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Title: A Study Of Petroleum-Natural Gas Legislation


1
A Study Of Petroleum-Natural Gas Legislation
  • WANG MingYuan, XIAO Jing ZHANG ZhiJun
  • Center for Environmental, Natural Resources
    Energy Law, Tsinghua Law School

2
Basic Considerations
  • Law on petroleum and natural gas is a kind of
    special law on special objects. We have to take
    their specific characteristics into
    consideration, as well as the distinction and
    connection with mining law.
  • Its necessary to analyze the multiple objectives
    of petroleum and natural gas law and to discuss
    how to achieve them with specific institutional
    arrangements.
  • (The multiplicity of objectives decides the
    diversity and complexity of legal means. )

3
Relations between Petroleum Law and Natural Gas
Law
  • Traditional Concepts Modus Operandi
  • The two used to be integrated. Its generally
    held that the term of petroleum in Petroleum
    Law includes both petroleum and natural gas.
  • Reason
  • There are many similarities between petroleum and
    natural gas. And they come from the same source
    (oil-gas field). The only difference lies in the
    state One is liquid, the other is gaseous.
  • As a result, they also share many
    similarities in legislation.

4
Relations between Petroleum Law and Natural Gas
Law
  • However, the tendency is to prescribe natural gas
    independent of petroleum and to make up separate
    Natural Gas Law.
  • Reason
  • 1. The production of natural gas has greatly
    increased. As an energy resource, natural gas
    has become more and more important. It is not a
    supplementary to petroleum any more.
  • 2. The difference between the natural gas and
    petroleum industry has been more and more
    apparent.
  • 3. Foreign experience in legislation has also
    demonstrated that it is necessary to have
    independent natural gas law.
  • the US Natural Gas Act, made in 1938
  • the UK Petroleum and Natural Gas Law,
    made in 1982
  • Natural Gas Act, made in 1986

5
Relations between Petroleum Law and Natural Gas
Law
  • Main Contents
  • First, introduction to petroleum law, which
    includes objectives and systems that petroleum
    law and natural gas law have in common
  • Second, analysis of some special problems of
    natural gas law based on the specific
    characteristics of natural gas
  • Third, a concise analysis of existing petroleum
    and natural gas legal system framework, current
    problems and several important problems to be
    stressed in legislation

6
Petroleum Law - the Energy Cycle of Petroleum
  • Energy Cycle
  • Exploration ---- Exploitation ---- Refinery
    ----Transport ----- Consumption
  • (mining) (deep-processing)(s
    ervice industry)(marketing)
  • At every link of petroleum industry, both the
    inherent characteristics of petroleum resource
    and distinguishing features of different
    processes have deep impact on relevant legal
    system.

7
Petroleum Law - the Energy Cycle of Petroleum
Production Process
  • The production process of petroleum is divided
    into three periods exploration, drilling and
    exploitation.
  • Exploration is just a guess at the possible
    existence of certain energy resource.
  • Only drilling can prove whether there exists an
    oil field.

8
Petroleum Law - the Energy Cycle of Petroleum
Production Process
  • Impact of the limited survey techniques on law
  • Geologists can only infer whether there is an oil
    field by terrain analysis. All these inferences
    are testified by drilling. However, drilling is
    rather expensive.
  • Sure enough, developers want to control investing
    direction and occasion and to disperse the risks,
    all of which need legal support.

9
Petroleum Law - the Energy Cycle of Petroleum
Production Process
  • Special embedding form of petroleum
  • Neither reservoir nor pool is an exact word.
  • Petroleum usually exists in the holes of special
    ores and cannot exist independently.
  • Natural gas either exists in gaseous state or
    dissolved in petroleum. Whats more , there is
    salt water in it. As a result, it lies in the
    bottom because of its specific gravity.
  • Petroleum and natural gas are so closely
    connected that it is difficult to distinguish oil
    field and gas field. And its also difficult to
    prescribe them in the production process.

