Article from: OGEL 1 (2019), in Editorial
Professor Raphael J. Heffron, (Centre for Energy, Petroleum, Mineral Law and Policy (CEPMLP), University of Dundee, UK); Dr Penelope Crossley, (University of Sydney Law School, Australia) and Dr Tade Oyewunmi (Tulane University Law School- Center for Energy Law, USA) are pleased to serve as co-editors for this Special Issue on "Energy Law and Regulation in Low-carbon and Transitional Energy Markets"
This special issue aims at inspiring contributions to the debates about the role of energy law, policy and regulation in managing the costs and benefits of the global transition towards low-carbon energy systems and markets. Over the past century, industry and markets that developed in the context of production, supply and utilisation of hydrocarbons for energy purposes have been crucial to societal modernisation, and industrial and economic growth. However, the externalities that have developed are many significant sources of greenhouse gas emissions such as carbon dioxide and methane. In the energy context, renewable energy, especially from solar and wind, is often promoted as being the more sustainable alternatives. In addition, transitional energy markets are subject to the increasing role of new technologies such as smart meters, electrification of key hydrocarbon-based energy demand centres in transportation and industry, and even in some jurisdictions, consumers are becoming prosumers who may now be able to supply excess energy into existing grids and networks from decentred renewable energy facilities.
A more balanced energy transition's process would require, among other things, pragmatic policies and regulatory instruments that enhance timely investment in cleaner, smarter and more efficient energy technologies in both natural gas and renewable energy industry context. Industry operators in the petroleum industry will also need to adapt portfolios and practices to meet the needs of the times going forward. Curtailing operational practices such as flaring and venting of natural gas (which comprises mostly of methane) and CO2; electrifying upstream and midstream operations; installing renewable-based systems in upstream and midstream operations; investing in carbon capture utilisation and storage (CCUS) at significant points of CO2 emissions; injecting CO2 in enhanced oil recovery operations; and using low-carbon hydrogen in place of hydrogen produced using natural gas could be some of the lower-cost options to cutting energy-related emissions.
In considering some of these issues, this OGEL Special on Energy Law and Regulation in Low-carbon and Transitional Energy Markets comprise the following articles:
(a) Independence, Regulatory Competences and the Accountability of National Regulatory Authorities in the EU, Prof. Dr S. Lavrijssen
The paper examines the role of National regulatory authorities (NRAs) in the EU regarding the supervision, regulation and the process of realising the transition to a low carbon energy system for the European internal energy market. NRAs have to ensure that energy (service) markets can develop and that consumers can reap the benefits by having a real choice between competing alternatives for renewable energy supply and demand response contracts. It discusses the requirements for NRAs to be sufficiently independent of politics and from market operators, to be consistent and effective. More recently, EU Member States have seemed reluctant to grant adequate discretionary powers and independence to their NRAs. Thus, this paper further examines the question- whether the delegation of broad discretionary powers to an independent regulatory authority aligns with national constitutional principles, such as the principles of democracy and legality. By considering developments in the Netherlands in particular, it reflects on if and how the European independence requirements are in line with these two principles in the light of developments in the energy governance field.
(b) Energy Demand Response and Energy Storage as Sources of Flexibility: Which Role for Regulatory Authorities?, David Haverbeke, Wouter Vandorpe and Raf Callaerts 
The authors highlight the EU legislative framework through which conditions have been created to remove barriers to specific products and services to make the energy market more flexible. Sources of flexibility contribute to achieving the policy goals of security of supply, energy efficiency and the integration of renewable energy. The paper points out that in the years to come, certain flexibility services, in particular, demand response and energy storage, are expected to play a critical role in delivering affordable energy and more efficient energy networks. Barriers to these services will have to be removed to unlock their potential in the market entirely. It posits that the full potential of demand response and energy storage will not materialise without appropriate action from the specialist National Regulatory Authorities (NRAs), followed by policymakers. This contribution also makes it clear that NRAs and policymakers can now perform various actions in their current competencies, by facilitating the opening up of organised markets to demand response and energy storage, and by offering general dispute settlement processes. It further recommends that NRAs and policymakers should ensure these energy market segments work for all parties involved.
