Government's review on offshore oil drilling too narrowly focused | WWF-Canada

Government's review on offshore oil drilling too narrowly focused

Posted on 22 June 2010
Craig Stewart, Director, Arctic Program
© WWF-Canada
Reprinted with permission of The Hill Times, June 21, 2010

AS GULF OIL SPILLS, ENVIRONMENT GROUP
CALLS ON FEDS FOR INDEPENDENT PUBLIC
ENQUIRY INTO OFFSHORE DRILLING IN CANADA

By KRISTEN SHANE

     Some environmental groups and opposition
MPs say the government’s planned review of
offshore oil and gas drilling here in Canada is
too narrowly focused, as the world witnesses
one of the worst oil spills and environmental
disasters in U.S. history in the Gulf of Mexico.
     After an explosion killed 11 workers
and sparked the spewing of an estimated
40,000 barrels or more of oil a day from an
offshore oil well into the Gulf of Mexico on
April 20, a federal agency that regulates
Canada’s oil and gas industries, the National
Energy Board, announced that it would
review safety and environmental requirements
for offshore drilling rigs in the Arctic.
     Three weeks after the announcement,
the House unanimously agreed to an NDP
motion calling the government to immediately
conduct a thorough review of legislation
concerning the development of unconventional
sources of oil and gas, including
deepwater offshore drilling.
     The government has since pointed to
the NEB review as proof that it is following
the terms of the motion. But environmental
groups such as the World Wildlife Fund
Canada say that’s not good enough.
     A look at the initial scope of the NEB
review, released June 10, shows that it isn’t
comprehensive, said Craig Stewart, director
of the WWF’s Arctic program.
     It focuses on questions such as hazards
in conducting Arctic offshore drilling and
the effectiveness of available spill containment
methods.

     "These are all technical questions related
to: how do you drill and what do you do when
something goes wrong," said Mr. Stewart.
They don't delve into whether Canada
has the right regulations in place, he said. 

     “It’s a very different question what the
NEB is asking than what parliamentarians
agreed to two weeks ago,” he said last week.
Not only is the scope of the review’s
content too narrow, “The NEB may not
have the jurisdiction to ask the questions
that need to be asked,” he said.
     The NEB regulates drilling off the coast of
British Columbia (currently under an indefinite
moratorium), Hudson Bay, James Bay,
parts of the Gulf of St. Lawrence, the Bay of
Fundy and the Beaufort Sea. Newfoundland
and Labrador and Nova Scotia have separate
federal-provincial offshore petroleum boards
that regulate drilling in their waters.
     The NEB review covers the Arctic only,
because it's the only place within the NEB's
mandate in which companies have been
interested in drilling, said NEB spokesperson
Sarah Kiley. 
     Indian and Northern Affairs Canada is
in charge of the bidding process in which
companies vie to lease the drilling rights
to certain parts of the Arctic. It has issued
10 companies exploratory drilling licenses
that are still active, said Ms. Kiley.
     All are big names in the oil industry,
such as BP, Chevron and Encana. There
is no active offshore drilling in the Arctic
now, but one of those 10 companies could
start as early as 2014, said Ms. Kiley.
     The fact that INAC and the NEB regulate
different parts of Arctic drilling further
limits the scope of the NEB review. Questions
about leasing, for instance about
drilling locations, are inapplicable at this
stage. 

     "It's out of our jurisdiction. At this
point, it's not on the list of issues," said
Ms. Kiley. 

     
But, she added that anyone is
welcome to log on to the NEB website until
July 16 and suggest changes to the regulator’s
preliminary scope of the review.
     “The scope is not final,” she said. Board
members would likely consider any changes
suggested, she said.
     But Ms. Kiley acknowledged: “We can’t
hold an inquiry and lay down the law for,
say, the offshore [petroleum] board.”
     A full-fledged inquiry is exactly what
WWF wants, said Mr. Stewart.

     "WWF is calling for a time-limited commission
of enquiry that would be independent of the
NEB and any other regulator," he said.

     
He called for something similar to the
bipartisan commission United States President
Barack Obama announced would be
given six months to study the BP spill in the
Gulf of Mexico and make recommendations
about the future of American offshore drilling.
     The environmental group Sierra Club
Canada has also called for the Canadian
government to appoint an independent commissioner
to conduct a full, public inquiry,
and that the government place a moratorium
on new drilling and construction in the meantime.
While the American inquiry takes place,
Mr. Obama has extended a ban on new deepwater
drilling permits for six months.
     In Canada, NDP energy critic Nathan
Cullen (Skeena-Bulkley Valley, B.C.) said
he supports pressing the “pause button” on
new drilling until the cause of the Gulf spill
and the need for regulatory change here
can be determined.
     Ms. Kiley said that is effectively what’s
happening.
     This year’s drill season is finished and will
only start up again in the winter. The NEB has
no new applications in front of it now.
     “We can’t foresee any drilling going forward
until this [review] is completed,” she said.
Quebec Conservative Senator David
Angus is leery about moratorium talk.
     He said he suggested to the Senate Standing
Committee on Natural Resources, Energy
and the Environment, which he chairs, to
do a series of hearings on offshore oil and
gas drilling. It struck him that 52 per cent of
Canadians surveyed last month in an Ekos/
CBC poll believed Canadian offshore drilling
should be paused until the government
can review its risks, or stopped completely.

