THE SENATE COMMITTEE ON ENERGY, THE ENVIRONMENT AND NATURAL RESOURCES

Do the Facts Justify Banning Canada’s Current Offshore Drilling Operations?

The Senate Committee on Energy, the Environment and Natural Resources Tables its Report on Offshore Drilling

Ottawa, August 18, 2010 – As a consequence of concerns expressed by Canadians following the recent disastrous BP incident which spewed millions of barrels of crude oil into the Gulf of Mexico, the Standing Senate Committee on Energy, the Environment and Natural Resources conducted 6 weeks of fact-finding hearings to determine the actual status of Canada’s offshore drilling operations. The goal was to establish whether there is an imminent risk to Canada’s environment from subsea oil and gas exploration activities off Canada’s three coasts (Atlantic, Pacific and Arctic). This special study included a review of Canada’s federal and provincial regulatory regimes governing Canada’s offshore oil and gas exploration and development industry. The committee today tabled its report Facts do not Justify Banning Canada’s Current Offshore Drilling Operations: A Senate Review in the Wake of BP`s Deepwater Horizon Disaster.

There is only one drilling project presently being carried out, namely, the Chevron Lona O-55 exploratory well being drilled in the Orphan Basin of the Atlantic Ocean, some 430 km northeast of St-John’s Newfoundland. There are no offshore operations off Canada’s Pacific coast or in its Arctic waters. There are, however, some active oil and gas development operations being carried out off the coast of Newfoundland and Labrador and Nova Scotia. The committee also found that Canada’s federal and provincial regulatory regimes work well, and are continually improved based on experience such as the BP incident. Accordingly, the committee concluded in the absence of evidence to the contrary, there is no justification for a temporary or permanent ban or moratorium on current Canadian offshore operations. The committee, however, did conclude that any future offshore drilling operations authorized to take place in Canadian waters, especially in the Arctic, will need to be carefully regulated and controlled, taking into consideration lessons learned from the BP incident and the National Energy Board Regulatory Review presently being carried out. 

In keeping with its commitment to establish a framework for a more efficient energy system for future generations, the committee made six recommendations in its report to stimulate discussion in order to find the best path forward to a secure, competitive and sustainable energy future. These recommendations include: 

• Exploring in greater detail the structure and role of the offshore petroleum Boards to determine whether there may be in fact a material conflict between regulatory roles.

• Greater collaboration between all those responsible for responding to an oil spill in developing, preparing and practicing in advance of an event.

• That all offshore operators be required to organize Tier Three spill response tabletop drills at regular intervals.

• A comprehensive review of the issue of liability, including whether the thresholds should be adjusted to reflect current economic realities.

“Our committee has conducted these hearings to educate and inform Canadians about offshore drilling and exploration in Canada. Canadians are questioning whether we have sufficient regulatory and other safety regimes in place to minimize the risk of a similar disaster in Canadian waters. Based on the evidence we have received from a number of witnesses involved in regulation and industry, the committee was assured that Canada’s current legislative and regulatory regime is among the most stringent and innovative in the world,” said Senator W. David Angus, Chair of the Senate Committee on Energy, the Environment and Natural Resources. 

“The committee learned that Canada has a goal-oriented regulatory approach which avoids setting ceilings for standards and that technology continues to improve in the offshore industry. These factors should help to minimize the risk of repeating past incidents,” said Senator Grant Mitchell, Deputy Chair of the Senate Committee on Energy, the Environment and Natural Resources. 

The committee held nine hearings and heard from 26 witnesses. Testimony has been heard from many different stakeholders including the Canada-Newfoundland and Labrador Offshore Petroleum Board; Canada-Nova Scotia Offshore Petroleum Board; the World Wildlife Fund Canada; Natural Resources Canada; Chevron Canada; the National Energy Board; the Eastern Canada Response Corporation; the Canadian Coast Guard; Husky Energy; Encana Corporation; the Canadian Association of Petroleum Producers; and the Offshore/Onshore Technologies Association of Nova Scotia.

For further information or for a copy of the report visit the committee website at: www.senate-senat.ca/eenr-eern.asp.

To schedule an interview or learn more about the committee, please contact:

Media Relations:
Mona Ishack
613-944-4082
ishacm@sen.parl.gc.ca

Committee Clerk:
Lynn Gordon
613-991-3620
gordol@sen.parl.gc.ca