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New directive proposed for EU oil and gas companies

February 26, 2013
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The European Commission (EC) has proposed new regulations that could require oil and gas companies operating on European Union territory to submit emergency response plans and show evidence that they are able to fund the fixing of potential environmental damage caused during operation.

The newly suggested changes would allow each member state to implement reforms depending on their individual needs. The British oil and gas industry has expressed its satisfaction with the proposed reforms, after it had been lobbying against the EC's original proposal, claiming it could have put the safety of oil and gas industry workers at risk.

Robert Paterson, health and safety director of industry body Oil and Gas UK, commented that the British industry has been working hard to raise awareness of the threat that the previous proposal would have posed. The decision to drop those plans and look at establishing a directive on offshore safety instead is the best possible alternative. It would facilitate reaching the goal to raise standards across the EU to match the high levels already present in the North Sea, he added.

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The European Parliament's Energy Committee has already announced that the text of the new directive has been provisionally approved by member states and highlighted that the directive would simplify regulation by eliminating the need for redrafting existing national laws. If formally adopted, the directive will then be subject to further votes by the Energy Committee and the European Parliament.

If the directive comes into effect, drilling companies will have to devise their own corporate accident prevention policy that has to be submitted to national regulators before being allowed to start operations. The EC believes that such a policy could serve as a guarantee that each company would adopt an open reporting culture, ensure protection for whistleblowers and promote consultation with elected safety officials. In addition, companies would have to list any potential major hazards for each specific installation, as well as any protective measures put in place to safeguard workers on site.

Businesses would also be required to offer an internal emergency plan in which they should present the equipment and various resources available to tackle a potential accident and how they would go about it. National regulators would have to prepare emergency response plans that refer to all drilling installations under their control. Combined, those plans would outline the financial obligations of each company and the roles of the authorities and emergency response teams in case of accident.

Last but not least, oil and gas companies would be asked to prove they are able to adequately provide the necessary funds to cover potential liabilities before they are given their licenses for an offshore installation. This should cover cleanup costs and liability for potential economic damage. Companies would have to show evidence they have "sufficient physical, human and financial resources to minimize and rectify the impact of a major accident," the directive said.

 

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