THE STANDING SENATE COMMITTEE ON ENERGY, THE ENVIRONMENT AND NATURAL RESOURCES
EVIDENCE
OTTAWA, Tuesday, November 25, 2025
The Standing Senate Committee on Energy, the Environment and Natural Resources met with videoconference this day at 6:32 p.m. [ET] to examine and report on Newfoundland and Labrador’s offshore petroleum industry; and, in camera, for consideration of a draft agenda (future business).
Senator Joan Kingston (Chair) in the chair.
[English]
The Chair: Before we begin, I would like to ask all the senators to consult the card on the table for guidelines to prevent audio feedback incidents. Please make sure that your earpiece is away from all microphones at all times. Don’t touch the microphone, and the deactivation and activation will be done by the console operator.
Finally, avoid handling your earpiece while your microphone is on. Earpieces should remain on the ear or be placed on designated sticker at each seat. Thank you all for your cooperation.
I would like to begin by acknowledging that the land on which we gather is on the traditional, ancestral and unceded territory of the Anishinaabe Algonquin Nation.
My name is Joan Kingston. I’m a senator from New Brunswick. I’m the chair of this committee, Energy, the Environment and Natural Resources, and I would like to have the other senators introduce themselves. I would like to start on my right, please.
[Translation]
Senator Verner: I am Josée Verner, deputy chair of the committee, from Quebec.
Senator Miville-Dechêne: Julie Miville-Dechêne from Quebec.
Senator Youance: Suze Youance from Quebec.
Senator Aucoin: Réjean Aucoin from Nova Scotia.
[English]
Senator Lewis: Todd Lewis, Saskatchewan.
Senator McCallum: Mary Jane McCallum, Treaty 10, Manitoba region.
Senator Fridhandler: Daryl Fridhandler, Alberta.
Senator D. M. Wells: David Wells, Newfoundland and Labrador.
[Translation]
Senator Galvez: Rosa Galvez from Quebec.
[English]
Senator Arnot: David Arnot, Saskatchewan.
The Chair: Thank you very much. So I would like to welcome everybody here today as well as those listening online at sencanada.ca.
Today, pursuant to the order of reference received from the Senate on October 8, we are pursuing our study on the Newfoundland and Labrador offshore petroleum industry. Today, we’re pleased to welcome our first panel as an individual, Max Ruelokke, Professional Engineer (Retired), by video conference. And from One Ocean, Ashley Woodford, Managing Director, by video conference as well.
Mr. Ruelokke and Ms. Woodford, we would like to welcome you here tonight. You have five minutes each for opening remarks, which will be followed by questions from the senators.
Mr. Ruelokke, if you would like to begin.
Max Ruelokke, Professional Engineer (Retired), as an individual: Thank you, Madam Chair. I’m a native Newfoundlander, retired professional engineer and commercial diver. I’ve spent nearly four decades in the offshore oil and gas industry mostly in Atlantic Canada, but also in the Gulf of Mexico, the North Sea, offshore Brazil, offshore India and in the Beaufort. That’s the conclusion of my opening remarks. I’ll be happy to take questions when you have them.
The Chair: Okay. Thank you very much.
Ms. Woodford, can you continue?
Ashley Woodford, Managing Director, One Ocean: Good evening, honourable senators. Thank you very much for the invitation to be here with you this evening and to speak to the committee. It’s my pleasure to be here to tell you a little bit about One Ocean, the liaison organization for the fishing and the offshore petroleum industries in Newfoundland and Labrador.
To give you a brief history of when and why the organization was formed. In 2001, the Canada-Newfoundland Offshore Petroleum Board, or C-NLOPB, and now the Canada-Newfoundland and Labrador Offshore Energy Regulator sponsored a series of meetings with industry representatives from the fishing and petroleum sectors to discuss establishing a liaison organization to enhance the working relationship between the two industries in Newfoundland and Labrador.
In the early 2000s, these discussions were timely, as the offshore was full of activity with Hibernia operating in the field, the anticipation of first oil at Terra Nova, ongoing work in the White Rose field among other activities in support of a busy and growing offshore petroleum sector.
As for the fishing industry, as you will know, the fishing industry in Newfoundland and Labrador is robust, long in history, tradition and part of our cultural landscape. Once, of course, highly dependent on cod, today’s modern fishery sees a variety of species harvested and processed in the province, including snow crab, lobster, shrimp, cod, yellowtail flounder, red fish, among many others. As you will all know, the fishing and the offshore petroleum industries are tremendously important to the economy of Newfoundland and Labrador.
When these two industries came together in the early 2000, both identified the importance of a forum to bring industry representatives together, to share and exchange information, learn more about each other’s operational activities and provide the opportunity to identify, address and resolve issues before they become problematic.
