Joe McHugh (Donegal North East, Fine Gael) | Oireachtas source

I move: "That the Bill be now read a Second Time."

Tá an reachtaíocht seo a bhaineann le coinníollacha sábhailteacha iontach caol agus gairid. Chomh maith le sin, tá brú ar achan tír san Aontas Eorpach cloí leis an spriocdáta den 9 Iúil. Déanaim comhghairdeas le mo chuid oifigigh as ucht an obair a rinne siad ar an reachtaíocht tábhactach seo san am gairid a bhí acu.

I am pleased to introduce the Petroleum (Exploration and Extraction) Safety Bill 2015 for the consideration of the House. The purpose of the Bill is to transpose Directive 2013/30/EU, the offshore safety directive, which is focused on the safety of offshore oil and gas operations. Transposition of the directive will further strengthen the safety regulation of offshore oil and gas exploration and production in Ireland’s offshore area.

The offshore safety directive is the European Union's response to minimise the risk of offshore accidents throughout the Union following its review of offshore oil and gas operations in Europe prompted by the Deepwater Horizon incident in the Gulf of Mexico in April 2010. The directive seeks to ensure a consistent implementation of best regulatory practices in all European jurisdictions with offshore oil and gas activities, as well as strengthening the European Union's preparedness and response capacity to deal with an emergency that would potentially affect its citizens or the environment.

This is an exciting time for the petroleum exploration sector in Ireland. In the past four years we have witnessed strong momentum in exploration interest with the number of exploration licences in place at its highest level ever. We now need to see this effort translated into increased drilling levels, as it is only through exploration drilling that the true potential of Ireland's offshore area can be proved. I would welcome an opportunity in the future to outline in greater detail to the House some recent and ongoing initiatives aimed at ensuring continued positive momentum. However, having regard to the time available, I will confine my comments to the Bill and the directive it will transpose.

The offshore safety directive specifically provides for the institutional separation of regulatory functions relating to offshore safety and the environment from those functions focused on the economic development of offshore resources such as licensing and revenue management. It also provides for a goal-setting approach in major accident prevention based on thorough risk assessment and reliable management systems; clarity on environmental liability in the event of a major accident; and emergency preparedness and response arrangements. The deadline for the transposition of the directive is 19 July 2015.

The approach to transposition involves integrating the directive requirements with the safety regulatory system for oil and gas exploration and production activities in Ireland introduced under the Petroleum (Exploration and Extraction) Safety Act 2010. That Act conferred on the Commission for Energy Regulation, CER, the responsibility for the safety regulation of petroleum exploration and extraction activities in Ireland, including a requirement to establish and implement a petroleum safety framework. The petroleum safety framework is the system the CER uses to regulate the safety of petroleum activities carried out by licensed petroleum undertakings. These activities extend from exploration through to decommissioning of infrastructure at the end of the lifecycle of a development.

It should be noted with regard to decommissioning that, in accordance with their petroleum lease conditions, all parties to a lease are required to post a decommissioning security once the decommissioning process is triggered. This ensures the costs of decommissioning are met by developers, not by the State.

The petroleum safety framework was designed in line with best international practice, with petroleum undertakings required to reduce all safety risks to the internationally accepted level that is as low as is reasonably practicable, ALARP. A guidance document was published in 2013 by the CER setting out how developers needed to demonstrate ALARP in their safety case applications and how the CER would assess such applications. While the Bill provides for fines of up to €3 million on developers for failure to ensure all petroleum activities are carried out in accordance with their safety management system and safety permit, it also provides that petroleum undertakings are financially liable for the prevention and remediation of environmental damage. It does not propose a limit on such liability. The key requirements of the directive are broadly analogous with the provisions of the 2010 Act. While a significant element of the transposition of the directive involves the introduction of consistent terminology and language, the main regulatory implications of the directive required to be addressed in the Bill are the establishment of a national competent authority; provision for the assessment of potential major environmental hazards offshore within the scope of the safety case regime; clarity on industry liability in the event of a major accident; and specific obligations to be placed on both operators and owners of petroleum infrastructure.

Section 1 is a standard provision concerning definitions.

Section 2 replaces section 13A of Part IIA of the Electricity Regulation Act 1999 with a new interpretation section that is consistent with the terminology and language of the directive. Key new definitions include those for "operator" and "owner". These definitions enable the obligations under the directive to be placed on the relevant entity and integrated with the existing safety regulatory framework for petroleum safety.

