North /Offshore - Questions and Answers
Notice: On 1 April 2014, the Government of the Northwest Territories assumes responsibility for the regulation of onshore oil and gas activities in the NWT outside of the Inuvialuit Settlement Region and the Norman Wells Proven Area and other miscellaneous federal lands. More information can be found on our website under North / Offshore > NEB Regulatory Oversight in NWT Post-Devolution.
- What is the NEB's role with respect to Offshore and Onshore Drilling?
- What safety regulations exist for companies drilling in Canada and specifically the Arctic?
- What does the NEB do to minimize the chance of an accident?
- What does the NEB do in the event of an accident?
- Will the NEB respond to all spills in the Beaufort Sea?
- Who pays for cleaning-up a spill?
1. What is the NEB's role with respect to Offshore and Onshore Drilling?
The NEB regulates oil and gas exploration and production offshore on the West Coast, onshore and offshore in frontier areas in northern Canada, except the Yukon, and those regions offshore on the East Coast that fall outside the jurisdiction of the Canada-Newfoundland and Labrador Offshore Petroleum Board and the Canada-Nova Scotia Offshore Petroleum Board.
A company wishing to explore and drill in areas within NEB jurisdiction must apply to the NEB for an authorization. A company seeking this authorization must provide comprehensive information about its proposed work, including contingency plans, a safety plan and an environmental protection plan, all of which is carefully scrutinized by the Board's expert staff. Every project that has the possibility of negative environmental effects will be subject to an environmental assessment (EA) by the NEB.
Developments (projects) that are proposed for the Inuvialuit Settlement Region require an environmental screening or review under the Inuvialuit Final Agreement. An environmental screening is conducted by the Environmental Impact Screening Committee (EISC). Projects may be referred to the Environmental Impact Review Board (EIRB) which carries out environmental impact and public reviews. Projects which are designated projects under the Canadian Environmental Assessment Act, 2012 (CEA Act), trigger a CEA Act 2012 environmental assessment that is undertaken by the NEB.
The Nunavut Impact Review Board (NIRB) screens proposed developments (projects) onshore and offshore in the Nunavut Settlement Area (NSA) under the Nunavut Land Claims Agreement to determine whether or not an environmental impact review is required. NEB-regulated projects or portions of projects that are located outside of the NSA are assessed by the NEB under the Canada Oil and Gas Operations Act (COGOA), the National Energy Board Act (NEB Act), Part 5 of the Mackenzie Valley Resource Management Act (MVRMA) or under the CEA Act 2012, depending on the location and type of project, and whether it is a designated project under the CEA Act 2012.
Proposed development projects that occur in the Mackenzie Valley require a preliminary environmental screening, EA or review under Part 5 of the MVRMA. A preliminary screening is conducted by a Land and Water Board (LWB). Projects may also be referred to the Mackenzie Valley Environmental Impact Review Board (MVEIRB) which carries out EAs and public reviews.
Prior to an authorization being considered by the NEB, a company must provide evidence of financial responsibility to cover costs of an incident response including containing, cleaning-up the environment and compensating affected third parties The NEB determines the amount of financial responsibility on a case-by-case basis using the Draft Financial Viability and Financial Responsibility Guidelines.
If the applicant meets all the requirements, an authorization to drill may be granted.
2. What safety regulations exist for companies drilling in Canada and specifically the Arctic?
Oil and gas companies operating in Canada in areas where the NEB has jurisdiction must adhere to COGOA, the NEB Act and the Canada Labour Code, Part II. Operators must also adhere to the Canada Oil and Gas Drilling and Production Regulations and other regulations under COGOA. These regulations promote three main themes:
- protection of the environment; and,
- conservation of oil and gas resources.
Drilling will not occur unless the NEB is satisfied that plans adequately demonstrate safety for workers and protection of the environment.
3. What does the NEB do to minimize the chance of an accident?
The Board conducts a rigorous evaluation of the equipment, procedures and methods proposed when a company applies for an authorization of its proposed operations. The Board will only authorize the work if it is convinced that the chance of an accident has been minimized by the approach proposed by the company.
The NEB has a rigorous compliance program to ensure that operators comply with all applicable regulations and meet all of the commitments and conditions of the authorization. To do this, the NEB inspects drilling equipment and audits company management systems, including elements such as the emergency response training and competency of personnel. All rigs must be certified fit for purpose.
The NEB has a comprehensive Emergency Management Program in place and is ready to respond to an emergency situation any time of day or night. Regulated companies are required to file and maintain up-to-date contingency plans and emergency response procedures that are carefully scrutinized by the NEB. In an offshore area where oil is reasonably expected to be encountered, each company must also identify the scope and frequency of the field practice exercises of oil spill countermeasures which the NEB monitors.
The NEB works with the operators of offshore drilling platforms and other regulators to proactively share information related to safety and environmental protection.
4. What does the NEB do in the event of an accident?
The NEB's top priority in any emergency is to make sure that people are safe and the environment is protected. In the event of a major incident at an NEB-regulated project, the NEB would work with the company to enable a safe and effective, coordinated response.
NEB staff would be onsite to monitor and oversee the company's immediate response and the eventual clean-up in case of a spill. If the NEB is not satisfied that an effective emergency response is being undertaken, the NEBâ€™s Chief Conservation Officer may authorize and direct such persons as may be necessary to take over the management and control of any work or activity.
The NEB also works with its federal, provincial and territorial partners to coordinate the regulatory response and will request advice from the Environment Canada-led Arctic Regional Environmental Emergencies Team as needed.
The NEB maintains an Emergency Operations Centre in Calgary to coordinate field staff at an incident site and to provide situation reports to the Emergency Operations Centre for Natural Resources Canada in Ottawa. The Board investigates and reports on incidents and corrective actions to help prevent them from happening again.
5. Will the NEB respond to all spills in the Beaufort Sea?
The NEB is the lead federal agency for responding to an oil spill in the Canadian Arctic if the spill comes from a drilling platform while it is engaged in drilling activities. If the spill occurs from a drilling platform that is not engaged in drilling activities, the lead response agency would be the Canadian Coast Guard (for example if the rig is being towed to a location).
6. Who pays for cleaning-up a spill?
NEB-regulated companies must anticipate, prevent, mitigate, and manage incidents and oil spills of any size or duration.
In the event of an incident, the Board expects an Operator to clean up the spill and debris, as well as pay out all claims as appropriate. The Board could take over spill response and pay out claims if the Operator does not appropriately address an incident.
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