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Analysis: Lax Offshore Oil Regulation Puts Atlantic Canada Ecosystems, Communities at Risk

Offshore oil and gas activities in Atlantic Canada are a genuine threat to the ocean ecosystem and exacerbate climate change, but the federal government is falling short in its plans to regulate that activity, writes Mark Brooks, senior specialist, oil and gas at WWF-Canada, in a recent post on the WWF blog.

If a major spill or a well blowout (an uncontrolled release of crude oil after a pressure release system fails) was to occur in the Atlantic Ocean—where extreme weather and deepwater drilling are commonplace—it would seriously imperil the surrounding marine environment, potentially destroying habitat for whales, fish, sea birds, and many other animals.

The consequences for coastal communities, many of which depend on healthy, clean waters for their livelihoods, could be devastating.

The elevated risk of operating hundreds of kilometres offshore in an extreme environment makes it incumbent upon the Canadian government to ensure the world’s highest standard of safety and environmental protection for oil and gas operations.

The federal government recently proposed updated regulations for oil and gas operations in the offshore areas surrounding Nova Scotia and Newfoundland and Labrador. Unfortunately, these regulations fall far short in ensuring safety and environmental protection.

In fact, the new rules do not even require the use of the best available and safest technologies on offshore installations and spill response equipment.

The proposed new regulations are notable for their inadequate provisions and for the critical issues they omit, Brooks says—most glaringly, climate change, drilling in ecologically or culturally sensitive areas, and Indigenous rights.

There are no requirements to ensure that a major oil spill could be contained within a specified time frame.

In Alaska, spill containment equipment such as oil well capping stacks must be onsite within 24 hours of an accident.

And after the 2010 Deepwater Horizon blowout, the use of safety equipment (such as double shear rams) is now required in the Gulf of Mexico to provide backup in the event of equipment failure.

No such requirements exist in Canada’s proposed regulations.

The regulations also inexplicably do not prevent oil companies from drilling in ecologically sensitive marine ecosystems or in culturally important or high-risk areas. The North Atlantic has sensitive and unique ecosystems that are vulnerable to disturbance and many communities depend on a healthy marine environment for their subsistence, as well as their social, spiritual, and cultural well-being. These areas should be off-limits to drilling.

If a major accident does occur in the offshore, Canadians could be on the hook for billions of dollars in clean-up costs. Current regulations cap operator liability at C$1 billion, whereas the Deepwater Horizon spill reportedly cost US$62 billion in damages, and some studies have estimated the actual cost at $145 billion.

In Canada, liability is unlimited only if the operator is proven to be at fault. But if a serious accident were to take place as the result of a chance occurrence—such as a severe storm or iceberg collision, both made more likely by climate change—it’s not clear who would be responsible for the damages. The United Kingdom, Russia, and Greenland have unlimited liability for offshore oil and gas operators, meaning the operator is liable for pollution damage regardless of the reason.

Given the risks of a major offshore spill in the Atlantic, there can be no justification for companies to use cost as an excuse for not taking every necessary measure to reduce risk when effective and immediate oil spill response is in doubt. Norway’s citizens are informed about risk levels and individual company practices through a government website, so why aren’t we?

There are also no requirements in the new regulations to ensure that decisions about offshore oil and gas activities are consistent with Canadian carbon reduction commitments and Indigenous rights and agreements.

The regulator will not be obliged to recommend the rejection of a project that has an inadequate strategy to minimize or eliminate greenhouse gas emissions.

Meanwhile, in Greenland, the government must consider any negative impact on the climate when it decides whether to grant an offshore licence. This has led to the country’s recent decision to ban all future offshore oil exploration on environmental grounds.

Finally, the Atlantic offshore petroleum Boards will continue to be in charge of both ensuring the “maximum recovery of petroleum” and regulating the industry for safety and environmental protection.

Investigations into previous offshore accidents have highlighted the critical importance of separating responsibilities for production and safety under different agencies.

Canada is far behind other countries in ensuring that offshore oil and gas activities can be carried out safely with the lowest possible risk to local communities and the marine environment. We must do better.

This post originally appeared on the WWF-Canada blog. Republished with permission.