10
Petroleum Law - the Energy Cycle of Petroleum
Production Process
  • The understanding of physical features of
    petroleum has affected relevant legal system.
  • In the history of common law, judges judged
    petroleum on the analogy of wildlife at first.
    This led to two legal results
  • 1. Ownership system
  • (Petroleum is separated from solid mineral
    resources. The rule of from the sky to the
    earths core was nullified. )
  • 2. Application of the rule of capture in the
    exploitation of petroleum

11
Petroleum Law - the Energy Cycle of Petroleum
Production Process
  • With the improvement upon knowledge, people come
    to know that petroleum resource has neither the
    fixity that solid mineral resources have nor
    the free mobility that wildlife has. It is
    affected by mechanism of oilfield.
  • Mechanism of oilfield
  • Oil well can dry out oilfield.
  • What one obligee does on the oilfield has a great
    impact on other obligees interests and the
    development efficiency of the whole oilfield.
    Accordingly, legislation on exploitation must
    correspond to this geological rule.
  • US the practice of oil well certificate and oil
    well demarcation

12
Petroleum Law - the Energy Cycle of Petroleum
Production Process
  • The limitedness of petroleum resource also has an
    impact on exploitation legislation.
    requirement of energy conservation
  • Many states in the US have made out detailed laws
    on energy conservation. Different from energy
    conservation in the general sense, the US
    legislation has classified the waste of energy
    into two types

13
Two types of energy waste in the US
Underground waste (incomplete exploitation)
Waste of energy
Physical waste
Overground waste (leak, combustion and so on)
Over low price (producing excessive oil and
unwise use)
Economic waste
Over high cost of investment
14
Petroleum Law - the Energy Cycle of Petroleum
Transport
  • The greatest difference between the industry of
    petroleum and natural gas is Transport.
  • Natural Gas
  • Pipeline is the only mode of transport.
  • Petroleum
  • It can be transported by pipeline. Besides, it
    can also be transported on land by truck and
    railway and over sea by tanker.
  • In all the laws on petroleum, oil pipeline
    companies have always been treated as common
    carriers. But its not the case in natural gas.
    The position of natural gas pipeline company has
    changed greatly with the development of industry.

15
Petroleum Law - the Energy Cycle of Petroleum
Consumption
  • The end use of petroleum and natural gas is
    different.
  • Petroleum products are mainly used as fuel used
    in automobile, ships and aircraft. (traffic fuel)
  • According to American statistics, petroleum
    occupies 97 of traffic energy in 1994 and 94 in
    2015.
  • Natural gas is mainly used for heating, power
    generation and industrial fuel.
  • The end users of natural gas are more dispersed.
    As a result gas distribution is one special
    link in the industry of natural gas.

16
Necessity for Petroleum Legislation
  • Specific characteristics of petroleum resource
  • From the above analysis on energy cycle of
    petroleum, we can see there are so many specific
    characteristics in different links throughout the
    petroleum industry that its necessary to make
    special laws.
  • Strategic position of petroleum resource
  • limited
  • irreplaceable

17
Necessity for Petroleum Legislation
  • Range of adjustment of petroleum law and the
    connection and distinction with mining law
  • 1. Mining law is aimed only at exploration and
    exploitation of mineral resources.
  • The industry of petroleum includes exploration,
    exploitation, processing, refining, storage and
    transportation, supply and trade. Its identical
    in space, continuous in time and inseparable in
    content. Thus arise the necessity and feasibility
    of a special law .
  • There is certain overlap between the two of
    them in exploration and exploitation.

18
Necessity for Petroleum Legislation
  • 2. Even in exploration and exploitation,
    petroleum has some characteristics different from
    other mineral resources
  • Integrated
  • large scale
  • risky
  • high technology
  • high investment

19
Basic Contents of Petroleum Law
  • It must covers the overall process from
    exploration to consumption.
  • It usually includes 5 parts
  • Law on petroleum exploitation and production
  • Law on petroleum refinery, supply imports and
    exports
  • Law on petroleum policy
  • Law on petroleum pipelines
  • Law on petroleum companies
  • Petroleum law has changed from a simple petroleum
    mining law to a legal system based on petroleum
    mining that combines multiple separate
    regulations together.