(c) Australia's Regulatory Framework for the Decommissioning of Offshore Petroleum Projects: Reforms for a Low-Carbon Future, Fiona Cameron
This paper points out that in the next 25 years, about 100 petroleum installations in Australia's offshore territory will reach the end of their useful life and require decommissioning. The current Australian regulatory regime envisages a 'base case' of complete removal of offshore oil and gas installations once they have reached the end of their useful life. However complete removal is costly, emissions and resource-intensive, and likely to be made more difficult by the changing climatic and ocean conditions associated with global warming. Alternative methods which may reduce the net emissions and environmental impact of the process may include by repurposing depleted formations and existing infrastructure for carbon capture and storage projects (CCS) and undertaking 'in situ' decommissioning rather than completely removing structures. While it is possible under current legislation for titleholders to decommission using alternative, more climate-friendly methods, this article argues that issues of regulatory fragmentation and application of the 'base case' act as disincentives to adopting alternative methods of decommissioning within Australia. Drawing on the experience of other jurisdictions and interventions, the article suggests reforms which might be made to address these and other issues, and to enable the petroleum industry to decommission more effectively for a low-carbon future.
(d) International Petroleum Transactions and the Development of Gas-to-Power Markets in West Africa, Tade Oyewunmi
This article develops on the premise that - as the emergence of low-carbon and transitional energy markets gain traction globally, the viability and security of gas supply markets are becoming as essential as the need to decarbonise and curb unsustainable practices such as flaring and methane leakages along the value chain. In the Sub-Saharan African context, it is necessary to ensure the reliability of supplies from upstream petroleum production sources as well as promote commercially secure institutional and investment climate of the domestic downstream energy sectors. The paper notes that energy demand in Africa is projected to grow at 3.5% per annum (p.a.) over the next couple of decades, while gas production is expected to increase by 110%. By examining relevant developments in Nigeria and Ghana such as the Offshore Cape Three Points (OCTP) area projects and the West African Gas Pipeline (WAGP) project, this paper discusses the spectrum of international petroleum transactions, legal, policy, and risk assessment issues that underpin gas utilisation and commercialisation in sub-region. It contends that projects designed to support production and supplies must be bankable, thus requiring applicable legal, regulatory and contractual frameworks which are designed to enhance timely investment decisions and effectively mitigate post and pre-completion risks.
(e) Gas Flaring in Nigeria and the Flexed Muscles of the 2018 Regulations: Key Implications and Investment Considerations, Stephen Oluwaṣeun Ọkẹ
This paper critically examines the Flare Gas (Prevention of Waste and Pollution) Regulations 2018 ("Regulations") recently issued in Nigeria and its impact on upstream petroleum transactions and operations among other things. The Regulations applies to all petroleum leases, licences and marginal fields in Nigeria, with the aim of providing a legal framework for the protection of the environment against the adverse effects of gas flaring, prevent waste of associated gas and create social and economic benefits to Nigeria from gas which would otherwise be flared during oil production operations. The paper points out the new dimension to the old tale of flare-out attempts in Nigeria, to the extent that the Regulations create an avenue for a new category of players to collect and use or resell associated gas which otherwise would have been flared by gas producers. It also considers the provisions of the new Regulations and subsequent guidelines to the forthcoming flare-gas licensing rounds and issues about the allocation of operational and environmental risks in the agreements to be made by the identified players. The Regulations could help to achieve the flare-out objective without imposing on upstream gas producers the additional costs and burden of investing in flare-out systems.
(f) Mapping Environmental Regulatory Measures Affecting Investments Under the EU's Changing Framework of International Investment Law - The Case of Shale Gas, Katariina Särkänne
Considering the controversial nature of shale gas production and regulation in the EU, primarily relating to - hydraulic fracturing, fracking and environmental impacts - this paper examines whether a possible dispute may follow an EU-level environmental regulatory measure affecting investments in shale gas development. Also, what would be the implications of EU law as well as the recent developments in the relationship between EU law and international investment law in such a case? The paper posits that there is still some uncertainty on the question of whether the EU should adopt more regulation addressing the issues of shale gas. The sovereignty of Member States' over their natural resources and their right under EU law to decide on their energy mix as well as their vastly differing opinions on shale gas supports shale gas regulation taking place in the Member States; rather than for the intervention of the EU. However, there are various reasons why EU-level regulation is considered necessary - perhaps the most obvious of them being the concern of sufficient environmental regulation that would address the possible cross-border environmental effects shale gas activities may have. If the EU were to adopt such environmental regulation, one could ask, whether it would be possible for the shale investors possibly suffering losses due to the regulation to successfully challenge the regulatory measures under international investment treaties.
