Toward International Regulation of Offshore Oil Drilling?

Date: 2011
Vers une régulation internationalede l'exploitation pétrolière off shore ?
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Worldwide Offshore Oil and Gas Production

On 20 April 2010, the British Petroleum Company's Deepwater Horizon oil rig caught fire and sank into the Gulf of Mexico, in United States territorial sea. The accident killed eleven people and caused one of the largest oil spill in history. During the 85 days before the leak was stopped, an estimated 4.9 billion barrels of oil escaped, seriously damaging the surrounding ocean and approximately 400 kilometres (250 miles) of coastline.

Deepwater Horizon: one of The Largest Oil Spill in History

The Deepwater Horizon spill was not the first in the history of offshore oil drilling, although it was one of the largest ever. Whatever the scale of such accidents, however, offshore drilling activity accounts for only 9% of marine hydrocarbon pollution: 68% of all oil spills are caused by maritime traffic incidents (Kloff and Wicks 2004). Nonetheless, the depth of the Deepwater Horizon's drilling - 1,500 metres or 5000 feet below sea level - contributed to the seriousness and exceptional size of the oil leak, preventing direct human intervention and making repairs complex, chaotic and slow. Strikingly, the growing offshore drilling industry has an economic vitality matched only by the risks it poses; it threatens marine and coastal environments because of ever-deeper wells and the difficulty of managing accidents at great depths. Moreover, offshore drilling is expanding considerably in the waters of countries lacking any means of monitoring or intervention. In this essay, we will propose that stronger international rules and regulations are the only way to address weaknesses in the current regulatory system.

Offshore oil drilling flourishes, providing 30% of the world's oil production; its percentage of the total increases yearly. Deepwater offshore drilling, at depths of more than 500 metres or 1650 feet, is expanding rapidly, driven by major technological progress in "seismic profiling and underwater installations" (Serboutoviez 2010) and higher crude oil prices that make it profitable. The Deepwater Horizon accident raises questions about this expansion. The ecological, human and financial costs and difficulties abruptly raised awareness about the large risks involved in deepwater oil exploration and drilling, motivating public and governmental questioning of the industry's future.

A Drilling Moratorium's Twin Destinies

As American officials investigated conditions leading up to the accident, the United States, Canada, European Union and the OSPAR (Oslo-Paris) Commission

OSPAR is the mechanism by which fifteen Governments of the western coasts and catchments of Europe, together with the European Community, cooperate to protect the marine environment of the North-East Atlantic.

proposed two types of moratorium, on new drilling in currently-exploited areas and on opening new areas to oil exploration and/or exploitation. Although China and the West African states have an equal stake in offshore drilling, neither proposed suspending operations. Immediately after the oil rig explosion, President Obama's administration ordered a six-month moratorium on deepwater drilling in the Gulf of Mexico and postponed a review of several large drilling projects off the coast of Alaska. After several political debates and judicial twists and turns, the American government lifted and then re-established a partial moratorium on drilling projects in the Atlantic and Gulf of Mexico, effective until 2017. In Canada, which has one deepwater drilling installation (operating at a depth of 2,500 metres or 8,000 feet), the Senate Committee on Energy, the Environment and Natural Resources held fact-finding hearings on issues raised by the Deepwater Horizon accident. The senators' report concluded: "The Committee wishes to assure Canadians that Canada's offshore oil and gas industry is in good hands, that we could not identify any justification for a temporary or permanent ban or moratorium on current offshore operations" (Senate of Canada 2010). The European Commission proposed a moratorium on new deepwater drilling licenses for European waters pending a draft of new regulations in 2011. The European Parliament rejected that proposal; the Commission then reiterated its position in favour of a moratorium, without further resolution by the year's end. As this summary suggests, responses to the moratorium proposal varied widely, both among stakeholder countries and within European institutions. The economic clout of the offshore industry and its vital contribution to oil market stability have apparently deterred serious efforts to curb its growth.

The Need to Strengthen Regulations

Governance of offshore oil drilling depends on self-regulation by drilling operators and oil companies. The industry's use of advanced technology means that operators must monitor their own security measures, since public authorities lack the technical knowledge to perform detailed inspections. Furthermore, conflicts of interest are rampant in the industry: energy ministers, who sometimes double as oil ministers, often have contradictory dual mandates - to encourage oil production on one hand and to oversee security and inspections on the other. Within this governance framework, resting for the most part on private actors, all oil-producing countries and the European Union have agreed on the need for stronger national (and European) regulations and security for deepwater drilling operations.

Towards International rulesfor Offshore Oil Drilling

The current offshore international regime rests on the United Nations Convention on the Law of the Sea (UNCLOS 1982), and a few of its very general articles - e.g. 194, 288, 214. These address polluting activities on sea floors under national jurisdiction, as well as removal of oil drilling platforms at the end of their productive life. The offshore industry must also follow specific environmental protection conventions and regional agreements on preservation of marine biodiversity. Other activities related to offshore drilling, such as crude oil shipping and waste management, are regulated by much more specific conventions that require cooperation and reciprocal notice if an accident occurs. Only one international legal instrument specifically controls offshore oil drilling: the 1976 Barcelona Convention for the Protection of the Mediterranean Sea Against Pollution. Along with its 1994 Madrid Protocol, it aims to control pollution arising from exploring and drilling in the continental shelf, seabed and subsoil. The Madrid Protocol contains very strict clauses for drilling installations and operators' obligations for pollution prevention and cleanup: it was ratified by six countries - Albania, Cyprus, Libya, Morocco, Syria, Tunisia - the minimum number required for it to take effect. Unfortunately, no European country except Cyprus has ratified the Protocol at present; once again, the gap between Europe's professed good intentions and its actions proves evident.

An Urgent Need for Regulation

Elsewhere, the international community has not seen the need to address ocean pollution caused by the offshore industry, leaving its management to operators, and coastal states. Companies continue to push the boundaries of the ecumene (human-inhabited world) with sophisticated technologies, under increasingly perilous environmental conditions, all the while extolling the virtues of sustainable and responsible development. Europe's ratification of the Madrid Protocol would take a vital first step towards controlling such expansion and the pollution it entails. Other primary measures would include an independent audit of drilling platforms, as well as a systematic assessment of national authorization and control practices. Beyond these initial steps, a project to develop appropriate international regulations deserves the support of all stakeholder countries.

Worldwide Offshore Oil and Gas Production

Source: Based on Jérémy Drisch for ISEMAR and data from Ortolland and Pirat (2007); IEA (2008)
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