One Ocean was officially launched in 2002. I’ll also briefly this evening tell you about our organizational structure which consists of a secretariat, chair and managing director, a board, working group and fisheries and land tenure committee. Before I discuss who is involved with One Ocean, it’s very important for me to note that One Ocean does not represent the fishing and offshore petroleum industries in Newfoundland and Labrador but rather serves as a bridge between the two.
Being a neutral liaison organization, it’s important to have equal representation for both industries. And for the past 23 years, we have had the privilege to have participation and engagement from industry leaders in the provincial fishing and offshore petroleum sectors. Engaged with our organization, we have fishing representatives from FFAW-Unifor, the Association of Seafood Producers and the Atlantic Groundfish Council.
Our petroleum industry directors are from member organizations with the Canadian Association of Petroleum Producers, or CAPP. We also see the value in having industry regulators represented on our board and see the engagement from the C-NLOER, DFO as well as the Fisheries and Marine Institute and the Canadian Coast Guard.
Briefly, our objectives include providing a neutral forum for information exchange, promoting the understanding of the sector’s operational activities, identifying and advancing specific initiatives to meet industry challenges and successful coexistence. I know we don’t have a lot of time this evening for opening remarks.
In brief, our objectives are met through activities such as robust round tables at meetings of One Ocean for information sharing, through educational seminars, study tours and through the development of resource materials. These resource materials include documentation on effective engagement, resources including a guide to developing fisheries communications plans for exploration drilling programs. We have also had significant engagement on oil spill prevention and response as well as on seismic, which is a priority area for our member groups.
Very briefly, this gives you an overview of our organization as well as some of the mutually beneficial practices and resources that our organization has developed over the past 23 years. Certainly for more detail, I invite you to visit our website oneocean.ca.
As I conclude my brief opening remarks, I’ll underscore to the committee that paramount to One Ocean is the successful coexistence between the offshore petroleum and fishing industries in Newfoundland and Labrador. To achieve successful coexistence, of course, the two industries must work together and endeavour to effectively communicate, manage expectations, build awareness and understanding, identify and address potential conflicts and risks, identify common priorities, ensure safe practices and very importantly, there must be trust, cooperation and respect. We know that meeting all of these objectives can be challenging but the history of the fishing and offshore petroleum industries coming together in Newfoundland and Labrador demonstrates that this is possible.
I thank you for the opportunity to speak to the committee this evening and look forward to taking your questions.
The Chair: Thank you to both of you, and now we’re going to start with questions from the senators. There will be about a five-minute block for question and answer for each of the senators in the first round. I would like to start with Senator Verner.
[Translation]
Senator Verner: My question is for Mr. Ruelokke. During a CBC interview in 2022, you said that the Ocean Ranger tragedy in 1982 led to deep and lasting changes to safety measures for workers and offshore installations. Among the main measures adopted following the public inquiry, which ones do you think have had the most impact on worker and installation safety thus far, in terms of preventing another tragedy?
[English]
Mr. Ruelokke: There were so many recommendations that came out of the inquiry. It’s difficult to specify just a few, but the ones that I think have had the most impact are — I actually worked on the Ocean Ranger, and we were the diving contractors there. We had no safety training, we had no safety survival suits, we had no real safety culture on the rig. Everybody thought that safety was going to be the safety supervisor’s responsibility and not theirs. Of course, that’s far from the truth. It think it’s safe to say that no other incident worldwide caused or has led to as many changes in safety as the Ocean Ranger did. Our industry has been safer in the last 20 years than it was leading up to that.
Senator D. M. Wells: Before I ask my question, certainly to Mr. Ruelokke first, I just want to say that he significantly downplayed his role in the Newfoundland and Labrador offshore industry. He is not just highly respected as an expert in regulatory and engineering fields in Newfoundland and Labrador, but globally. I just want to recognize the quality of professionalism that we have here as a witness. He also established that safety culture that he likely referenced, but I want to emphasize it a little more that even though the offshore regulator, when it was the offshore petroleum board, has four mandates from the Atlantic Accord, Mr. Ruelokke was the one who reinforced that safety was to be a primary significance.
I also want to say that he has been a mentor to me in my role at the ward while he was there. I’ll start with that.
Mr. Ruelokke, we hear comparisons all the time about regulatory agencies, regulatory bodies around the world — in Guyana, West Africa, in the Beaufort Sea, especially in Norway. Do we have anything to learn from them, or how does the Newfoundland and Labrador offshore regulatory authority compare with those globally?
Mr. Ruelokke: I think it compares very well. Senator Wells, as you would know, we have something called the International Regulators’ Forum. It brings together the regulators from a number of countries, including the ones that you mentioned.
