Canada’s Environment Minister, Leona Aglukkaq, gave Shell Canada up to three weeks to cap any subsea blowout that might result from future petroleum exploration off Nova Scotia’s South Shore. Similar legislation in the U.S. requires companies to cap a ruptured well within 24 hours.

The three-week time period is included in Shell Canada’s capping plan, a part of the company’s proposed Shelburne Basin Venture Exploration Drilling Project. Minister Aglukkaq green-lighted the project on June 15 following an assessment by the Canadian Environmental Assessment Agency.

Under the plan, a blowout would spill oil or gas into the ocean for up to 21 days before Shell would be required to have a capping stack or marine well containment system in place.

Capping stacks buy time for engineers to plan a permanent seal or a diversion of hydrocarbons at the site of a blowout. Because they can weigh 50 to 100 tons, transporting and maneuvering stacking caps to the site and onto a blowout can be time consuming and difficult.

Allowing Shell up to three weeks to contain a blowout means that the company does not have to retain the expensive capping equipment on shore in Nova Scotia or aboard a nearby vessel. Rather, Shell states in the assessment that the equipment can be deployed from Norway with backups in Scotland, South Africa, Brazil and Singapore.

Nova Scotia Decision Pending

John Davis, a photographer for National Geographic, is taking some credit for exposing this issue to public scrutiny and for forcing the regulator to defend its position rather than simply rubber-stamping the environmental assessment.

“We’ve called them on it,” said Davis in an interview with DeSmog Canada. Davis is also a concerned citizen with a lifetime of experience on the oceans as a former fisherman, fish plant owner and resident of Nova Scotia’s South Shore.

“The only good thing is we got them to say, ‘We are reviewing this and maybe something will change.’”

Stuart Pinks, CEO of the Canada Nova Scotia Offshore Petroleum Board, the joint regulator of the industry in Nova Scotia waters, told the CBC in an August 6 interview he is still “knee deep” in the review of the Shell application.

In a statement posted to the regulator’s website the board notes it is conducting an “extensive review” of Shell’s proposed exploratory program and has yet to make a final decision based on the federal environmental assessment.

“The CNSOPB will only authorize Shell Canada’s proposed drilling program once it is satisfied that they are taking all reasonable precautions to ensure that the program proceeds safely and in a manner that protects the environment.”

Following the regulator’s interview with the CBC, Davis said, “Now they’re going to have to consider the environmental safety of the South Shore of Nova Scotia and the fishing industry and communities that exist there.”

Pinks claimed that blowouts are a rare occurrence and that a capping stack is just one piece of equipment among a whole set of systems and processes assessed for the prevention and mitigation of incidents like blowouts. “Blowout prevention would be the main line of defence,” said Pinks who was adamant that his board will require and review a well-capping plan.

In response, Davis pointed out that exploratory wells are particularly dangerous.

“The largest oil well spills are from exploration wells,” he said, citing recent accidents off Australia, the Caspian Sea and in the Gulf of Mexico with the Deepwater Horizon. Davis said the danger of blowouts in exploratory wells comes from the inability of oil companies to predict the backpressure of a well until a drill breaks into a reserve.

In 2010, the BP Deep Water Horizon platform exploded during a blowout that killed 11 workers and dumped 4.9 million barrels of crude oil into the Gulf of Mexico at enormous cost to wildlife, habitat and livelihoods. Crude flowed for 87 days before the well was finally sealed. A report in 2012 found that the well still leaks.

Davis is troubled by this recent history. “If you look at Deep Water Horizon, they were in about 1000 metres. Shell is going to be in about 3000 metres of water. [BP was] 80 or 90 kilometres offshore. Shell is going to be 250 kilometres offshore.”

“They are in deeper water, in environments that are much harsher, at the very edge of their technological capability.”

Contrasting U.S. Regulations

In comparison to the leeway granted Shell by the Canadian government, U.S. regulations require marine blowouts to be capped within 24 hours. To achieve this goal, companies need to keep stacking caps close to offshore wells.

For a marine drilling project off Alaska, Shell keeps a stacking cap aboard a nearby vessel as required by the American equivalent of the Canadian Department of the Environment.

Pinks said the Alaska comparison is not a fair one because ice can move in very quickly, making the presence of a capping stack nearby essential.

But Davis does buy Pinks’ claim: “He’s blowing smoke. Ice floats at the surface and the capping stack is at the sea floor. Shell knows when the ice is coming. The drilling stops well before any ice arrives at their site. That was a red herring. That was Mr. Pinks pretending that Alaska has a problem we don’t have here.” 

