Analysis of Energy Law in USA & UAE

With the development over time and move towards industrialization the dependency
on machinery, electricity and natural resources are increasing, to fulfill our need we
need generation of power, electricity, fuel, etc. With the increasing demand and
scarcity of resources various countries started regulating and formulating various
types of rules and policies to stop exploitation and start optimum utilization of
natural resources.

United States Energy Law

United states has federal law structure has different level, in which energy law
functions for example at federal level it is regulated by United States Department of
Energy and in state level they have their own policies. However, before the period of
1920 the federal government doesn’t play an active role in the energy industries due
to widespread belief in “unlimited supply of energy” and there role was restricted to
the disposition of oil, gas and coal on federal lands through The General Mining Act
of 1872. This act also authorizes and governs prospecting and mining for economic
minerals, such as gold, silver etc.

Early regulation of energy started with the legislation of Federal Power Act of 1920,
which created the Federal Power Commission. The original purpose of the act was to
more effectively coordinate the development of the hydroelectric projects in the
United States. The act also created Federal Power Commission (FPC) as the licensing
authority for various electricity generating plants. The FPC regulated interstate
movement of the electrical power, natural gas and helped federal government to
coordinate with the states for hydroelectric power activities. They also regulated the
price for the consumer and 37.5% of income generated through distribution or sale
of electricity from the hydroelectric under the 1920 Act was given to the state where
the damn was located. Then the act was amended in 1935 and the FPC’s regulatory
jurisdiction was expanded to include all interstate electricity transmission and
wholesale power sales & resale.

In 1977, they further amended and changed the Federal Power Commission to
Federal Energy Regulatory Commission (FERC) and also created the Department of
Energy. FERC is an independent regulatory agency that oversees the natural gas, oil
and electricity markets in US. FERC acts as a licensing authority for hydroelectric
plants, also regulates the sale, transmission and resale of various energies (except for
sale of oil), they also look over any environmental issues arises in the process of sale,
transmission or generation of various energy. The body is headed by 5 presidential
appointees, only three of which can be from the same political party who is currently
serving the nation for five year term. In 2005, the act was again amended and
renamed as The Energy Policy Act 2005 which further extended the jurisdiction of
FERC by giving them power to control and regulate certain power plant and their
sales and resale.

After the 1920’s and during the period of The Great Depression and World War II, the
Federal Government started making regulatory framework. Furthermore, The
Manhattan Projects of the 1940 developed the era nuclear power. This lead to
formation of The Atomic Energy Act in 1946, The Prince-Anderson Nuclear Industries
Indemnity Act 1957 and later US Nuclear Regulatory Commission (US NRC).

The Prince-Anderson Act is a federal law, which governs liability related issue which
occurs due to nuclear incidents and to compensate the general public for the loss
occurred to the due such incidents. It establishes No-fault insurance type liability.
These act was constitutionally challenged in 1974 in the Supreme Court in the case of
Duke Power Co. Vs Carolina Environmental Study Group held that the legislation is
not discriminatory by giving special benefit to people effected due to nuclear
incident.

US NRC, is an independent agency created by congress in 1974 to ensure the safe use
of radioactive materials for beneficial civil purpose while protecting people and
environment. The US NRC also regulates commercial nuclear power plant and other
uses of nuclear materials.

In addition to it, the major policy was passed on 2005 know as Energy Policy Act,
2005. The act subsidize the distribution of electricity and provided tax incentives to
many Energy Generating Sector and private players associated with energy sector. It
also seek to increase coal as energy source while reducing the air pollution, by giving
$200 million annually as clean coal incentives and also by repealing the current 160
acres cap on coal lease. It authorizes tax credits for wind and other alternative
renewable energy, it also added ocean energy source including, wave and tidal
energy (for the first time these source of energy were separately identified as
renewable energy). The act also authorizes $50 million annually to promote the law
for biomass grants and increases the quantity of biofuel(usually ethanol) which must
be mixed with gasoline. The act further extended the power of Department of Energy
and asked the department to conduct study and report on existing natural energy
resources including wind, solar, waves and tides and also report in one year on how
to dispose of high-level nuclear waste. The act also give much emphasis on
renewable energy by giving $2.7 billion to extend the production of electricity by
renewable method and gave renewable electricity production credit for all such
producers.

In 2007 the Federal Government passed two legislations namely Energy

Independence and Security Act, and The Food and Energy Security Act of 2007. Both
legislation were legislated with the intention, to make country more energy
independent and to promote renewable energy by asking automobile manufacturers
to shift towards electricity based vehicle or gas based vehicle, certain policy were
made regarding Greenhouse Emissions and asked various agencies to reduce petrol
consumption by 20% and increase the use of alternative fuel by 10% yearly. Made
many other rules and regulations were made, to reduce pollution & greenhouse
emissions and to promote renewable energy and dependency on it.

In The Food and Energy Security Act, the Biomass Research and Development Board
was made to promote the use of biomass for generating energy. In this act it also
gave freedom to independent property owner to establish their own small renewable
energy generating equipment. This act also gave subsidy and incentives to various
farm owners to use renewable energy to generate electricity and also made it
mandatory for various states to generate certain energy using renewable energy.

Energy Law in UAE

The United Arab Emirates (UAE) is a federal structure of seven emirates i.e. Abu
Dhabi, Dubai, Sarjah, Ajman, Fujairah, Ras Al Khaimah & Umm al-Quwain. The federal
government of UAE gain most of its power from its Constitution. While the UAE
Constitution gives federal government exclusive legislative and executive jurisdiction
over electricity and power generating sector, but in reality the larger emirates of
Dubai and Abu Dhabi, to some extent Sarjah, and in recent times northern emirates
of Ras Al Khaimah, formulates their own policy for electricity. However, there is
Federal Ministry of Energy, which formulates and implements Energy policies over
the states but these policies are very limited, so that each state can use it according
to their needs and demands.