The key purpose for that is to learn from one another. I think we all do a very good job in our own jurisdictions, but when we get together and compare notes, we always find things that we can improve just a little bit. But in terms of the overall efficiency of the safety regulation regime in Newfoundland and Labrador, I think it’s equal to any and much better than some.
Senator D. M. Wells: Mr. Ruelokke, thanks for that. What do you see as the biggest impediment to increasing activity in the offshore?
Mr. Ruelokke: I think right now, unfortunately, it’s something that governments have done. I think the passage of Bill C-49 has introduced a higher level of risk to offshore petroleum activities because of clause 56 within that bill. It gives governments the opportunity to cease exploration, cease development or cease production from the project that has already been approved. Or it can be subject to environmental assessments, development plans and benefit plans if governments perceive there will be some threat to the environment in the future. In addition they can pass legislation that would cause activity to cease even if they are in the middle of producing, for example, in Hibernia or Terra Nova. I believe that’s one of the reasons we have not seen any extra bids for exploration licenses in the last two years. That’s very unhealthy. If we don’t have a continuation of exploration, our industry is in a decline.
Senator D. M. Wells: So you would see a change in the legislation or removal of clause 56 in Bill C-49 as a remedy?
Mr. Ruelokke: Absolutely, I would see it that way. Yes.
Senator D. M. Wells: Thanks. I have a question for Ms. Woodford too. Thanks, Ms. Woodford, for your presentation and for the work you do to mitigate risks.
Can you talk about some of the conflicts that have arisen that One Ocean has helped solve prior to it being full-blown conflict on the water or on shore?
Ms. Woodford: Certainly. Thank you, Senator Wells, for your question. As I mentioned in my comments, the biggest objective for One Ocean is to support successful coexistence in the shared marine environment between the offshore petroleum and fishing industry in Newfoundland and Labrador.
There is, of course, opportunity for overlap between these two industries when it comes to programs like exploration drilling programs and seismic survey programs. Throughout the course of the past 23 years, certainly we found that the biggest way to help mitigate any issue, be it whether being attached to an exploration drilling program or a seismic survey program, is early notice to the fishing industry, engagement with the fishing industry, as well as effective communication with the fishing industry.
I’ll use seismic survey program for an example, which often takes place, of course, in the spring and the summer, which would be in direct timeline correlation with the crab fishery. When these programs, which were often large in scale, are ongoing and, throughout the course of spring and summer, cover a large amount of ground, it’s tremendously important to engage with fishing industry stakeholders early and on an ongoing basis throughout the duration of that program. I would certainly say that some of the communication protocols that we have helped implement between parties, be it seismic or be it recommendations for communication on exploration drilling programs, are initiatives that help communication and play a large part in mitigating conflict. Another example is the Fisheries Liaison Officer program, which is administered through FFAW-Unifor, that sees an individual aboard a seismic vessel and helps mitigate any sort of conflict with fishing activity by means of communication on board that vessel.
The Chair: Thank you.
Senator Galvez: First question is to Mr. Ruelokke. We know that in 2018 there was an oil spill of 250,000 litres of crude oil in the Atlantic Ocean. Would you consider that negligible? What is the line you will draw in order to say these environmental impacts are nothing, so we should get rid of section 56, but these other environmental impacts such as the ones that were caused by the Deepwater Horizon, are unacceptable? Where do you draw the line? What is acceptable? What is not acceptable?
Mr. Ruelokke: No oil spill is acceptable, ever, in the marine environment.
Senator Galvez: Okay. Thank you. I want to talk to you about the economics of this oil exploitation. We know that the United States intends to lease and sell new offshore oil and that the two major companies involved are Chevron and ExxonMobil.
At the same time, we have oil exploration and production boom under way in South America, with Brazil and Guyana. First question is: How does this competition from the United States and competition from Guyana and Brazil affect the economy of the oil in Newfoundland? How much do you expect that the oil — the barrel of oil will go? Do you think it will eventually get back to $100 a barrel?
Mr. Ruelokke: I will take your first question first. The oil industry is competitive on a worldwide basis. When the oil companies make a decision as to where they are going to invest their dollars, they make a risk assessment based on a variety of factors. One of them, obviously, the key one, is the potential productivity of any reservoir there. That’s why we have seen such a huge increase in the last number of years in Guyana.
Unfortunately, when there are areas that appear to be more productive, then that’s where the oil companies are going to spend their money, and the fact that the current U.S. government is opening up offshore areas that were, heretofore, forbidden to oil exploration, then that certainly is a factor that, again, reduces the potential for further expenditures in the Newfoundland and Labrador offshore area.
As to the second question, if I thought I could predict what the price of oil was going to be at any point in time, I think I would be a much wealthier man than I am right now. I really can’t answer. But I will just state a couple of facts that will impact that.
