Courtesy of Wintershall Arctic NGO Forum ARCTIC OIL AND GAS DEVELOPMENT Marcus Lippold, The future of energy in Europe and European Energy Policies Coordinator, International Energy Relations, European Commission, Haparanda, 12-13 Nov 2012 This presentation reflects the views of its author but does not constitute a formal commitment on behalf of the European Commission.
Outline..Objectives of EU Energy policies.current EU energy mix and role of oil & gas.brief overview of EU policies.offshore safety EU ENERGY POLICY, FOCUSING ON THE PETROLEUM SECTOR 2
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The current EU Energy Mix EU Gross inland consumption 2008 EU Gross inland consumption 2030 in % (1799 Mtoe; 2008) in % (1807 Mtoe; 2030 «business as usual») Source: Eurostat 2010, PRIMES 2009 EU ENERGY POLICY, FOCUSING ON THE PETROLEUM SECTOR 4
Final Energy Consumption by Sector 2008 1168.63 Mtoe EU ENERGY POLICY, FOCUSING ON THE PETROLEUM SECTOR Source: Eurostat 2010 5
The Share of Oil in the Energy Mix From Gross Inland Consumption, 2008 100% 80% 60% 40% 20% 0% Malta Cyprus Source: Eurostat Luxembourg Greece Ireland Portugal Spain Italy Netherlands Denmark Belgium Austria Slovenia EU AVERAGE United Kingdom Germany Latvia France Lithuania Finland Sweden Hungary Romania Poland Bulgaria Czech Republic Slovakia EU ENERGY POLICY, FOCUSING ON THE PETROLEUM SECTOR 6 Estonia
Oil Production: 1.95 million barrels/day EU-27, 2010 Other 19% Denmark 13% United Kingdom 68% Source: BP Statistical Review of World Energy June 2011 EU ENERGY POLICY, FOCUSING ON THE PETROLEUM SECTOR 7
Oil Production and Consumption EU-27, billion barrels 1 6 1 4 1 2 1 0 8 6 4 2 0 1965 1967 1969 1971 1973 1975 1977 1979 1981 Production Source: BP Statistical Review of World Energy June 2011 Consumption 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 EU ENERGY POLICY, FOCUSING ON THE PETROLEUM SECTOR 2009 8
EU-27 Import dependence in % 2005 2008 2020 2030 2005 2008 2020 2030 100 92,7% 94,1% 80 82,4% 84,3% 82,8% 75,9% 60 62,3% 57,7% 40 20 (based on 2009 baseline scenario) OIL GAS EU ENERGY POLICY, FOCUSING ON THE PETROLEUM SECTOR 9
The EU Depends on a Few Suppliers EU imports of crude oil EU imports of natural gas Russia 32% Nigeria 4% Others 11% Norway 15% Algeria 15% Russia 40% OPEC Countries 36% Kazahkhstan 5% Azerbaijan 3% Mexico 2% Others 7% Norway 30% in % (2008, total = 561,46 Mt) in % (2008, total = 12,958,133 TJ) Source: Eurostat 2010 EU ENERGY POLICY, FOCUSING ON THE PETROLEUM SECTOR 10
Petroleum products, EU partners Source: Eurostat EU ENERGY POLICY, FOCUSING ON THE PETROLEUM SECTOR 11
Brief overview of Energy Policies -> Top priorities of Energy 2020 Open and competitive energy markets Energy infrastructure development Energy Efficiency and energy from renewable sources Research and Development External dimension of the EU energy market 12
Energy Roadmap 2050 - scenarios 1 Business as usual (Common Reference Scenario) 1bis Current Policy Initiatives scenario 2 High Energy Efficiency 3 Diversified supply technologies 4 High Renewables 5 Delayed CCS 6 Low Nuclear 13
Key results: Renewables move centre stage but all fuels can contribute in the long-run Decarbonisation scenarios - fuel ranges (primary energy consumption in %) 75% 2030 75% 2050 50% 50% 25% 25% 0% 0% RES Gas Nuclear Oil Solid fuels RES Gas Nuclear Oil Solid fuels 2005 14
Liquid biofuels production EU-27, million tons 15 10 5 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Source: Eurostat EU ENERGY POLICY, FOCUSING ON THE PETROLEUM SECTOR 15
On the road to 20-20-20 by 2020 Current trend to 2020 Reduce greenhouse gas levels by 20% -20% Increase share of renewables to 20% Reduce energy consumption by 20% Current trend to 2020-10% 100% Current trend to 2020 20% 16
EU external energy policy: 4 priority areas.building up the external dimension of our internal energy market;.strengthening partnerships for secure, safe, sustainable and competitive energy;..improving access to sustainable energy for developing countries;.better promoting EU policies beyond its borders. and about 40 key follow-up actions EU ENERGY POLICY, FOCUSING ON THE PETROLEUM SECTOR 17
Offshore safety Oil&Gas -> EU s post Macondo agenda 2010.Reviews on laws, industry and regulator practice, dialogues.communication Facing the challenge of the safety of offshore oil and gas activities.energy ministers conclusions.european Parliament resolution 18
