Europe Weighs Deep-Water Drilling Ban

EU energy commissioner Gunther Oettinger has indicated that member states should stop giving out fresh permits for deep-water oil drilling in the light of the BP (BP) oil catastrophe.

"I am considering discussing this with member states, so that when new permits are issued, especially in extreme cases, they will consider deferring this," he told MEPs at a debate in Strasbourg on Wednesday (8 July).

"I am actually considering suggesting a moratorium at this moment...And I think it is really not justifiable to be issuing licences or permits for further drilling operations at this moment."

The commissioner underlined that decisions on oil permits and safety rules are made exclusively by national capitals. But he said member states should consider giving away some of their powers in this area in future.

"National supervision will certainly remain in place but it would be a good idea to have overarching European standards and a European supervisory authority," he said.

Mr Oettinger has launched talks with major oil firms with a view to future proposals on supervision, emergency planning, clean-up operations, environmental liability rules and compulsory oil spill insurance.

On the pro-industry side, he noted that BP and Shell (RDSA) are major European employers.

He also pointed out that despite EU plans to move toward renewable energy sources and to boost efficiency, Europe – and in particular its aviation and road transport sectors – is going to be dependent on oil for decades to come.

Mr Oettinger said he would be happy if just 10 percent of the 200 million petrol-powered cars on the road in the EU today could be retired by 2020. "Over the next few decades if we accept individual mobility, if we want to keep on manufacturing cars, then oil will have a role to play," he explained.

There is no standard industry definition of "deepwater." The US designates wells below 305 metres as deep water, but its largest private oil company, Exxon Mobil (XOM), says only wells below 400 metres qualify.

The vast majority of known sub-400-metre oil fields are found off the eastern coasts of Brazil and the US and the west coast of Africa. There is just one, north of the UK, in the EU region. Two deep-water development operations are also ongoing in the Adriatic and Mediterranean seas.

Norway, a major oil producer, in June was the first country outside the US to announce a temporary ban on new deepwater oil and gas drilling.

BP the same month urged governments not to make knee-jerk reactions to the Gulf of Mexico disaster, which happened at 1,500 metres depth. "Companies have been drilling in deep water in the Gulf Of Mexico for 20 years and until now have had a good safety record," its global chief of staff, Steve Westwell, said.

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