ST. JOHN & # 39; S, N.L. – Newfoundland and Labrador's ambitious plans to drastically expand the province's lucrative offshore oil and gas sector suffered an unpleasant shock on Nov. 16.
Amidst a violent winter storm, about 250,000 liters of oil were spilled into the ocean from Husky Energy's SeaRose platform, some 350 kilometers from St. John. It was the largest leak in the province's offshore industry history and sparked calls for regulatory change.
Critics are urging stricter control of the industry as the province moves to expand the size and reach of offshore drilling, and fast.
"This incident, we hope will light up the laws and how we undertake oil and gas in Canada and how we will regulate them if and when," said Gretchen Fitzgerald of the Sierra Club Canada Foundation.
"If they are going to undertake this great industrial activity in the hectic waters of the North Atlantic, there has to be a better regulatory scheme."
Currently there are four platforms producing oil in Newfoundland: Hibernia, Hebron, Terra Nova and SeaRose.
Expansion plans include the proposal for 100 new exploration wells and more than 650,000 barrels of oil per day by 2030. This long-term view also includes "shorter time from prospecting to production."
The expansion will also take the industry to uncharted territory with the first deepwater drilling site at Bay du Nord on the Flemish Pass after announcing an agreement with Norway's Equinor earlier this summer.
The remote part of Bay du Nord, some 500 kilometers east of St. John, sits in more than 1,100 feet of water – 10 times deeper than SeaRose, the deepest spot today.
Premier Dwight Ball has called the announcement a "new frontier" for the province's offshore industry, but deepwater expansion also raises new concerns about worker safety and the possibility of a quick cleanup if another spill occurs.
Oil royalties promise a much needed economic boost for the financially needy province
A report this month from the Conference Board of Canada predicts Newfoundland and Labrador will lead all provinces in economic growth in 2019, just one year after having the weakest economic outlook in 2018, with oil revenue receiving all credit.
In an interview, Ball said the November leak was "unfortunate" and reiterated the government's priority regarding worker safety and the environment.
The premier said his government would consider regulatory changes, including more transparent, public and accessible summaries of operators' safety plans, based on the findings of the SeaRose investigation.
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"Once this investigation is completed and completed, if there are changes that need to be made, we will be more than willing to implement those changes," Ball said.
The premier said his government is looking at other jurisdictions around the world as it plans to expand its industry and prepare for potential incidents in the future.
The Offshore Oil Council of Canada-Newfoundland and Labrador (C-NLOPB) regulates the development of the industry in the province, as well as its safety and environmental responsibilities. The spill occurred when Husky began restarting production on November 16, when the storm began to recede, a decision that depended on the company, not the offshore management.
Operators such as Husky are responsible for following their own internal safety and environmental plans that are approved by the board, which monitors and investigates if things go wrong. Production at the SeaRose remains stalled when the offshore board investigates whether the company has followed its own internal procedures.
Husky provides its procedures to the board, but a Husky spokesman told The Canadian Press in an e-mail that the company "does not disclose its specific operating procedures publicly for commercial and security reasons." Critics say that operator transparency is a key area of possible reform, especially as the industry prepares for expansion under even more risky conditions.
Premier Ball calls the industry record "pretty solid"
Ball said his government is giving Equinor time to properly assess the deepwater drilling site before construction is scheduled to begin in 2020.
He said his government will seek other jurisdictions as it prepares for new deepwater ventures, adding that it believes the industry record is reasonably clean in the long run.
"Our track record when you look at it is pretty solid," Ball said.
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The province's offshore sector does not have a history of several major oil spills, but was marked by devastating tragedies. The memory of the 1982 Ocean Ranger disaster still haunts the province. An offshore platform sank during an intense storm, claiming the lives of all 84 people on board.
In March 2009, Cougar's 491 flight collided with the ocean as it took workers and employees to the oil fields, killing 17 of the 18 people aboard. Following an investigation into helicopter safety, Commissioner Robert Wells in 2010 called Newfoundland's offshore conditions "probably the most severe in the world," citing cold water, strong winds, sea ice, haze, severe and long sea states helicopter flights.
Wells has recommended the establishment of a self-contained and independent safety regulator for the province's offshore industry. The recommendation was repeated by the provincial NDP after the recent SeaRose spill, urging the premier to establish a separate safety and environmental council similar to that of Norway and the UK.
Lana Payne, Atlantic regional director for Unifor, which represents some 700 offshore oil workers on the Hibernia and Terra Nova platforms, said the industry has seen some safety improvements since the helicopter safety survey. But she said the union still has room for more, including setting up a separate council on security and environment, especially in light of the recent closure.
"You should never use that word around security, but we feel like we were lucky," Payne said.
Husky was unable to follow the ice management plan during the Iceberg incident in 2017
There were 81 people aboard the SeaRose at the time of the leak and although there were no injuries, the incident evoked another safety incident on the same platform recently. An investigation by the offshore board found that the company did not follow its ice management plan during a nearly a year-long approach to a large iceberg. The platform was not disconnected when the iceberg approached, with 84 people and more than 340,000 barrels of crude oil on board.
Fitzgerald believes that the Canadian Environment Ministry and the Fisheries and Oceans Department should have regulatory power to ensure that the most knowledgeable people oversee the industry. More federal involvement in the sector would also help maintain national environmental priorities, such as climate change and the protection of endangered species, Fitzgerald said.
Payne said that, at the very least, the regulator needs more experience and staff for the rapidly expanding industry.
"There will be a lot of pressure on the system to get things done quickly, and when you do it in an offshore environment things can go wrong," Payne said. "We have to do everything we can to make sure that does not happen."