Offshore oil and gas drilling to become substantially safer, also in the Arctic

Companies drilling for oil or gas in the Arctic area will in the future need to observe much stricter EU rules. This is the result of a new European Directive that has been adopted by the European Parliament, imposing strict safety requirements throughout the EU.

Ivo Belet MEP, Rapporteur for the new Directive, said: “Oil and gas operators are venturing ever more into drilling in extreme circumstances, including in the Arctic. However, a leak could have dramatic consequences for the fragile Arctic ecosystem. Unfortunately, a moratorium on drilling in this area is not achievable. Therefore we have opted for a concrete and efficient approach: oil and gas companies need to test whether their emergency response plans can be carried out in all climatological circumstances. This implies that they cannot drill when bad weather makes safe drilling impossible.”

Protecting the Arctic area against the so-called ‘cold rush’ for oil and gas remains tricky as the EU has no waters in the Arctic. Oil and gas producing countries, such as the US, Canada and Russia would ignore an EU moratorium and continue drilling in their part of the Arctic.

Therefore, in addition to the new Directive, it has been agreed that Sweden, Denmark and Finland will increase their efforts to ensure within the Arctic Council* that the highest safety standards for drilling are complied with.

Other important innovations of this Directive are:

Liability and financial guarantees: Oil and gas companies are fully liable for any form of environmental damage. They must prove that they have sufficient financial capacity to cover the consequences of a possible incident**.

Mandatory risk assessment and contingency: Prior to starting up any drilling activity, operators must complete a risk analysis and prepare an emergency response plan, which must be tested regularly. Coordination with neighbouring countries is required if crossborder effects can be expected. The materials needed to carry out the emergency response plan need to be available at all times.

Stricter licensing procedure: Drilling at sea can only start after approval by an independent national authority.

Europe sets the tone: Companies operating in EU waters must now demonstrate that their risk prevention policy also applies to operations outside the EU.

Involvement of the population: All Member States are now legally obliged to closely involve the local population even before exploratory drilling is carried out.

Greater role for EMSA: The expertise of the European Maritime Agency should be used if a gas or oil leak occurs. EMSA must inspect the emergency response plans.