Establishing a Framework for Arctic Development - National Energy Board
Ron Wallace, Board Member
National Energy Board
Inuvik Petroleum Show
Inuvik, Northwest Territories
25 June 2014
Slide 1 speaking notes (click to view)
Good morning and thank you for the opportunity to speak with you today.
I’m very happy to be back in Inuvik, and I would like to take this opportunity on behalf of the National Energy Board to congratulate the Inuvialuit people on the 30th anniversary of the signing of the Inuvialuit Final Agreement that was marked on June 5. We’re sorry to have missed the festivities!
This morning I would like to speak with you about NEB and its work with the people of the North and Northern institutions. In particular, I will discuss:
- Our ongoing role in the North, including our commitment to the people and how we work with our partners in the North;
- Expected industry activity; and,
- What we are doing to ensure we are prepared for the future.
This presentation is available on the NEB’s website in French and English.
Slide 2 speaking notes (click to view)
We are here for the people of the North
We remain committed to engagement across the North.
- The NEB continues to value and place high priority on our relationships with Northerners and Aboriginal Communities.
- It is clear that Northerners want regulatory processes that are transparent and accountable and - within our mandate, capacity and knowledge - we are working to help.
Over the past year, the Board has continued to expand Northern engagement activities.
- The purpose has been to hear from those who are directly affected by oil and gas activities in the North so we may achieve our shared objectives for safety and environmental protection.
- Meetings have been with Northern communities, youth, land claim institutions, governments, environmental non-government organizations, regulatory agencies, and the energy industry.
We also work closely with other decision makers in the North.
- This helps support a robust and coordinated environmental and socio-economic assessment process, provide greater predictability around timelines and minimize duplication.
The Board continues to offer the knowledge and expertise of our staff related to energy exploration, development, transportation and performance-based regulatory approaches to other decision makers.
- For example, the NEB has MoU’s in place with northern agencies, particularly in the Inuvialuit Settlement Region (ISR). This includes the Inuvialuit Water Board through which the NEB has assisted with regulatory evaluations and the furtherance of public hearings.
- The NEB has a Service Agreement with the Government of the Northwest Territories to allow the NEB to provide GNWT with technical services and advice to support projects, and the transfer of records.
We are actively working with Jon and his Environmental Impact Review Board to develop a coordinated process that will provide regulatory certainty to all parties.
- Coordination with the Environmental Impact Review Board has been ongoing. The National Energy Board has provided expert staff to the Environmental Impact Review Board to enable the Environmental Impact Review Board to plan its hearing processes and assist on technical analysis.
Slide 3 speaking notes (click to view)
We continue to have an important role in the North
We continue to have an important role in the North, with regulatory responsibility for the Arctic offshore, the Norman Wells Proven Area, and the entire Territory of Nunavut.
- As set out in the NWT devolution agreement, the Board also regulates the onshore part of the ISR for a period of 20 years, in accordance with territorial legislation that mirrors the Canada Oil and Gas Operations Act (COGOA.)
- Land tenure, rights issues, benefits plans, and royalty management in non-devolved Northern areas are administered by Aboriginal Affairs and Northern Development Canada.
The bulk of NEB’s regulatory responsibilities for the North are set out in the COGOA and the Canada Petroleum Resources Act (CPRA).
- The main purposes of COGOA are safety, protection of the environment and conservation of oil and gas resources.
- Under the National Energy Board Act the Board also remains responsible for regulating interprovincial oil and gas pipelines, like the Norman Wells Pipeline.
The proposed amendments to COGOA and CPRA, introduced by the Government in early 2014 would add further openness and transparency.
- It is important to note that these changes are only proposals until passed by Parliament.
Slide 4 speaking notes (click to view)
We take all available actions to protect the environment and the public
The Board takes all available actions to protect the environment and the public. We will continue to do so for any applications made under COGOA, including operations authorizations for Arctic offshore drilling.
No work or activity proposed under COGOA will occur unless the Board is satisfied that a company’s plans are safe and will protect the environment.
- Processes for environmental screening or assessment under the various land claim agreements must also be respected.