In 2022, the International Energy Agency’s report predicted that by 2050 the worldwide demand of oil would be reduced from the approximately 100 million barrels of oil per day that it is now to 24 million barrels of oil per day. Thirteen days ago, on November 12, they released their 2025 report. It stated that under current government policies, the daily requirement for oil in 2025 will not be 24 million barrels a day, it will be 113 million barrels of oil per day. If you look at those two numbers, that leads you to believe that the price of oil can only increase because the demand is going to increase.
Senator Galvez: What about the supply? Is the supply not increasing?
Mr. Ruelokke: Supply has been increasing, but it is a non-renewable resource, so eventually the supply will have to run out.
[Translation]
Senator Miville-Dechêne: I will turn to Ms. Woodford first.
Where does One Ocean get its funding?
[English]
Ms. Woodford: Thank you for your question. One Ocean is funded privately through our member organizations. We don’t receive any sort of public funding.
[Translation]
Senator Miville-Dechêne: You are not funded by the oil industry?
[English]
Ms. Woodford: We’re funded through member organizations of the Canadian Association of Petroleum Producers.
[Translation]
Senator Miville-Dechêne: Okay.
Last week, a Unifor representative appeared before the committee to talk about fisheries. She wasn’t as optimistic as you are about the fishermen. We learned that when oil prospectors occupy a large ocean area, fishermen receive no compensation. Have you participated in negotiations regarding compensation for fishermen when ocean areas are used for, or destroyed in part by, oil exploration, or talks on how to compensate the impacted fishermen?
[English]
Ms. Woodford: Thank you for your question. I first would like to say — and I reiterated this in my opening statement — One Ocean is a neutral industry group. We do not represent the fishing nor the offshore petroleum industries of Newfoundland and Labrador, but rather, we serve as a bridge between the two industries. That is, of course, always important for me to note. The member groups under our respective umbrella, they represent the interests of their respective memberships and organizations.
In terms of your question around compensation, that has never been a legislative or regulatory requirement for compensation associated with exploration drilling and space that this may take out. That’s a complicated question — I can’t say historically if it’s never been a discussion. To the best of my knowledge, it never has.
Obviously, before a company or an operator is awarded an exploration drilling licence, they go through the land tenure process as regulated by the C-NLOER. Under that process, there are opportunities through the land tenure system for groups such as our fishing industry groups as well as any individual or member of the public to submit information in support of the lands that are up for bids. Certainly, throughout that process, the regulator would encourage the fishing industry, and has encouraged the fishing industry throughout the history of the offshore of Newfoundland, to submit data and information in support of any fishing information on the areas that are being considered for perspective bids.
There is sort of a whole wide system where the — obviously, managed by the C-NLOER — where the fishing interest has the opportunity to feed into the land tenure process before an exploration drilling program was to happen. That’s step one is that there is an opportunity to contribute feedback to that process before exploration drilling even does occur so that there is an awareness of what the fishing areas are. We know that can change year over year.
But, in summary, that has never been a legislative or regulatory requirement.
[Translation]
Senator Miville-Dechêne: Have the fishermen ever won? Have they ever succeeded in stopping oil exploration, because the impact on fish stocks was too great?
[English]
Ms. Woodford: No. I understand your question to be in terms of if the fishing interest has ever stopped, as in stopped in its process. In the exploration drilling program that has, historically, never occurred in our province. Certainly, we hope, through robust consultation the voice of the fishing interest is heard well in advance of any exploration drilling program occurring. As I mentioned, there is opportunity for the fishing industry to do that through the land tenure process.
Senator Miville-Dechêne: I have to interrupt you because I’m out of time. Thank you very much.
[Translation]
Senator Aucoin: Thank you to our guests for joining us. My question is for Mr. Ruelokke. You are an engineer and, as you pointed out, you are also a diver. You have worked all over the world and been on many drilling platforms. Many witnesses over the last few weeks have talked about safety measures that have been put in place. You talked about the safety standards in Newfoundland and Labrador, which are recognized everywhere.
My question is on two points. I would like to know how it works on the ocean floor, because we haven’t talked about that. When, for example, an oil well at the bottom of the ocean needs to be capped for whatever reason or when a platform needs to be moved, how does that work? What does that look like? Is it safe?
[English]
Mr. Ruelokke: Thank you for your question. I will speak specifically about a remote exploration well, or perhaps a remote production well. For a floating production and offloading system, the wells are not directly located directly within the platform, they’re out on the seabed some distances away. There is a system of valves connected to each, sub-sea valves on each petroleum well. They are controlled remotely from the surface.
If there is a need to, for example, pull away from that particular well, for whatever reason, then you would close those valves, flow sea water back through the pipeline to ensure there is not going to be any spill from the pipeline, and then it’s safe to move away from that well.
