Oettinger plans EU deepwater drilling ban

BP oil spill picnik.jpg

Europe's energy chief will this week call for a temporary ban on new deepwater drilling for oil until a probe is completed into the causes of BP's spill in the Gulf of Mexico, a draft document shows.

Oil-drilling countries questioned whether Brussels authorities should intrude for the first time in a sector that has traditionally been controlled at national level.

Günther Oettinger will propose on Wednesday (13 October) a regulatory clampdown on the offshore oil industry, following the Deepwater Horizon accident, his spokeswoman confirmed.

"The EU has a vital interest in preventing a similar disaster," said a draft of the proposal seen by Reuters.

"The Commission reiterates its call upon the member states to suspend the licensing of complex oil or gas exploration operations until technical investigations [of] the causes of the Deepwater Horizon accident are completed and the European offshore safety regime has been reviewed," it adds.

In a separate vote at the European Parliament, politicians narrowly rejected a moratorium on new drilling, which carried no legal weight but shed light on how they might react to Oettinger's future proposal.

"This vote will be seen as a rebuke for those who want to see the European Commission gain powers over oil and gas resources," said Ian Hudghton of the Scottish National Party.

"It was ridiculous to suggest that Scotland's oil industry, with its first-rate safety record, should be jeopardised by such a knee-jerk reaction," he added.

Oettinger, the bloc's energy commissioner, is expected to say next week that Europe's myriad regulations for offshore exploration are too fragmented to cope with an industry that is drilling further and further offshore in deep, rough waters as "easy oil" runs out.

Liability regime

The draft observes there are more than 1,000 installations in the northeast Atlantic, over 100 in the Mediterranean and plans for new exploration off the coasts of Cyprus and Malta.

"Licensing stands out as the first key tool to ensure the safety of new drillings in complex environments," says the draft proposal, which would need the approval of the Parliament and the EU's 27 member countries before taking effect.

"The licensing regime needs to be backed up by an unequivocal liability regime," it adds.

Britain does not see a case for any ban or moratorium on deepwater drilling, a government spokeswoman said.

"Our regulatory regime for oil and gas activities is already among the most robust in the world, and all drilling programmes are considered on a case-by-case basis," she added.

"UK deepwater oil and gas production is necessary during the UK's transition to a low-carbon economy."

Oettinger's draft said that 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.

The Commission will also look at bringing drilling ships under the same rules as offshore drilling rigs.

(EURACTIV with Reuters.)

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 to discuss potential loopholes in EU legislation that might need to be addressed in order to prevent similar catastrophes from occurring in Europe.

  • 13 Oct. 2010: Commission Communication on 'Facing the challenges of the safety of offshore oil and gas activities'.

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