Thursday, 15 July 2010

As US spill continues, EU confused over its own drilling

As the US waits with baited breath to see if BP's latest attempt to cap the gulf oil spill will work, across the Atlantic European leaders are frantically trying to assess whether they too are vulnerable to such a spill. If the Deepwater Horizon disaster was apparently caused by a lack of oversight and regulation by the US government, things must be much more safe over here on a continent notorious for high levels of regulation, right? Well, nobody seems quite sure.

Over the past month I've attended numerous seminars, parliamentary hearings and press conferences trying to answer that question. And Europe's leaders seem no closer to answering it today than they were three months ago when this leak began. It turns out that oil drilling in the EU is remarkably uncoordinated and there is little reliable data about what is going on Europe-wide. This has infuriated green groups and politicians. This frustration was evident last night when I went to a press briefing after a meeting between the EU energy commissioner and top oil industry execs. As the oil industry representatives entered the commission there was a crowd of Greenpeace activists gathered by the front door, covered in oil and holding signs demanding an immediate moratorium on oil drilling in European waters. Unfortunately for them, by the time the oil execs arrived a sudden torrential rainstorm had washed all their oil off, leaving them shivering in their underwear and looking more like they had come to demonstrate for the rights of nudists than protest oil drilling. Still, I think the oil execs got the message.

The energy commissioner, Guenther Oettinger, has himself proposed a moratorium on new drilling in Europe until it can be demonstrated that oil rigs in Europe are safe and the companies have the ability to stop a catastrophic leak. Of course it's all well and good for him to say that, but it's rather irrelevant because the EU has no competency in this area. It is up to individual member states to regulate oil drilling within their territorial waters, and they're free to do as much of it as they like.

Oettinger emerged from the meeting yesterday with the environment commissioner and the head of the oil and gas industry association saying he had told the oil execs that they should halt drilling for now until safety can be demonstrated. The response from the head of the oil and gas industry association was, as is to be expected, not exactly receptive. Oettinger has been working to convince EU member states to impose moratoriums, but so far there has not been a very positive response. Ironically Norway, which is not an EU member state, is the only important drilling country that has heeded his call. The UK has continued to rule out a moratorium. And there's nothing the EU can do to make them impose one.

Then again, there may not be the same need to impose the same kind of moratorium that the Obama administration attempted to impose. That moratorium, which was struck down by US courts, would have only stopped deep-water drilling. But there are not so many deep-water drilling projects in EU waters, mostly because European waters just don't get that deep. According to the European Commission, the average depth of oil rigs in European waters is 90 metres. The deepest one is 700 metres, far shallower than the ultra-deep wells that have been authorised in the US. And 700 metres is actually as deep as the North Sea gets. But Ireland has been considering granting deep-sea permits for the Atlantic seabed, and proposals have also been made for deep-sea drilling off the coast of Greenland.

It took awhile to even get these figures from the commission though. At a meeting of the European Parliament's environment committee I attended last month, MEPs expressed great frustration at the difficulty they've had in getting answers to basic questions about the European oil drill situation. MEPs told the commission's representative that questions such as how many oil drills are there, how deep are they, what safety checks are in place, and what insurance and contingency plans exist had  either gone unanswered or been met with inconsistent responses.

MEPs were also extremely concerned that, because of a hole in EU legislation, oil rigs appear to be unaffected by EU environmental liability and monitoring law. EU legislation in this area was set up following a series of oil tanker disasters and is geared toward that type of accident. In fact, MEPs are saying that the European Agency for the Safety of the Sea, based in Lisbon, does not even cover pollution from oil platforms at all. It was set up to only deal with tanker accidents.

Commissioner Oettinger said yesterday that the commission will propose a raft of new monitoring and safety measures in September. But when a reporter asked him if he would favour the EU having more control over these drilling issues, he dodged the question. It is a question which may build to a fever pitch in the coming months. If an accident within a member state's territorial waters can have a devastating impact on other member states, should those decisions really be left to that member state alone? When it comes to cross-border pollution, these are tricky issues to grapple with.

But the commission may have little leeway in this area. It is certain that the current British conservative government would strongly resist any efforts by the EU to centralise drilling permitting.
So in the absence of any real power, the commission may choose instead to propose a basket of feel-good measures that may make people feel safer, but could have little actual effect on making sure member states are holding oil companies to account for the safety of their oil rigs.

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