By HARRIS MACLEOD, The Hill Times, May 17, 2010
House Natural Resources Committee begins hearings into offshore drilling, after massive Gulf of Mexico oil spill.
Following the catastrophic British Petroleum oil spill in the Gulf of Mexico, one U.S. President Barack Obama called a "massive and potentially unprecedented environmental disaster," there needs to be a "national conversation" about whether Canada should continue to exploit its offshore oil resources, which critics say are "fraught with peril."
The offshore oil industry in Canada is still mostly undeveloped compared with the thousands of rigs in the Gulf of Mexico. Currently, there are only three offshore rigs in Canada, all off the Newfoundland coast. But oil giant Chevron has plans to drill one of the deepest offshore oil wells in the world, also off of Newfoundland, and oil companies are eyeing projects in the Beaufort Sea, off British Columbia, as well as in the Arctic. Imperial Oil and BP have paid a combined $1.8-billion for exploration licences.
Dave Martin, a policy adviser for Greenpeace, said oil found in the shallow areas of the continental shelf is drying up and that is what's driving oil companies to drill in deeper, more risky areas. Recently, Newfoundland Premier Danny Williams said people would have to accept that there could be no guarantees that something like the BP spill couldn't happen in Canada.
"It's really true," said Mr. Martin.
He said the oil companies, including BP, hoping to drill for oil in B.C. and the Arctic "ironically" have been lobbying the government to let them off the hook for the current requirement to have relief wells.
"If there's one lesson that comes out of the BP gulf accident it's the need for relief wells," he said. "Right now the standard is that if they're going to drill a well in the Beaufort they've got to be able to also complete a relief well in the same season, which is apparently difficult to do given the limited, relatively short summer season in the Arctic. And, ironically, we have BP lobbying at the National Energy Board to be absolved from the requirement for relief wells in the Beaufort at the same time we see the disaster that's resulted from that policy. It would be very timely and appropriate to entertain a national review of safety requirements for existing offshore operations as well as exploration activities."
Last week, the National Energy Board (NEB), which oversees offshore drilling on the West Coast and the Arctic, announced it would launch a full public review of drilling and safety requirements following the BP spill. Although NDP leader Jack Layton (Toronto-Danforth, Ont.) last week in the House of Commons described it as an "industry-friendly body," a statement that Prime Minister Stephen Harper (Calgary Southwest, Alta.) said was a slight against Canada.
"Canada has strong environmental laws and standards, and a robust safety regime. Oil and gas rigs used in the Canadian offshore industry, as well as the equipment and training required to operate them, must all meet strict regulatory standards that are among the highest in the world," said a spokesperson for Natural Resources Canada in an email to The Hill Times. "In light of this incident, we are looking at what actions may be needed to further minimize the risk of such an accident occurring here and to ensure we have the best possible response plans.
Liberal environment and energy critic David McGuinty (Ottawa South, Ont.) said the Harper government has so far offered nothing, but "phony posturing" about how the rules in Canada are far more stringent than in the U.S., and accused the government of "fast tracking" the exploration licenses for oil companies in the Beaufort Sea in 2008.
"The government did so in full knowledge that the territory under exploration embraced some of the most sensitive habitat for polar bears and beluga whales," he said.
Mr. McGuinty did not rule out drilling off the coast of B.C. or in the Arctic unequivocally, but he said either initiative is "very hard to imagine" and would be too risky until more is known about what would happen if there was to be spill like the one in the Gulf of Mexico, which is currently leaking an estimated 900,000 litres of oil a day into the ocean. He said there is confusion about whether the moratorium on offshore drilling is a formal, legally binding agreement, or simply a convention, and said the government is refusing to answer.
Mr. Martin said Greenpeace and other NGOs have asserted that the moratorium is real, and should also include tanker traffic, which is set to become a bigger issue because oil giant Enbridge is poised to build a $3-billion pipeline that would transport oil from the Alberta tar sands to Kitimat, B.C., where it would then be shipped to Asia. He said, however, that because of the memory of the 1989 Exxon Valdez spill and opposition by First Nations, expanding oil production activity on the West Coast could be politically difficult, and now even more so because of the BP spill.
"That combination is quite politically potent and this has created problems for both the Harper government and the Campbell government who are interested in loosening things up and seeing exploration and offshore oil and gas exploitation start to begin," said Mr. Martin.
He said if there is a silver lining in the BP spill, it's that people in Canada will be a lot more attuned to this issue and question whether the economic benefits are worth the risk.
"It would be hard to underestimate how much depth this issue really has with the public. There's a lot of concern about our oceans and a lot of very emotional attachment to the preservation and protection of those marines environments," he said. "People know and love those environments and any government that at this point proposes to expand offshore oil and gas activities will do so at their own political peril."
Last week the House of Commons Natural Resources Committee began hearings into the issue.
hmacleod@hilltimes.com
The Hill Times