Currently, there are 14 active exploration licences issued by Aboriginal Affairs and Northern Development Canada for the Arctic offshore totaling roughly $2 billion dollars in work bid commitments.
Slide 5 speaking notes (click to view)
We expect to receive applications for up to three proposed offshore projects in the coming years, all shown on the map here:
- 1. Imperial Oil, as the operator of a joint venture with ExxonMobil and BP, has indicated its interest in drilling one or more offshore exploratory wells.
- Imperial’s Project Description is currently with the Environmental Impact Review Board.
- 2. Chevron Canada has expressed an interest in drilling an exploration well.
- In regard to these exploration projects, both Imperial and Chevron have separately requested that the NEB consider the well control approaches the companies will use, and provide a ruling on whether the approaches will meet the intended outcome of the NEB's Same Season Relief Well Policy.
- The Board has asked for additional information from each company before it will make the decisions. That information has recently been filed, and the Board is currently examining the additional information.
- 3. ConocoPhillips is in the initial planning phase for development of the Amauligak offshore oil and gas field.
The Board’s decision on an application by Multi Klient Invest AS (MKI) for a Geophysical Operation Authorization to conduct a large, multi-year 2D offshore seismic survey program in the Baffin Bay and Davis Strait is pending.
Slide 6 speaking notes (click to view)
We continue working to ensure that we are prepared for potential applications under COGOA
Ultimately - drilling will not occur unless the National Energy Board is satisfied that drilling plans are safe for workers and the public, and will protect the environment.
Following the BP Deepwater Horizon incident in 2010, the Board undertook the Arctic Review to examine safety and environmental requirements for offshore drilling in Canada’s Arctic environment.
- The learnings have been incorporated into the Board’s regulatory requirements for Northern oil and gas activities.
As per our mandate, the Board will continue to efficiently and effectively implement any legislative and regulatory changes approved by Parliament.
We remain committed to supporting the Government of the Northwest Territories and the Government of Canada through the regulatory transition.
- The NEB is committed to continuing to support the Government of the Northwest Territories through a Service Agreement. We will continue listening to the people of the ISR and continuing to work closely with Inuvialuit and Inuit throughout the North.
We are working with other jurisdictions on common regulatory objectives. For example:
- Domestically, we are working with the Government of Canada, Newfoundland and Labrador, and Nova Scotia, and the two East Coast offshore Boards to modernize the regulatory framework for frontier and offshore oil and gas, consistent with legislation.
- Internationally, the NEB and the two East Coast offshore Boards are collaborating with United States’ Bureau of Safety and Environmental Enforcement (BSEE), and the United States’ Pipeline and Hazardous Materials Safety Administration (PHMSA), on opportunities to move a concerted safety culture effort forward.
The Board has been developing and consulting on additional guidance documents to provide clarity on our expectations of companies operating in the North.
For example, last month the Board issued a letter to interested parties to indicate that the next step in developing the COGOA Financial Filing Requirements, there will be consultations on a risk matrix in Fall 2014.
Slide 7 speaking notes (click to view)
In closing, I would like to note that Gaétan Caron, our previous Chair, has departed following the end of his term and 35 years of service. As he has said, his departure does not change the good work being done at the Board. Peter Watson was appointed the new Chair and CEO of the NEB effective August 18, 2014. My colleague Lyne Mercier was appointed as Vice-Chair, and is Acting Chair until Mr. Watson joins us. I would like to highlight that Lyne was a key panel member of the Arctic Review.
- Here with me today, and available for discussions or questions, are:
- Patrick Smyth, Business Leader of Operations, who recently assumed the role of Chief Safety Officer (CSO);
- Jamie Kereliuk, Business Leader of Applications, who recently assumed the role of Chief Conservation Officer (CCO);
- Brian Chambers, Professional Leader Northern Engagement; and,
- Gary Woo, Northern Compliance Program Manager.
We are confident that, by working cooperatively with our northern regulatory partners, and listening carefully to the views of those who would be most directly affected by oil and gas exploration and development in the North, Northerners will continue to see the Board as a trusted, credible, organization that exercises its mandate in a professional manner for the benefit of all Canadians.
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