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OilPolicies & Politics

Becoming 'Arctic Ready' – Report Urges Canada to Reform Drilling Laws

Spring, Canadian Arctic, NASA photo
Spring in the Canadian Arctic (NASA photo)

A new report by the Pew Environmental Group (PEG) asserts that Canada’s system of regulating and licensing offshore oil and gas drilling requires “major reforms” to create an “Arctic ready future” that will protect the region and its people from serious environmental harm.

The 27-page report, Becoming Arctic-Ready, was sent to Prime Minister Stephen Harper on Friday as well as the National Energy Board (NEB),which is a (Canadian) independent agency currently conducting public review of offshore oil drilling rules in the Canadian Arctic.

The report identifies crucial gaps in the Canadian government’s licensing process and regulatory system and recommends an 11-step program of policy reforms. The timing couldn’t be better as Canada is currently in the process of approving its first deep water, oil and gas development project. The exploratory phase of this operation is the most environmentally crucial, as this initial phase is when the risk of a catastrophic “blow out” (due to an up-welling of highly pressuring gas and oil) is at its highest.

Canadian Arctic Oil and Gas Reference Map
Canadian Arctic Oil and Gas Reference Map (PEG) {click to enlarge}

The report also notes that Canada has yet to implement key regulations made over twenty years ago made by by a federal-provincial-Inuvialuit review board. That review, which examined shallow-water oil drilling in the Beaufort Sea, found an “inability to adequately contain and clean up a major oil spill in the Arctic’s icy, remote waters; inadequate assessment of potential liability; and a lack of consultation with Inuit about proposed oil development.” (source: PEW news article; see below for link).

The NEB is holding hearings in Inuvik, Northwest Territories, this coming week as part of its Public Review of Arctic Safety and Environmental Offshore Drilling Requirements. This review, which will conclude in December of this year, was established primarily to review proposals from industry to weaken the “same-season relief well” rule which was designed to prevent multi-year blowouts. The rule requires that an spill or blow out be stopped before the ocean freezes up again.

In the wake of the 2010 Deepwater Horizon/BP oil spill in the Gulf of Mexico, this industry proposal has become highly contentious.

Inuit women at Nain, Newfoundland and Labrador
Inuit women at Nain, Newfoundland and Labrador (credit: Perrona)

PEG report co-author Louis Porta states that ““Requiring that operators have the capability to kill a blowout and contain a spill in the same season is essential to safeguard the Arctic from devastating environmental damage,”

But the NEB has only partial authority in the matter, as the Indian and Northern Affairs Canada (INAC) is responsible for licensing. Since 2010, the INAC has issued three offshore drilling licenses for drilling in the deepest offshore locations ever permitted. Inuit leaders from the region have asked INAC to cease issuing licenses until new regulations are in place. Native leaders are asking the federal government for a “time out” on the issuing of new licenses. The PEG report offers some weighty, additional support for their position.

(From the PEW news site article):

Among the Pew report’s key recommendations for reform are:

Hudson's Bay Company Ships, Prince of Wales and Eddystone, bartering with Inuit
Hudson's Bay Company Ships, Prince of Wales and Eddystone, bartering with Inuit off the Upper Savage Islands, Hudson Strait, Canada , 1819 (Hood, Robert (1795/6 - 1821)
  • Engage in meaningful consultation with Inuit groups at key stages of the process, from participation in early environmental assessments to decisions about oil-spill preparedness and royalty sharing.
  • Mandate a strategic environmental assessment of a proposed licensing area in the Arctic Ocean before calling for industry nominations of potential exploration sites.
  • Require that operators meet minimum Arctic-based standards for drilling performance and environmental protection before bids on offshore licenses are accepted and ensure that companies have the financial resources to meet worst-case oil-spill liability requirements.
  • Ensure that Arctic-tested standards for offshore oil-spill preparedness and response capacity are in place before authorizing exploration and that these standards maintain the intent of the same-season relief well policy to protect the Arctic and its people from multiyear blowouts.
  • Add a mechanism for government review and cancellation (with compensation) of existing tenure rights on long-term leases in justifiable circumstances such as dramatic environmental changes, industrial accidents or national security issues.

Some Source material (reference map, quotes, list of reforms, above) for this post came from the PEW Charitable Trust news site article ‘Becoming Arctic Ready’

Photo: (Inuit women) Perrona ; CC – By – SA 2.5




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