The European Parliament’s industry committee has rejected attempts to introduce a moratorium on offshore oil and gas drilling in the Arctic, overruling a contrary vote by its environment committee last month.
The key vote in the industry committee yesterday (9 October) instead proposed a new directive to ensure that companies have “adequate financial security” to cover the liabilities that could be incurred by any accidents.
Drilling companies would also have to submit to national authorities a safety hazard and emergency response report at least 24 weeks before the planned start of operations.
A plenary vote in December will now consider one surviving amendment from the environment committee vote, which would impel member states to refrain from licencing drills unless an effective accident response can be guaranteed.
The European Commission had initially proposed a binding EU-wide regulation, but the industry committee’s vote instead plumped for a directive, which member states can choose how to enforce according to their regional standards.
“Questions have been raised about the significant revocation and amendments of existing equivalent national legislation and guidance [a regulation] might entail,” said the parliamentary rapporteur, Ivo Belet (European People's Party).
“Such redrafting would divert scarce resources from the safety assessments and inspections on the field,” he added.
British oil industry representatives used similar arguments, according to minutes of a stakeholder peer review meeting at the European Commission’s Joint Research Centre.
“Implementing the Regulation would tie-up considerable resources in both industry and regulators … taking them away from the ‘front line’ where the hazards are,” representatives of Oil and Gas UK said.
After that meeting, the head of the European Commission’s coal and oil unit, Jan Panek, invited the Oil and Gas UK representatives to a separate bilateral meeting on the legal instrument and requirements in the regulation, which took place in April 2012.
Tip of the iceberg
Environmentalists suspect that this was the tip of a lobby iceberg. “This vote had the fingerprints of oil lobby all over it,” Greenpeace spokesman Joris den Blanken told EurActiv.
Amid intense industry lobbying, EurActiv has learned that the oil giant Chevron offered MEPs on the committee a free trip to its offshore Alba platform on 12-14 July, involving two nights stay in an Aberdeen hotel, helicopter trips to the platform, and several briefings.
But a Chevron representative informed EurActiv that the trip had not in fact gone ahead, due to “organisational reasons” on which she declined to elaborate.
Ivo Belet’s office said that he had “had the intention” of going on the package, but instead visited a platform in the Netherlands on a paid-for trip to GDF Suez’s K12B gas-producing platform which utilises carbon capture and storage techniques.
In March 2011, another shadow rapporteur on the committee, Vicky Ford (European Conservatives and Reformists), who tabled more than half of the 642 amendments on the report, visited a rig off the coast of Aberdeen paid for by the oil company ConocoPhillips.
Such trips are considered necessary and educational for legislators, and may not be luxurious, but environmentalists are wary of undue influence when MEPs adopt positions close to the industry's interests.
A spokesperson at Ford’s office said that she had registered her trip on her European Parliament online declaration of interests but it was not mentioned there at the time of writing.
Camel operations in the Sahara
Oil producing countries such as Norway also pushed hard for the proposed regulation to be transmuted into a directive, because of the “massive administrative burden” and “complicated legal questions” it could raise, according to a Norwegian position paper, seen by EurActiv.
Norway's deputy oil and energy minister, Per Rune Henriksen, went further, arguing that for the EU to claim jurisdiction over the Arctic by banning drills there “would almost be like us commenting on a camel operations in the Sahara.”
The EU sees itself as an actor in the Arctic because three EU countries have territory in the Arctic – Denmark, Finland and Sweden – while Iceland is an EU candidate.
The EU has in return applied for an enhanced observer seat on the Arctic Council, partly because climate change is a transboundary issue, affecting European weather patterns and fish stocks alike.
Gustaf Lind, the Arctic Council’s current chair, told EurActiv that “of course, as we have EU members, we can all say that we’re positive, very positive [towards the EU’s application] but we try to avoid reviewing specific applications in the media.”
Arctic resource race
The EU’s application comes as the continent’s ice has melted to its lowest level ever, carving the pristine region open for a resource race.
The US Geological Survey says that the region could be home to 13% of the world’s undiscovered oil reserves and 30% of its undiscovered gases, and gold and diamond mining companies also view its prospects with relish.
Arctic nations often bemoan a perceived southern hypocrisy that would prevent them from enjoying the same economic benefits from fossil fuel production that others have done.
Oil extracted from the Arctic emits no more greenhouse gas than that produced anywhere else but the region’s remote and hostile terrain could make rescue operations treacherous in the event of an accident.
Gunnar Wiegand, a director at the EU’s External Affairs Action Service, told an Arctic Futures Symposium in Brussels on 4 October that he hoped EU legislation could inspire Arctic nations to firmer environmental legislation.
“The acquis [accumulated legislation] in the Arctic Council doesn’t go as far as any of the environmental legislation of the EU,” he said.
Maria Damanaki, the EU’s maritime commissioner, told the same conference that as the continent’s ice thawed, new opportunities could arise.
“Offshore drilling in the Arctic now becomes a viable option for big oil companies,” she said. “Arctic reserves could hold enough oil and gas to meet global demand for several years. This is a need the world economy has.”
“Though we may be greening the world economy, oil and gas remain vital for us and will do for some years,” she added.
Scientists are more concerned that the Arctic ice melt could raise sea levels, accelerate global warming by reducing the region’s ice reflectivity of solar heat, and change Gulf Stream currents.
If the Arctic’s summer ice melts completely, some scientists fear that methane hydrates currently frozen on the seabed could be released, causing a runaway and unstoppable greenhouse effect.
Nicolas Fournier of the environmental group Oceana told EurActiv that he was “very concerned and appalled by the report that adopted by the industry committee. Several elements concerning the environmental impacts of drilling have been neglected and the committee has sent a signal to plenary that’s quite worrying. We are very disappointed that the Arctic moratorium was also rejected.”
“If the amendments had been passed, it would have sent a very strong political signal that Europe is watching offshore oil and gas developments in the Arctic,” he continued. “It would have meant that member states would have had to refrain from giving licenses for drilling in the arctic, and instruct the competent authorities not to authorise drilling there.
“There is a race for hydrocarbon resources in the arctic and a lot of countries fight restrictions there but for us, it’s a collective good that we have to take care of. As the arctic goes, so goes the world, so the question is realty whether we want to protect this last pristine, sensitive and vital area of the world or not.”
The resource-rich Arctic is becoming increasingly contentious as climate change makes the region more navigable.
In the aftermath of the BP oil slick in the Gulf of Mexico, the European Commission convened safety talks on deep-sea oil drilling with several oil companies, including Shell and BP.
A series of meetings were held over the summer of 2010 to discuss potential loopholes in EU legislation that might need to be addressed in order to prevent similar catastrophes from occurring in Europe.
In Europe, over 90% of oil and over 60% of gas production comes from offshore operations, mostly in the North Sea and Norwegian Sea.
- 22 October: Arctic Council International Forum
- 11 December: European Parliament plenary vote on Arctic offshore safety and drilling legislation
- EU Arctic Policy
- Sea Basin Strategy: the Arctic Ocean
- EU stakeholder peer review meetings on the assessment of risks in the offshore oil and gas industry
- European Parliament - Offshore oil: No drilling without hazard report and emergency response plan
- United Nations: Convention on the Law of the Sea