Address of Professor Yiannis Maniatis, Greek Deputy Minister of Environment, Energy and Climate Change
Session IV: After the Gulf of Mexico:
Hydrocarbon Development and Risk Management
There is no doubt that anyone who is involved in offshore exploration and production, either from a policy/regulatory or from a business perspective, has learnt a great deal from BP’s Macondo disaster and has learnt it the hard way. The recent tragic events concerning the Macondo oil spill accident in the Gulf of Mexico have changed “the rules of the game” in offshore oil & gas exploration all over the world. The European Commission is examining ways of establishing more strict safety measures while other E.U. member-states, such as Italy and Denmark, are in the process of undergoing a similar re-evaluation.
This new environment has also forced B.P. to postpone the initiation of deep-water drilling operations off the coast of Libya and should motivate all concerned states to re-examine their environmental protection processes in close coordination with the European Union. Given the geography of the Mediterranean Sea and the Black Sea a Macondo-size event could have far more serious and devastating implications for what is a relatively closed and non-oceanic maritime environment. This geographic reality seems to have escaped the attention of nations engaged in offshore oil & gas exploration in both the Mediterranean and Black Seas.
This process may be developed –as it should- along national lines but a certain level of coordination between the littoral states is more than necessary and should lead towards a joint prevention and crisis management plan for the Mediterranean and Black Sea regions. The European Commission should take the lead in proposing a detailed plan that would streamline and synchronize the national response mechanisms of all littoral states so that a potential oil spill could be contained before it spreads beyond the territorial waters of the nation which is affected first.
Our Action Plan must focus on the design and implementation of new risk management and risk aversion policies. We have to implement decisive measures immediately. The Commission has identified five areas where such action is needed to maintain the safety and environmental credentials of the EU.
These include:
(1) thorough precaution in licensing,
(2) improved system of public authorities’ controls,
(3) identification of gaps in existing legislation – clear, transparent, up to date, to the highest possible level,
(4) reinforced EU disaster response capabilities, and
(5) cooperation with international partners to promote offshore safety worldwide.
Industry representatives have been asked to present individual action plans as well as a joint industry roadmap detailing timing, nature, content and resource-intensity of intended actions. As part of this peer review, the presentation of individual action plans as well as joint industry roadmaps shall become mandatory. These should be submitted for scrutiny to the regulators. The Commission has initiated changes to the Regulation (EC) No 1406/2002 formally allowing EMSA (European Maritime Safety Agency) to respond not only to accidents in maritime transport but also in oil and gas offshore installations. Ultimately, EMSA should be also ready to perform its prevention activities, such as checks, reviews or workshops, in maritime transport security issues.
The Greek government offers its full support to the proposals of the EU Commissioner on Energy regarding the management of future risks. According to Commissioner Oettinger, the efforts of EU legislation should focus on creating such a legislative and regulatory framework that not only focuses on minimizing the associated risks, but also reacts rapidly and effectively in order to contain and confront any potential damage once the accident has taken place. Furthermore, the Commissioner has made clear that the legislative framework must be modernized in such a way so as to guarantee that companies are forced to place safety at the top of their priority list. As Mr. Oettinger adequately put it “for us Europeans, the safety term “is not negotiable”! Going a step further, the Commissioner has proposed that even though European legislation is focused on the prevention of major accidents, Europe should enforce its framework so as to make it the “most stringent regime in the world”.
What Mr. Oettinger has proposed is the creation of a system to “control the controllers” as he specifically underlined. We totally agree that this would be a significant step to reassuring that European control mechanisms will operate to their fullest capacity. In this regard international co-operation at the level of prevention and risk aversion is of utmost importance. Effective regional coordination is of paramount importance when dealing with a major oil spill accident and in this regard, the Union for the Mediterranean and the Black Sea Economic Cooperation organization (BSEC) constitute two indispensable partners for the European Union.
The European Commission should take the initiative and set up joint working groups with the two abovementioned regional organizations that could progressively lead towards the drafting of a joint preventive and crisis management plan which would avert the occurrence of a major oil spill accident in Europe’s southern seas. The Macondo accident should galvanize us into action by making sure that we have all the necessary regulations in place to preclude such a catastrophic event, while establishing the most effective, cross-regional response mechanisms that would minimize the implications of an oil spill, should it occur.
On the other hand the Macondo incident should not be the equivalent of opening Pandora’s Box for the offshore oil & gas business. We should not realistically expect nor should we wish that offshore oil exploration stops because of the Macondo accident. We need to keep in mind that we have to strike a balance between the economic realities of the energy industry and the absolute imperative of environmental protection is so sensitive an ecosystem.
Even the worst affected American states along the Gulf of Mexico, including Louisiana, are actually defending the development of the U.S. offshore oil industry. No Caspian, Mediterranean or North Sea state is expected to stop or even curtail its offshore oil activities. Even as BP tried to contain the Macondo disaster, many Black Sea states including Bulgaria and Romania were issuing new or expanding pre-existing tenders for offshore oil and gas field on their respective Exclusive Economic Zones.
Turkish offshore exploration in the eastern part of the Black Sea has developed systematically over the last years attracting the attention of super-major such as Exxon and Chevron, while recently another major exploration agreement was signed between Rosneft and Chevron regarding the development of Russia’s Black Sea shelf. The U.S. Geological Survey and the I.E.A. have indicated that the Mediterranean Basin and the Black Sea constitute two very promising frontier areas for the exploration and exploitation of hydrocarbons at the dawn of the 21st century. Ten or fifteen years from now we may look back to 2010 as the beginning of such a process.
As offshore oil production begins to expand in the Black Sea region over the next decade, the area could emerge –along with the Eastern Mediterranean- as Europe’s next North Sea, thereby limiting Europe’s expanding dependency on imported hydrocarbons. Such a prospect would only precipitate the need for a second Bosporus by-pass pipeline that would significantly decrease the possibility of a destructive tanker accident across the Straits.
We all know that the Bosporus has overcome its congestion point as a natural waterway for transporting crude oil to Europe, as we all know that the solution to that problem can not be found in a unilateral attempt to revise international conventions. The best means for de-congesting the Bosporus and increasing the region’s environmental safety is to construct a major crude oil pipeline that would divert the flow of oil from the Sea of Marmara. There are several options for achieving this task, but all comparative studies have manifested that the Burgas-Alexandroupolis pipeline constitutes the cheapest, safest, most financially sound and most mature, from a regulatory point of view, alternative by-pass.