Pinks would not say whether or not the Shell Canada plan for the Shelburne Basin would require the presence of a stacking cap as in other jurisdictions around the world.

“We don’t look at each component in isolation,” he said.

Whatever equipment is brought into play, Davis is asking for one assurance. “Surely we can clean up oil in the offshore. That’s the simple request everyone on the South Shore should be making to our Minister of the Environment and to our Alberta-based, petrochemical government.”

Image: Shell

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A moratorium on oil and gas development on a large piece of the continental shelf between Southwest Nova Scotia and Cape Cod called Georges Bank will be extended for seven years, protecting the ecologically diverse waters beloved by fishermen and environmental groups in the region.

The shallow waters of Georges Bank, located about 100 kilometres off the Nova Scotia coast is abundant in haddock, halibut and scallops and is a refuge for endangered turtles and whales that migrate through the nutrient-rich corridor.

The shelf is also thought to be home to large quantities of natural gas.

Nova Scotia recently announced it will renew legislation, Bill C-64, this fall that maintains the moratorium, following a similar decision announced by the federal government before parliament broke for summer.

According to Mark Butler, policy director at the Ecology Action Centre in Halifax, the provincial decision to extend the moratorium “passed at the very last minute.”

“It’s quite amazing, really, but nonetheless it passed.”

Many were holding their breath as the end of the current sitting of Parliament neared. “There was a fair amount of pessimism, so I think everybody was surprised at what happened in the final hours of the House of Commons,” said Butler about Bill C-64. “It passed first, second and third readings in one vote, which is unusual I understand.”

Spill in Georges Bay Would Have “Devastating Effect”

Throughout the history of the moratorium, fishers and groups representing the industry have been outspoken about the importance of the various fisheries on Georges Bank to the regional economy.

“It would be really tough if you had a spill there because of the currents,” said veteran fisher Dale Richardson on his way from his home in Little Harbour on the southern tip of Nova Scotia to Georges Bank to fish for swordfish. “It’s a mixing ground for that Bay of Fundy, northeast seaboard area. The dissipation of an oil slick would be unreal there. It could affect the whole Bay of Fundy and southwest coast of the province.”

Georges Bank has a diverse ecosystem with more than 100 fish species and many more of birds and marine mammals because the nutrient-rich Labrador Current washes over the shallow waters and meets the warmer Gulf Stream. Phytoplankton grows much faster there than on other continental shelves, setting up a feeding cycle for a complex eco-system.

A map of the Gulf of Maine shows the Canada/U.S. border cutting through Georges Bank. Credit: NOAA

While Richardson is a swordfisher in summer, his main occupation is as an inshore lobster fisher. He and the other 10,000 licensed lobster harvesters working off Canada’s East Coast rely on Georges Bank and other breeding grounds to grow a significant proportion of the nearly 75,000 tons of lobster landed in 2013 worth $680.5 million.

“It would have a devastating effect,” said Richardson of any accident involving petroleum on Georges Bank. “It would certainly affect anything that spawns and stays on the surface like lobster larvae, herring and things on or near the surface all the time.”

Lobster, herring, swordfish, bluefin tuna, scallops, cod and haddock — the list of commercial species that rely on Georges Bank as a breeding and feeding ground is significant. Many other important species also live there at certain times of the year including whales such as the endangered North Atlantic right whale, sea turtles, sharks and many species of seabirds.

The Battle for Georges Bank

Georges Bank is a sub-sea plateau of 28,800 square kilometers — about the size of Belgium — that was an island before the last ice age just 12,000 years ago. For the last 400 years, it’s been one of the world’s most productive fishing grounds.

In 1984, the International Court of Justice in The Hague ruled on a dispute between the U.S. and Canada, dividing Georges Bank between the two countries with the U.S. getting about four fifths.

About 40 years ago, oil companies drilled exploratory wells on Georges, but found nothing. The activity led to calls from fishers and environmental groups on both sides of the border to place a moratorium on oil and gas activity. Both countries did so in 1988, banning drilling until the year 2000.

On the Canadian side, the legislation also called for the creation of a joint federal provincial Public Review Panel, which later recommended extending the moratorium through 2012. The U.S. extended their moratorium a third time, setting an expiration date of 2017. The Canadian and provincial governments only extended theirs through 2015.