Section 3 inserts a new section 13GA and establishes the CER as the independent competent authority under the directive. The principal objective of the CER as competent authority is the effective safety regulatory oversight of operator and owner compliance in reducing the risk and potential consequences of major accidents offshore to a level that is as low as reasonably practicable.

Section 4 replaces the existing section 13H with a new section which integrates the competent authority functions under section 5 and the directive requirements in the context of the CER's general petroleum safety functions. The matters to be considered by the CER in carrying out its functions are also set out and include minimising the potential for overlap or duplication of effort.

Section 5 further strengthens the existing emergency preparedness and response arrangements through inserting a new section 13HA, providing the CER with the power to direct industry to conduct emergency exercises and tests and to direct industry to take adequate measures to ensure the continuing safety of designated petroleum activities.

Section 6 amends section 13I to align with the terminology and language of the directive. Section 13I requires the CER to establish and implement a risk-based petroleum safety framework through which it shall exercise its petroleum safety functions. The CER has successfully operated the petroleum safety framework established under the 2010 legislation since December 2013.

Section 7 which deals with obligations on petroleum undertakings, operators and owners inserts three new sections - 13KA, 13KB and 13KC - to reflect the general and specific obligations of each of the three related regulated entities under the directive, namely, the licensee, described in the 2010 Act as the petroleum undertaking; the operator who is appointed by the licensee to carry out oil and gas operations; and the owner who is the legal entity with operational control of a non-production installation.

Section 8 which deals with safety case guidelines replaces section 13L with a new section which requires that the contents of the safety case guidelines published by the CER be consistent with the specific information requirements of the directive.

Sections 9 to 11, inclusive, replace the existing sections 13M, 13N and I3O with new sections, placing the obligation to submit a safety case on operators and owners.

Section 12 which deals with notifications sets out the regulatory process for the submission, assessment and acceptance or refusal of design notifications and combined operation notifications by operators to the CER in accordance with the offshore safety directive.

Sections 13 and 14 which deal with safety permits and the refusal or revocation of a safety permit amend the existing sections 13P and 13Q to reflect the CER's assessment of safety cases submitted by operators and, where relevant, owners to reflect the capacity of the operator or owner, as appropriate, to carry out a designated petroleum activity.

Sections 15 to 18, inclusive, amend existing sections 13S, 13T, 13U and 13V. These sections relate to the notification to the CER by operators or owners of petroleum incidents or potential incidents; the further investigation and-or the taking of enforcement action by the CER regarding the notified petroleum incident; and the issuance of a report by the CER to the Minister with respect to each petroleum incident that results in the loss of human life, serious personal injury, damage to third party property or a major accident. The Bill provides that any petroleum incident must be notified to the CER immediately and potential incidents within 24 hours.

Section 19 which deals with the improvement plan and notice amends the existing sections 13Y and 13Z to extend the existing power of the CER to issue a direction requiring the submission of an improvement plan or the serving of an improvement notice on petroleum undertakings to also apply to operators and owners.

Section 20 which deals with access to safety case information amends the existing section 13AC to put the obligation on the relevant operator to provide a mechanism by which a copy of the accepted safety case can be made available to any member of the public who requests it.

Section 21 which deals with miscellaneous amendments makes a number of consequential amendments to the 1999 Act to, among other measures, extend the CER's enforcement powers to apply to operators and owners, in addition to petroleum undertakings, and enable the CER to charge operators and owners a safety case fee.

Section 22 amends the Petroleum and Other Minerals Development Act 1960 to require the assessment by the Minister for Communications, Energy and Natural Resources of the technical and financial capability of applicants for an offshore petroleum authorisation in line with the offshore safety directive. The section also makes provision for ministerial approval of an appointment of an operator proposed by a petroleum undertaking.

Section 23, an amendment to section 6 of the Continental Shelf Act 1968, amends the definition of "designated area" under the Act to align with Article 6(7) of the directive which requires the establishment of a safety zone in the vicinity of an offshore installation.

Section 24 makes the usual provision for the Short Title and citation.

The Bill is an important measure in the continued strengthening of the overarching regulatory framework governing offshore exploration for and the production of oil and gas in Ireland. It comprehensively transposes the directive in a manner that will enhance the safety of the offshore oil and gas sector, build on the regulatory model successfully implemented in December 2013 under the 2010 Act and incur the least cost on the industry and the public service.

I hope the outline I have provided of the Bill's provisions has been of assistance. I look forward to listening to the views of Deputies on this important legislation and their help in progressing the Bill into law prior to the directive's transposition deadline of 19 July.

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