MPs worried about impact of oil disaster but refuse to recommend moratorium on drilling

MPs have stopped short of recommending a moratorium on deep water drilling west of Shetland, but admit harsh weather conditions in the North Sea and Atlantic would make the clear-up operation from a major oil disaster extremely difficult.

They have voiced serious doubts about the ability of specialist equipment to function in often choppy waters close to the isles, where wells are being drilled over 1,000 metres deep, should a major leak occur.

However the report released today by the energy and climate change committee said halting deep water drilling, as called for by environmental groups, would “undermine” the UK’s energy security. Its chairman Tim Yeo insisted a moratorium on the practice “isn’t necessary”.

The report stated: “We conclude that a moratorium on offshore drilling in the UK Continental Shelf would cause drilling rigs and expertise to migrate to other parts of the globe.

“A moratorium on deep water drilling would decrease the UK’s security of supply and increase the UK’s reliance upon imports of oil and gas.

“A moratorium could also harm the economies of communities in Scotland who rely upon the UK offshore oil and gas industry as well as the wider British economy to which the industry makes a major contribution.”

The report said safety regulations on drilling in UK waters were already tougher than they were in the Gulf of Mexico – the scene of last April’s Deepwater Horizon explosion 50 miles off the Louisiana coast, which claimed the lives of 11 men and sent millions of barrels of oil spewing into the sea.

However it warned oil companies should not be complacent as more drilling begins to take place, recommending new measures be implemented.

It said oil spill response plans drawn up by companies should be “site-specific” and take local conditions into account.

Any new systems for capping or containing a spill, it added, should be designed with the harsh and challenging environment west of Shetland firmly in mind.

“We conclude that the UK has high offshore regulatory standards, as exemplified by the safety case regime that was set up in response to the Piper Alpha tragedy in 1998,” it stated.
“The UK regulatory framework is based on flexible, goal-setting principles that are superior to those under which the Deepwater Horizon operated.

“Nevertheless, despite the high regulatory standards in the UK, we are concerned that the offshore oil and gas industry is responding to disasters, rather than anticipating worst-case scenarios and planning for high-consequence, low-probability events.”

The report also pointed to a lack of “clarity” in UK liability rules, which could also see taxpayers pick up the tab for a major oil spill.

The £158 million liability limit in the voluntary Offshore Pollution Liability Association is not enough, it said.

“We conclude there needs to be clarity on the identity and hierarchy of liable parties to ensure that the government, and hence the taxpayer, do not have to pay for the consequences of offshore incidents.

“Any lack of clarity on liability will inhibit the payment of compensation to those affected by an offshore incident. We recommend that it should be a requirement of the licensing process that the licensee prove their ability to pay for the consequences of any incident that could occur.”

The committee also urged the Health and Safety Executive to prescribe the use of two blind shear rams – the crucial device that failed to operate on the Deepwater Horizon, because its battery was flat – on all UK deepwater rigs.

It should also ensure that the UK offshore inspection regime cannot allow simple failures go unchecked, the report said.

It also highlighted concerns that employees who try to draw attention to safety problems may feel intimidated by their managers.

It pointed to contradictions in reports from the Health and Safety Executive about bullying and harassment on rigs and assurances from the industry that whistle-blowers will be heard and protected.

“It is imperative that there is someone offshore who has the authority to bring a halt to drilling operations at any time, without recourse to onshore management.

“We urge the government to seek assurances from industry that the prime duty of the people with whom this responsibility rests is the safety of personnel and the protection of the environment.”

One person who gave evidence to the energy and climate change committee was SIC councillor Jonathan Wills, although he insisted he was there as a private individual and not on behalf of the council.

He welcomed the report’s findings and said the industry was able to live up to the standards expected of it.

“It was a very honest and clear report,” he said. “The committee was right to conclude that a moratorium is not necessary, but I would only agree with that if the commitee’s recommendations are carried out.

“One of the most telling parts of the report is where they say oil companies have plans to respond to major disasters, but what they don’t have are detailed plans for preventing such things.”

For full story and reaction, see tomorrow’s Shetland Times.