* Only cover European firms' activity within Europe
* Increase geographical reach of polluter-pays legislation
* Oil and gas industry sees no need for new law
By Barbara Lewis
BRUSSELS, Oct 27 The European Union on Thursday
unveiled draft plans to regulate offshore oil and gas across the
bloc and guard against a repeat of BP's catastrophic Gulf
of Mexico spill as oil firms drill deeper to tap remaining
Environmentalists welcomed the plans but said they did not
go far enough.
Oil and gas firms have said national legislation is already
adequate and the BP disaster was a result of safety lapses
within the company, not across the industry.
The cost of implementing the new laws, which would be mostly
met by industry, is estimated at more than 130 million euros per
year ($179 million) in a draft text.
Potentially, the cost of accidents is far higher.
BP's accident in the Gulf of Mexico last year, which killed
11 workers and led to the biggest oil spill in U.S. history, is
estimated to have cost more than $40 billion.
"Securing best industry operations in all our offshore
operations is an indisputable must. Today's proposal is a
crucial step forward," Energy Commissioner Guenther Oettinger
said in a statement.
Only this week, BP was granted its first permit following
its accident to drill a new well in the U.S. Gulf after it
passed a series of U.S. regulatory hurdles.
EMERGENCY RESPONSE PLANS
The new EU regulation would require all EU countries to
enforce much stricter standards before awarding offshore
operating licences and would enforce a regime of independent
checks. Companies would have to draw up detailed safety reports
and emergency response plans.
The draft legislation is the EU's first specific attempt to
legislate on offshore oil and gas drilling, although it
complements an existing directive on environmental liability
under which the polluter pays.
The new draft proposals aim to expand the reach of that
legislation from 12 nautical miles offshore (22 kilometres) to
200 nautical miles (370 kilometres).
Oil and gas companies would only be subject to the EU rules
within Europe, and although the Commission said it hoped
European companies would follow best practice world-wide, it
said it could not enforce that.
"While there is agreement on the principle that EU-based
companies should not lower standards when operating outside the
EU, enforcement would not be feasible," said a draft text.
Some legal experts shared the view of the oil companies that
national governments were already dealing competently with
offshore oil and gas.
"Further, only a minority of member states have offshore
activities going on, so why should the EU get involved?" asked
Lucas Bergkamp, a partner at Hunton & Williams in Brussels.
Already the European Commission has softened its stance.
In the immediate aftermath of the Deepwater Horizon
accident, the Commission floated the idea of a moratorium on new
deepwater drilling operations.
Previous plans also showed the Commission had considered
proposing that oil and gas multinationals headquartered in
Europe be forced to apply EU standards wherever they operated.
Rebecca Harms, president of the Greens group in the European
Parliament, said the new draft law was "certainly an
improvement", but the Commission should be going further.
"Drilling in environmentally sensitive areas like the Arctic
should be banned," she said in a statement.