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Brussels climbs down on oil drilling moratorium

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Published 14 October 2010, updated 15 October 2010

The European Commission has softened its call for a moratorium on oil drilling in deep water, calling instead for EU member states to stop granting licences for new installations until safety regimes have been assessed.

The call was a response to BP's accident in the Gulf of Mexico, but the idea has been rebuffed by the European Union's parliament and by Britain, the home of the EU's biggest oil explorers.

"Safety is non-negotiable," said EU Energy Commissioner Günther Oettinger, presenting the plans on Wednesday (13 October).

"We have to make sure that a disaster similar to the one in the Gulf of Mexico will never happen in European waters. This is why we propose that best practices already existing in Europe will become the standard throughout the European Union."

A draft paper last week called on EU governments to implement a drilling ban, but the final version of the plan now says it is a decision best made in national capitals.

"National licensing procedures in all member states should be reviewed to reflect recognised best practices and to include EU-wide obligations for safety, health and environmental performance, risk management and independent verification," the paper says.

Key requirements for the licensing of hydrocarbon exploration and production "should be defined at EU level," the Commission adds, saying it will make proposals in 2011.

Meanwhile, "a temporary suspension of future authorisations could be appropriate" for complex offshore operations, the Commission added, without recommending a full moratorium.

Oettinger said that Europe's current regulations for offshore exploration cannot cope with an industry that is drilling further offshore, under different safety regimes.

"Such a fragmented regime may not provide an adequate response for the risks posed by the evolution of offshore oil and gas industrial activities," the plan says.

Any legally binding proposals that emerge from the review would need to go before the European Parliament for debate and would need approval from all 27 EU member states before taking effect.

"The licensing regime needs to be backed up by an unequivocal liability regime which must include adequate financial security instruments to cover major incidents," the document says.

During licensing, companies would have to prove the "safety case" for each operation and demonstrate the company's ability to prevent and deal with crises.

They might also have to prove their financial ability to handle the consequences of unforeseen events, possibly via insurance schemes or risk-coverage instruments. 

(EurActiv with Reuters.)

Positions: 

French MEP Corinne Lepage (Alliance of Liberals and Democrats for Europe) praised the European Commission for its "realistic assessment of the situation in recognising that the legislation on offshore drilling is currently incomplete, heterogeneous and too fragmented".

However, Lepage said she was "worried" about the Commission's ambiguous stance on the moratorium. "The commissioner explicitly mentioned a moratorium during his press conference, but the word does not appear any more in the communication. The text states that the Commission calls upon the member states to suspend the granting of licences for new installations until safety regimes have been assessed, which is different from what the commissioner proposed until now."

Bart Staes (Groen), a Belgian Green MEP, welcomed the Commission's proposals as a "first step in addressing the glaring holes in EU rules" with regards to offshore exploration, but said that Europe was still not prepared for the consequences of an accident.

"In these circumstances, the only responsible course of action is to freeze dangerous deep sea drilling activities and we regret that the Commission has backtracked on proposals in earlier drafts clearly calling on member states to suspend licensing until EU rules are revised," he said.

Dutch Green MEP Bas Eickhout added that the EU Environmental Liability Directive would quickly now need to be revised. "Given the devastating consequences of a spill, watertight liability legislation is necessary to ensure the public is not left to pick up the bill for the oil industry," he said.

"Given the consequences of any spill would clearly extend beyond national borders, we urgently need to ensure that European-wide safety rules are a strong as possible," he added, describing current legislation as "piecemeal".

Calling on EU member states to suspend deepwater exploration in the meantime, Eickhout appealed for the EU to "not make the mistake of waiting for an accident, like the Deepwater Horizon disaster, before acting".

Ian Hudghton, an MEP from the Scottish National Party, welcomed what he described as a "climb-down" from the European Commission. "I'm pleased that common sense seems to have prevailed. Commissioner Oettinger is wise to heed last week's vote in the European Parliament where we clearly rejected calls for a deep sea drilling moratorium."

"We reject any suggestion that the EU should gain powers over oil and gas resources and will continue working to ensure Scotland has full control over its natural resources."

Next steps: 
  • By summer 2011: European Commission to table new measures (legislative or not), after holding further consultations on scope of proposed initiative.

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