Unconventional oil and gas policy: BRIA

Scottish Firms Impact Test

During the consultation period, discussions were held with a range of oil and gas sector businesses. This helped inform the Scottish Firms Impact Test.

The Scottish Government held a workshop during the consultation period in November 2018 with oil and gas businesses and regulators:

• UKOOG
• INEOS
• DLA Piper
• SEPA
• Schlumberger
• Kingdom Oil and Gas Ltd
• Reach CSG Ltd

Competition Assessment

• Will the measure directly or indirectly limit the number or range of suppliers? No. Unconventional oil and gas exploration, development and production in Scotland will continue to be subject to the planning system under each of the options. In the event that local decision making by planning authorities results in limiting the market for supplies and services to the unconventional oil and gas industry in Scotland, this should have no impact on the market within other parts of the UK and internationally. It is also worth noting that many of the skills, equipment and techniques used for unconventional oil and gas drilling are similar to those used for offshore oil and gas, conventional onshore oil and gas and geothermal thereby providing other avenues for businesses to explore in Scotland.
• Will the measure limit the ability of suppliers to compete? No. Local decisions made by planning authorities will help determine the market for supplies and services to the unconventional oil and gas industry in Scotland but, within that market, none of the options should limit the ability of suppliers to compete. There will be no impact on suppliers' ability to compete in other parts of the UK and internationally. In addition, none of the options being considered would limit the ability of suppliers to compete in other related industries in Scotland, such as offshore oil and gas, conventional onshore oil and gas, and geothermal energy.
• Will the measure limit suppliers' incentives to compete vigorously? No. Local decisions made by planning authorities will help determine the market for supplies and services to the unconventional oil and gas industry in Scotland, but within that market, none of the options should limit suppliers' incentives to compete vigorously. There will be no impact on suppliers' incentives to compete elsewhere in the UK and international markets or in other related domestic industries.
• Will the measure limit the choices and information available to consumers? No. Shale gas is currently available on the international market. None of the options should limit import opportunities or information available to unconventional oil and gas consumers.

Consumer Assessment and Digital Impact Test

The Scottish Government consultation on the partial BRIA sought views on the following matters:

• To what degree, if any, stakeholders consider the Options outlined within this document will impact on consumers.
  At the stakeholder workshop attended by oil and gas industry and regulatory bodies in November 2018, oil and gas industry representatives agreed there was a potential impact on suppliers and consumers from the implementation of the preferred policy position which may impact on future economic growth and consumer choice. Specific reference was made to direct industry supply of cheap energy, which would be of particular interest to high energy users.

• What impact, if any, stakeholders consider future technological advances may have on an unconventional oil and gas industry.
  Within consultation responses, the predominant view was that the adoption of Option 1 (the preferred policy position) would create opportunities for the development of other businesses, including those related to the renewable energy and low carbon technology sectors.

Oil and gas business and industry respondents stated that the adoption of Option 1 could damage Scotland's reputation regarding its commitment to science and technology, and did not consider that this would lead to investment in other sectors.

No respondents commented specifically on the impacts of future technological advances on an unconventional oil and gas industry.

Test run of business forms

Administrative forms introduced to support Scotland's onshore oil and gas licensing regime will be similar to those used by the Oil and Gas Authority (OGA) which has been the licensing authority since 2015 until the devolution of onshore oil and gas licensing in 2018. Holders of current licences in Scotland are familiar with the OGA forms, many of which are available online for stakeholders to view.