This fourth and latest moratorium will protect Georges Bank until 2022 from petroleum related activity by the oil companies that continue to hold exclusive exploratory rights on the Canadian portion of Georges.

Fisheries regulators in the U.S., however, are currently considering opening nearly 13,000 square kilometres of Georges Bank to commercial fisheries. The Fishery Management Council in New England state voted to reopen the area in June although the final decision rests with the National Oceanic and Atmospheric Administration.

A phytoplankton bloom illuminates Georges Bank. Credit: NASA via Stuart Rankin on Flickr.

Calls for More Research, Regulation Before Moratorium Lifted

The rich marine ecosystem of Georges Bank is at risk from more than a well blow out or oil spill, according to a massive 529-page study by the Maritime Region of the Federal Department of Fisheries and Oceans.

Seismic testing and a wide array of impacts from toxic drilling wastes or produced water can negatively impact the mortality of eggs and larvae and have sub-lethal effects up through the food chain.

Others worry drilling for oil or gas could crowd out the centuries-old fishing industry.

“The area around the rig would close down even if there were no impacts from seismic or produced water or drill muds,” Mark Butler said. “Just the simple loss of access would be enough to hurt the fishing industry.”

Still, not all fishers are against the opening of Georges to the oil industry.

Dale Richardson said he’s not “100 per cent against drilling.”

“I just think we need to have more research. We have a tendency here in Nova Scotia and Canada to come in with the most lax regulations compared to the North Sea or other places. I’m not real comfortable with them going there yet.”

Looking into the future, Butler would rather see the moratorium become permanent than risk further last minute extensions.

“We obviously need to drastically change what types of energy we use and how we use it,” he said.

“Maybe by 2022 we’ll all come to realize we shouldn’t risk important areas like Georges Bank for nonrenewable resources. Maybe we’ll be over the hump by then.”

Image Credit: James Brooks 

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Nova Scotia is potentially on the hook for millions of dollars in decommissioning costs as ExxonMobil prematurely winds down production at a massive offshore gas project near Sable Island.

In 1997 the province’s Liberal government negotiated a deal with Exxon to get the Sable Offshore Energy Project, about 190 kilometres off the coast of Nova Scotia, up and running. As part of that arrangement, Nova Scotia promised to pay a portion of decommissioning costs at the end of the project’s life.

The costs, expected to be in the millions, will be deducted from the $1.7 billion in royalties collected by the province since operations began in 1999.

Nova Scotia Energy Minister Michel Samson said a portion of the royalties have been set aside to pay the province’s contracted share of the decommissioning, but added he “[didn’t] have the exact numbers.”

"Knowing this was a potential liability for the province, the moneys have been set aside,” Samson told a press conference last Thursday.

Mark Butler, policy director for the Ecology Action Centre in Halifax, attended the initial assessment hearings for the project in the late 1990s.

“Back when I went through the hearings, we were critical of the royalty arrangements, but the government was keen to get some activity off our coast. I think they thought the Sable project would be the start of many more projects, so they were willing to give the industry a pretty nice deal.”

Butler told DeSmog Canada the Ecology Action Centre fought against the agreement from the beginning, advising the Nova Scotia government to reject the deal. Nearly 20 years later, Butler said he and others are saying we told you so.

“It was a bad deal,” he said. “Royalties for offshore hydrocarbon projects should be separate from the development costs of the company.”

“I am totally perplexed as to why this should be a government responsibility,” he added. “It’s a private project.”

Exxon said the exact date of decommission — which will include capping underwater wells and dismantling five offshore platforms — won’t be known for another year. Exxon is interested in providing commercial access to the offshore infrastructure to another company, but so far has been unable to generate interest.

Gas production from the Sable project has been steadily declining for seven years.

Nova Scotia has only one other offshore petroleum project — operated by Encana — but renewed interest in oil production off Canada’s east coast in the last year could mean more to come.

Butler said Nova Scotia should avoid disadvantaging itself in future offshore deals.

“Oil companies go around the world and bargain for a living whereas with Nova Scotia it’s a once in a lifetime thing they do when they’re hungry for the business.” 

Given that other companies like Shell and BP are now seriously considering further offshore projects, Butler believes the Nova Scotia government should learn a valuable lesson from the experience with Exxon.

He added that, while the Ecology Action Centre is opposed to further petroleum production off the coast, if development does go ahead “the current royalty regime should not be replicated for this non-renewable resource.”

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