(g) Unbundling the Opportunity for Irish Onshore Wind Generation Technology-Ireland's 2020 Renewable Electricity Target at Risk, Michael M. O'Connor.
This paper considers whether Ireland's approach to electricity network unbundling has held back the rate of new wind farm commissioning in Ireland and contributed to the uncertain pursuit of Ireland's 2020 renewable energy targets. The Sustainable Energy Authority of Ireland has published its latest findings on Ireland's progress towards meeting its 2020 renewable energy targets. Based on current trajectories, Ireland is on course to miss its targets. The deficit in respect of the overall EU target of 16 per cent of final gross consumption of energy from renewable energy sources is anticipated to be 2.7 per cent. The National Renewable Energy Action Plan prepared by Ireland according to Directive 2009/28/EC notes that the overall target will be achieved by drawing on contributions from renewable energy in each of three sectors: electricity, transport; and heating. Thus, in the electricity sector, in 2020 40 per cent of electricity used must be from renewable sources (RES-E Target). The SEAI projected 2020 outcome for this sub-target is 37.3 per cent. If the RES-E Target is to be met, then renewable electricity generation needs to increase at a rate of over 11 per cent per annum, and if this increase is to be entirely drawn from onshore wind energy, it will require an annual build rate of between 300 MW and 350 MW of new installed wind generation capacity. Achieving this level of new capacity seems highly improbable, and Ireland will more than likely miss its RES-E Target.
This paper discusses the role of the government and multinational oil companies in ensuring more effective regulation and management of environmental impacts of oil exploration and production in Nigeria. It analyses the current status of the laws and institutions in this regard, and it finds them inadequate, thus, makes recommendations for the way forward. As this paper argues, the inadequacies of the relevant laws and institutions have been sustained mostly by the government compromising its regulatory role in the manner in which it is collaborating through joint ventures with the oil companies and given that the country's economy is mainly hinged on the oil industry which in a way has made it a 'sacred cow'.
 Professor of Economic Regulation and Governance of Network Industries and is affiliated to the Tilburg Law and Economics Center, Tilburg University
 David Haverbeke is Partner in the Energy and Utilities Practice of Fieldfisher and visiting scholar at the University of Aberdeen, UK. Wouter Vandorpe is Of Counsel in the Energy and Utilities Practice of Fieldfisher and affiliated researcher at the KU Leuven (Institute for Environmental and Energy Law). Raf Callaerts is Associate in the Energy and Utilities Practice of Fieldfisher and academic staff at the KU Leuven (Institute for Environmental and Energy Law).
 Barrister, Victorian Bar, and Candidate, LLM (Public and International Law), University of Melbourne.
 Visiting Research Fellow, Tulane University Law School's Center for Energy Law, New Orleans, Louisiana, USA.
 Legal practitioner in the Energy and Natural Resources practice group of Banwo & Ighodalo, Lagos, Nigeria. Stephen holds a LL.B from Babcock University, Nigeria and a LL.M from the University of Cambridge, UK.
 European Law Lecturer, UEF Law School, University of Eastern Finland.
 LL.B., LL.M (Cantab.), is a Solicitor of the Supreme Court of England & Wales (1994); and a Solicitor of the High Court of Ireland (2000).
 LLB (Hons) (Lagos), BL, LLM (Lagos), PhD (Dundee); Dean of the Faculty of Law, University of Port Harcourt, Nigeria; former Senior Legal Counsel, Commonwealth Secretariat, London, and former General Legal Counsel, Organization of Petroleum Exporting Countries (OPEC), Vienna, Austria.
 LLB (Hons) (Benin), BL, LLM (Nottingham), PhD (Strathclyde, Glasgow), FHEA (UK); Senior Lecturer and Head, Department of Jurisprudence and International Law, Faculty of Law, University of Port Harcourt, Nigeria.
 LLB (Hons) (Port Harcourt), BL, LLM (Aberdeen), PhD (Aberdeen); Senior Lecturer and Head of Private and Property Law Department, Faculty of Law, University of Port Harcourt, Rivers State, Nigeria.