Good news looking at Europe Region Improved HSE statistics. Long without major disaster Best practices in EU jurisdictions. Containment technologies being developed 19
Main challenges.shift to frontier operations.ageing installations..structural changes in industry.fragmented regulation.access to/sharing of information.austerity vs regulators resources.compliance with rules (safety culture) 20
Planned action (1/2). Promote. Incentivize. Improve. Improve. International use of best practices/ state of the art technology» Throughout EU» Goal setting approach» Sharing information/lessons learnt, peer review compliance and prevention» Clear and robust liability regime Adequate controls, inspections» Public and peer pressure through transparency authorisation procedures» Demonstrate key elements of technical (incl environmental) and financial capacity to deal with eventual accidents emergency preparedness» Contingency planning (company, national, EU)» Transboundary information, consultation, safety management cooperation» G-20, capacity building etc» Barcelona Convention offshore protocol 21
Planned action (2/2). Environmental. Emergency. Health. Product Liability» Extend territorial coverage of ELD (Env Liab. Direct.) response» EMSA to offshore response» Stronger EU disaster response coordination and safety at work» Implement lessons from DWH and other relevant incidents» Converge implementation to best practice safety» Consider standardisation mandates and treatment of mobile offshore units 22
High latitudes, high stakes 23
Evolving interdependency - EU-Arctic oil.eu s import dependency in oil and gas to 94% and 83% by 2030 while decarbonisation. underway.russian export and technology dependency offshore high while PRC coming.norwegian hydrocarbons> EU total, more to Arctic.Iceland, Greenland exploring 24
EU approach to the Arctic.Arctic is an important region with a sensitive environment..authorisations for oil and gas exploration in the Arctic are a national competence and COM respects that..competent authorities and industry need to take account of the challenges that operations in extreme environments like the Arctic entail (E.g. access to emergency response, ice management)..» Challenges in containment and disaster response (also GoM report re Alaska) are real.eu draft law on safety of offshore oil and gas activities is based on a goal-setting regulatory approach which puts responsibility (and liability for damages) for safety of operations on industry, also being the beneficiary of risks taken..this risk based approach works equally well in the Arctic as around the equator therefore no special regime is needed (also, EU has no jurisdiction in the Arctic). 25
Proposed Regulation for Offshore Safety - State-of Play.Co-decision negotiations on COM proposal entering decisive phase in both Council and EP. Possible that common text agreed by end 2012; however, could also happen during the IE Presidency..Key are a) robust Competent Authorities, b) industry to cooperate on sharing lessons learnt and c) operating to EU level standards globally whenever possible..issues discussed concern» Nature of independent Competent Authority for safety and environmental regulation» Extent of delegated powers» Operations outside EU waters and public participation..choice of a Regulation as legal instrument derives from its direct applicability to industry and its immediate effect on all EU MS, some of whom have scant regulatory systems for their offshore sectors..by and large, MS ambitions for developing offshore sector beyond North Sea Black Sea, Mediterranean, and Atlantic margins - are growing rapidly. COM believes problem reported by a few MS concerning unwarranted damage to national regimes is overstated. 26
Concluding comments. Decarbonise yes but sustainable oil & gas needed for decades No room for complacency nor secrecy on HSE. Industry s main responsibility Public authorities to set objectives, control and. incentivise compliance EU to fill regulatory gaps, promote state-ofthe-art practice and add transparency 27
Courtesy of Wintershall Thank you for your attention DG ENER: http://ec.europa.eu/dgs/energy/index_en.htm