The Brookings Energy Security Initiative released a report titled: Offshore Oil and Gas Governance in the Arctic.
The report is a must read analysis of leadership issues to be addressed in managing the fragile assets of the Arctic.
Of particular interest to our readers is the excellent coverage devoted to regulatory governance. In particular the report concludes:
One of the most often referenced differences in national governance schemes is whether the country’s regulatory approach is prescriptive or performance-based. The U.S. traditionally has employed a prescriptive approach, which the Arctic Council defines as one in which standards are adopted as explicit regulatory requirements. A regulatory body then evaluates and inspects operations in accordance with these standards. In this approach, the regulator is responsible for ensuring the operators meet clearly-defined requirements.
Among the Arctic states, Norway is widely viewed as a model for utilizing performance-based standards. This approach is designed to place more responsibility on and encourage innovation by the operators. While the regulator remains responsible for setting quantifiable goals, the performance-based approach leaves the means of reaching those goals up to the operators.
In response to a question from the audience it appears that a number of the players in the Arctic are moving in the direction of performance based standards. The authors of the report also emphasized the following observations as a result of their study which involved interviews of some eighty leaders in the Arctic:
— There is a need for more industry involvement in the governance process.
— There is a need for uniform Arctic specific standards.
One might conclude from the above that Arctic regulatory governance should be moving in the direction of Arctic specific performance- based standards which are adopted by all Arctic countries.
Read the Brookings Offshore report.