Offshore oil drilling in the EU: environmental policies corroded by lobbying

The EU Parliament’s industry committee missed an opportunity today to make offshore oil drilling more safe and responsible 

Anna Galkina
9 October 2012

Today the EU Parliament’s Industry committee (ITRE) has made a decision on a document that could have made offshore oil drilling in Europe and outside of it much more responsible – but is unlikely to, mostly due to the work of a group of UK MEPs and the industry lobby. ITRE has determined the majority of the text of a proposed regulation on offshore oil and gas safety. It will go to a plenary vote in December.

The life of this document starts back in 2010, when the shock of the Deepwater Horison disaster jolted politicians into bold statements on offshore drilling. EU Energy Commissioner Oettinger suggested an offshore drilling moratorium until the causes of the disaster were investigated. Two years and several corporate court cases later, responsibility for the accident is still under dispute, and the lessons have not fully been learned.

Proposed in 2011, the EU regulation on offshore oil and gas safety contained a number of radical approaches that may have changed the way responsibility for safety in oil drilling works: among them, a clause that would bind EU companies to EU standards when operating elsewhere, and a “polluter pays” clause (companies have to show they have the financial means to clean up an accident before they are granted licenses).  

The Environment, Public Health and Food Safety committee (ENVI) voted on amendments to the regulation two weeks ago, supporting the full application of the “polluter pays” principle, as well as adopting a clause warning member states to restrict licensing for oil and gas exploration and drilling in the Arctic.

However, the final word on the regulation before it goes to plenary belongs to ITRE, which today rejected the Arctic clause among others. In this committee more strongly than in ENVI, a group of UK MEPs led by Conservative Vicky Ford have consistently worked to dismantle the regulation, claiming that it is inconsistent with, more expensive or ‘weaker’ than the UK regime.

Back in November 2011, Vicky Ford describes the day after she first read the proposals for an offshore safety regulation: “Before dinner, oil giants ENI and Total talked to me about the offshore oil proposals. They worry that the European Union safety standard focusing on 'major hazards' is going to be lower than the UK's 'as low as reasonably practicable' standard. It's not often that industry worry that laws are not strong enough.”

The story is that the industry knows best. A browse of the Conservatives’ lobbying contacts register quickly shows that Ms Ford has had monthly meetings with oil company lobbyists between January – June 2012. These meetings were mostly organised by the Oil and Gas Producers association (OGP), but also included a separate session with three BP representatives on 15 May. Another meeting on 16 June was organised by the controversial PR firm Hill & Knowlton Strategies featuring actors as diverse as Russian oil giant Lukoil and Oil & Gas UK. (Hill & Knowlton are otherwise known for laundering the reputation of tobacco companies in the 1930s and more recently being part of a coalition of PR companies hired to present fracking as “America’s new Natural Gas. Cleaner, smarter energy.”) OGP “advised” Ms Ford’s report on offshore oil and gas safety last year, and lobbying body Oil and Gas UK state they were in “close contact” with Ms Ford in the run up to the Parliament vote on this report.

Vicky Ford submitted over 360 amendments to the proposed regulation, most of which appear to be language clarifications, among which the important points can easily get lost for a casual browser. It is clear, however, that they do not constitute a strengthened version of the document. The most important amendment is to change the status of the document from a binding “regulation” to a “directive”, which states may interpret as they see fit. Ms Ford also proposes to change the definition of “acceptable” risk of major accidents to a weaker “tolerable” level of risk.

A number of other UK MEPs in the committee, from SNP’s Alyn Smith to Labour’s Peter Skinner all support some of Ms Ford’s amendments. Energy minister Charles Hendry alsospoke at an Oil & Gas UK organised event to condemn the proposals, saying that a regulation would be too difficult to implement.

Bringing the regulation in line with its UK equivalent sounds like a valid concern, but this is not (or nowhere near all of) what the amendments do. The most striking example concerns Article 18.6. The environment committee (ENVI) approved a version of this clause stating that EU-registered companies should be bound by EU standards even when operating outside EU waters, and mandating the European Commission to formulate a legal framework for this over the next year. On the other hand, in the version of the same clause proposed by Ms Ford, companies are instead only required to “comply with local requirements” and to “endeavour to conduct their offshore oil and gas operations when outside the Union in accordance with the principle of minimising major accident risks from those operations wherever possible.” I.e., to do nothing on top of what they are required to do already.

This clause in its stronger version would use the EU’s extraterritorial authority (i.e. in this case authority EU member states have over their companies) to enforce stringent safety standards in places where states are either unwilling or too weak to enforce them. In the Russian far north, oil extraction is a ‘strategic’ government project but cannot be carried out without foreign investment and expertise, and cutting corners on safety is no secret. This legal principle would change the way oil companies operate in places with less strict safety enforcement: it is no wonder the oil industry has lobbied hard against it.

It appears that instead of using the opportunity of the proposed regulation to truly strengthen offshore safety provisions in the UK and outside of it, the UK government and MEPs have simply done everything to ensure that the oil industry as well as the UK regime had to change as little as possible. By default, UK diplomats, civil servants and even ministers are expected to act on behalf of the country’s oil companies, and this is only ever challenged if the deals they helped seal result in business failure or environmental disaster. But if we are to have any hope of a more safe and democratic approach to energy, this has to change.


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