20
Multiple Objectives of Petroleum Law
  • Efficiency
  • Stability
  • Safety

21
Systems Promoting Efficient Utilization of
Petroleum(1/3)
  • The system of property right
  • Ownership of petroleum resource (usually owned by
    the state)
  • Mining right of petroleum (bidding, competitive
    leasing and contracting)
  • Refining right of petroleum (the right to refine
    crude oil)
  • Storing and transporting right of petroleum (the
    right to operate petroleum pipeline)
  • Supplying right of petroleum (the right to trade
    petroleum at domestic market)
  • Importing and exporting right of petroleum (the
    right to import and export crude oil and other
    oil products)

22
Systems Promoting Efficient Utilization of
Petroleum (2/3)
  • Licensing system of petroleum industry
  • All the mining right, refining right, storing and
    transporting right, supplying right, importing
    and exporting right of petroleum must be based on
    license. (the basis for allocation of property
    right)
  • The system consists of the subject, licensed
    program, licensed principles, licensed
    termination and cancellation, legal
    responsibilities and relief.
  • The key is to solve the problems of administering
    by law and in reason.

23
Systems Promoting Efficient Utilization of
Petroleum (3/3)
  • The system of technological innovation
  • The purpose is to inspire, protect and boost
    technological advancement, thus to promote the
    efficient utilization of petroleum.
  • Backward technology
  • technical supervision and elimination
  • Common technology
  • prescribed technical standards
  • Advanced technology
  • protection of intellectual property or incentive
    policies (such as tax preference)

24
Systems Promoting Stable Utilization of
Petroleum(1/4)
  • The system of planned supply
  • Under this system, government regulates the
    demand and supply, production, imports and
    exports, refinery and other important issues
    through planning.
  • To ensure the safe, stable and reasonable supply
    of petroleum
  • Applied to overall regulation and control under
    normal conditions

25
Systems Promoting Stable Utilization of Petroleum
(2/4)
  • The system of petroleum supply adjustment
  • Government gives direct instruction to the
    subjects of title in petroleum industry according
    to law and adjusts petroleum supply and demand to
    stabilize the safe petroleum supply order.
  • Applicable conditions
  • Great changes happening to the relations between
    supply and demand of petroleum
  • Disorders happening to the circulation order of
    petroleum
  • Applied to individual adjustment when petroleum
    industry fluctuates.

26
Systems Promoting Stable Utilization of
Petroleum(3/4)
  • The system of compulsory petroleum supply
  • Government adjusts the relations between supply
    and demand of petroleum compulsorily according to
    law.
  • Aimed at taking compulsory measures in case of
    emergencies such as war, disaster or
    international petroleum deterioration. This
    system is taken when the system of petroleum
    demand and supply adjustment is invalid.
  • Applied to serious emergencies

27
Systems Promoting Stable Utilization of Petroleum
(4/4)
  • The system of strategic petroleum reserves
  • Under this system, government reserves a certain
    amount of petroleum resource and product oil.
    Without authorization, the reserve cannot be
    used.
  • Aimed at the safe supply of petroleum in dealing
    with emergencies
  • The variety and quantity of strategic petroleum
    reserves must be able to sustain the countrys
    economic development and satisfy the basic
    demands of peoples daily life in a certain
    period.

28
Systems Promoting the Safe Utilization of
Petroleum
  • The system of safe operation of petroleum
  • Inflammable and explosive nature
  • To guard personal safety
  • The system of environmental protection of
    petroleum
  • High polluting industry
  • To protect environmental safety

29
Others - Funding System in Petroleum Industry
  • Under this system, government establishes special
    fund according to law, which is used specifically
    to promote the development of petroleum industry
    under government authorization.
  • Aimed at stabilizing the supply and demand
    relations and price of petroleum
  • This system can achieve the three objectives of
    efficiency, stability and safety of petroleum
    utilization at the same time.

30
Others - Funding System in Petroleum Industry
  • It mainly includes
  • Special fund for exploration and exploitation
    (efficiency)
  • Petroleum reserve fund (stability)
  • Fund for damage subsidy (safety)
  • Fund for storing and transporting facilities
    construction (efficiency)
  • Fund for technological innovation (efficiency)

31
Others - Funding System in Petroleum Industry
  • Special fund for exploration and exploitation can
    promote effective utilization of petroleum.
  • Necessity for the fund
  • Petroleum and natural gas industry is not so
    attractive to enterprise investment because of
    its own characteristics deep embedding,
    complicate conditions in forming a mine and risky
    exploration
  • Petroleum production declines with the release of
    stratum pressure, which makes it hard to discover
    and increase backup reserve and makes it hard to
    make the most of petroleum resource.

