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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Rich G20 nations are spending about $88 billion (USD) each year to find new coal, oil and gas reserves even though most reserves can never be developed if the world is to avoid catastrophic climate change, according to a new report.

Generous government subsidies are actually propping up fossil fuel exploration which would otherwise be deemed uneconomic, states the report, “The fossil fuel bail-out: G20 subsidies for oil, gas and coal exploration.”

Produced by the London-based Overseas Development Institute and the Washington-based Oil Change International the 73-page analysis also noted the costs of renewables is falling and the investment returns are better than fossil fuels.  

“Every U.S. dollar in renewable energy subsidies attracts $2.5 in investment, whilst a dollar in fossil fuels subsidies only draws $1.3 of investment,” said the report released Tuesday, just days ahead of the G20 leaders meeting in Brisbane, Australia.

The report also notes the G20 nations are creating a ‘triple-lose’ scenario by providing subsidies for fossil-fuel exploration.

“They are directing large volumes of finance into high-carbon assets that cannot be exploited without catastrophic climate effects,” the report said. “They are diverting investment from economic low-carbon alternatives such as solar, wind and hydro-power. And they are undermining the prospects for an ambitious climate deal in 2015.”

Noting that leaders of the G20 countries, which produce about 80 per cent of global carbon emissions, pledged in 2009 to phase out ‘inefficient’ fossil-fuel subsidies, the report says there is a large gap between G20 commitment and action.

So who is paying for this exploration?

According to the report $49 billion of these subsidies occurred through state-owned enterprises, $23 billion from national subsidies delivered through direct spending and tax breaks and $16 billion from public finance from banks and financial institutions.

During the same period, the report said, the top 20 private oil and gas companies, globally, invested just $37 billion in exploration – less than half of what is provided annually by G20 governments – suggesting their exploration activities are highly dependent on public finance.  

The report added global fossil fuel subsidies — of which exploration is just one portion — are estimated to be $775 billion a year. 

Key findings in the report show that the U.S. provided some $5.1 billion in national subsidies to fossil fuel exploration in 2013 – almost double the level in 2009.

Australia, meanwhile, is providing $3.5 billion for the development of offshore and inland fossil-fuel resources and Russia is provides $2.4 billion in national subsidies for fossil fuel exploration.

The report noted the Canadian government offers a wide array of national subsidies that total a minimum of $928 million annually to encourage fossil fuel exploration, including tax benefits for nearly all exploration activities.  

“Despite the widespread perception that renewables are costly, our research reveals that finding new fossil fuel reserves is costing nearly $88 billion in exploration subsidies across the G20,” the Overseas Development Institute’s Shelagh Whitley said. “Scrapping these subsidies would begin to create a level playing field between renewables and fossil fuel energy.”  

Oil Change International’s director Stephen Kretzmann said “five years ago, G20 governments pledged to both phase out fossil fuel subsidies and take action to limit climate change. Immediately ending exploration subsidies is the clearest next step on both fronts.”

The report recommended governments should price carbon to reflect the social, economic and environmental damage associated with climate change, and reduce emissions to levels compatible with the globally agreed 2oC target.

It also recommended that G20 nations should immediately phase out exploration subsidies as a first step towards a wider fossil-fuel subsidy phase out and reform.

In addition, it said governments should transfer subsidies from exploration and other fossil-fuel subsidies to support for the transition to low-carbon development and universal energy access.

On the same day the report was published, a number of high-profile economists said in a letter to a number of newspapers that governments should end fossil fuel subsidies and galvanize international action on climate change.

“Given that two-thirds of currently known reserves cannot be exploited if the world is to remain within the internationally agreed 2º Centigrade threshold, this is a bad investment for tax-payers and the planet,” said the economists. “Fossil fuel subsidies turn upside down the logic of effective action on climate.”  


Religious leaders in Australia, according to a story published Wednesday, said “world leaders must move towards a renewable energy future or there will be human suffering on an unthinkable scale.”  

Anglican Church Bishop Professor Stephen Pickard was quoted as saying there is overwhelming scientific evidence about the impact of unchecked climate change.

“To our very great shame, unthinking economic growth has become the great treasure,” Pickard said. “It has captured our hearts. It has captured our pockets. It has blinded us to the wellbeing of the planet.”

Under Prime Minister Tony Abbott, coal-rich Australia, described as “being the developed world’s worst polluter per head of population,” repealed the nation’s carbon tax earlier this year.

Image Credit: Stop sign in the oilsands region. Photo by Kris Krug.

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