Falklands Legislative Assembly committed to ‘enabling’ oil production
Written for the October 21, 2022 issue of Penguin News. Printed under the headline “Assembly committed to ‘enabling’ oil production”.
Members of the Legislative Assembly John Birmingham and Pete Biggs have both voiced personal distaste at the concept of oil production in the Falkland Islands, despite an overall commitment in the Islands Plan 2022 to “progress extractive industries in an environmentally conscious way.”
MLA Biggs, asked if he personally supports the idea of the Falklands entering into oil production, said “I rather hate the idea of going into a production state in the Islands, however, I can see the sense if it’s properly regulated.
“Then the environmental impact can be relatively small,” he added.
Asked if he saw a clash between the environmental commitments of the assembly and the goal to make progress with hydrocarbons, MLA Birmingham said “no, because if anything happened the regulations would be as strict and as environmentally friendly as you can possibly get.”
When asked if he was personally in support of production, however, MLA Birmingham said: “It’s a matter for the majority view, personally I can’t get excited about it.
“I’m very much concerned about the future, which is one of the reasons why I stood last year and was so adamant that there wouldn’t be any salmon farming on an industrial scale here.”
MLA Biggs raised that the Falklands “need to spend a lot of money on our infrastructure” and that some of the capital programme works “towards making the Falklands a far greener place” through waste management works and a new power system “which will phase in more and more renewable energy.”
As such, amidst the current global situation, MLA Biggs conceded that “there is the possibility of a constructive, well managed, and well regulated hydrocarbon extraction.”
Penguin News received comment from Dr Andrea Clausen as Acting Director of Mineral Resources.
Regarding the commitment to “progress extractive industries in an environmentally conscious way,” Dr Clausen said that. “In the supporting delivery plan, there are a number of clear objectives to achieve this, which include putting in place identified legislative priorities to support oil and gas development and production.”
Dr Clausen said this work “will ensure that FIG is at the appropriate level of oil readiness for the Sea Lion project to commence, should it achieve regulatory approval and project sanction” and would include “development of robust policy and legislation (and updating existing regulations) through identification of best practices in other jurisdictions, and recommending the best fit-for Falklands solutions that are aligned with up-to-date best practice in the oil and gas industry worldwide.”
She stated cross-department work across FIG would be central in this process “to ensure that regulations are complementary, not contradictory, to other policies and environmental objectives.”
Dr Clausen concluded that: “Oil development will only proceed once [FIG] has implemented all of the necessary laws and policies to ensure any future oil exploration or exploitation is done to up-to-date environmental standards, and in as sustainable a manner as possible.”
MLA Teslyn Barkman, asked for her view as portfolio lead for Natural Resources, including mineral resources, said the “Assembly’s collective commitment is to continue to support hydrocarbons sanction.”
She added that the assembly is committed to enabling FIG to work with hydrocarbons and that a new Director of Minerals is “incoming.”
MLA Barkman added: “Our extractive economy comes with a responsibility to provide for the future, this requires stewardship of our biodiversity and environmental balance, this is recognised by all members. We will continue to give oversight to FIG that ensures hydrocarbons is a ‘Falklands-fit’, bespoke to our needs and challenges.”
Energy Charter Treaty issue
Concerns are often raised in European nations about banning oil exploration and drilling due to the Energy Charter Treaty (ECT).
The treaty enables companies to sue governments if they make policy decisions that could cut profits, posing a clear challenge as governments seek to reduce their fossil fuel emissions. The plan was drawn up to protect the profits of European energy companies as the Soviet Union disbanded in the early 1990s, but has allowed lawsuits for a range of reasons following landmark cases.
Recently the Italian Government was sued for £210m by Rockhopper Exploration, the British firm who also have interest in the Falklands, after the Italian Government banned oil exploration and production within a 12 mile-limit off Italy’s coast in 2015.
Following investigation and discussion with FIG, Penguin News has been able to confirm that The 1994 Energy Charter Treaty does not extend to the Falklands, or indeed any UK Overseas Territory - and has only been extended to the Crown Dependencies of Guernsey, Isle of Man and Jersey.
Associated editorial from Nicholas Roberts as deputy-editor, same issue.
I find myself befuddled at the continued inclusion of oil in regular conversations and government projections despite the fact that the rest of the world is trying to get rid of it. I can’t think of a single other business operation which gets this treatment.
When the workforce development paper came out over a year ago, it included projections for oil going ahead, and how many people that would bring in; in casual conversation people slide an “and if we start extracting oil” into the topic every once and a while.
Maybe this makes me a soup-tossing liberal [see the Wednesday entry in Mark’s My Islands Week], but it feels ludicrous to me to be talking about the thing that everyone else wants to get rid of as a starry eyed “maybe in the future” concept, especially when so many Government meetings still use the term “future-proofing.”
Entry into a production state for oil would require us spending time, effort, and resources on changing policy and legislation and adding regulations, all while the rest of the world is already pushing for net-zero carbon production. Future-proofing indeed.
“Well we’ll still need to use it until the next thing comes along” is always the argument, but I have yet to see anyone argue in favour of setting up a CD factory in the Islands, because the next thing is already here. I won’t even argue the point of the size of the oil field, because there is no goldilocks zone between it being so small it’s not worth it and so big that we’re going to all be oil barons. It won’t happen in a way that we just do it for a little while, all become better off, then stop. If we do it, we’re doing it, and I’d rather not start.
Nicholas Roberts