After the Deepwater Horizon incident occurred in the Gulf of Mexico in April 2010, the European Commission (EC) reviewed the existing regulatory framework around Europe. It concluded that the divergent and fragmentary nature of the requirements in place applying to the safety of offshore oil and gas operations did not provide adequate assurance that risks from offshore accidents were minimized.
As a result, the European Commission published the Offshore Directive June 28, 2013. This aims to “help prevent accidents, as well as respond promptly and efficiently should one occur. The Directive, broadly based on the UK’s current offshore safety regime according to the UK’s Health and Safety Executive, includes requirements relating to licensing, environmental protection, emergency response and liability, as well as safety. And it will come into effect in just a few weeks’ time, June 19.
Under the new regulations companies must prepare a major hazard report for their offshore installation, before exploration or production begins. This report must contain a risk assessment, as well as an emergency response plan, and be updated whenever appropriate.
The major hazard report is also subject to a thorough periodic review by the operator at least every five years. An estimate of oil spill response effectiveness will need to be submitted as part of the major hazard report’s emergency response plan, which takes into account a variety of environmental conditions. Aspects such as weather, tides, ice presence and hours of daylight, as well as other conditions that might influence the efficiency of the response equipment or the overall effectiveness of a response effort, will need to be reported in this analytical document.
In order to ensure effective response to emergencies, companies must keep resources at hand and put them into operation when necessary. These emergency response resources must be maintained and should be regularly tested. As part of the new Directive, when granting licenses EU countries must ensure that companies are well financed and have the necessary technical expertise in place. Licensing authorities are also required to thoroughly examine a company’s capability to ensure continued safe and effective operations under all foreseeable conditions. Additionally, when assessing the financial capability of entities applying for authorization, EU member states are required to verify that such entities have provided appropriate evidence that adequate provisions have been, or will be, made to cover liabilities deriving from major accidents.
INDEPENDENT VERIFICATION, PUBLIC INFORMATION & COMPANY LIABILITY
Under the new EU rules, technical solutions that are critical for the safety of operators’ installations must also be independently verified prior to the installation going into operation. Operators and owners are required to take appropriate action based on the advice of these independent verifiers, who are themselves required to have suitable technical competence. National authorities must verify safety provisions, environmental protection measures and the emergency preparedness of rigs and platforms too. If companies do not respect the minimum standards, EU countries will have the power to impose sanctions as part of the new Directive, which can even include halting production.
The EU Offshore Directive will also work to keep the public informed. Information on how companies and EU countries keep installations safe will need to be made available for citizens and member states will need to provide periodic reports of activity and incidents to the Commission, in order to facilitate transparency and public confidence within offshore oil and gas operations in the European Union. Member states will also need to inform the Commission, and any other member state whose territory or offshore waters are affected, as well as the public concerned, of any major accidents “without delay”, according to the Directive.
As referred to above, companies will be fully liable for environmental damages caused to protected marine species and natural habitats under the EU regulations. For damage to marine habitats, the geographical zone will cover all EU marine waters including exclusive economic zones and continental shelves. The new EU Offshore Directive takes environmental wellbeing seriously, stating that “environmental damage needs as a matter of priority to be rectified at source”.
The majority of oil and gas production in Europe takes place offshore and there are currently over 1,000 operations in European waters, according to the European Commission. Thanks to the EU Offshore Directive these operations will all fall under the same blanket rules in the near future. Whether this will increase the safety of projects and further help to prevent environmental damage remains to be seen, although the regulations certainly appear comprehensive enough to try and achieve that goal.