DIRECTORATE GENERAL FOR ENERGY
Directorate B - Security of supply, Energy markets & Networks
B.3 - Internal Market III: Retail markets Coal & Oil
EU Offshore Oil and Gas Authorities Group (EUOAG)
7TH MEETING
Brussels, Conference Centre Albert Borschette
3rd – 4th July 2014
DRAFT
Record of Ordinary Session (4th July 2014)
The Ordinary Session of the 7th meeting of the EU Offshore Oil and Gas Authorities Group (EUOAG) took place on the 4th July, 2014 in Brussels. The Agenda is included in Annex 1.
Co-chairs: / Mr. Klaus Dieter Borchardt, [KDB] - COM, Director of DG ENER, Directorate BMr. Jan de Jong, [JdJ], Inspector General, SSM, The Netherlands.
Participants (detailed list in Annex 2): Regulatory Authorities, Commission officials.
Technical Secretary: / Mr. Michalis Christou (MC, DG JRC)Ordinary Session – Regulatory Authorities
The Ordinary Session was co-chaired by Mr K. D. Borchardt [KDB], Director in DG ENER, and Mr J. De Jong, Inspector General in SSM-NL. The Chair [KDB] welcomed all the participants and remarked that this is the last meeting co-chaired by Mr Jan de Jong [JdJ]. After thanking him for his excellent work and contribution to the activities of EUOAG, he reminded the Group that in the 6th meeting it had been decided that NL would hold the Co-Chair for one year and therefore decisions are to be made at the next meeting about a new Co-Chair. He recalled that nominations can be proposed to COM at any time.
Summary Record of 6th EUOAG meeting: The Summary Record was approved and will be published on the EUOAG website and become available to the public.
1. Questions by the MS related on the implementation of the Directive
At the 6th meeting of EUOAG, the following questions had been tabled:
1. Definition of installation (Article 2(19)) – Onshore treatment plants (IT);
2. Inclusion of pipelines in the scope of Directive 2013/30/EU (CY);
3. How to determine a common threshold to define an acceptable level of risk (IT);
4. How should near misses be reported (IT).
To assist Member States in implementing the Directive, COM services provided answering comments. As explained previously in EUOAG, these answers simply reflect the current views of COM, they are not legally binding and they are without prejudice to any potential future changes, particularly in light of the fact that binding interpretation of EU legislation is the exclusive competence of the Court of Justice of the European Union.
The following remarks were made during the discussions:
· The question whether pipelines are included in the scope of Directive 2013/30/EU requires further clarification; the Commission will soon provide further reply. Without doubt - and as the Piper Alpha accident has highlighted - the presence, characteristics and content of pipelines should be taken into account in the RoMHs;
· No quantitative threshold for acceptable risk can be established and would not be compatible with the ALARP principle on which OSD is based. Quantitative Risk Assessment results can be used for comparison amongst solution (e.g. in order to decide about the implementation of a safety measure), though combined with qualitative risk assessment results (emphasis on QRA has also been taken out from UK Safety Case Regulations). It should be also kept in mind that:
o Art. 2(8) of Directive 2013/30/EU defines as “acceptable” a level of risk for which the time, cost or effort of further reducing it would be grossly disproportionate to the benefits of such reduction; however, after an event, it would be duty of the Court of Law to judge over this concept of “disproportionality”. In order to prevent this, use of good practice, standards, etc. appears to be a good solution.
o Setting a threshold for an acceptable level of risk might prevent companies from working towards continuous improvement of safety levels.
2. Common Reporting Format / Implementing Regulation update
The Inaugural meeting of the Advisory Committee for the adoption of the Implementing Act took place on June 6th, 2014. The tasks and scope of the Advisory Committee were explained and rules of procedure were approved.
