Environmental assessment rules for offshore oil and gas projects

Regulations applying EC rules on environmental assessment to offshore oil and gas projects finally came into force on 30 April, almost ten years behind schedule.1 Criteria spelling out when assessments are likely to be required have been set out in guidance, which also makes it clear that consent for offshore schemes may be refused for firms without environmental management systems. The regulations contain enforcement and offence provisions which may have implications for other sectors.

Certain offshore oil and gas operations are covered by the 1985 EC Directive on environmental assessment of major projects, which was due to be implemented by mid-1988. The previous Government's failure to apply the regime to offshore activities attracted strong criticism, and it has taken a change of Government to rectify the omission.

The new regulations apply to deep drilling, production development and offshore pipelines. Environmental assessments of three classes of project - those producing more than 500 tonnes of oil or 500,000m3 of gas per day, and pipelines over 800mm diameter and more than 40 kilometres long - will be mandatory, implementing requirements in the 1997 amending Directive almost a year ahead of the due date.

For other projects, environmental assessments will be required where they are likely to give rise to "significant" environmental effects. Offshore operators will have to apply to the Secretary of State for a direction that no assessment is required, submitting information on a project's "main environmental consequences" to inform her decision.

The regulations will open up the consent procedure to public participation. Companies will have to advertise the availability of environmental statements and make them available at a maximum cost of £2. The public will have four weeks in which to make representations to the Secretary of State in relation to a consent application.

The regulations contain offence and enforcement provisions which are new to the UK's environmental assessment regime. "Any person" will be able to apply to the courts for an order to quash an offshore consent on the grounds that the Secretary of State had failed to take into consideration an environmental statement or representations from the public or an environmental authority, or where that person's interests had been "substantially prejudiced" by a failure to comply with any other aspect of the regulations. Applications to the courts will have to be made within six weeks of the grant of a consent.

The Secretary of State will be able to apply to the courts where an offshore operator has failed to comply with the environmental assessment requirements or with any consent condition intended to protect the environment. The courts will be able to order the cessation of an activity or compliance with the consent conditions, or even removal of the offending structure and reinstatement of the site concerned. The main defence against an application for non-compliance with consent conditions will be that the breach resulted from action urgently needed on safety grounds.

In addition, the regulations make it an offence for any person to "intentionally or recklessly" submit false or misleading information to the Secretary of State as part of the assessment process, to carry out an offshore project without a consent granted in accordance with the regulations, or to breach a consent condition intentionally. Individual officers as well as a company may be prosecuted for such offences.

None of these provisions appear in the other regulations which implemented the 1985 Directive, and the Government may come under pressure to include them in regulations which will implement the 1997 amending Directive next year.

Guidance on the regulations has been issued by the Department of Trade and Industry.2 It includes criteria for informing decisions on when environmental assessments may be required. Assessments will "normally" be required where, for example, an exploration, appraisal or development well is within 40 kilometres of the coast or a site designated under the EC Directives on bird and habitat protection, or within 20 kilometres of concentrations of bird of international importance. Assessment "may" be required where a project might have impacts on other seabird or mammal communities or spawning grounds.

The guidance also points out that consent "may be refused" where provision has not been made for a "comprehensive externally verifiable environmental management system" covering a project's life-cycle and including "a mechanism for its periodic review in the light of experience and technological advances." Where operators intend to introduce such a system, they are advised to describe it in their environmental statements, set out how its effectiveness will be audited, and explain how the project's environmental impact will be monitored.

Environmental groups which have taken an interest in decommissioning of offshore structures may be intrigued by a section of the guidance which says that no environmental statement is required for decommissioning. However, it goes on to point out somewhat unenthusiastically that since the EC Directive requires assessments to cover indirect, secondary and long-term effects, operators should spell out "any likely significant impacts" of decommissioning in their environmental statements to the extent that these can be identified.

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