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Home / Policy and Issues

Policy and Issues

Policy - helping to shape the future

IOGP naturally follows political and legislative developments that will shape the future of our industry.

This involves engaging decision makers to explain our views, offer expertise and provide data. Our aim is to help regulators and legislators draft rules and laws that are balanced and effective.

We do much of this work with the European Union, since what is decided in Brussels often has a direct impact beyond Europe and can set an example for other parts of the world.

IOGP’s Brussels team maintains a constant dialogue with the European Parliament, the Council of the EU and the European Commission on a variety of different issues:

Policy issues

Safety

It is the industry’s top priority: IOGP aims to promote safe, responsible and sustainable operations.

Environment

Environmental legislation is a crucial area of interest for the upstream oil and gas industry

Energy markets

A well-functioning internal energy market in Europe, in which oil and gas can flow freely across borders, is essential if the EU is to achieve many of its ambitions.

GasNaturally

IOGP is a leading force behind GasNaturally, a partnership of six organizations that extend the length of the natural gas value chain.

International law and trade

As the Association that represents the global upstream industry, IOGP closely follows evolving trade patterns and shifting investment flows worldwide.

The Arctic

Development of the Arctic’s untapped oil and gas resources will be crucial to meet the challenge of providing sufficient energy for the world’s rapidly growing population.

EU energy policy - clean energy package

EU energy policy - clean energy package

Energy Efficiency Directive

We support energy efficiency as a contributor to European competitiveness, greenhouse gas emission reduction, and customer empowerment.

  • A non-binding indicative energy efficiency target for 2030 is appropriate: it will complement the greenhouse gas emissions target and allow more flexibility to reduce greenhouse gas emissions in a cost-effective way.
  • The Commission’s Impact Assessment shows that a binding energy efficiency target is likely to have a negative impact on the ETS, and decrease the share of renewables and & gas while increasing that of coal.
  • The Primary Energy Factor (PEF) should be at least 2.2: PEF should not be turned into a tool to promote the use of electricity, and therefore it should be based on the existing fuel mix, not what it could be in 2020.

Power Market Design

We welcome the Commission’s proposal to reinforce competitive energy market principles, notably through the phase out of regulated prices.

  • The partial removal of priority dispatch as proposed by the Commission is a good first step. We recommend going one step further and phase out priority dispatch entirely.
  • We welcome the extension of balance responsibility to all generating and consuming entities: this offers a strong incentive for variable renewables and other balance responsible parties to improve their forecasting, bid more accurately in the day-ahead market and be more active in the intraday markets.
  • Capacity Remuneration Mechanisms should be a last resort and as much as possible harmonized preventing negative impact on cross border trade. The allocation process for should take into account elements such as cost, reliability, flexibility, efficiency and CO2 emissions.

Renewables Directive

As the share of variable renewable energy increases in Europe, gas power plants can dispatch affordable and flexible energy to ensure reliable supply of electricity to consumers.

  • Subsidies for all mature technologies should be phased out and focused on R&D&I.
  • A binding EU target for renewable energy in 2030 will unnecessarily complicate EU climate & energy policy and lead to market fragmentation, as has already occurred in the past.
  • Binding targets for renewable energy in the heating & cooling sector is an expensive and inefficient way of reducing emissions in the sector. Gas appliances are much more efficient and cheaper to use than electric ones to reduce emissions in a cost-efficient manner.

Energy Union Governance

The Governance Regulation should ensure the achievement of the targets by guaranteeing effective implementation and monitoring, avoiding policy overlap with the EU ETS, exploiting synergies and facilitating the achievement of the internal energy market.

  • The Governance Regulation should not be used as a backdoor to introduce national binding energy efficiency and renewable targets.
  • Regular information exchange among Member States will be key to achieving solidarity.
  • Reduced import dependency is not a desirable goal in itself as it does not necessarily lead to lower energy prices or improved competitiveness.
  • In their national plans, Member States should provide information on how they plan to achieve their national GHG emission targets.
  • Member States should also clarify, in their national plans, the role that they foresee for natural gas, in their energy mix.

Safety

Safety

It is the industry’s top priority: IOGP aims to promote safe, responsible and sustainable operations.

In 2013, the European Union approved the Offshore Safety Directive, a set of key principles, mainly on the safety of offshore platforms. These rules are being implemented and we are working closely with EU authorities to help shape an effective implementation.

The new rules need to be sufficiently adaptable to the different conditions in which our industry operates: shallow or deep waters, open sea, low, areas of low pressure etc.

Safety is best achieved by non-prescriptive, goal-setting legislation that builds on established regulations from countries that have an extensive experience of the oil and gas sector.

Environment

Environment

Environmental legislation is a crucial area of interest for the upstream oil and gas industry. Our Members work in highly diverse geographic areas including the North Sea, and the Mediterranean around Cyprus as well as onshore in an area stretching from the Netherlands to Italy to Poland.

EU legislation particularly relevant to these activities covers air quality, best available technique reference documents, financial responsibility and environmental liability and the offshore environment.

Best available techniques reference documents (BREFs)

The EU has developed documents illustrating how to reduce environmental impact when developing new industrial activities.

Our priority is to raise awareness among policy makers about the need for balance in the BREFs: they need to be effective in preserving the environment, but should not discourage investment by being unnecessarily prescriptive.

BREFs should complement good practices that the industry has developed through decades of experience.

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Financial responsibility and environmental liability

We are also closely following the issue of financial responsibility and environmental liability, a specific set of rules aimed at regulating the extent of a company’s liability in case of environmental damage.