If it’s an exploration well, then at the bottom of the drill string — located on the seabed — on top of the undersea drill pipe there is something called the “blowout preventer.” It has a series of valves and, in extreme cases, shear rams. It can shut off the valve and then shear the drill pipe. Then it becomes safe to move away.
Unfortunately, we’ve seen instances where that hasn’t worked. And the most spectacular one was the Deepwater Horizon in 2011 in the Gulf of Mexico, where the blowout preventer failed to perform those activities and there was obviously a very huge spill as a result of that.
[Translation]
Senator Aucoin: My last question is on that topic. What more could be done to improve this system and prevent blowouts?
[English]
Mr. Ruelokke: There are usually three sets of rams in the blowout preventer. Either one of them — if it is used successfully — can prevent a blowout. Unfortunately, there can be times when all three will fail. To my knowledge, it’s only ever happened once, but then once is too many.
People are always looking for ways to improve, but to my knowledge a way to improve that situation has not yet been found, unfortunately.
Senator Aucoin: Thank you, sir.
The Chair: I want to inform each of our guests that although you are muted, each time you stop talking, you are not automatically unmuted. We are sorry about that.
Senator Arnot: Mr. Ruelokke, you have extensive expertise, and based on your career-long understanding of the sector, do you believe Newfoundland and Labrador can remain competitive and safe in a net zero 2035 world?
Secondly — and this is a general question and I will get more specific — what market and economic conditions would be necessary for that to be true?
And, sir, I want to understand, are you saying that in Bill C-49, section 56 is an impediment to investment which is essential? I’m asking you if Bay du Nord needs a total green light for the survival of the Newfoundland offshore industry?
Mr. Ruelokke: Yes. To answer your second question first, I think if Bay du Nord doesn’t go ahead then we’re looking at a continuation in the decline of overall production within the Newfoundland offshore oil and gas industry.
Hibernia has been producing since 1997, Terra Nova and White Rose since the early 2000s, Hebron just started a few years ago. They are all in a process of decline. It is only new projects like Bay du Nord that can return us to higher production levels.
Senator Arnot: Are you saying that section 56 is an impediment to the kind of investment required for Bay du Nord? Just explain that a little more, please.
Mr. Ruelokke: As I mentioned in response to an earlier question, all oil company investments are done on the basis of risk assessment. I believe that section 56 presents an additional risk to operators. Projects are subject to rigorous examination before they are approved. There is an environmental assessment, operational planning, benefits planning, and resource planning. Even though a project has passed all those hurdles and is in production, if either of the two governments believe that there might be additional risk to the environment in the future, they then have the opportunity to cancel that program, whether it is exploration or development or production. I believe operators see that as a level of risk that most of them are probably not going to be willing to accept.
I believe that’s one of the reasons why, in the last two years, we have not seen any bids for exploration licences, and that’s very unusual. The last exploration licences that were bid on successfully was in January 2023, nearly three years ago. If we don’t see new exploration licences then we’re not going to see a continuation of the oil and gas industry.
Senator Arnot: If you eliminate section 56 would you anticipate significant investment to follow because that risk would be abated?
Mr. Ruelokke: Yes. I can’t say that it would be significant because there are a lot of other factors involved, but there would definitely be more interest in bidding in offshore Newfoundland and Labrador if that section was removed from Bill C-49, in my view.
Senator Arnot: And you seem surprised that there isn’t more investment activity over the course of the last three years. The drop-off is remarkable?
Mr. Ruelokke: It is huge. I was at the board from 2006 to 2012, and it was not unusual for us to receive exploration bids totalling more than a billion in a year. Those bids are commitments to spend money on exploration.
Senator Arnot: I think that’s fine. I have got a clear picture of your evidence there. Thank you for assisting us in our work.
Senator McCallum: Following the passage of the One Big Beautiful Bill Act, the United States of America Department of Interior has announced a long-term schedule for offshore oil and gas lease sales in that country. The first lease sale is in the works to incentivize companies to bid. The royalty rate has been lowered from 18.75% to 12.5, the lowest allowed under U.S. law.
Offshore oil production in the U.S. is already more significant than Canada’s offshore production in terms of its share of total production. The two U.S. oil majors are two of the main operators in Newfoundland and Labrador’s offshore, Chevron and ExxonMobil. How does competition with the U.S. offshore petroleum sector nuance Newfoundland and Labrador’s offshore petroleum sector?
It is troubling to hear that since 2025 you haven’t gotten any bids. I find that troubling because right now, we have no other option, and we need to support oil at this time.
Mr. Ruelokke: I would certainly agree with that, but I think any time there’s a new area opened up for offshore exploration development or production, it decreases the likelihood of investment in the other areas. They have a certain amount of money to spend, and if there are more areas that are eligible for that, then the amount they spend in any particular area is likely to decrease. It is going to negatively impact, potentially, any investments here.
