Oil and gas spending on health and safety will grow 60 percent by 2030, driven by increased regulations, according to study released Friday.
Energy companies are expected to increase their health, safety and environment budgets from current spending at $35 billion up to $56 billion in the next twenty years, in response to the increased regulatory focus over environmental disasters such as the Deepwater Horizon accident in 2010, Lux Research wrote in a Friday report.
Upstream producers spend about 70 cents a barrel on safety and health issues, according to Rick Nariani, an analyst with Lux Research and author of the study.
“Pressures from the general public and regulators will force midstream providers to ramp up their spending,” Nariani wrote, noting that midstream operators spend less than a penny a barrel on safety issues. “However, midstream companies now need to navigate past interest groups and journalists before every major project, especially since Enbridge’s 2010 spill in Michigan, and will need to invest accordingly.”
Domestic spending accounts for nearly 40 percent of the money spent worldwide for health and safety – driven by a tight regulatory regime, the report said. Spilling a barrel of oil costs about $8,000 in penalties in the US.
The increased focus on safety is expected to benefit companies with new technologies in leak containment and detection, such as Envirovault, AdOil, Synodon, Kimtron, Opgal and Creaform 3D.