership of oil and gas deposits in the Crown and provides for a system of licensing persons to explore for and exploit such deposits;
the subject-matter of section 1 of the Mineral Exploration and Investment Grants Act 1972 (contributions in connection with mineral exploration) so far as relating to exploration for oil and gas. This covers the giving of financial assistance relating to exploration for oil and gas. Financial assistance is generally a devolved matter except for financial assistance specifically in relation to a reserved commercial activity such as oil and gas exploration. Financial assistance in respect of other types of mineral exploration is not reserved. This power is also a “shared power” under section 56 which means that a UK Minister can also exercise this power in or as regards Scotland;
offshore installations and pipelines. This covers generally the regulation of such installations and pipelines, including the construction or laying and dismantling of them;
the subject-matter of the Pipe-lines Act 1962 (including section 5 (deemed planning permission)) so far as relating to pipelines within the meaning of section 65 of that Act. The 1962 Act provides for authorisation of the laying of pipelines on land. In practice it applies mainly to oil and gas pipelines, since section 65 excludes many types of pipe, including water and air pipes and sewers. Section 5 of the Pipelines Act has been mentioned for the avoidance of doubt since deemed planning permission for other types of development is granted under planning legislation and is therefore not reserved;
the application of Scots law and the jurisdiction of the Scottish courts in relation to offshore activities. Part IV of the Oil and Gas (Enterprise) Act 1982 provides for the application in relation to oil and gas installations on the Continental Shelf of the civil and criminal laws of the different parts of the United Kingdom, and the jurisdiction of their courts;
pollution relating to oil and gas exploration and exploitation, but only outside controlled waters (within the meaning of the Control of Pollution Act 1974). This is the subject-matter of the Prevention of Oil Pollution Act 1971. Pollution from ships, as opposed to installation and pipelines, is now governed by the Merchant Shipping Act 1995, which is also reserved. Pollution in controlled waters - relevant territorial, coastal, inland and ground waters - is not reserved. The marine environment apart from this reservation is generally not reserved;
the subject-matter of Part II of the Food and Environment Protection Act 1985 so far as relating to oil and gas exploration and exploitation, but only in relation to activities outside such controlled waters. This is necessary to ensure that the reservation of matters relating to the oil and gas industry covers the regulation under the 1985 Act of activities in the sea, such as the deposit of substances or articles in the sea and incineration and flaring of gas, so far as those activities relate to oil and gas exploration and exploitation. It ensures that the Ministerial powers under the 1985 Act to exempt from the licensing regime under the Food and Environment Protection Act 1985 “operational discharges” from oil and gas installations and, where compatible with international obligations and where safe to do so, to license the deposit in the sea of oil-related articles such as redundant oil installations are reserved to the UK Government. “Marine dumping” not relating to oil and gas exploration and exploitation is not a reserved matter and to that extent the Scottish Ministers exercise the licensing powers under the Food and Environment Protection Act 1985 within Scottish waters and for operations commencing in Scotland;
restrictions on navigation, fishing and other activities in connection with offshore activities. Sections 3 to 7 of the Offshore Petroleum Development (Scotland) Act 1975 provide for the designation by the Secretary of State of sea areas within territorial waters where certain activities are restricted. Part III of the Petroleum Act 1987 provides for safety zones where navigation is restricted in the immediate vicinity of installations in territorial waters or the Continental Shelf;
liquefaction of natural gas. This covers the subject-matter of section 9 of the Energy Act 1976, which regulates the liquefaction of natural gas; and
the conveyance, shipping and supply of gas through pipes. This covers the subject-matter of the Gas Acts 1986 and 1995, which regulate the industry of conveying, shipping and supplying gas through pipes.
Exceptions from Reservation
The following are excepted from the reservation:
the subject-matter of sections 10 to 12 of the Industry Act 1972 (credits and grants for construction of ships and offshore installations). This makes it clear that the giving of financial assistance, in the form of credits and grants, for the construction of ships and offshore installations is not a reserved matter. Paragraph 4 of Part III of Schedule 5 provides that the giving of financial assistance to industry for the purposes of promoting or sustaining economic development or employment is not a reserved matter. This means that the Parliament can make provision of a general nature for assistance to industry including those which operate in reserved areas, but it does not have competence to legislate for such assistance specifically in relation to a reserved commercial activity such as oil and gas exploration. Section 56 also provides for certain powers, including this one, relating to the giving of financial assistance to industry which are not reserved to be “shared powers”, so that a UK Minister can continue to exercise those powers in or as regards Scotland. For example, the power to give financial assistance in relation to mineral exploration (other than for oil and gas which is a reserved matter as explained above) is a shared power under section 56(1)(e);
the subject-matter of the Offshore Petroleum Development (Scotland) Act 1975, other than sections 3 to 7. This ensures that the provision of financial assistance under the 1975 Act for onshore activities in support of offshore activities, for instance construction of installations, are not reserved. This is in line with the fact that assistance to industry generally is not reserved;
the subject-matter of Part I of the Environmental Protection Act 1990, which makes provision for the control of pollution.
the manufacture of gas. The production of combustible gas other than natural gas is thus not reserved; and
the conveyance, shipping and supply of gas other than through pipes.