Issue link: https://maltatoday.uberflip.com/i/271600
maltatoday, WEDNESDAY, 5 MARCH 2014 9 News Tony Hayward: From BP disaster to Malta tations are dangerous in this busi- ness, we are confident in the geol- ogy and look forward to drilling them both." How does he assess the Malta's potential for finding oil? "I stand by those comments. We are targeting 250mmboe and we like the look of the geology, but oil and gas exploration is never a sure thing. We estimate that the chance of success is around 1 in 5, but with drilling set to begin around the end of the first quarter of 2014, we will know soon enough". How safe is drilling? Nearly four years after the Deep- water Horizon incident, scientists are still assessing the effects of the estimated 170 million gallons of oil that flooded into the Gulf after the explosion of BP's Deepwater Horizon oilrig. Five months after the spill was capped, the federal government estimated the marine animal death toll at 6,104 birds, 609 sea turtles, and 100 mammals, in- cluding dolphins. Scientists have found significant amounts on the Gulf floor, and the oil that has al- ready washed into wetlands and beaches will likely persist for years. If a similar accident happens next to Malta, the country would be denied literally of half of its water supply, which is derived from the sea. After the incident, Tony Hayward was at the centre of a media storm, clashing with US President Barrack Obama who called for his resigna- tion from BP four months before he was replaced. In view of this incident, can off- shore drilling ever be safe and is it worth taking such enormous risks if the cost to communities and the environment can be so great? Safety comes first? Hayward argues that oil companies spend a tremendous amount of time analysing and mitigating risk. "Every incident results in lessons to be learned, and every one leads to more stringent processes". For example, for the well in Malta, GENEL will be using an upgraded Blow Out Preventer and as part of the oil spill response plan, GENEL will have a capping stack available in the unlikely event of a well control incident, both of which are a result of lessons learned from Deepwater Horizon. "It is sadly impossible for any in- dustry to be one hundred percent failsafe, but there are thousands of offshore wells that are drilled safely each year that provide huge benefits to local communities – not just in terms of revenue from oil produced, but also from the number of jobs cre- ated both directly and indirectly". How prepared are oil companies to cater for such major disasters and can we ever be prepared enough? "The industry never stands still and it has seen great technological improvements helping to both pre- vent incidents and also mitigate their impact". Expertise and experience remain crucial He claims that GENEL and Medi- terranean Oil & Gas are a strong combination. "Both companies have been in- volved in offshore wells recently, and we have a fine drilling contractor with world class experience. We also have a team with extensive experi- ence of offshore wells. While we can never be complacent, all steps are taken to mitigate any risk, including comprehensive planning for a wide range of scenarios that, while ex- tremely unlikely, means we will be as prepared as it is possible to be". Despite the dramatic consequences of the 2010 incident, Hayward still thinks that offshore drilling has a future. "Offshore drilling continues to play a significant part in fulfilling our en- ergy needs. With fewer regions con- taining oil that is easily accessed, and technological capabilities improv- ing all the time, a hugely significant amount of oil is yet to be discovered offshore. This oil is going to play a key part in the world's energy secu- rity". Assessing seismic risks In a recent interview with MaltaTo- day, Italian geologist Carlo Casaniti, former vice-president of the Ordine Geologi Sicilia, warned of volcanic and seismic risks in Malta's oil ex- ploration area unless proper studies are carried out. Is enough considera- tion being given to geological factors before the commencement of oil ex- ploration? Hayward replies that these risks are always assessed. "Before drilling extensive analysis is undertaken, and risks are compre- hensively analysed. Drilling would not take place if there were serious concerns over seismic activity". Risk assessments have been carried out for the first time ever before the commencement of exploration activ- ities though the Maltese government has refused to publish these reports. The shift to gas While allowing oil drilling on its coast, Malta is shifting from oil to gas for its own national consumption. Hayward anticipates that LNG prices will continue to decrease in the next years but still believes that there is a place for oil. "Global gas prices will continue to converge, exports from the US over time will become the principle price setting mechanism – the link be- tween gas and oil prices will continue to weaken". But he also anticipates that demand for oil will continue to rise "as it re- mains the preferred fuel for trans- portation". In defense of fracking Fracking technologies have con- tributed to falling gas prices world- wide but this technology is met with concern in Europe due to safety impacts, fears of contamination of ground water sources and possible seismic activity resulting from the process. But Hayward dismisses these concerns and insists that frack- ing is a safe technology. "If I could implement one energy policy I would put natural gas (in- cluding fracking) at the heart of Eu- rope's energy policy for the next 30 years. Fracking has been around for many years; it is a safe and proven technology. While the population density in Europe, and the lack of an existing supply chain, may mean that it will not have as great an effect as we have already seen in the United States, it could have significant ben- efits for Europe. It is also consider- ably cleaner than coal, and will help to reduce emissions across the con- tinent." Clean energy at a cost? One option, which was enter- tained by the PL in opposition, was the use of carbon capture and storage technologies but the proposal was not even considered in the new government's energy plan. According to Hay ward, carbon capture and storage will remain a niche 'clean' energy technology for the foreseeable future. "It is very expensive, not com- mercially viable without signifi- cant subsidies and there are se- rious concerns over the storage of large volumes of CO2. It only makes sense today where the CO2 can be used to increase the re- covery in depleted oil fields", says Hay ward. Renewable energy from the sun or the wind is the cleanest and safest source energy around. But Hay ward doubts whether EU tar- gets for 20% renewable energy by 2020 are realistic. "Renewable energy has an im- portant part to play in a diver- sified energy mix. Today most forms of renewable energy require significant subsidies to allow them to compete with fossil fuels. Everyone wants an increase in re- newable energy, but not a rise in their energy bills. The EU targets look very challenging". Drilling would not take place if there were serious concerns over seismic activity