ABSTRACT
Environmental legislation and policy in Europe affects the quality of oil products for transportation, the quality of fuel oil demanded by oil consumers, the industry’s own operations, liabilities for cleaning up sites, and the risks of oil spills. Objectives aiming to protect human health, preserve ecosystems and protect the climate sometimes overlap and sometimes conflict. In most cases, achieving successful environmental outcomes requires action not only by the oil industry, but by its customers and by related industries. 1
Product quality Unleaded gasoline and catalytic converters are now established policies. The oil industry is reducing volatile organic compound (VOC) evaporation from its own operations, but is in debate with the European Commission and the automobile industry about whether emissions from vehicles being filled or in use should be further monitored by closely controlled systems or by additional changes in gasoline specifications. Further reductions in sulphur levels in diesel and marine fuel are also under discussion, and could prove very costly. Constraints on the use of sulphur by industry and electricity customers have already driven markets to the use of gas.
Oil spills Minimizing the risk of oil spills is a major issue. A quantum leap is needed to enforce existing standards on vessels and practice. Failures put 130the whole oil and shipping industries at risk from public reaction to oil spills.
Operations and site liability For petroleum operations, there will be further reductions of sulphur emitted to the atmosphere from refinery fuel and of oil discharged into the North Sea from produced water and oil-based muds. 2
Site liability is the subject of a Green Paper for discussion with the Commission by the oil and insurance industries and the legal profession. There are continuing uncertainties on liability which inhibit investment and divestment.
Climate protection: carbon dioxide and taxes Carbon taxes are not doing well politically. Meanwhile, the industry faces a ‘mixed bag’ of gasoline tax increases and threats of regulation. European governments have taken advantage of crude price reductions since 1985 to maintain or increase gasoline taxes in real terms.
Industry attitude Industry is responding to these developments by a mixture of reaction, argument and initiatives. Not much is being done to put the main case for oil as a fuel. Its economic value is measured by the high taxes consumers are prepared to pay. Oil’s environmental impact, including its carbon dioxide emissions, is superior to alternative fuels in many applications.
