Energy firms wanting to drill in deep waters within the European Union's economic zone would have to show they are financially able to cover 100 percent of the environmental cleanup costs of a major oil spill under a measure approved Wednesday in Strasbourg, France.
The European Parliament environment committee voted 55-10 to accept the measure, which is backed by EU Energy Commissioner Guenther Oettinger but opposed by energy companies and some member nations as a costly new burden.
The bill goes on to the energy committee where it is set for a vote next month.
Among its many other provisions cracking down on drilling in the wake of the 2010 Deepwater Horizon disaster in the Gulf of Mexico, the legislation demands energy firms have "adequate financial security" enabling them to pay for "full cleanup or compensation" for any environmental damage from oil spills.
The costs of the Deepwater Horizon disaster have been estimated at $38 billion. Rig owner BP said in July it had set aside an additional $875 million to help pay for the accident.
"We urgently need a strong regulation to secure safety and environmental standards across all EU waters -- from the North Sea to the Mediterranean -- to avoid disasters such as the Deepwater Horizon oil spill in the Gulf of Mexico and more recently the gas leak from the Elgin oil and gas platform in the North Sea," Lithuanian Member of European Parliament Justas Vincas Paleckis said.
Paleckis, a Socialists and Democrats Party MEP, said the European Union must spell out the financial responsibility of energy companies to pay for the damages caused by spills in deep-water areas.
"There must be a clear obligation for operators to put in place the financial guarantees necessary to cover the costs of cleaning up and compensation in the event of a major accident," he said. "Let's remember the key principle of EU environmental legislation: The polluter should pay."
Among its elements, the law would extend the purview of the European Union's mandate to more than 200 miles from the coast, supplanting current piecemeal regulations that cover wells only as far out as the continental shelf where member states have jurisdiction.
In a bid to regulate the newer phenomenon of deepwater oil rigs, the regulation would cover all EU marine waters, including its exclusive economic zone, which stretches up to about 230 miles from the coast.
In addition to financial liability, the measure would set minimum European standards for offshore oil and gas safety and would regulate licensing, emergency plans and decommissioning of platforms.
Another tightening would come in the area of company "transparency" in their drilling activities. The legislation mandates that before an EU member nation can issue a license, it must probe companies' prior involvement in incidents worldwide and effectiveness of their responses.
Before the measures become law, however, they must be approved by Council of Europe, where they face opposition from member countries, including Britain, The Guardian reported.
"We know that the commission is considering proposals which might result in a greater regulatory burden on the U.K. industry," the Department of Energy and Climate Change said in a statement last year.
"We will continue to work with the commission toward a pragmatic approach which does not reduce the standards of the very robust regulatory system which we already have here."