There is no easy answer to that. As I say, the current American government is removing the restrictions that have been in place for years. Obviously, that has renewed interest within — as you mentioned specifically — the U.S.-owned operators to invest in their own country.
Senator McCallum: And for Ms. Woodford, One Ocean seems to be in a very unique partnership. How will the renewables affect this relationship, and what factors would need to be taken into consideration? Is that something you’re thinking about?
Ms. Woodford: Thank you for your question. What is known or been studied so far — and certainly from the recommendations that have been made from the committee that studied potential areas for offshore wind in Newfoundland and Labrador last year — to the best of our knowledge, at present, it does not appear that there will be an overlap with any sort of prospective offshore wind project and fishing and petroleum activity. There is no intersection of the fishing industry, the offshore petroleum industry and a potential third industry being offshore wind.
Our One Ocean mandate is between the offshore petroleum and fishing industries because of the opportunity for spatial conflict that currently exists. To the best of our knowledge right now with what has been done with the regional assessments in the current recommended areas, there would be no overlap of the three. It is something, of course, that our member groups are interested in and look forward to seeing how that new industry rolls out in the province. We know there is a lot of work to do and sometime before land sales for offshore wind commence, and obviously the fishing industry stakeholders have an interest in offshore wind, and they have expressed their views through the regional assessment process, and I’m sure will continue to do so. So it is something that we’re monitoring, but at present it doesn’t appear that there will be a spatial overlap between our two industries and an emerging industry in offshore wind.
Senator McCallum: Thank you.
Senator Fridhandler: Mr. Ruelokke, my colleague Senator Wells is a big booster of the offshore Newfoundland industry and that’s one of the things I like about him. He would always tell me that offshore Newfoundland is much friendlier climate-wise than onshore Alberta. I know it is hard to broad brush, but can you give me a comment on that, just to tell me whether you think he is correct or not. But don’t be too polite.
Mr. Ruelokke: To talk about climate, I will give you one example that is perhaps a little bit striking. We had a semi-submersible drill rig called the Eirik Raude to drill a well up near northeastern Newfoundland in about 2010. She was on that well for about 210 days. Statistically speaking, during those 210 days, we had two 100-year storms blow through that region. That tells you a little bit about the climate in offshore Newfoundland. It can be rough. I don’t know enough about the climate in onshore production areas in Alberta to be able to draw a comparison.
Senator Fridhandler: Let me ask you a follow-up on a different matter. When we talk about seeing the offshore industry thrive. Have there historically been reserves that have been identified that have not been brought into production that at the right price and only price might be commercially viable?
Mr. Ruelokke: Yes, there certainly have been areas where, for various factors, it is going to be more expensive to produce. Operators will review them on an annual basis or even more periodically perhaps to see whether the cost of tying back, for example, 20 million barrels of oil that’s in a more remote location, if the current price is going to justify the economics of tying them back. The short answer is, yes, there are reserves that could be brought on if the economics are right.
Senator Fridhandler: Ms. Woodford, on the oil industry side of things, I find it interesting that it is CAPP, an industry association, and not the operators, and I suspect when there are incidents between fish harvesters and operations that are specific to an operator, you interface with the operator directly or industry players within that operation. Not that I have a problem with CAPP, I just want to understand how you got into the direct relationships. I have worked with these folks, and they don’t all think the same.
Ms. Woodford: Thank you for the question. My apologies, I should have been more specific in my opening remarks.
To further elaborate on the organizations that are involved with One Ocean, on the petroleum industry side, the representatives that we have at our board of directors, for example, are representatives from member organizations of CAPP. For example, we would have a seat for ExxonMobil Canada, Suncor, Equinor, basically all of the operators. I didn’t mean to just specify CAPP as an organization, but we do have representation from all of the producing operators in our province that participate in One Ocean again, organizations like Equinor, Suncor, Cenovus, ExxonMobil Canada, as well as representation from CAPP. I apologize, I wasn’t very clear in my remarks.
Senator Fridhandler: That’s your board, but what about when you deal with situations? Are you always dealing through intermediary CAPP or are you dealing with the operators?
Ms. Woodford: My apologies. Yes, we interface directly with the operators, be it the producing operators or be it an operator who is undertaking an exploration drilling program. There is direct interface both through One Ocean and with our fishing stakeholders directly, with the operators and again, the examples of that could be during an exploration drilling program, the operator will be required to interface and engage with fishing industry stakeholders. Again, I apologize for that lack of clarification, but we certainly do have engagement from all our producing operators in the province as well as any new entrants into the province for exploration drilling purposes.
Senator Fridhandler: Thank you.
[Translation]
Senator Youance: My question is for Ms. Woodford.