32
Others - Funding System in Petroleum Industry
  • The system of special fund for exploration and
    exploitation includes
  • (1) The system of state fund for exploration and
    exploitation
  • (2) The system of maintaining extracted oil
    fields
  • (3) The system of oil-gas field exploitation
    subsidy

33
Special Problems With Natural Gas
  • Natural gas is a special commodity. Its market
    demand development must be based on networks.
  • This kind of network-dependent industry is of
    three important distinctive features
  • 1. The market demand development and rate of
    industrial development depend on the development
    of network (infrastructure).
  • 2. The network construction needs continuous,
    enormous investment, which is low in return, long
    in payoff and risky in investment.
  • 3. The network is an economy of scale and scope
    because of enormous investment. It belongs to
    natural monopoly.

34
Special Problems With Natural Gas
  • In this field, there is a contradiction between
    the economy of scale and scope and the
    competitive mechanism of market. To achieve the
    efficiency of the economy of scale and scope,
    monopoly of market is sure to affect operating
    efficiency To raise efficiency through market
    competition, its sure to lose the efficiency
    brought with the economy of scale and scope.
  • In the initial stage, the difficulty lies in how
    to guarantee enough investment to construct
    large-scale infrastructure When the industry
    takes shape, the difficulty lies in how to
    maintain the vitality of market competition and
    achieve the efficiency of the economy of scale
    and scope.

35
A Survey On US Natural Gas Legislation
  • Natural Gas Act of 1938
  • This act founded US Federal Power Commission
    (FPC, the predecessor of Federal Energy
    Regulatory Commission) to regulate the interstate
    pipeline transportation of natural gas. The
    Congress granted FPC to set fair and reasonable
    price. But pit head price and intrastate natural
    gas transportation and distribution were out of
    FPCs supervision.
  • Problem Slow pipeline construction caused rapid
    price fluctuation and supply shortage.

36
A Survey On US Natural Gas Legislation
  • Supreme Courts Phillips Decision of 1954
  • It ruled that supervision over pit head price
    should be included in Natural Gas Act.
  • It established the natural gas supply structure
    in the early stage.
  • producer-pipeline company-local
    distribution company-end user
  • Prices at all the links of supply chain were
    under supervision.
  • Problem The Decision got the price fluctuation
    under control. However, the demand increased
    because the set price was lower than the real
    market value. At the same time, the producers
    could get such small profit that they lost the
    motivation to do further exploration and
    exploitation, which finally led to the supply
    shortage in 1970s.

37
A Survey On US Natural Gas Legislation
  • Natural Gas Policy Act of 1978
  • This Act founded the Federal Energy Regulatory
    Commission (FERC), which conducts direct reform
    on the pricing of natural gas .
  • It declared to loosen pit head price step by step.

38
A Survey On US Natural Gas Legislation
  • FERC 436 of 1985
  • FERC 436 forced interstate pipeline companies to
    separate selling from transporting and introduced
    market competitive mechanism to natural gas
    supply, thus gave local distribution companies,
    large end users more freedom to choose.
  • FERC 436 permitted pipeline companies to provide
    public access service to consigners. Customers
    were able to bargain directly with producers and
    sign independent transport contract. But it was
    not compulsory for the pipeline companies to
    provide public access service according to FERC
    436 .

39
A Survey On US Natural Gas Legislation
  • With the enactment of FERC 436, there emerged
    natural gas dealers in the 1980s.
  • The enactment forced the pipeline companies to
    separate the transporting and selling function.
    Once the pipeline companies stopped providing
    natural gas, local distribution companies had to
    seek for reliable providers and did the bargain
    over price. To small local distribution
    companies, its difficult to change their roles
    right off and their foremost task was to
    guarantee secure supply of natural gas. Thus
    arose natural gas dealers.

40
A Survey On US Natural Gas Legislation
  • Unlashing Natural Gas Pit Head Price Act of 1989
  • The Act marked the end of pit head price control.
    It cancelled all the control over pit head price
    and from Jan.1, 1993 pit head price was
    market-set and free competition was brought in.

41
A Survey On US Natural Gas Legislation
  • FERC 636 in 1992
  • FERC 636 led to the reorganization of interstate
    pipeline companies. It forced all the pipeline
    companies to provide public access service, to
    separate selling and transporting and allowed all
    the users to choose supplier and pipeline company
    freely.
  • Natural gas dealers, local distribution companies
    and large end users purchased gas directly from
    producers. Other users were able to choose to
    purchase gas either from local distribution
    companies or gas dealers. Pipeline companies
    changed the traditional role as brokers to the
    single role as transporting companies and
    collected transportation fees under the
    supervision of FERC.

