How the European Union is responding to the Deepwater Horizon accident

How the European Union is responding to the Deepwater Horizon accident

Summary

The lifting of the moratorium on deepwater drilling in the Gulf of Mexico is only one step in the process of US and International
regulators responding to the Deepwater Horizon accident. This analysis gives an assessment on how the European Commission have responded to the disaster and what impact that may have on offshore exploration and production activity in European waters.

Analysis

Following the Deepwater Horizon accident, the European Commission launched an urgent assessment of the safety in oil and gas exploration and production activities in European waters. The Commission identified the following actions needed to maintain the safety and environmental credentials of the EU:

  • Thorough licensing procedures;
  • Improved controls by public authorities;
  • Addressing gaps in applicable legislation;
  • Reinforced EU disaster response; and
  • International cooperation to promote offshore safety and response capabilities worldwide.

Also in response to the GOM deepwater moratorium the EU Commissioner for Energy, Mr. Guenther Oettinger called for a temporary ban on new deepwater drilling in European waters. That call has not been repeated by the EU Commission but instead it has stated that any decision to suspend offshore drilling is left to the discretion of member states.

However a recent communication from the European Commission entitled "Facing the challenge of the safety of offshore oil and gas activity" spells out the need for a single legislative framework for offshore operations. The Commission sees the need for uniform procedures across Europe that conform to certain basic common criteria, because major oil spills are not limited to the boundaries of individual states. It goes on to suggest some key requirements for the licensing of hydrocarbon exploration and production that should be defined at EU level including:

  • Presentation of a full 'safety case' and associated health and safety documentation for each operation;
  • Demonstration of the technical capacity of prospective operators to take appropriate measures to prevent and respond to critical events; and 
  • Financial capability to handle the consequences of unforeseen events.

Many in the offshore oil and gas industry will view the European Commission’s proposals as a step too far and will create a federal prescriptive safety regime across the EU. The chief Executive of Oil and Gas UK Mr. Malcolm Webb has already strongly
criticised the proposals stating that "safety is the most important issue for all persons working the UK oil and gas industry and we never take it lightly. Our lives and livelihoods depend on it”.

However in the defense of the European Commission, whose role is to ensure the safety of all it's citizens and protect the surrounding environment, they cannot rely on discretionary initiatives and self-regulation alone. Recognising that most countries with oil and gas exploration and production activity in the North Sea are operating with a strong and fit for purpose safety regime others with a less mature industry operate with a less developed regime. The ideal solution for all concerned would be for the European Commission to engage with member states to ensure that the best practices adopted by North Sea countries, many of which were put into effect following the Piper Alpha disaster, are applied to all European waters where hydrocarbon exploration and production activity is executed. 

 

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