European Union seeks unified policy for offshore drilling

European Union officials, eyeing the Deepwater Horizon incident in the Gulf of Mexico last year, have proposed new rules aimed at bringing offshore oil and gas drilling under a common policy.

Most European oil and gas is produced offshore, often in harsh geographical and geological conditions, said EU Energy Commissioner Guenther Oettinger.

“We need to prevent accidents…from happening,” he said. “Securing best industry practices in all our offshore operations is an undisputable must. [This] proposal is a crucial step forward towards safer offshore activities to the benefit of our citizens and our environment.”

According to Europe’s environment chiefs, the likelihood of a major offshore accident in European waters remains unacceptably high, a point underlined by Environment Commissioner Janez Potocnik.

Potocnik said the proposed regulation “will help us prevent such future crises from happening in all marine waters which fall under EU member states’ jurisdiction.”

The draft regulation establishes rules to cover exploration and production activities from design to the final removal of an oil or gas installation. Under control of the member states’ regulatory authorities, European industry will have to assess and further improve safety standards for offshore operations on a regular basis.

“This new approach will lead to a European risk assessment that upgrades continuously by taking into account new technology, new know-how and new risks,” the EU said.

The proposed legislation introduces several key requirements for preventing and responding to a major accident:

• Licensing. The licensing authorities in EU member states will have to make sure that only operators with sufficient technical and financial capacities necessary to control the safety of offshore activities and environmental protection are allowed to explore and produce in EU waters.

• Independent verifiers. The technical solutions presented by the operator that are critical for safety on the installation need to be verified by an independent third party before and periodically after the installation.

• Obligatory emergency planning. Companies will have to prepare a major hazard report for their installation, containing a risk assessment, and an emergency response plan before exploration or production begins. These reports will need to be submitted to national authorities.

• Inspections. Independent national authorities responsible for the safety of installations, who will verify safety provisions, environmental protection, and emergency preparedness of rigs and platforms and the operations conducted on them. If an operator does not respect the minimum standards, the competent authority will take enforcement action or impose penalties. An operator failing to comply could have to stop drilling or production.

• Transparency. Comparable information will be made available to citizens via web sites about industry performance standards and the activities of the national authorities.

• Emergency Response. Companies will prepare emergency response plans based on their rig or platform risk assessments and keep response equipment available. Member states will consider these plans when they compile national emergency plans. The plans will be periodically tested by the industry and national authorities.

• Liability. Oil and gas companies will be fully liable for environmental damages caused to the protected marine species and natural habitat. For damage to waters, the geographical zone will be extended to cover all EU marine waters including the exclusive economic zone (up to 370 km from the coast) and the continental shelf where the coastal Member State exercises jurisdiction. For water damage, the present EU legal framework for environmental liability is restricted to territorial waters (22 km offshore).

• International. The European Commission will work with its international partners to promote the implementation of highest safety standards across the world.

• The EU. Offshore Authorities Group Offshore inspectors of member states will work together to ensure effective sharing of best practices and contribute to improved safety standards.

The proposed legislation is aimed at coordinating policy among all EU members.

The industry group Oil & Gas UK opposes the proposals.

“Oil & Gas UK is opposed to blanket EU regulation of this country’s offshore oil and gas industry, which operates under a fully fit for purpose and robust regulatory regime,” said Malcolm Webb, chief executive officer of Oil & Gas UK.

Contact Eric Watkins at hippalus@yahoo.com.

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