Published in EPT by Wilhelm Sicking, June 27, 2016
Oil and gas issues unsettled after UK vote to leave EU
By Bob Tippee, Oil & Gas Journal, Editor-in-Chief
June 27, 2016 + + + Policies affecting oil and
natural gas join myriad issues thrown into question by the UK’s vote on
June 23 to withdraw from the European Union.
An immediate question is the status of
Scotland and its crucial role in operations on the UK Continental
Shelf. Scottish voters strongly supported retaining membership in the EU.
Leaders of the Scottish government were reported to be seeking ways to
maintain ties to the EU, possibly in conjunction with Gibraltar and
Northern Ireland, where voters also supported staying in the union.
The UK vote also revived speculation about Scottish independence,
although First Minister Nicola Sturgeon called a new referendum on that
issue “highly unlikely.” An independence initiative failed in 2014.
Also of obvious concern is the flexibility
of oil and gas workers to move between the UK and other EU members,
now unrestricted. Immigration issues will be subject to negotiations that
will begin once the UK provides formal notice of its intention to
withdraw. Those talks are supposed to be completed within 2 years unless
the parties agree to an extension.
Negotiations also will have to resolve the
British relationship with a host of EU energy and environmental measures,
many of which the UK has enacted into law.
The UK’s status
in the Energy Union, for example, is now unclear.
project seeks to harmonize efforts of EU members toward supply security, a
fully integrated internal energy market, energy efficiency, climate action
and emissions reduction, and research and innovation on climate.
a supporter of energy liberalization, the UK government can be expected to
want to stay connected with the effort, if welcome. But it will need terms
of participation as an EU nonmember.
Related to the Energy Union is
the EU’s Third Energy Package, which legislates liberalization of
electricity and natural gas transmission through unbundling of supply and
transportation. Another part of the package encourages cross-border
cooperation between transmission system operators.
The UK has
gas-pipeline connections with three EU members, Belgium, the Netherlands,
Existing EU directives and regulations directly
affecting oil and gas cover matters such as obligatory oil and gas
inventories, offshore safety, information-sharing, and price transparency.
More generally, the EU has
aggressive programs for climate-change mitigation and decarbonization of
energy supply. In many cases, the UK has parallel programs of its own.
The EU, for example, has set targets for reducing emissions of
greenhouse gases (GHGs) by at least 20% from 1990 levels by 2020. By that
year, it wants 20% of energy supply to come from renewable sources and
energy efficiency to improve by 20%.
For 2050, the EU seeks
cuts in GHG emissions of 80-95%.
The UK has set a target
for GHG emission cuts in 2050 of 80% and a renewable-energy market share
in 2020 of 15%. Its climate-change legislation includes 5-year “carbon
budgets” and covers adaptation measures.
The UK participates in the
EU’s Emissions Trading Scheme (ETS) and had a cap-and-trade system of its
own before the European version began operation.
If the breakaway
country stays on course with climate mitigation, it probably will want to
remain part of the ETS.
But even that is uncertain after the
resignation of Prime Minister David Cameron, a supporter the country’s
climate policies who wanted his country to remain in the EU and called for
the vote that contradicted his wishes.
Contact Bob Tippee at
100,000 paid subscriptions
|Since May 2015
Oil, Gas &
Petrochem (OG&PE) is published as part of the
OIL & GAS
JOURNAL to serve a consolidated monthly audience of 135,000 oil/gas professionals worldwide
more than 48,000 subscriptions -
100% one-year direct request
'What's New' in Upstream, Midstream and
Downstream Products & Services. Circulation 37,000
Oil & Gas Journal
Oil & Gas Journal Russia
Oil, Gas & Petrochem Equipment
Oil & Gas Financial Journal
+ + +
For more information, media
sample copies please contact