Meeting Summary - 19 May 2011

Arctic Offshore Drilling Review

Information Meeting Summary

Date and Location
Date Location
Thursday
19 May 2011
1:30 p.m. and 4:30 p.m.
and
7:00 p.m. and 9:00 p.m.
Westmark Hotel
Whitehorse, YK

Purpose: Phase 2 Information Meeting

Participants
Participants
Brian Chambers Northern Advisor, NEB
Bharat Dixit Technical Leader, Exploration and Production, NEB
Pamela Romanchuk Environmental Specialist, NEB
Susan Gudgeon Northern Coordinator, NEB

Presentation (NEB):

National Energy Board staff gave a presentation providing an overview of:

  • the Board's role in the North
  • the scope of the Arctic Offshore Drilling Review
  • what has occurred to date including stakeholder meetings and information filed
  • where the Review is now at
  • what is coming up
  • funding

Questions and Comments:

The following questions and comments were posed:

  • Where does the Review fit into the application of abandonment lifecycle that was described in the presentation?
  • Were there any opportunities to meet with Aboriginal groups in the NWT and Yukon?
  • Are there any plans to meet with the Council of Yukon First Nations?
  • Is there a strategy for deciding to meet with Aboriginal groups?
  • How safe does the National Energy Board think drilling in the Arctic is? Has the Board come to this determination?
  • Does the National Energy Board use a risk assessment and is there a risk threshold? If so, what mechanisms are used to create this and how might that be changed as a result of the Review?
  • It is one thing to assess the likelihood and consequences of a project but without a threshold and assessing each application individually, that is a concern.
  • Using the experience of others (other regulatory regimes) is fine to say but it is different given the unique Arctic environment. How does the National Energy Board make choices?
  • If all the National Energy Board considers is safety and environment and the consequences, there would be no drilling. There must be other considerations.
  • It sounds like there is not enough information but the National Energy Board is learning as it goes and this exercise is to learn more.
  • Sure National Energy Board is neutral but there must be other underlying agendas that recognize benefits.
  • If the aim is to try to have no risk, drilling won't go ahead. There must be other factors being considered. There will always be risks and can never get to no risk and still have drilling. Why would companies even apply?
  • It was difficult to find detailed information about today's meeting.
  • There are many concerns in Old Crow with respect to major projects. Happy that there is this presentation here today but the National Energy Board did not have the courtesy to invite and include the 11 nations.
  • Seeing the picture of the Kulluk rig brings with it the issues that people in Old Crow are still dealing with from the 1980s (social issues). Many fathers, brothers, uncles, sisters worked on the rig.
  • How will social ramifications of major projects be dealt with?
  • The National Energy Board must keep the door wide open for involvement by everyone. This will bring strength to the Review.
  • There is a concern even though the Board is seeking the best available information. Sometimes there is no information.
  • Heard in the presentation today the National Energy Board would be looking at the safest ways to extract resources. Does this mean it is a foregone conclusion that drilling will take place or could an application for drilling be denied?
  • Beyond the mandate of the Review, could the National Energy Board recommend a moratorium?
  • There is a concern of the knowledge gap in relation to the Arctic. Before drilling is considered there needs to be baseline work done. What guarantees or assurances can be given that the knowledge gaps will be filled?
  • Is the information from research projects trustworthy and can it be relied on?
  • When the first letter came out asking for comments on the scope, comments were provided asking for a broader scope - spills beyond the Canadian borders.
  • May have forty years of exposure to drilling but the world is different now (climate change).
  • Can the National Energy Board make recommendations regarding disasters that happen outside our borders but end up being our problem?
  • Given that the Inuvik Roundtable will be in September and the Report is said to being coming out in December, another data stream is coming out of BREA which is a five year process. How will be Board deal with the data gap in the interim?
  • In terms of information fed into the process, is there a time that information can continue to be sent in following the Roundtable and still considered in the Review?
  • Is it anticipated recommendations will be made for regulatory changes?
  • The intensity of the activity in the Gulf was surprising. How is the scale of activity going to be controlled once the door is open to drilling in the Arctic and, in particular, how will cumulative effects be considered?
  • Other factors such as the price of oil, melting ice and the pipeline could increase the volume of activity in the Arctic.
  • Was the National Energy Board's role affected by the changes in the budget last year?
  • There have been no changes with respect to the same season relief well policy. What stops Chevron, for example, from asking for a waiver?
  • Saying the operators are the best people to identify what is going to occur on frontier lands and proving to the Board that their systems are safe and they are the ones making the money, this is a concern. Huge holes can be seen around the world with this type of thing.
  • Even though operators are accountable, they hire more lawyers than environmental monitors.
  • If the National Energy Board were to be facing an large volume of applications, does it have the finances and resources to make sure operators are doing what they said and what they filed and does it have the money to do the necessary research?
  • Would the National Energy Board consider multi-lateral agreements? Arctic Council would be a good route as it naturally invites indigenous peoples.
  • When Canada has representatives in Greenland, where they from the Board and, if so, what was the reason they were there?
  • Does the Board see a difference in safety culture between North America and Europe?
  • There needs to be distinct best practices for Arctic offshore as it is just different (ice, currents, sunlight, temperature, scarcity of resources). This is a different league. There needs to be time to build up in the Arctic. The concern is that if one application is approved, then a dozen more may get approval. Not all the information is known. That is not to say to shut everything down but the National Energy Board needs the wherewithal to say this is enough for now.
  • There is a concern at how rapidly things are unfolding. There is an agenda and the National Energy Board may not have the capacity to keep up.
  • In the Yukon, when mines go into production money is put into a fund for clean up at the end. Is there any thought of having industry do the same - put money into a fund so taxpayers aren't on the hook?
  • Does the Board return the money they have as security upon abandonment?
  • Are abandoned wells being checked?
  • There has been a change in technology. Will this be pointed out to Parliamentarians so that drill ships are covered under frontier law and not marine law (liability cap)?
  • In terms of the environment and cumulative effects, the government tends to silo things. How are such thinks like climate change taken into consideration?
  • Will the filing requirements be in the Report?
  • What about stakeholders that can't make it to the Roundtable in Inuvik in September?
  • At the end of the Roundtable, will there be an opportunity to review the draft Report before it is finalized and mandated?
  • Does the National Energy Board supersede any laws or regulations with their filing requirements?
  • Will there be a section in the Report on risk and unknowns?
  • Other incidents occurred where there was supposedly "state of the art" technology.
  • How does financial concerns factor into the Board's considerations?
  • Courts can drag out litigation as seen with the Exxon Valdez.
  • In watching the court proceedings and reclamation of the Valdez, no one is winning except lawyers.
  • In the Inuvialuit Final Agreement the worst case scenario is fairly strong and is stronger than anything south.
  • How is the regulatory regime different from the Arctic and the east coast?
  • Is this a cradle to grave type of regime (from exploration to finished production/didn't find anything)?

Concluding remarks:

NEB staff are available to assist in:

  • completing registration forms for the Roundtable as well as funding applications; and
  • navigating through the information filed with the Board and contained on the website.

Copies of DVDs containing the information on the NEB Arctic Offshore Drilling Review website are available.

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