     "Why the hell stop a viable industry?"
said Sen. Angus. 

     There’s only one active deepwater drilling
site in Canada now, said Sen. Angus. It’s
a Chevron pump off the coast of Newfoundland.

     "We have found that Canada has a very 
mature and evolved and well thought out regulatory
system in place, and it is also in the process
of shoring it up and reviewing it," he said.

     
Alberta Liberal Senator Grant Mitchell,
the co-chair of the committee, added
that industry witnesses, from Chevron for
instance, have shown to the committee that
they are on top of the issues.
     “There’s lots of reason to be confident,”
he said. But it’s still a good opportunity
to look at what happened in the Gulf of
Mexico and learn from it.”
     Conservative MP Leon Benoit (Vegreville-
Wainwright, Alta.), who chairs the House Natural
Resources Committee, said he’s found,
through the hearings, that Canada has a better
system in place than in the U.S. Nevertheless,
there’s always room for improvement.
     He noted Kevin Roche’s testimony
before committee Thursday. Roche is a
32-year veteran of the oil drilling industry
who spoke on behalf of the International
Association of Drilling Contractors.

     "We believe Canada has a very robust 
system in place," Roche told the committee. 

    
It looks as if one of the main contributing
factors to the Gulf spill was that one of
two pressure barrier systems was suspect
and the other removed, he said. It would
be hard to even get to that point in Canada.
     “There’s a much closer intervention,
there’s a much closer observation of regulatory
bodies, in my experience,” he said.
     Observing a Coast Guard-conducted
spill drill last week in Miramichi, N.B., Fisheries
Minister Gail Shea (Egmont, P.E.I.)
told CBC News that Canada could respond
quickly and effectively to a major oil spill.
     But while some observers are lauding
Canada, others are more critical.
At the same meeting, York University
environmental studies professor Gail Fraser
said a broad review of the legislation
related to offshore oil and gas drilling
should happen. 

     Current laws don't provide
enought protection for marine environments,
said Fraser. She also outlined a
lack of transparency in the workings of
the Canada-Newfoundland and Labrador
Offshore Petroleum Board. 

    
Mr. Stewart and several opposition MPs
have also noted weaknesses in Canada’s
regulatory regime.
     For instance, Mr. Stewart said, “The current
system allows drilling within environmentally
sensitive areas.”
     INAC, which gives leases for Arctic
drilling, does not have a stringent enough
environmental assessment process, he
said. That has led it to lease space for drilling
along the Beaufort shelf in an important
whale feeding ground.
     “If an oil spill were to occur, of any size,
within such a sensitive area, it would cause
damage before you were able to limit it,”
he said.
     The situation would be even more critical
because there is no currently acceptable
way to clean up a spill in ice-covered
waters, said Mr. Stewart.
     “The question is when will the government
of Canada announce a review that
actually does conform to what [it] agreed
to when passing that motion in the House,”
he said. “Upon analysis of the preliminary
scope provided by the NEB, it’s clear that
the NEB review will not extend that far.”
     David Anderson (Cypress Hills-Grasslands,
Sask.), parliamentary secretary to the
Minister of Natural Resources later said that
INAC would be “conducting its own affairs”
and that the Nova Scotia and Newfoundland
offshore petroleum boards were independent
agencies that would make their own
decisions about conducting reviews.
     “I think this disaster in the Gulf of Mexico
has got everyone’s attention, and certainly
a responsible thing for regulators
to do is take a look at their own structures
and see if they’re adequate. And I think
that’s what the NEB is doing. I think that’s
what others are doing as well,” he said.
     Federal agencies involved in regulating
the offshore oil and gas industry shouldn’t
conduct reviews on their own, said Mr. Cullen.
“We need a little bit of arm’s length,” he
said. 

     "If any agency reviews itself, it's easy
to imagine how there might be some bias.
We don't want any bias," said Cullen. 

     
The Newfoundland offshore petroleum
board “is just far too close to the industry,”
he said.

kshane@hilltimes.com
The Hill Times
Craig Stewart, Director, Arctic Program
© WWF-Canada Enlarge