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Oil and gas safety regime to include fines of up to €3m

Lorna Siggins - Irish Times

SANCTIONS OF up to €3 million and imprisonment terms of up to three years may be imposed by the independent energy regulator in a proposed new oil and gas safety system.

Oil and gas exploration companies found guilty of breaches could also lose their safety permit. This would halt production under the proposed framework published by the Commission for Energy Regulation last night.

Recent serious petroleum pollution incidents such as BP’s Deepwater Horizon incident in the Gulf of Mexico have been influential and European petroleum safety regulators have been consulted, the commission says in its 157-page document.

The Corrib gas project will be regarded as a “test case” for increased safety powers, transferred to the commission by former energy minister Eamon Ryan and promised five years ago by his predecessor Noel Dempsey.

No gas will flow from the Corrib field until the commission approves the developers’ safety procedures, it has said.

The Kinsale gas field, the Shannon liquefied natural gas project and any new finds which move to production will also be governed by the new framework, which has been issued for public consultation with a closing date of September 27th.

Until last year, the commission’s safety functions were confined to downstream safety, mainly monitoring of gas installations and electrical contractors.

The new safety functions awarded under the Petroleum (Exploration and Extraction) Safety Act, 2010, will be discharged in an “open, transparent and independent manner”, commission chairman Dermot Nolan and commissioner Garrett Blaney state.

The document says it is critical the commission implements a rigorous audit and inspection system which will allow it to meaningfully assess ongoing compliance within the requirements of the existing law.

The inspection system may be backed up by a verification system, it says. The framework will be based on a “risk based approach where petroleum undertakings are required to reduce all safety risks to a level that is as low as reasonably practicable”, the paper states.

It proposes that “tolerable risk” will be a key concept in the application of the principle – as in “the willingness of society as a whole to live with a risk so as to secure certain benefits in the confidence that the risk is one that is worth taking and that it is properly controlled”.

It also says that a balance must be struck between the need to learn from incidents (particularly near misses) and the taking of enforcement action. “If the emphasis on petroleum incident notification by the regulator is solely on enforcement, there may be a strong incentive upon petroleum undertakings not to report incidents (particularly near misses),” it notes.

The commission’s high level design of petroleum safety framework is on

Posted Date: 
3 August 2011