Safety of oil platforms comes to fore again
By Marie-Martine Buckens | Tuesday 12 June 2012
Meeting on 15 June in Luxembourg, the member states’ energy ministers will hold an exchange of views on the European Commission’s draft regulation of October 2011 on the safety of offshore oil and gas prospection, exploration and production activities. The European Parliament and the European Economic and Social Committee largely endorse the text. While some capitals dispute the choice of a regulation – which is directly applicable – rather than a directive, which gives member states more application leeway, the main question to be addressed is the extension of the geographical scope of environmental liability contained in the Commission’s proposal.
After the Deepwater Horizon accident in the Gulf of Mexico, in April 2010, the Commission decided to present a single legislative instrument that strengthens and complements the numerous texts that have an impact on offshore oil and gas activities in Europe, and above all to avoid combining texts focused on personal security matters (drilling activities and workers’ safety) with those applying to environmental aspects. The Commission also found that it would be impossible to resolve the numerous questions to be addressed in different legislative texts.
Concretely, the Commission proposes:
- a strict separation between the regulator and the control authority. The creation of a European control authority was abandoned to the benefit of national authorities
- stricter conditions for the grant of national permits to the industry and for the approval and notification of operations. Workers’ health and safety and environmental risk are taken into account
- emergency plans and prevention measures to be developed by the operator and submitted to national authorities for approval
- drafting of safety reports to ensure transparency and information-sharing
- sharing of best practice among EU partners
- extension of the geographical scope of liability for environmental damage to all territorial waters and exclusive economic zones (EEZ).
This proposal to extend the geographical extent of environmental liability of Directive 2004/35 represents a major challenge for oil companies. In this connection, the EU Court of Justice, in a ruling handed down on 17 January, held that EU law applies to workers on offshore platforms on the continental shelf adjacent to a member state – beyond the EEZ.
The main question is the extension of the geographical scope of environmental liability
The offshore oil and gas sector in Europe includes some 1,000 installations: 486 in the United Kingdom, 181 in the Netherlands, 123 in Italy, 61 in Denmark, seven in Romania, four in Spain, three in Poland, two each in Germany, Greece and Ireland and one in Bulgaria (source: European Economic and Social Committee). Offshore makes up an increasingly large share of global oil and gas production, currently accounting for 35% of oil production and 19% of gas production. According to estimates by the French ESC, in 2010 global oil production was 87.5 million barrels a day, of which 30.5 mbd provided by offshore exploitation, ie more than the combined demand of the OECD countries, China and Japan for that year (28.2 mbd). Marine deposits are thought to make up 20% of proven and likely oil reserves and 40% of proven gas reserves. The share of very deep offshore production is still relatively modest (7% of global oil production), but is expected to increase in the coming years.