I read in a document that One Ocean published on its website risk management matrix guidelines. It was very useful, because it highlighted the potential conflicts between the two industries, and the dialogue structure needed in such cases. It really meets One Ocean’s objectives.
Could you tell us what methodology was used to develop the guidelines?
[English]
Ms. Woodford: The documentation that you are referring to has a rather long title, but it is called the One Ocean Risk Management Matrix Guidelines for the Utilization of Fisheries Liaison Officers and Fisheries Guide Vessels for the Fishing and Petroleum Industries of NL. Basically, through the course of the past 23 years, early in One Ocean’s existence, the two industries came together and built upon some programs that were already in existence, called the fisheries guide vessel programs and the fisheries liaison officer programs. To keep it brief, basically the fisheries guide vessel program is utilized when there is a tow, for example, of a concrete gravity structure, or CGS, to the offshore, as we saw last summer.
This particular program engages a member of the fishing industry to participate in a tow program, of which we’ve seen many throughout the course of the offshore, be it tow-out of Hebron, for example. So we would have a member of the fishing industry participate in that tow out, with the primary purpose of scouting gear, and communicating gear location back to the tow master with the hope to avoid any potential interaction with that gear. So it is a communications role, in large part that has participation from the fishing industry. The document which you are referring to outlines some suggestions for operators to consider when they have a program that requires, for example, a tow of a structure and in which they should consider engaging a fisheries guide vessel. Fisheries liaison officers are primarily used for a seismic program. I alluded to that earlier, in which an individual who maintains certain credentials, a member of the fishing industry, would be aboard a seismic vessel, with the purpose of basically scouting for gear so there is no interaction with that particular seismic vessel.
That particular documentation was developed in consultation and collaboration with the two industries some 20 years ago and still processes and programs are in place today.
[Translation]
Senator Youance: Is there an updated version of the document? Even better, is there a similar tool to evaluate the long-term environmental and economic impacts on the fishing industry?
Finally, if ever there were discussions about the repercussions on the local economies, what recommendations would you have for a potential governance or coordination mechanism to address the daily consequences of offshore development on the fishing industry?
[English]
Ms. Woodford: To the best of my recollection, I do not believe there have been studies done in terms of the economic impact on the fishing industry. I will, certainly, follow-up if I am found to be in error on that, but to my knowledge, I don’t believe that studies have been done. I will follow this up if there is some historical information that I’m not aware of. Pertaining to the beginning of your question, I believe you asked about updating of our protocols, which we do endeavour to review and update on an ongoing basis.
The Chair: Thank you. I have a favour to ask of the two of you, Mr. Ruelokke and Ms. Woodford. Do you have another 10 minutes or so after 7:30? More senators want follow-ups? Are you okay to stay on, both of you?
Mr. Ruelokke: Yes.
Ms. Woodford: Yes.
Senator Lewis: Bill C-49 and section 56 specifically, in your experience, Mr. Ruelokke, you’ve been in lots of jurisdictions, is there any similar legislation or regulation that you’ve run across that sets out the same parameters as clause 56 does?
Mr. Ruelokke: To the best of my knowledge, there isn’t, but in saying that I have to acknowledge that I’ve not been in the regulatory business for over 10 years, so there may well have been regulatory changes that I’m not aware of. But just from chitchat with colleagues, I do not believe there is any other such restriction in other jurisdictions.
Senator Lewis: For Ms. Woodford, you have a lot of masters with all your membership and everything. We talked about some impediments. Are there impediments between the federal government and the provincial government and all the other DFO and governmental agencies that you deal with in communication and cooperation between them and the other people in your group?
Ms. Woodford: Just speaking for One Ocean, while we don’t represent or speak for the industries themselves, we have great engagement from the regulatory entities, C-NLOER and DFO. As well, we have some participation from Natural Resources Canada on our committees, as well as provincial representation. We find — and maybe I am just very optimistic, which I do tend to be — that we have good collaboration between all stakeholders. That is one of our objectives, and something that’s very important to our organization is the relationship-building aspect between the fishing industry and the offshore petroleum industry with the individual operators and any other contractor that may come in, for example, on a seismic basis.
The relationship building has been essential to what we would like to call success of the successful coexistence. I can’t say there are not any barriers. We have great engagement and great participation from all the stakeholders, and we certainly do our best to promote relationship building and that has led to what we would generally consider to be success.
Senator Lewis: Thank you.
