Rio Grande do Norte discusses improvement of environmental legislation for the Oil and Gas sector

Working group created by the governor of the state should present a new Bill by the end of November this year

This Monday (17th), the second meeting of the Working Group created by the Government of the State of Rio Grande do Norte was held to discuss the improvement of environmental legislation for oil and gas activities. The discussion was opened during the Mossoró Oil&Gas Expo, on July 06, by Governor Fátima Bezerra.

The Brazilian Association of Independent Oil and Gas Producers (ABPIP) participated in the meeting represented by its Executive Secretary, Anabal Santos Jr., by legal consultant Daniela Santos and by analyst Kidja Frasão. Also present were Secretary Carlos Eduardo Xavier, who assumed the coordination of the WG; Hugo Fonseca, coordinator of Energy Development for the State of RN; Marina Siqueira and Thereza Montenegro, from Potigás; Leonlene Aguiar and Natália Oliveira, from IDEMA; in addition to other representatives of the State Government and of producing companies associated with the ABPIP.

On the occasion, ABPIP and the Foundation for the Development of Science, Technology and Innovation of the State of Rio Grande do Norte (FUNCITERN), in a work led by Professor Mairton França, presented the main challenges imposed by current state legislation and proposals for adjustments. “We are confident that this joint effort between the state government and industry will bring, by the end of the year, the necessary corrections so that we have more transparent and more agile processes, which lead to cost reduction, improvement of the State's competitiveness and the attraction of new investments”, explained Santos Jr.

It was defined that an internal WG meeting will be held on November 10 to define the government's proposal. On November 17th, a new meeting will be held with representatives of ABPIP and companies oil and gas producers in the state, for the presentation and discussion of the proposal, aiming at alignment with the industry. The forecast is that on November 30, the bill will be forwarded to the Legislative Assembly of Rio Grande do Norte.

Work group

The Working Group was established by Ordinance-SEI No. 239, of June 24, 2022, with the objective of proposing the improvement of the state environmental legislation regarding oil and gas activities. The WG is made up of representatives from the State Planning and Finance Secretariat (SEPLAN), responsible for coordinating activities; Secretary of State for the Environment and Water Resources (SEMARH); State Secretariat for Economic Development (SEDEC); Secretary of State for Taxation (SET); State Attorney General's Office (PGE); Institute for Sustainable Development and Environment (IDEMA); and Companhia Potiguar de Gás (POTIGÁS).

The products resulting from the activities carried out within the scope of the GT will compose a final report to be presented to the Secretary of State for the Environment and Water Resources (SEMARH). The period stipulated for the conclusion of the works was 180 days, from the publication of the Ordinance.

Proposals listed by Oil and Gas entrepreneurs

1. 60-day period for authorization for plant suppression
2. Aggregated Licensing: by polygon or by well set, upwelling line, road and collection station. Allows cost reduction and greater agility, as the areas and activities to be licensed can be inspected by a single team and at a single time.
3. Definition a priori, in the first stage of the application, of all documents and studies for issuing the license and, in cases of need for additional studies, in the course of the process, that a grounded NT be issued and based on legislation. It reduces costs, improves transparency and shortens the licensing process, as the entrepreneur will be aware of everything necessary for licensing their activities.
4. Area guarantee through the creation of a Database with orders placed by the P&G sector: There are cases in which when starting studies in a certain area to oil production, companies are surprised by the release of the same area for other types of undertakings.
5. Publication of license applications and licenses issued by the environmental agency (only on the IDEMA portal and DOE) : Entrepreneurs understand that advertising is a federal requirement, but that the agent who should advertise can be the environmental agency itself, in addition to reducing costs on the part of the entrepreneur, improving the state's competitiveness
6. Use of the risk matrix to classify the potential pollutant degrader, in three levels: mild, moderate and high: Proposal backed by methodology recommended by IPIECA (global association of oil and gas for the advancement of environmental and social performance) and included in the study coordinated by the Brazilian Institute of Petroleum (IBP), with advantages with regard to a classification of the activities of the most up-to-date P&G sector and aimed at a risk classification calculated by the probability of occurrence of damage and impact.
7. Triennial readjustment of all values, fees and public prices (both licenses and studies related to P&G activities): Using as an indicator an index that better reflects any variations in costs related to issuing the license, since the indicator used to readjust the amounts charged (IGP-M) overvalued the tables, compared to the inflation indicator in Brazil (IPCA), since it absorbs the effects of exchange rate variations, mischaracterizing the tables in view of the economic reality. The use of an indicator based on licensing costs is, in the view of entrepreneurs, more appropriate, since it deals directly with the return of procedural costs.
8.  The terms of the licenses will follow federal regulations: The deadlines adopted for the validity of licenses in the RN are shorter than the deadlines established in federal regulations. This could reduce costs and make the State more competitive.

Source: Simone Azevedo Communication

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