Environment: Unprepared for disaster

As Israel prepares itself to receive an influx of natural gas from its Tamar reservoir in the upcoming months, experts are concerned that the country’s environmental law framework is entirely ill-equipped to face the potential ramifications of the extraction process.

“The current situation is convenient for industry,” Dr. David Schorr, chairman of the Law and Environment Program at Tel Aviv University’s Buchmann Faculty of Law, told The Jerusalem Post on Wednesday. “There is obviously a lot of pressure from their quarter not to have a big legal reform in this area.”

Both classic regulation defining environmental procedure and liability specifying who is responsible for disaster cleanup are starkly missing from the Israeli legal infrastructure regarding offshore oil and gas drilling, the professor explained.

Immediately after Passover, Schorr will publish a new policy paper, titled “Environmental Regulation of Offshore Drilling: Tort Liability and Insurance for Environmental Damage from Offshore Gas and Oil Drilling,” analyzing the situation. The way Israeli environmental law stands today – particularly because the drilling occurs in the country’s economic waters and not its territorial waters – no one will be held accountable for any damages that occur as a result of the ongoing work there, the paper argues.

“The government itself is of two minds,” Schorr told the Post. “On the one hand, people are aware in the Environment Ministry of how dangerous the current situation is. On the other, everyone is also very anxious that these gas fields be developed as quickly as possible.”

With an influx of natural gas will come cheaper energy, royalties for the government and an alternative to burning much dirtier fuels, Schorr noted.

No matter where in the world it occurs, oil and gas drilling always risks inflicting great damage upon the surrounding ecosystem in both routine and accidental capacities, Schorr writes. While most of these damages will be environmental – such as sea pollution, coastal contamination and damage to flora and fauna – there are also plenty of possible negative economic ramifications, including the harming of tourism, fishing and other marine and coastal-based industries.

As seen in the aftermath of the 2010 British Petroleum Oil spill in the Gulf of Mexico, potential damages from drilling accidents can reach up to billions of dollars – about $40 billion in that case – yet Israeli law fails to pinpoint what authority would be responsible for handling such a disaster, the report says. Possible harm could include bodily injuries to rig employees, beach-side property damage, influx of invasive species accompanying the rigs, poisoning of fish and mammals and creation of biological “dead zones.” From the economic perspective, damages could spread to tourism and to sea dependent industries, such as beaches or desalination facilities, according to the paper.

“There is no dedicated law or regulation that defines the responsibility for these damages,” the authors write.

“Damage to the environment is not defined or known, and therefore, is expected to remain without repair or compensation.”

Also problematic is the fact that Israel does not define a trustee for natural resources who would be capable of suing the offender for environmental damages, the report explains.

The current government liability scheme is therefore one of negligence, which does not place responsibility for cleanup and restitution on the polluters, the paper continues.

In other countries, the legal situation regarding environmental ramifications of drilling is much more defined. The United States, for example, has a law dedicated to the subject of oil and gas pollution, which answers most of these questions. The law imposes strict liability on those responsible for causing the contamination and defines a trustee over natural resources with suing powers. England has similar regulations formed within the European Directive for Environmental Liability, as does Norway, which has a specific law regarding petroleum activity and the responsibility of the license-holders, the authors write.

Looking at the situation in Israel, the authors recommend that the government immediately adopt a regulation that clearly defines who is liable for drilling hazards, particularly imposing strict liability on those responsible for the damage. It is likewise crucial to include a protocol that grants power to a natural resources trustee to sue those who have brought about the contamination – which could potentially be the Environmental Protection Ministry, the Israel Nature and Parks Authority or non-government organizations that are recognized by law.

The regulation should also determine the amount of compensation money to be paid in such a case; mandate a plan for environmental rehabilitation; and suggest an action plant for damage that cannot be reimbursed, the authors continue. Meanwhile, the regulation should stipulate that the driller must purchase liability insurance, although partial liability would be imposed on an alternative responsible party – those financing the project. In addition, drillers would need to show a minimum amount of assets before engaging in such a drilling project, the authors add.

While British Petroleum has sufficient financial backing to fund the rehabilitation efforts caused by their rig explosion in the Gulf of Mexico, the same can not be said for Noble Energy, the largest shareholder of the drilling contingent in Israel’s Mediterranean, Schorr tells the Post.

“Not only that the damage would go uncompensated, but it also means that they are deterred much less,” he says. “They don’t have as good of an incentive to be careful.”

Supervision of regulations related to drilling would best be placed under the authority of the Environmental Protection Ministry, rather than the Energy and Water Ministry, where a conflict of interest would ensue due to the needs of industry, Schorr explained.

Even better would have been the establishment of a unified Environment and Energy Ministry, he notes.

“Given that that’s not what happened, the decision has been made to run with this without thinking about the downsides of gas and oil development; I think it’s important that the regulator be independent of those who see their job as furthering development,” Schorr says.

Experts at Adam Teva V’Din (Israel Union for Environmental Defense) also expressed their preference that any supervision regarding offshore oil and gas occur under the Environmental Protection Ministry.

“We think that the true solution is that you have to separate between the Energy Ministry and the Environment Ministry and give the Environment Ministry the whole authority,” says Dana Tabachnik, head of economics and environment at Adam Teva V’Din. “I think that’s one of the only solutions you can do, and do it now.”

As the situation currently stands, the Energy and Water Ministry handles all aspects of drilling, a circumstance that Adam Teva V’Din finds problematic.

Focusing on the civil liability issue first would be the easiest way to move forward toward a quick and efficient establishment of environmental regulations in the offshore drilling sector, Schorr stresses. As occurs in the US, if someone contaminates the sea and thereby kills seals or birds, the government or another body should be able to immediately sue the offenders, he adds.

Because most of the drilling occurs outside Israeli the territorial waters and is not technically governed by Israeli law, a legal reform would be required “so that someone could step in on [nature’s] behalf and sue,” Schorr says.

Two months ago, however, Deputy Attorney-General Avi Licht drafted an official opinion stressing that all Israeli laws and environmental regulations must apply to the economic waters where most drilling occurs – also called the Exclusive Economic Zone. Although this opinion has not technically yet been transformed into law, Tabachnik says that Adam Teva V’Din views Licht’s interpretation as equivalent to law,and that none of the drilling companies in the Israeli Mediterranean have objected to his opinion.

“With respect to the enforcement against and punishment of polluters, it must be emphasized that environmental laws do apply to economic waters – as per Avi Licht’s opinion – and empowers Adam Teva V’Din to file claims for damages and crimes against the polluters,” Tabachnik tells the Post.

She stresses, however, that her organization supports Schorr’s report and agrees entirely that there must be a “separation of powers” when it comes to drilling supervision and licensing.

“We welcome all academic research related to the regulation of oil and gas drilling,” she says.