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Home > Speeches and Presentations > Speeches and Presentations 2010 > House of Commons Standing Committee on Natural Resources - Opening Statement by the National Energy Board

House of Commons Standing Committee on Natural Resources - Opening Statement by the National Energy Board

Presented by
Gaétan Caron
Chair and Chief Executive Officer
National Energy Board

House of Commons Standing Committee on Natural Resources
Opening Statement by the National Energy Board

2 November 2010

Introduction

Good morning, Honourable Members of Parliament. I thank you for the opportunity to appear before you today and I look forward to providing you with an update on the status of Emergency Response to Offshore Oil and Gas Drilling.

NEB Arctic Review

On May 11, just weeks after the blow-out in the Gulf of Mexico, the National Energy Board committed to reviewing the safety and environmental requirements for offshore drilling in the Canadian Arctic.

Since I last appeared before you in May, more than 115 different groups and organizations have registered to participate in the Arctic Review, including Northern communities, Aboriginal Groups, Environmental Non-government organizations, other regulators and the industry.

On September 20, the National Energy Board announced that the Arctic Review would be conducted in three phases. The purpose of phase one, which is in progress, is to gather the best available knowledge about offshore drilling in an Arctic environment. To further build our knowledge base, the NEB also released a Call for Information on September 30 inviting anyone with expertise or knowledge to provide this information to the NEB. More calls for information are expected. The Board will also consider the recommendations of the U.S. Government's National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling, which we expect to be available in January 2011.

Phase two of the Arctic Review will give the participants an opportunity to examine the information collected, to ask questions and to provide their comments on the information. Once phase two is complete, the Board will consider all the information gathered and produce a public report, to be used in our examination of any future applications for offshore drilling in the Canadian Arctic.

This review will be public. It will be transparent. There will be opportunities for people who are concerned about these issues to get involved.

Meetings are already being scheduled to discuss the Arctic Review with Northern communities. For example, on November 24, we will be in Inuvik to meet with the Inuvialuit Regional Corporation. In early December, we will also be meeting with the Inuvialuit Game Council and the Wildlife Management Advisory Council. The NEB intends to visit other Northern communities, including communities in Nunavut, to hear their concerns.

I would like to stress that it is very important for the NEB to meet with, and listen to, Northern communities. They are the people who will be most affected by any decisions made regarding offshore drilling in the Canadian Arctic.

In the information package we released just last Wednesday, we described the process by which people can ask for meetings, as part of phase one, for fact-finding and information gathering. We have asked people to tell us by January 31 2011.

We have also announced that we intend to retain consultants and experts, in order to acquire some of the knowledge we need and we have asked for anyone registered in the review to suggest areas where current information may be lacking or insufficient by the end of November.

Finally, we announced that we would make up to $300,000 in funding available to assist participants with travel costs related to attending phase two meetings. These phase two meetings are scheduled for next spring in Inuvik, Iqaluit, Yellowknife and Whitehorse, and other locations as necessary. The meetings will provide Canadians with the opportunity to examine the information we have collected to date and to question each other about this information.

Emergency Response

One of the topics the NEB will examine during the Arctic Review is the subject of emergency response.

Our focus is on preventing accidents from happening in the first place. At the same time, the NEB must be ready to respond to any emergency situation, at any time.

If an offshore drilling spill or incident were to occur in the Canadian Arctic, the NEB would be the lead federal agency. It is our job, as lead agency, to hold the operator accountable for anticipating, preventing, mitigating and managing incidents and oils spills of any size or duration.

To ensure that a company is fully prepared to respond to an incident, the NEB enforces a comprehensive set of rules on emergency preparedness. A critical requirement for offshore drilling which is set out in section 6 of the Canada Oil and Gas Drilling and Production Regulations is the need for companies to provide an emergency response plan, which is reviewed in detail by the NEB before any drilling authorization may be issued. If there are gaps in the plan, the company would have to address these gaps before they would be permitted to drill.

The Canada Oil and Gas Drilling and Production Regulations also calls upon the industry to identify the scope and frequency of the field practice exercise of oil spill countermeasures, as well as to coordinate these efforts with federal, territorial, provincial, and municipal response agencies. As lead agency, we would have a key role in emergency response. To prepare for potential future offshore drilling, our staff have participated in six emergency response exercises in the past six months alone. More exercises will take place in the future.

Current Regulatory Regime

Before any project is approved, the NEB must be satisfied that an operator's drilling plans include robust safety, emergency response and environmental protection plans which meet the Board's standards. The NEB reviews every single application to make sure that workers and the public will be safe and the environment will be protected. Safety, environmental protection and conservation of the resource are the only relevant factors the Board may examine when considering an application under the Canada Oil and Gas Operations Act - this is stated explicitly in the purpose of this Act.

As part of the Arctic Review, the NEB will be looking very carefully at new US safety rules released in early October. At first glance, I can say that many of the changes being implemented since the moratorium has been lifted in the United States are already included in Canada's regulatory regime. As an example, the new U.S. regulations require companies to acquire an independent, 3rd party certification demonstrating the safety of rig operations, something that is already addressed in the Canada Oil and Gas Operations Act and the Canada Oil and Gas Certificate of Fitness Regulations.

The new U.S. regulations also call for industry to develop and integrate a safety and environmental management system. Canada's regulations already require operators to have safety and environmental management systems. In other words, the United States are moving towards where Canada has been.

Learnings from the International Regulatory Community

Canada is an active participant in the International Regulators' Forum (IRF). The IRF held its latest major conference in Vancouver, the week of October 17. Several NEB staff, including Dr. Dixit and myself, attended the three-day conference.

My own personal learning from that conference is that the key players in the offshore regulatory world, including the United States, Norway, Denmark, the UK, Ireland, Australia, Mexico, Brazil, the Netherlands and Canada, are very united around the concept that we need to promote a safety culture in offshore drilling, that we need to rely on management systems to promote that culture, that the role of regulators is to hold the industry accountable for the desired safety, environmental and emergency response outcomes, and that audits of these management systems, and field inspections, form a key part of the enforcement tool kit of offshore safety regulators.

Closing

Thank you, Honourable Members of Parliament, for the opportunity to provide you with an update on the status of Emergency Response to Offshore Oil and Gas Drilling.

 

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Date Modified:
2011-10-28