4. OIL

Emergency response policy

The Liquid Fuel Stocks Act (LFSA) is the key piece of legislation relevant to emergency oil stocks and other emergency measures for liquid fuels. The LFSA places responsibility for emergency response with the MEAC.

In the event of an oil supply disruption, Estonia would release emergency oil stocks from its public stockholding. Based on a proposal of the Minister of Economic Affairs and Communications, the Estonian government would decide on the drawdown of emergency oil stocks. The government decision to draw stocks would specify, according to Article 7 of the LFSA: 1) the reason for the release of the stocks; 2) the estimated duration of the period during which the stocks are to be used; 3) the conditions for the release of the stocks (i.e. terms of sales agreements); 4) the activities necessary for replenishment of the stocks; and 5) the quantity of the stocks to be released.

The LFSA also provides the statutory authority to use o short-term measures to reduce oil demand in a crisis. These would be based on Estonia’s Handbook for Demand Restraint Measures, which lays out the plans and the operational procedures of emergency measures that could be initiated in the event of oil supply disruption. Possible demand restraint measures include actions such as reducing speed limits, and campaigns such as ecodriving, car sharing, better use of public transport, and working from home. According to the handbook, if all of the measures examined are implemented, a total savings of over 8% of oil consumption used for road transport could be achieved, or roughly 1.54 kb/d.

A 2018 regulation under the Emergency Act mandates providers of vital services to take specific steps to ensure supplies during blackouts. Under this regulation and starting in 2022, fuel service stations which are defined as providers of vital services must install stand-alone power, hold back-up reserves, be able to prioritise emergency vehicles and be able to operate within 30 minutes of the beginning of a blackout. Eight of the existing filling station networks fall under this regulation and are each required to designate three stations as vital service providers. The regulation also requires partners of vital service providers, such as oil terminals, to develop emergency plans for continuity of service and to evaluate and choose business partners based on their ability to provide services in emergency situations.

Oil emergency reserves

The Estonian Oil Stockpiling Agency (OSPA), established in 2005, is tasked with establishing and maintaining compulsory oil stocks to fulfil Estonia’s international obligations. The agency’s operational and administration costs are covered through a stockpiling fee paid directly to OSPA by oil companies, which pass the cost of this fee on to consumers through the price paid at the pump.

Based on IEA methodology for net imports, Estonia’s stockholding obligation is relatively low due to the volumes of shale oil exports. As OSPA emergency stockholding must also cover Estonia’s obligation as a member of the European Union, its relevant stockholding obligation is 61 days of consumption of main oil products under the EU Oil Directive. The level of OSPA stocks is thus well above the 90-day net import level required as a member of the IEA.

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