42
A Survey On US Natural Gas Legislation
  • Transportation and selling were priced
    separately. Producers sold natural gas to local
    distribution companies, gas dealers and large end
    users at the price set by market. Pipeline
    transportation fees were under the supervision of
    FERC. Local public utilities commissions
    supervised the price to end users.
  • After the reorganization of pipeline companies,
    local distribution companies and large end users
    had the right to choose providers. With the
    escalation of competition between suppliers, cost
    descended quickly. However, its not the case
    with the gas cost paid by inhabitants and small
    business users, which had a negative effect on
    natural gas utilization. In order to boost a
    healthy development of natural gas industry, the
    US government spread the successful experience to
    inhabitants and small business users.

43
Table 1 4 Stages in the Development of Natural
Gas Industry
Initial Stage Growing Stage Shaping Stage Mature Stage
Demand Very small market Element users were city fuel gas companies. Fast development Mainly used for power generation Demand tends to saturate. Market develops slowly. Demand tends to stabilize.
Infrastructure Limited Mass construction of large infrastructure All the leading cities have natural gas supply network. Long pipeline transportation networks are interconnected. Multi-source composite network has come into being. Its necessary to transform, innovate and expand the capacity of existing infrastructure
44
Initial Stage Growing Stage Shaping Stage Mature Stage
Market Participator Very few Monopolized operation of infrastructure Gas supply as a public utility Having the obligation of public service Increased market participators and becoming competitive Long-term contract Third partys use of excessive pipeline transporting capacity Calling for more specific supervising system Numerous market participators Large users being able to choose suppliers Open-architecture pipelines, secondary market of pipeline transporting capacity being developed Separate operation of supply chain links Numerous market participators Fierce competition, all users able to choose suppliers Low profit Short-term and spot contracts High efficient market formed
Time needed 015 years 1520 years 2040 years More than 40 years
45
Table 2 Government Targets and Relevant Policies
in Different Stages
Development Stage Typical Government Targets Relevant Natural Gas Policies
1. Initial Stage To develop natural gas infrastructure To increase the ratio of natural gas in basic energy resources To improve international payments equilibrium (resources importing countries) To develop domestic natural gas (resource- rich countries) Taking financial incentive measures (i.e. accelerated depreciation, reduction or remission of taxes) to attract investment in high risky field with reasonable return rate Encouraging development of gas sources with preferential policies Direct, powerful government investment and control Environmental protection policies
46
Development Stage Typical Government Targets Relevant Natural Gas Policies
2. Growing Stage To guarantee the reasonable allocation of resources To reduce government investment To encourage further development of the industry Enacting laws and regulations to provide long, stable investment environment Preferential policies to encourage the development of gas resources Carrying out attractive return policies
47
Development Stage Typical Government Targets Relevant Natural Gas Policies
3. Shaping Stage To ease government fiscal burden To lower natural gas price by improving operating efficiency To make full use of market competition To improve government supervision by separating specific economic supervising affairs from policy-making function To be concerned with social welfare Enacting laws and regulations to protect consumers interests Taking the policy of privatizing state-owned assets Introducing and promoting competition, including separating gas supply and pipeline transporting Establishing supervising organizations under government control Requiring general service
48
Development Stage Typical Government Targets Relevant Natural Gas Policies
4. Mature Stage To regulate market operations through competition To improve market efficiency To improve government supervision and get restricted to natural monopoly field Formulating and implementing the policy encouraging market participation Establishing high efficient resource trading market Canceling government supervision over perfect competition fields
49
Summary of Natural Gas Legislation
  • Different development stages require different
    regulating systems, different levels of market
    openness and corresponding legislation.
  • Based on our actual conditions, use foreign
    experience in legislation for reference
  • Developed countries and regions like US, UK and
    EU
  • Countries experiencing economic transformation
  • Developing countries like India and Brazil

