European Commission envisages comprehensive EU safety legislation for oil platforms

The European Commission has recently published a Communication entitled "Facing the challenge of the safety of offshore oil and gas activities".

The Deepwater Horizon accident in May prompted the Commission to launch an urgent assessment of safety in oil and gas exploration and production activities in European Waters. The Commission identified the following as 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.

A Single Legislative Framework for Offshore Operations

The Communication highlights that oil and gas operations in Europe are largely determined by the national legislation of each member state, which results in varying licensing, operational safety and environmental protection regimes between countries. The Commission believes that this complicates the management of health, safety and environmental risks in Europe and risks hampering incident response. The Commission’s proposals envisage a single legislative regime for offshore oil and gas activities throughout Europe.

EU "Key Requirements" for Licensing

The Commission argues that it is crucial that licensing procedures across Europe conform to certain basic common criteria because major oil spills are not limited to the boundaries of individual states. It has suggested a number of key requirements for the licensing of hydrocarbon exploration and production that it proposes should be defined at EU level. These include:

• 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.

Uniform Criteria for Offshore Operations

The Commission recognises that as member states transpose minimum requirements from health and safety directives to national legislation, variations will occur. It states that requirements applicable to industry must be designed according to uniform criteria. One of the Commission’s proposals is to extend the scope of EU product liability legislation to cover mobile offshore drilling rigs (MODUs), which are currently not included in the legislation. The Commission has also stated an intention to assess current regulations for well design and control in light of the lessons learned from the Deepwater Horizon incident.


Independent Evaluation of National Regulators

The Commission indicated its intention to work with member states to provide a framework for independent evaluation of the performance of national regulators (e.g. DECC) in order to ensure that common standards are being applied across Europe.


No Ban on Offshore Drilling

Guenther Oettinger, Europe’s Energy Chief, had called for a temporary ban on new deepwater drilling. That call is not repeated in the Communication, with the Commission stating that any decision to suspend offshore drilling is left to the discretion of member states. The Commission has, however, indicated that member states should continue to examine whether suspension of licensing of new complex oil or gas exploration operations is needed until European offshore safety regimes have been reassessed.

Global Health and Safety Initiative

The Commission sees the EU as well placed to take a key role in international efforts to strengthen Health & Safety rules globally and plans to work with existing international partners to initiate an EU-driven global initiative for offshore safety.

Commentary

It will be interesting to observe how far the Commission’s proposals make it through the EU legislative process. It is understood that the Commission aims to put a formal proposal together before summer 2011. In order to be enforceable, the proposals would require approval from the European Parliament, European Economic and Social Committee and Committee of the Regions. If approved, the proposal would become law in the EU.

The UK, which is renowned for its high standards in offshore health and safety, has already indicated that it will not be supporting the Commission’s proposals. Oil and Gas UK’s Chief Executive, Malcolm Webb, has 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. This is why we must respectfully but openly disagree with the Commission’s proposed implementation of a federal, prescriptive approach to safety across the EU."

To view the Commission’s Communication, please here click here