1 Introduction
1. On 20 April 2010 an explosion on the Deepwater
Horizon drilling rig—operated by Transocean in the Gulf
of Mexico, under contract to BP—led to the deaths of 11
workers and an oil leak at an unprecedented depth. The full extent
of the environmental impact and the effect on communities is not
yet known. In light of the incident, the Department of Energy
and Climate Change (DECC) conducted a review of the existing safety
and environmental regulatory regimes in the UK and found them
to be "fit for purpose". However, it announced that
annual inspections of drilling rigs were to double and insurance
requirements were to be reviewed. The US suspended all deepwater
drilling in the aftermath of the incident, and the European Commissioner
for Energy, Günther Oettinger, urged EU national governments
to ban any new deepwater drilling temporarily. The UK did not
impose any such ban. In the light of these events, we decided
to examine the safety and environmental regulations of oil and
gas operations on the UK Continental Shelf (UKCS)—especially
in the deepwater to be found in the region West of Shetland—and
the potential positive and negative impacts of a moratorium on
deepwater drilling.
2. We announced our inquiry on 20 July 2010 and sought
evidence on:
- the implications of the Gulf
of Mexico oil spill for deepwater drilling in the UK;
- the extent to which the existing UK safety and
environmental regulatory regime is fit for purpose;
- the hazards and risks of drilling in the deeper
waters West of Shetland;
- the necessity of deepwater oil and gas production
during the UK's transition to a low-carbon economy; and
- the extent to which deepwater oil and gas resources
will contribute to the UK's security of supply.
We are very grateful to all those who have assisted
us during the inquiry.
3. We believe that the offshore industry needs to
revisit scenarios that they previously thought were too extreme
and unlikely to occur. As demonstrated by BP's response in the
Gulf of Mexico, the industry was not prepared for a sub-sea blowout.
They incorrectly believed that they had mitigated away the risks
associated with high-consequence, low-probability events, and
failed to plan for them. We conclude that BP appears to have cut
corners during its operations to make the Macondo well ready for
production. We are concerned that the poor decisions made in the
run up to the blowout—that led to loss of 11 lives and 4.9
million barrels of oil being released into the Gulf of Mexico—could
have been driven by commercial pressures. At Annex 1, we describe
the chronology that we believe led to the Deepwater Horizon incident.
In this report we now go on to examine the implications of the
incident for offshore oil and gas exploration in the UK.
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