The Energy Sector in UAE plays a crucial role in shaping the UAE’s internal and
external strategies and policies. Since the discovery of oil and gas the UAE has
become one of the central player in global hydrocarbon energy market, providing a
reliable and stable supply of energy. UAE has 7% of global oil reserves, about 100
million barrels. In 2013 the energy sector accounted for about 25% of the country’s
GDP(such as petroleum, crude oil and natural gas), the backbone of UAE’s economy.

As we know, the UAE federal government doesn’t have any concrete law over the
energy sector so all the emirates make their own law relating to energy and
electricity. In Abu Dhabi the main legislation governing the electricity sector is the
Law No. 2 of 1998 concerning the regulation of water and electricity sector, as
further amended in 2007 and 2009, currently know as Abu Dhabi Electricity Law. In
Abu Dhabi, the exclusive electricity regulator is the Regulation And Supervision
Bureau (Currently known as Department Of Energy) and the major company is Abu
Dhabi Water and Electricity Authority (ADWEA), they are responsible for the
generation, transmission and distribution of electricity and water in Abu Dhabi. The
DoE is also responsible, inter alia for controlling, supervising and issuing licenses to
entities engaged in the energy sector.

In Dubai, the primary laws regulating the electricity sector are:

 Dubai Electricity Law

 Dubai Electricity and Water Authority (DEWA) Law

 Dubai Office Resolution

The main energy regulators of Dubai energy is the Dubai Supreme Council of Energy
(DSCE), which was established under Law No. 19 of 2009. The DSCE is the primary
regulator The Dubai Electricity and Water Authority (DEWA), Dubai Municipality,
Dubai Petroleum corps, etc. also comes under the purview of DSCE. It regulates the
exploration, production, storage, transmission and distribution of petroleum
products and electricity, they also proposes all the initiatives relating to energy
sector, which includes privatizing its electricity assets.

In Sharjah emirate, Sharjah Electricity and Water Authority (SEWA) are responsible
for the generation, transmission and distribution of water and electricity in Sharjah.
They are also authorized to determine the price of electricity and connection fees,
which are subject to the approval from ruler of Sharjah. In other Northern Emirates
the Federal Electricity and Water Authority (FEWA) act as a regulatory body for
electricity and water.

The UAE does not import electricity but they import 2 billion cubic feet per day of gas
from Qatar through the Dolphin Pipeline (largest cross-border gas pipeline in the
region) and 3 million cubic tonnes of Liquefied Natural Gas (LNG) per year through
the LNG terminal in Dubai. In UAE, gas is the major source of energy that fuels rapid
economic growth, rather than oil. It accounts for 90% of electricity generation, since
UAE accounts for fifth largest gas reserves in Earth but still they import gas since
2007.

In the recent trend toward renewable energy and reducing carbon footprint the UAE
has planned to increase its mix of energy sources (including natural gas, solar and
nuclear power). The energy demand grew by 37% nationwide between 2008 and
2012, to meet the growing demand Abu Dhabi and Dubai increase it power
generation capacity by 43.5% and 44.5% consequently.

Under Dubai’s Integrated Energy Strategy 2030, the emirates plans to reduce energy
imports and climate warming carbon dioxide power emissions by 30%, using its own
solar power and by importing nuclear power from Abu Dhabi. In Abu Dhabi they have
setup a full fledged and operational 10 megawatts (MW) photovoltaic plant in
Masdar City, and a zero-carbon city is currently under construction. They already
have 100 MW concentrated solar power plant known as Shams 1, since 2012. In
Dubai by 2030 the government has decided to setup a 1000 MW Solar Energy Park to
diversify its energy mix and reduce dependency on oil and gas, these project are
under the direct supervision of DSCE.

In 2009 the Emirates Nuclear Energy Corporation (an independent body) was
established by decree, to meet the growing demands for electricity. A move towards
reducing carbon emissions and increasing dependency on clean energy. The
organization constructed its first nuclear energy reactor in Barkah, also in other
western region of Abu Dhabi. ENEC is regulated by the Federal Authority for Nuclear
Regulations (FANR), it is an independent agency hold power to regulate and issue
license relating to nuclear activities in UAE, by keeping public safety as their primary
concerns.

Conclusions and Outlook

Therefore, we can conclude that both the nations are preparing themselves towards
cleaner source of energy to reduce carbon emissions, although the initiative were
taken little late and the pace is not upto the need of time “but it’s better late than
never”. The UAE is all geared up to reduce the carbon emissions by implementing
long term planning and strategy which was launched on 2017 i.e. to meet its energy
need by using Green Fuel by 2050. USA has also formulated various policies relating
to their green initiative, with the help of this initiative renewable energy is one of the
fastest growing energy source in the US, it made up to more than 17% of net US
electricity generation in 2018, majority is coming from hydropower and wind power.
They have projected to climb from 11% of total solar generation in 2017 to 48% by
2050, making it the fastest growing electricity source, in addition to it, the use of
renewable ethanol and biodiesel transportation fuels has increased to over 12% from
6% in 2006. These actions from both the Nations shows the efforts that have been
taken to enhance global leadership position via renewable energy diplomacy which
will act as a landmark for affordable and sustainable sources of power for millions of
people in developing countries around the world. This steps will also encourage the
other Developed and Developing Nations to adopt renewable energy and to
formulate policies accordingly for better and cleaner future.