Offshore environment: the seas

About 80% of European oil and gas extraction takes place offshore. IOGP has developed internationally-recognized guidelines to ensure safety, environmental protection, prevention and a rapid response to any possible issue exploration or production issue at sea.

In our daily activities in Brussels, we raise awareness about the challenges and innovations associated with offshore operations. We also want to ensure that our industry’s platforms, ships, helicopters etc. successfully co-exist with other maritime activities such as shipping and fishing.

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Energy markets

Energy markets

A well-functioning internal energy market in Europe, in which oil and gas can flow freely across borders, is essential if the EU is to achieve many of its ambitions.

An integrated energy market can:

  • Strengthen security of supply, ensuring that each country can access gas in case of need
  • Create more competition and therefore help keep costs under control
  • Encourage the use of gas with a net gain for the environment and climate

IOGP is working to make all of this happen. We engage in discussions on technical issues and strive to make sure that the rules covering financial issues enhance energy market developments.

Natural gas

Natural gas

IOGP is a leading force behind GasNaturally, a partnership of six organizations that extend the length of the natural gas value chain. GasNaturally represents more than 130 companies.

GasNaturally aims to showcase the potential that natural gas can play in building a cost-effective and sustainable energy mix. It seeks to help policy makers formulate a clear vision on how to face the challenges ahead, relying on natural gas as a safe, secure and reliable energy source.

Natural gas can:

  • Help achieve the transition to a low-carbon energy system cost-effectively
  • Provide the cheapest and fastest way to achieve significant CO2 emission reductions
  • Complement renewables by providing essential back-up capacity to balance out the variability of some renewable sources

For these reasons, gas will be a key player in the long term. Without it, the shift to a low-carbon energy system could seriously compromise quality of life by limiting access to affordable heat, light and mobility for households and businesses alike.

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International law and trade

International law and trade

As the Association that represents the global upstream industry, IOGP closely follows evolving trade patterns and shifting investment flows worldwide.

In recent years we have played a leading role in developing industry positions on environmental liability, transparency and financial reporting.

This includes:

  • informing members of relevant legal developments, including proposed international conventions that involve issues such as civil liability, insurance, corporate social responsibility and related matters
  • providing legal representation at appropriate international organization meetings
  • liaising with appropriate industry bodies (including OPOL) and governments
  • working to build additional know-how on the legal implications of carbon capture and storage.

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Transatlantic Trade and Investment Partnership (TTIP)

We advocate for free trade, including the the TTIP negotiations between the EU and the United States regarding the transatlantic trade in energy products.

The two papers below represent our policy positions on TTIP, developed jointly with the American Petroleum Institute (API).

Potential Standardisation of  LNG Sale and Purchase Agreements

IOGP comments on the Initial Review on Potential Standardisation of  LNG Sale and Purchase Agreements

Quo Vadis study

IOGP comments on the preliminary report for the Quo Vadis study

Revenue transparency

Several countries, including the EU member states, are adopting rules that require companies to unilaterally report their payments to governments, with the aim of tackling corruption in some oil and gas producing countries. These rules fail to take into account the governmental half of any corruption equation.

For true transparency, governments should be held accountable as well.

IOGP is working to clarify these points and ensure effective legislation that tackles corruption and supports good governance. Weak governance is bad for a country, but it is also a risk for the industry we represent, which relies on prosperity and stability.

That is why we support the joint public disclosure of payments made by industry and revenues received by governments. This is integral to IOGP’s commitment to transparency.

Many of our members have joined – and some were founders of – the Extractive Industries Transparency Initiative (EITI). This a voluntary scheme helps local communities manage revenues by providing information that citizens can use to hold their governments accountable.

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Shale gas

Shale gas

Europe holds significant shale gas potential. Even without development of the scale that has transformed the US economy, European shale gas could contribute a wide range of benefits including:

  1. more jobs: as many as 1.1 million by 2050 – in addition to those created by other sectors. Greater energy independence, cutting imports to as little as 62% down from an otherwise predicted 89% of demand in 2035
  2. more growth: adding as much as 3.8 trillion euros to the collective EU economy between 2020 and 2050
  3. more Secure energy: shale gas could reduce the EU energy dependence by as low as 62% from an otherwise predicted 89% in 2035

That is why it is worth exploring for European shale gas.

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Shale gas production is safe and environmentally-sound, thanks to the constant upgrade of well-known technologies.

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In response to the concerns about the chemical products used in shale gas, IOGP has launched the first chemical-disclosure website in Europe. NGS FACTS contains comprehensive data on many of the fields operated by our members.

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The Arctic

The Arctic

Development of the Arctic’s untapped oil and gas resources will be crucial to meet the challenge of providing sufficient energy for the world’s rapidly growing population. The US Geological Survey estimates that the Arctic could hold as much as 13% of the world’s still-to-be-discovered oil and 30% of its gas.

The oil and gas industry has been operating in the Arctic for decades. During that time, IOGP member companies have accumulated necessary experience and developed the technology to safely increase their engagement. Effective governance can best be continued by working with Arctic-specific international standards and adapted national regulations.

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The Arctic Environment

Climate change

Climate change

IOGP recognizes the risks of climate change due to rising greenhouse gas emissions. These result from the world’s fast growing requirements for energy driven by industrial and economic growth.

We support the international community’s commitment to address the global challenge of climate change. We also believe that the oil and gas industry is very much a part of the solution to this challenge and that it can be addressed while meeting society’s future energy needs.

The oil and gas industry produces abundant, affordable and reliable energy.  Every day, you rely on this energy for heat, light and mobility.  So do billions of other people around the world.

IOGP believes that the long term objective of climate change policy should be to reduce the risk of serious impacts on society and ecosystems, while recognizing the importance of reliable and affordable energy to society.