50
Current Petroleum-Natural Gas Legal System in
China
  • Current petroleum-natural gas legal system in
    China consists of laws, administrative
    regulations, departmental regulations and
    regulatory documents.
  • 1?the system of petroleum resource
    ownership
  • 2?the system of petroleum mining right
  • 3?the system of exploiting ashore and
    offshore petroleum resources through cooperation
    with overseas partners
  • 4?the system of petroleum-gas pipeline
    protection
  • 5?the system of petroleum seismic
    prospecting damage repair
  • 6?the system of petroleum-gas price
    control
  • 7?the system of petroleum environmental
    protection
  • 8?the system of production operation
    management of petroleum-gas industry
  • 9?the system of safety in petroleum-gas
    production
  • 10?the system of financial expense of
    taxation
  • 11?the system of labor insurance in the
    petroleum industry
  • 12?the system of national petroleum
    corporations

51
Current Petroleum-Natural Gas Legal System in
China
  • 1.the system of petroleum resource ownership
  • Main legal regulations
  • Mineral Resources Law, Detailed Rules for
    Implementation of Mineral Resources Law ,
    Administrative Provisions on Mineral Resources
    Depletion Charges, Provisions on Mining Royalty
    in Exploiting Offshore Petroleum Resources and
    Regulations on Geologic Information Management
  • Provisions
  • Mineral resources belong to the national state,
    and the ownership is exercised by the State
    Council. Both the overground and underground
    mineral resources belong to the state, which do
    not change with the ownership or right of use of
    the land transfer.
  • The State compensates for the exploitation of
    petroleum resources. The exploiters pay mineral
    resource depletion charges to the state in
    proportion to sales income of crude oil and
    natural gas.

52
Current Petroleum-Natural Gas Legal System in
China
  • 2. the system of petroleum mining right
  • Main legal regulations
  • Mineral Resources Law, Detailed Rules for
    Implementation of Mineral Resources Law ,
    Administrative Procedures of Mineral Resources
    Survey Section and Block Registration,
    Administrative Procedures of Mineral Resources
    Exploitation Registration and Administrative
    Procedures of Exploration and Mining Rights
    Transfer
  • Provisions
  • To explore, exploit petroleum and natural gas in
    China or waters under its rule, its necessary to
    settle certain formalities and apply for licenses
    to get exploration and mining rights.

53
Current Petroleum-Natural Gas Legal System in
China
  • 3. the system of exploiting ashore and offshore
    petroleum resources through cooperation with
    overseas partners
  • Main legal regulations
  • Regulations on Exploiting Ashore Petroleum
    Resources through Cooperation with Overseas
    Partners , Regulations on Exploiting Offshore
    Petroleum Resources through Cooperation with
    Overseas Partners
  • Provisions
  • CNPC and SinoPec are responsible for exploiting
    ashore petroleum resources through cooperation
    with overseas partners and have the exclusive
    right to explore, exploit and produce petroleum
    in the areas granted by the State Council.
  • China National Offshore Oil Corporation is
    responsible for exploiting offshore petroleum
    with overseas partners and enjoys the exclusive
    right to explore, exploit and produce petroleum
    in cooperative sea areas.

54
Current Petroleum-Natural Gas Legal System in
China
  • 4.the system of petroleum-gas pipeline protection
  • Main legal regulations
  • Regulations on Petroleum and Natural Gas Pipeline
    Protection
  • Regulations on the Interrelationship between Long
    Transporting Pipelines of Crude Oil and Natural
    Gas
  • Interim Provisions on Safety Supervision and
    Management of Petroleum and Natural Gas Pipeline

55
Current Petroleum-Natural Gas Legal System in
China
  • 5.the system of petroleum seismic prospecting
    damage repair
  • Main legal regulations
  • Provisions on Petroleum Seismic Prospecting
    Damage Repair

56
Current Petroleum-Natural Gas Legal System in
China
  • 6. the system of petroleum-gas price control
  • Main regulatory documents
  • Circular on Measures to Perfect Petroleum Price
    Integration and Adjusting the Product Oil Price
  • Circular on Regulating Natural Gas Price Control

57
Current Petroleum-Natural Gas Legal System in
China
  • 7. the system of petroleum-natural gas
    environmental protection
  • Main legal regulations
  • Marine Environmental Protection Law
  • Management Process on Environmental Influence and
    Assessment of Marine Petroleum Exploitation
    Engineering
  • Interim Supplemental Provisions on Oil Pollution
    of Tankers