An InterService Consultation (ISC) amongst COM Services on the draft implementing regulation as prepared with EUOAG's involvement had been launched on June 18th, 2014 and ended on July 1st, 2014. Ten Commission Services were consulted; comments received will be incorporated in the Implementing Regulation. These include:
· Some text changes in the legal text and in Annex I (“Details of information to be shared”);
· Additional requirement for description of environmental damages to be added in Annex II;
· Introduced the requirement for information on degradation of the surrounding environment following a major accident;
· Better explanation of “normalization” of data.
Following the ISC, the draft Implementing Regulation on the Common Reporting Format and the Common Publication Format was submitted to Member States ahead of the formal discussion at the Advisory Committee meeting scheduled for July 16th, 2014. The Implementing Regulation should be finalized and officially adopted still within 2014.
In the discussion that followed, it was mentioned that:
· Guidance to the CRF will not be included in the Implementing Regulation; nonetheless, a guidance document will be issued.
· for MS with a very low level of offshore activity (e.g. in the case of a unique operator), anonymity of data with regards to the identity of the operator/owner may not be ensured. Member States and COM need to take this into consideration when aggregating information to prepare the annual report. It should be possible for the MS to review/comment on the COM annual report before its publication and to make suggestions on what information may not be disclosed.
3a. Capacity Building – Determining potential gaps of Competent Authority capacity to enforce provisions of Directive 2013/30/EU
The Chair [KDB] informed the Group that a stocktaking study and analysis has been performed by the JRC, building on a HSL study on the situation in the UK and using i.a. a Questionnaire to which Member States have been asked to provide input.
A representative from COM-DG ENER, presented a summary of the study performed by Health & Safety Laboratory (HSL) on the human resources available/required by the UK Competent Authorities (HSE and DECC) to carry out Regulatory functions on the UK offshore installations.
A representative from COM-JRC presented the results of the JRC study on the stocktaking on offshore oil and gas installations, activities and national expert resources available in the Member States. For the study, input had been requested and provided by the Member States through a questionnaire, followed by telephone interviews. The collaboration of the MS in this exercise is gratefully acknowledged. Indeed, 12 MS had provided input, namely, CY-DE-DK-FR-GR-IRE-IT-MT-NL-PL-PT-UK.
Finally, a representative from COM-JRC, made a presentation on the results of the analysis performed by the JRC on the estimation of the adequacy of existing national expert resources in the Member States. The studies previously presented by the representatives of COM-DG ENER and COM-JRC constituted the basis for the evaluation of the adequacy of such resources.
The three presentations are available for consultation at the EUOAG website.
As the next step, the Commission is working with an external contractor on a follow-up study to further investigate the adequacy of competent expert resources available to the MS for complying with the Regulatory functions, as required in Art. 27(4) of Directive 2013/30/EU, and to analyse possible options to address any shortcomings.
3b. Capacity Building – Group Discussion Sessions
The presentations on the adequacy of national expert resources were followed by two sessions of group discussions on capacity building. In each session, meeting participants were split into four groups in order to discuss in small circles the following issues:
· Group Discussion Session No. 1: Competent Authorities’ challenges for implementing the regulatory functions required in the OSD (Groups A – D):
1. What are the challenges in resourcing your Competent Authority in line with the requirements of the Offshore Safety Directive?
2. If you have to set up a new authority or add new competencies to an existing authority, where do you see major bottlenecks and barriers to establish an adequate administrative capacity for enforcing the Offshore Safety Directive?
· Group Discussion Session No.2: Possible and preferred solutions to shortfalls in the provision of Competent Authorities’ offshore expert resources (Groups 1 – 4):
1. What options do you see for addressing shortfalls in expert staffing and/or operating/knowledge systems needed for enforcing the Offshore Safety Directive and which of them do you consider as the most effective?
2. What role do you see for the EU in facilitating solutions, how could the EU best contribute?
For each group, a delegate acted as rapporteur, reporting back to the full EUOAG at the end of each session the main points discussed in his/her group. The outcomes of the discussions are summarized below.
