EU bid to freeze drilling collapses

A bid to freeze deepwater drilling in Europe in the wake of the Gulf of Mexico disaster collapsed Wednesday under pressure from the multi-billion North Sea oil industry.

European Union Energy Commissioner Guenther Oettinger announced moves to tighten the issuing of drilling permits to ensure there is no repeat of the devastating Gulf of Mexico disaster in the United States.

But a temporary moratorium on deepwater exploration, the centre-piece of proposals that officials in his department thought had been agreed as late as Tuesday, was missing.

Oettinger said European partners had “agreed to examine the possibility of whether it might not be a good idea to have a moratorium.”

But he admitted: “You are right when you point out the word moratorium as such is not used.”

An EU source said EU foreign affairs chief Catherine Ashton, an English baroness, had successfully intervened.

The North Sea oil industry is worth some six billion pounds a year to the British economy (6.8 billion euros or 9.5 billion dollars).

The vast majority of it is located off Scotland, and an official with the Scottish government in Brussels said the EU had no legal basis under which it could impose such a ban.

“This is all about licensing and planning laws,” he said. “It’s not only about oil and gas, if the commission takes over that area, where would it lead to next?”

The International Association of Oil and Gas Producers also said the EU had no powers in this area.

“Common sense seems to have prevailed,” said European parliament lawmaker Ian Hudghton of the governing Scottish National Party, which wants oil revenues kept in heavily-devolved Scotland under moves towards greater fiscal independence from the United Kingdom.

“It would have been foolish to put jobs at risk in a knee-jerk reaction to the Gulf of Mexico disaster.

“We reject any suggestion that the EU should gain powers over oil and gas resources.”

However, Greenpeace’s Franziska Achterberg insisted that Europe should vigorously pursue a ban, warning that “regulators will always be playing catch-up as the industry chases after ever dirtier and more dangerous fuel reserves to keep up with demand.”

Oettinger said he would now come forward with “proposals to plug any gaps in existing legislation,” suggesting equipment safety, insurance, inspections and also “taxation” to ensure that companies could pay in the event of another accident.

He said that “luckily” the US catastrophe befell British giant BP, which has the resources to pay out billions of dollars in damages, but said Europe had to act to prevent the threat of smaller companies going bankrupt and leaving taxpayers to pick up the tab.

The European parliament had already voted to oppose any bid to impose a moratorium.

Oettinger’s bid was further weakened when President Barack Obama’s US administration lifted its moratorium on Tuesday.

Obama ordered a six-month freeze on deepwater offshore oil drilling in the Gulf of Mexico after a rig explosion in late April, which killed 11 workers, caused a massive undersea leak that spewed some 205 million gallons of oil into the Gulf.

Europe’s worst oil disaster was the 1988 destruction in a fire of the Piper Alpha rig off Scotland in July 1988, which killed 167 men. The rig was later judged to have been ill-maintained and overcrowded.

Of 1,000 platforms in the EU, 486 are in British territory, 181 in the Netherlands, 123 in Italy and 61 in Denmark with a handful each in Bulgaria, Germany, Greece, Ireland, Poland, Romania and Spain.

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