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British MPs warn against moratorium on deepwater drilling

by Staff Writers
London (AFP) Jan 6, 2011
A moratorium on oil drilling in deep waters off Britain would undermine the country's energy security, according to a report by lawmakers published on Thursday in response to the BP spill disaster last year.

However the study by the Energy and Climate Change Committee noted that extra precautions should be considered to ensure that a deepwater drilling disaster does not occur here.

The report comes in the wake of the Gulf of Mexico oil blast on April 20, 2010 that killed 11 workers and caused the worst spill in US history.

An explosion occurred on the Deepwater Horizon rig, which was leased by British energy group BP and operated by Swiss-based offshore drilling group Transocean Energy.

Following the spill, the United States imposed a moratorium on deepwater drilling in the Gulf of Mexico, which it lifted in October.

The British parliamentary report concluded a moratorium on deepwater drilling in the North Sea "would undermine the UK's energy security and isn't necessary".

It added: "We conclude that a moratorium on offshore drilling... would cause drilling rigs and expertise to migrate to other parts of the globe.

"A moratorium on deepwater 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 however raised "serious doubts" about Britain's ability to tackle a major spill.

"The harsh and windy conditions in the North Sea would make an oil spill off the coast of Shetland very difficult to contain or clean up," said committee chairman Tim Yeo.

"Safety regulations on drilling in the UK are already tougher than they were in the Gulf of Mexico, but oil companies mustn't use that as an excuse for complacency.

"Companies cannot continue producing cut and paste oil spill response plans and rig operators must make it easier for staff to raise concerns without fear of intimidation," added Yeo, an MP for the Conservatives, Britain's senior coalition partner.

The report also urged greater clarity on the identity of liable parties "to ensure that taxpayers are not required to pick up the tab for clearing up and compensation after a potential offshore incident."

The committee said the current liability limit of 158 million pounds (186 million euros, 245 million dollars) was "insufficient", given the hugh cost of the Gulf spill.

In December, the United States sued BP and eight other companies for uncounted billions of dollars in damages.

The broken well was eventually plugged but not before it gushed about 4.9 million barrels of oil into the Gulf waters. The spill destroyed hundreds of miles of fragile coastlines and caused BP's share price to collapse.

It also forced the resignation of BP chief executive Tony Hayward and the company to announce that it was selling assets worth up to 30 billion dollars.

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