Senator D. M. Wells: Mr. Ruelokke, one question about the one of the provincials of the Atlantic Accord, under which the regulator is responsible. I know there are four; health and safety, environmental, resource management and industrial benefits. This one is about industrial benefits because this is one of the things that’s most important to our province. I was at a supplier forum a couple of weeks ago, the Equinor supplier forum. There were 400 or 500 people in the room representing companies mostly in Newfoundland and Labrador but from around the world. Can you talk a little bit about what the requirements are under the industrial benefits provisions of the Atlantic Accord, and if there are no specific provisions in the Atlantic Accord acts, how did the other how does the regulator address the industrial benefits aspect?
Mr. Ruelokke: Thank you for that question, Senator Wells. The Atlantic Accord requires that qualified companies or individuals that are resident within the province be given fair and equal opportunity to any procurement activities by the operator. That’s really as specific as it gets.
As you will be aware, there is a requirement on each operator — be that exploration operator or production operator — to develop an industrial benefits plan and program. That is subject to review by the offshore energy regulator now and has to be approved prior to the development plan being approved.
I don’t do it anymore, but what the operator regulator tries to do is to encourage the operator to go above and beyond the strict requirements of the Atlantic Accord and be very proactive in seeking opportunities that might not have otherwise existed by just going a little bit further than the regulation requires.
Senator D. M. Wells: The operators, both in exploration and production, in your experience, do they supply over and above what the Atlantic Accord requires?
Mr. Ruelokke: It will vary. Over time, it has increased. Let’s just say it’s possible for the regulator to encourage them to think out of the box and to go a little further than they might be required to do if there is an opportunity to help a new company grow or to provide a level of service or type of service they haven’t done before. We would generally try to encourage that.
Senator D. M. Wells: Thanks Mr. Ruelokke for your contribution to the committee.
Ms. Woodford, one final question. I am a little confused about it, and I shouldn’t be. Is the organization funded by the operators or CAPP? Is the board the operators or CAPP, or are there other members that contribute? At what levels are DFO, the regulator, NRCan and FFAW-Unifor represented at? Are senior levels represented? Can you tell me how this works, and how they work things out at that level?
Ms. Woodford: Sure. Our board of directors, we have equal senior-level representation from both industry sectors. For example, from FFAW-Unifor we have their president, as well as their secretary treasurer and a member of their inshore council that sit on our board. It is the same with the Association of Seafood Producers, we would have their executive director and a member of their board. The same for the Atlantic Groundfish Council. We have a member of their board that participates as director of One Ocean.
On the petroleum industry side, as I mentioned earlier, we have the representation from all of the operators present. So ExxonMobil, Suncor, Cenovus, Equinor as well as an individual from CAPP. I apologize in my wording of that earlier, it wasn’t clear. But we do have senior level representation. I won’t endeavour to provide their titles and I might get it incorrect, but we do have senior-level representation from the operators present on our board.
And we do have a funding structure that is provided through the operators, and that’s in conjunction with a formula based on land that is held as well as from the operators. There is a formula for our members of CAPP to contribute funds.
Senator D. M. Wells: Are there any other organizations like this that you’re aware of in the world operating in other offshore production areas?
Ms. Woodford: No. I apologize, I didn’t answer the rest of your question in terms representation. We also have what we call official observer status for the C-NLOER on which the CEO sits, representation from DFO in which the regional director general sits, as well as the Coast Guard and vice-president of the Fisheries and Marine Institute.
To the best of our knowledge, as it exists, there is no other organization like ours that operates internationally. In the early days of One Ocean, we did take a lot of inspiration from places like Norway in how they operated and interacted with the fishing industry. But to the best of our knowledge, there is no organization quite like ours.
Senator Galvez: Mr. Ruelokke, thank you so much for saying that no oil spill is acceptable. Thank you so much for that.
But you know that there have been several past accidents in that area; Terra Nova in 2004, White Rose in 2008, Hibernia in 2006 and in the Hibernia platform in 2018, 12,000 litres was released.
You say that by eliminating section 56 of Bill C-49, it will reduce risk, you are not talking about reducing the risk for environmental problems. You are not talking about reducing risks for wildlife impact or fisheries and tourism. What you are talking about is reducing the risk for the investors because there will be an impact on the regulatory oversight because we’re eliminating this section.
If we give this mitigation of risk to investors, are you are saying that this will make the economic case for this project that otherwise doesn’t exist for the exploitation of the oil in this part of Canada’s ocean?
Mr. Ruelokke: What I’m saying is that the operators see section 56 as adding additional risk to their investment. It may well cause them to make their investment somewhere else. I should be careful to point out that I am not suggesting in any way that removing section 56 is going to decrease the level of environmental responsibility that the regulator places on operators. There is no linkage between the environmental requirements and the financial risk of the investor.
Senator Galvez: Thank you.
The Chair: We have come to the end of our evening together. I would like to thank Mr. Ruelokke and Ms. Woodford very much for being here. We’re going to take a two-minute pause, and we’ll be back. Thank you so much for being here.
(The committee continued in camera.)