Drilling for Oil Off the Coast of Nova Scotia

2_bluenose-sailing-past-rigby Robert Devet / Halifax Media Co-op

K’JIPUKTUK, HALIFAX — After a long period of non-activity offshore oil is once again a hot ticket in Nova Scotia.

Last year BP Exploration (Canada) acquired the right to search for oil in an area of almost 14,000 square kilometers, located between 200 and 350 kilometers south of Halifax. BP paid $1-billion for that opportunity.

Earlier, one of BP’s competitors, the Anglo-Dutch multinational Shell Canada gained the same right for another large area off Nova Scotia’s shores. And there is more to come. Nova Scotia is currently inviting bids for an additional six parcels near Sable Island.

Looking for offshore oil starts off with many months of intense seismic testing to understand the geological make-up of the area. Earlier the Halifax Media Co-op talked to a marine biologist who believes that the very loud noises generated under water by air guns at short intervals during the seismic testing can be harmful for oceanic wildlife.

Concerned about potential damage to whales, sea turtles and other sea creatures the World Wildlife Fund and the Ecology Action Centre asked Shell to shift its seismic testing exercise from summer to winter, when wildlife is much less abundant. Shell declined, citing crew safety concerns.

That response has disapointed Nova Scotia environmentalists such as Mark Butler of the Ecology Action Centre and Gretchen Fitzgerald of Sierra Club Atlantic.

But Fitzgerald and Butler are also concerned about what comes after seismic testing, when the oil rigs are brought in and drilling begins.

“Where Shell and BP will be drilling the ocean is deep and that makes it technologically very challenging,” says Fitzgerald. “It’s also far from shore, which means that it takes longer for other vessels to get there to help if a disaster were to happen.”

Pointing to an industry tainted by a history of spills and other mishaps Butler and Fizgerald argue that drilling should be approached with a lot more caution than is currently the case.

These days the 2010 Deepwater Horizon disaster in the Gulf of Mexico is exhibit number one in the case against the offshore oil and gas industry. The drilling of an exploratory well went horribly wrong, the rig sank, and eleven workers were killed in the initial firestorm. The well continued to gush oil for three months and its effects continue to be felt. That spill was the largest in history.

Earlier this year BP pleaded guilty to eleven counts of manslaughter in connection with the spill and agreed to pay $42.2 billion in criminal and civil settlements and trust fund payments.

“When the BP spill [in the Gulf of Mexico] happened, that was exploratory drilling,” says Gretchen Fitzgerald, director of the Sierra Club Atlantic, drawing a parallel with what is to come next to Nova Scotia’s off-shore. “Exploratory drilling is riskier, because when they are putting down the drill they don’t yet quite understand the geology.”

The Deepwater Horizon disaster was not an isolated incident. Eight months earlier the blowout of the Montara well offshore Australia in the Timor Sea unfolded in almost the same way.

And our own corner of the Atlantic has had its share of oil rig accidents. First and foremost there was the Ocean Ranger disaster, the rig that collapsed off Newfoundland during a terrible storm, a little more than thirty years ago, sending 84 crew to an icy grave.

The most recent oil spill of substance in our own neighborhood occurred in 2011, in the Atlantic Ocean off Newfoundland.”There was this big spill of about 27 thousand liter of drilling mud, which contains toxics,” says Fitzgerald. Drilling mud is used to lubricate and cool the drilling bit.

“Drilling mud typically sinks to the bottom so it doesn’t create the dramatic sheen, but if it happens near deep sea coral or deep see scallop beds it could be devastating,” says Fitzgerald. “They didn’t even tell the government for three days that this did happen.”

 

Keeping an eye on what the multinational oil companies are up to is the Canada Nova Scotia Offshore Petroleum Board (CNSOPB).

The CNSOPB is a joint venture of the federal government and the province. The sole focus of this small agency with forty or so employees is to manage our offshore oil and gas resources within the political framework set by the two governments. It regulates, solicits proposals and issues licenses for offshore oil and gas activities. Both rig workers safety and protecting the ocean are within the mandate of the CNSOPB.

When it comes to protecting the environment neither the Ecology Action Centre nor Sierra Atlantic believe that the CNSOPB is up to the job.

Part of it is how the Board is governed, with the two federal representatives appointed by Natural Resources Canada, and the two provincial board members selected by the provincial Department of Energy.

“These oil and gas people in Natural Resources Canada and in the provincial Department of Energy, they see their job as promoting oil and gas opportunities,” says Butler.

And another issue is how the Board mostly relies on the oil and gas industry to self-regulate and report accidents. Many critics simply don’t believe that the industry can be trusted.

Indeed, time after time, enquiries looking into oil rig disasters, from the Ocean Ranger to the Deepwater Horizon, conclude that an inability of the oil and gas industry to self-regulate is one of the major factors that cause things to go wrong.

For example, an independent report on the Deepwater Horizon disaster concludes that “the organizational causes of this disaster are deeply rooted in the histories and cultures of the offshore oil and gas industry and the governance provided by the associated public regulatory agencies. […] This disaster involves an international industry and its governance.”

Scott Vaughan, the former federal Commissioner of the Environment and Sustainable Development looked at the inner workings of the CNSOPB and its Newfoundland counterpart earlier in 2013.

In terms of monitoring the industry to make sure they rules are being followed, Vaughn had the following to say.

“More remains to be done to implement risk-based audits of the operators’ management systems, and to establish more formal arrangements for obtaining independent observations of offshore oil and gas activities.”

Butler and Fitzgerald agree with that conclusion. But for them it is not just a matter of fixing a process, it’s also a question of manpower. They point to the most recent CNSOPB organizational chart which shows a mere two positions dedicated to environmental protection.

For Stuart Pink, CEO of the CNSOPB, these are relatively minor issues that can and will be addressed well before drilling begins.

Pink tells the Halifax Media Co-op that the auditor’s concerns were mostly about a need to formalize an approach that was already in place in an informal and more intuitive manner. All issues will be addressed before the first exploratory drilling will occur, which is not expected to happen before 2015, says Pink.

And the CNSOPB may be small and the companies it regulates may be some of the largest and wealthiest multi-nationals in the world, but experience, training and access to a Canadian and international support network of regulators go a long ways in adddressing that.

According to Pink it’s not just the CNSOPB that is keeping an eye on the industry. Insurance agencies such as Lloyd’s of London also have a vested interest in making sure rules are followed.

And what about BP’s reputation after the Deepwater Horizon tragedy?

“I don’t want to defend BP, but, like any company after an accident like this, we have seen evidence of significant programs that they have implemented internally to address the situation,” says Pink, who also argues that the Nova Scotia regulatory regime has a lot more checks and balances than exist in American jurisdictions.

 

Mark Butler and Gretchen Fitzgerald continue to be worried.

“Any time I hear them say we are a world class regulator, I think to myself, name me one place that you wouldn’t approve, ” says Fitzgerald. “Even in the case of Sable Island they didn’t turn the oil and gas industry away, they said you can’t drill on the island, but you can drill under it, and you can do seismic testing on it.”

And Butler argues for a radically different approach to offshore oil and gas activities.

“Here in Atlantic Canada we have more of our offshore open than almost any part of North America,” says Butler. “It would be good to flip it around, so that areas are considered closed until they are opened.”

“Let the oil and gas industry make a case that it should have access, rather than make the fishing industry, the tourism industry and the environmentalists lobby and argue that an area should be closed.”

Tags: , , , , , ,