Proposal to designate a Deep Sea Marine Reserve in Scottish waters

Founded in 1940, the International Association of Drilling Contractors (IADC) is a non-profit member association dedicated to improving safety and advancing drilling technology in the upstream petroleum industry. IADC membership is established on a company participation membership, today IADC has over 1085 member companies representing the worldwide upstream oil & gas drilling industry. Our member companies represent literally thousands of highly skilled, well paid jobs within the energy sector. Our membership includes the vast majority of both on and offshore drilling contractors in the UK/ Europe as well as a large number of European companies which are suppliers and subcontractors to the drilling industry in the UK/Europe and in the rest of the world.
IADC recognises that the world’s energy systems are in the middle of an historic transition. In this regard, we are aligned with other international organisations such as the International Oil & Gas Producers Association (IOGP) and other allied trade associations in the understanding that the energy transition and environmental aspirations are a joint responsibility to which we wish to contribute constructively.
At the core of IADC's mission is an imperative to promote the highest standards of stewardship in industry safety standards, environmental integrity, and operational efficiency. As part of that mission, the IADC strives for reasonable regulation and legislation governing the work of its members.
The oil and gas industry provide the fuel that powers the world economy. Despite its name, the IADC includes more than just drilling contractors (companies who own and operate land or offshore drillings rigs). Its members also include operators and producers (companies engaged in exploring for and producing oil and natural gas) and other companies associated with the production of oil and gas (including service companies, equipment manufactures, and consultants). The IADC is committed to promoting responsible operations by fostering industry best practices that mitigate negative impact and maximize the benefits of drilling to the betterment of its workers, the economy, and the country.
IADC thanks the Scottish Government for an opportunity to contribute to this effort and is quite interested to collaborate further on this and other such consultations as appropriate.
Protection of the marine environment is tantamount to sustaining the well-being of the precious resources unique to Scotland along with the global impact such resources bring to those around the world, IADC, along with other stakeholders, understands the compelling to need to balance the considerations of marine health with the variety of activities performed in and upon the waters of this environment. It is from this viewpoint IADC offers the following comments.
Prior to answering questions that may provide the desired insight, IADC would like to posit several observations pertaining to this consultation for further clarification as a series of consultative efforts to further address this issue of a Deep-Sea Marine Reserve may ensue:
• In the context of the Sustainability Appraisal discussion begun on page 6 of the document, it was not clear how, on page 9, the “three scenarios” had been conceived as “reasonable alternatives”. Though these management scenarios provide for “indicative purposes” only and do not constrain future decisions, discussion of how such alternatives were derived would be necessarily prudent to enable the most thorough insight as it relates to the considerations for “oil and gas exploration and development.”
• The Intermediate and Upper Scenarios depicted on page 9 clearly express an intent for “No extractive activities that affect the seabed”, however, discussion of management measures on page 12 reference previous offshore oil and gas exploration activities and that “further activity may require additional mitigation measures”. Such a statement infers the potential for continued oil and gas exploration. It appears that this seeming contradiction requires further scrutiny to more cogently inform consultation respondents.
• As it relates to Present Value information displayed in Table 3, IADC is interested to better understand how the figure for Oil and Gas was assumed under the Lower Scenario. Since it was acknowledged on page 13 that “it was not possible to estimate costs associated with delays….future activity foregone, or for impacts on investor confidence”, all of which can exact profound influence over net present value project costs, it is vitally important to understand “known assumptions” prior to being able to bring forth pointed oil and gas insights.
With regard to your specific questions outlined under the consultation document, we respectfully offer the following for your consideration based on presumptions shaped by the above-mentioned observations;
IADC and our member companies could not support the designation of the West of Scotland Deep Sea Marine Reserve. We believe, as proposed, it seemingly represents subjective assumptions resulting in a broad overreach without more detailed discussion of management measures that might otherwise pragmatically address marine environmental concerns..

IADC and our members note a number of concerns with the scientific evidence including whereby the confidence assessment states “partial” confidence in much of the data. To make such wide-ranging decisions based on partial confidence does not seem to be in the best interest of any of the affected parties. It appears that assumptions are being made on a precautionary all-inclusive basis rather than reliable evidence. Therefore, at this time, we respectfully disagree that the scientific evidence represents a preponderance of justification for designation.

While the intent of the Conservation Objectives are most laudable, information contained in this consultation lacks the sufficient detail necessary to fully understand the entirety of impacts experienced by the affected stakeholders were this MPA to take effect. The cursory description of the management advice derived from a risk-based approach addressing the confluence of protected features, conservation projects and activities appears quite plausible, however further discussion of how risk-based mechanisms resulted in additional management measures is necessary to understand, in particular, reference made to mitigation addressing oil and gas exploration activities. Consequently, IADC is unable to consent, or otherwise agree to preliminary conclusions highlighted in this consultation. We are, however, quite interested to continue a dialogue with Scottish Authorities to more fully appreciate if the objectives of this consultation could be achieved with a more substantial engagement of oil and gas exploration subject matter experts.

The oil and gas exploration industry is certainly in opposition to the Intermediate and Upper management scenarios that appear to arbitrarily discount the industry’s ability to responsibly develop offshore energy resources in a complimentary manner to sustaining Scotland’s marine environment.

At this stage, IADC and our members are quite suspect of this consultation as it relates to consideration for Business and Regulatory Impacts. An expected level of due diligence appears lacking where quantitative specifics such as detailed assumptions, calculations, and sensitively analysis might be illustrated to better inform stakeholder concerns. Additionally, we wish to bring to your attention the following information related to Business and Regulatory concerns;

• Reference – UKCS Maximising Recovery Review: Final Report, 24 February 2014, Sir Ian Wood Page 11, Section 2.2 Business Environment; we find as follows - “The UKCS is now one of the most mature offshore basins in the world but still some interesting frontier areas, new exploration plays (such as the Carboniferous and sub-basalt) and huge opportunities in maximising brownfield recovery. For example, the area West of Shetland is essentially a frontier region which provides the opportunity to use the lessons learnt from the more mature UKCS areas to achieve the optimal development”

• Reference – Oil & Gas UK Economic Report 2019, The UK Oil & Gas Industry as a Key Economic Asset indicates;

a) Oil and Gas Production contributed over 24 Billion GBP to the UK GDP in 2018

b) Around 20 Billion GDP would be lost from the UK’s balance of trade without domestic production

c) The Oil & Gas industry supports around 270,000 jobs across the UK.

d) The industry is expected to contribute around 8.9 Billion GBP in production tax payments over the next 5 years.