Group Discussion Session No.1. The main challenges identified are the following:
· for Group A:
- separation between the safety authority and the licensing authority;
- financial restrictions, which make recruitment of new personnel very difficult;
- expertise is sometimes spread among different competent authorities; a cost-effective solution might comprise specific agreements between different competent authorities;
- MS with low levels of activity have few staff and very limited access to expertise, e.g. in case of well inspectors;
- need to provide training both to current and to new staff;
- salaries in civil services are much lower than in the industry, thus resulting in difficulties to retain competent personnel;
- the industry might be asked to contribute to the inspection costs, for example by covering the cost of helicopter transfer, providing food to inspectors when on board, etc.
· for Group B:
- difficulties in meeting requirements on expert resources, especially in MS with low and uncertain offshore activity;
- public sector’s financial framework and restrictions (IRE);
- new tasks need to be covered, and therefore new skills need to be developed and recruitment of new personnel is required; charging regime is a challenge (DK);
- maintaining resources is a challenge – recruiting campaign for wells & process engineers is certainly needed (UK);
· for Group C:
- financial restrictions (CY);
- in case of none or very few installations, although there is no formal need for separation between competent and licensing authority such separation has been achieved;
- adjustments to the existing national legislation are required (NL);
· for Group D:
- additional staff is needed and this can be an issue; recruitment of new personnel is difficult because of salary gaps between the industry and civil services (NL);
- access to drilling expertise and keeping up with the new technologies is difficult;
- competences are split among different competent authorities (PL);
- expertise is required, inter alia, for the assessment of RoMH.
The Chair [KDB] then summarized the discussion points as follows:
· lack of specialist expertise, especially in areas such drilling, well engineering poses a challenge to most competent authorities, both in established and in emerging offshore jurisdictions;
· constraints on financial resources are another widespread issue for competent authorities;
· specialist expertise is sometimes spread amongst different competent authorities and therefore some resource shortages could be overcome by closer/systematic collaboration amongst individual competent authorities.
· however, cross-border cooperation to pool staff and specialist activities may be limited by MS needs to satisfy the requirements of their governments and local legal liability regimes (although on the other hand the experts only provide their expertise and do not assume any responsibility; furthermore, there can be legal means to deal with the liability issue or options of e.g. limiting the pooling only to areas where liability does not arise, such as provision of training courses etc.).
It was also pointed out [UK] that there is a limited number of experts available globally and their labour market is also generally global (or at least not confined to national borders), therefore MS are to some degree competing against each other and against the industry in the recruitment of such experts.
Group Discussion No.2 – Addressing shortfalls and solutions:
· for Group 1:
- organization of workshops or of similar events for sharing of information;
- on-field expertise is extremely important, so it would be good to build up a pool of experts working for Member States which need to address common issues;
- otherwise, building up a pool of consultants (paid by MS governments) to travel to the MS which most require their expertise;
- establishment of a dialogue / collaborative approach with Industrial Associations;
· for Group 2:
- build up a pool of expertise;
- harmonized procedures to carry out regulatory functions;
- setting up a subgroup of EUOAG to help small MS to get access to the required knowledge;
- sharing of technical resources;
· for Group 3:
- some MS are already dealing with a heavy load of work due to the huge arrival of RoMHs, which would prevent them to provide help to the newer jurisdictions until 2018;
- training of existing personnel;
- build a platform/website to facilitate the exchange of information between the different Competent Authorities;
· for Group 4:
- for the assessment of RoMH, there is the risk of building the assessment process around the available resources. If sufficient resources are not available, then the MS may select sub-optimal assessment procedures;
- hiring external contractors to fill the gaps – the problem is that this is not an infinite resource and the external contractors may be less experienced than those available at the MS competent authorities;
- for the assessment of RoMH, it is important that everyone has the same structure and common high standards in order to ensure consistency. COM could help through a sub-group of EUOAG to the development of guidance on the structure of the assessment process.
- COM could facilitate training and sharing of information and expertise.
The Chair [KDB] then summarized the outcome of the group discussions: