Tax breaks for Big Oil as coalition breaks with US & EU to back deep sea drilling

Despite the emerging global trend to ban deep sea drilling, as The Independent reports today, the UK has rejected calls for a moratorium in our waters.

Back in May, shortly after the cataclysmic environmental disaster in the Gulf of Mexico, the President of the United States introduced a moratorium on deep sea drilling and suspended new licenses for drilling in Virginia.

A judge – who it later emerged had a direct financial interest in drilling in the Gulf – struck down the moratorium, but it was later re-introduced; President Obama’s Interior Department also suspended any decision on drilling in the Arctic.

On June 8th, Norway announced it was going to follow suit. Riis-Johansen, Norway’s oil minister said:

“What is happening in the Gulf of Mexico is so unique, it’s gone on for such a long time, the blow-out is so big, we must gather enough information from it before we move on.”

He later told Reuters:

“It is not appropriate for me to allow drilling in any new licenses in deep-water areas until we have good knowledge of what has happened with the Deepwater Horizon [the rig operated by BP] and what this means for our regulations.”

Following Obama’s lead, on July 7th, as oil continued to pump into the Gulf, the EU’s energy commissioner gave a speech calling for an EU-wide moratorium on deep sea drilling. Commissioner Oettinger said any responsible government would freeze new drilling permits. In the last couple of days, Associated Press reported that the Italian government would seem to be heeding these calls and is now considering a ban on drilling in the Mediterranean as the “right approach”.

But despite the emerging global trend, as The Independent reports today, the UK has rejected calls for a moratorium in our waters. This is despite plans by BP, revealed in last weekend’s Sunday Times and later highlighted in the Mirror, BBC, and elsewhere, to do their deepest UK drilling to date in a fragile wildlife haven off the Scottish coast.

The areas is home to around 20 whale and dolphin species, as well as puffins and guillemots and the industry admits the area they propose to drill in is known for its “extreme environmental conditions such as wind, wave, temperature and water depth”. The Sunday Times reported that if approved by ministers, BP may start drilling before the various reviews into the Gulf accident have concluded.

Dods has reported that at yesterday’s prime minister’s press briefing:

“Asked whether the Prime Minister shared the concerns of Greenpeace over BP’s deep water drilling off the coast of Shetland, the PMS said that they key thing was to ensure our oil industry was working to high standards and that there should be no repeat of events as seen in the Gulf of Mexico.”

This follows statements from Secretary of State Chris Huhne and energy minister Charles Hendry flippantly rejecting calls from Greenpeace, Green Party leader Caroline Lucas and others like Commissioner Oettinger to follow the lead set by Obama. Now the energy and climate change select committee are investigating whether the UK was right to rule out a moratorium so early.

Meanwhile, George Osborne just approved new tax breaks for offshore oil drilling, following recommendations from Tim Eggar, described by The Independent today as “the Tories’ friendly oil man” – who is coincidentally the former Tory Minister turned oil tycoon who oversaw the Brent Spar incident in the 1990s. The government have refused to publish Eggar’s advice to the Treasury, despite repeated requests from environmentalists.

However, it is known to have been the basis of Conservative policy announced in their pre-election policy paper, Rebuilding Security, which – as Left Foot Forward reported at the time – proposed new policies for “hunting” oil and “streamlining” regulation for offshore drilling.

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