58
Current Petroleum-Natural Gas Legal System in
China
  • 8. the system of production operation management
    of petroleum-gas industry
  • Main regulatory documents
  • Suggestions on Cleaning Up and Rectifying
    Circulating Enterprises and Regulating
    Circulation Orders of Product Oil
  • Measures on Organizing Importation of Crude and
    Product Oil
  • Automatic Licensed Procedures on State Trade of
    Product Oil in2004
  • Circular on Outlawing Local Oil Refining Field
    Points with Determination
  • Circular on Stopping Producing and Selling Leaded
    Motor Gasoline Within a Set Time

59
Current Petroleum-Natural Gas Legal System in
China
  • 9. the system of safety in petroleum-gas
    production
  • Main regulatory documents
  • Guidance on Safety Assessment of Ashore Petroleum
    and Natural Gas Exploitation
  • Circular on Further Strengthening Safety
    Management of Liquefied Gas Tank Cars
  • Regulations on Safety Management and Supervision
    of Pressure Pipelines
  • Regulations on Safety Management of City Fuel Gas
  • Urgent Notice on Strengthening Safety Management
    of LNG Stations

60
Current Petroleum-Natural Gas Legal System in
China
  • 10. the system of financial expense of taxation
  • Main regulatory documents
  • Regulations on Limit for the Use of Oilfield
    Maintenance Expenses
  • Management Procedures on Using Mineral Resources
    Depletion Charges
  • Interim Management Procedures on Charges for
    Compensated Use of Reserves
  • Explanation to Levying Scope of Consumption Tax
    on Gasoline and Diesel Oil
  • Management Procedures on Levying VAT on Retail
    Product Oil Refueling Station

61
Current Petroleum-Natural Gas Legal System in
China
  • 11.the system of labor insurance in the petroleum
    industry
  • Main regulatory documents
  • Reply to Overall Social Planning of Pension in
    Petroleum Enterprises
  • Reply to Implementing the System of Working at
    Irregular Time and Work System with Integrative
    Computation of Work Hours at Some Posts of
    Petrochemical Industry

62
Current Petroleum-Natural Gas Legal System in
China
  • 12. the system of state petroleum corporations
  • Main regulatory documents
  • Reply to Establishing China National Aviation Oil
    Group Company

63
Existing Problems in Current Petroleum-Natural
Gas Legal System
  • 1. Incomplete system and prominent structural
    defects
  • 2. Current laws and regulations are
    improvisational, provisional and hysteretic. As a
    whole, they are of poor operability and call for
    immediate revision and complement.
  • 3. There exists legislative blank in certain
    important fields such as the system of
    encouraging and protecting investment in
    petroleum, the system of petroleum reserve and
    protection of oil-gas fields and so on.

64
Key Problems to be studied in China
Petroleum-Natural Gas Legislation
  • 1. To study the status quo, problems and
    perfecting suggestions on China petroleum-natural
    gas supervision system
  • 2. To study the status quo, problems and
    perfecting suggestions on China petroleum-natural
    gas legal system
  • 3. To study the necessity, feasibility of China
    petroleum-natural gas legislation
  • 4. To study the experience, lessons, evolving
    patterns of petroleum-natural gas legislation in
    the world

65
Key Problems to be studied in China
Petroleum-Natural Gas Legislation
  • 5. To study the selection of legislative models
    of our petroleum-natural gas legislation
  • (To bundle petroleum and natural gas together
    or make separate petroleum and natural gas law
    If bundled together, how to connect such a law
    with Mineral Resources Law and the to-be-made
    Energy Law and If not bundled together, how
    to connect the two and how to cooperate with each
    other.)
  • 6. To study the establishment of legislative
    targets and principles
  • 7. To study the adjustment range and links of
    legislation
  • 8. To study the legislative framework
  • 9. To study the necessity and feasibility
    demonstration of legislation
  • 10. To analyze the economic, social and
    environmental impacts of legislation, cost and
    benefit analysis of system included
  • 11. Other problems demanding reinforced study

66
  • Thanks!
  • Welcome to contact with us----
  • Center for Environmental, Natural Resources
    Energy Law, Tsinghua Law School
  • Tel 62794974
  • E-mailwangmy_at_tsinghua.edu.cn
  • Website
  • http//www.law.tsinghua.edu.cn/ts_web/EnvLaw/index
    .asp
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