The European Commission’s intention to improve safety in offshore oil and gas across Europe by using the UK’s best practices should be welcomed. However, the form of legislation proposed would have the opposite effect and undo decades of established regulatory experience - putting the safety of workers at risk, writes Malcolm Webb, chief executive of Oil & Gas UK.
Malcolm Webb is chief executive of Oil & Gas UK, the leading representative organisation for the UK offshore oil and gas industry.
"Two years after the Macondo disaster in the Gulf of Mexico, the European Commission published its proposals to centralise offshore safety and environmental regulation, intending to create common standards across Europe and prevent a similar tragedy from happening in European waters.
In doing so, the Commission acknowledged the existing 'world-class' regimes of the North Sea countries and sought to use these as a template which other, less established countries should raise their standards to meet.
Whilst Oil & Gas UK welcomes the European Commission’s broad intent to improve safety by ‘levelling up’ the rest with the best, we strongly oppose the form of legislation proposed – a regulation - because it will result in the opposite of its intended aim and actually weaken safety.
As a major hazard industry, the safety of our people comes before everything else and we have well-established and competent regulators with decades of valuable knowledge and experience. The pivotal moment for the UK was the Piper Alpha disaster 24 years ago which led to a fundamental change in the way safety was managed offshore.
More recently, within a month of the Macondo incident , the UK’s oil and gas industry, regulators and trade unions proactively joined together to form the Oil Spill Prevention and Response Advisory Group (OSPRAG).
The purpose of OSPRAG was to review the sector’s offshore drilling practices in the UK continental shelf (UKCS) in light of the events in the Gulf of Mexico and assess the UK industry’s readiness to respond to a major event. There is no doubt that we now have an even stronger regime here as a result of OSPRAG.
We therefore believe that to shift the overall regulatory control away from member states over to Brussels, where there is no relevant experience or technical competence in these matters, represents a serious and unnecessary risk to the safety of offshore workers.
Furthermore, the proposed EU legislation would require member states to re-write or revoke their own world-class safety legislation to the extent that it covers the same or similar ground as the EU regulation. That would be a highly retrograde process involving significant cost and time. More importantly, it would prejudice offshore safety by diverting a significant amount of regulatory resources away from front-line safety issues and into rewriting existing legislation.
An additional safety risk comes from the huge administrative burden that operators would face when having to replace their safety cases with new ‘major hazard reports’, which would then have to be reassessed and processed by regulators at a national level. The backlog of work for regulators would be considerable and there is again the risk that regulators’ attentions could be diverted away from front-line work to dealing with this backlog.
So we see this proposed regulation as a costly, value-destroying exercise that will not improve – but rather risks damaging – safety standards in the UK offshore areas.
A crucial point to remember is that 90% of all the oil and gas produced in the EU comes from just three EU countries – the UK, Netherlands and Denmark - plus Norway. These countries are, of course, the North Sea neighbouring nations which the European Commission already regards as having world-class safety regimes.
Norway, not an EU member but part of the European Economic Area (EEA), has decided the proposed regulation is not within the scope of the EEA and therefore not applicable to Norwegian waters. Given that offshore oil and gas activity in Norwegian waters accounts for approximately half of all such activity in Europe, it therefore seems clear that the proposed regulation cannot now achieve its stated objectives and needs to be rethought.
Oil & Gas UK is willing to work closely with the European Commission to help spread the North Sea’s high standards across Europe and encourage greater information sharing and collaboration between governments.
We believe that, if the Commission must have legislation, a well-worded directive, rather than a regulation, would be the most appropriate form and we are ready to work with all interested parties to achieve this.
A directive could encourage improvements within those member states that do not currently achieve the recognised high standards present in the North Sea, without harming the world-class regimes of those, such as the UK, that already have high standards and robust regulatory regimes in place. A directive could raise EU safety standards and avoid the unnecessary disruption and increased risk to safety that the proposed regulation presents."