Canada’s new offshore oil and gas regulations too weak to ensure safety and environmental protection

Offshore oil and gas activities in Atlantic Canada are a genuine threat to the ocean ecosystem and exacerbate climate change.

If a major spill or a well blowout (an uncontrolled release of crude oil after a pressure release system fails) was to occur in the Atlantic Ocean — where extreme weather and deep-water drilling are commonplace — it would seriously imperil the surrounding marine environment, potentially destroying habitat for whales, fish, sea birds, and many other animals.

The consequences for coastal communities, some of whom depend on healthy, clean waters for their livelihoods, could be devastating.

The elevated risk of operating hundreds of kilometers offshore in an extreme environment makes it incumbent upon the government to ensure the world’s highest standard of oil and gas for safety and environmental protection are in place.

The federal government recently proposed updated regulations for oil and gas operations in the offshore areas surrounding Nova Scotia and Newfoundland and Labrador. Unfortunately, these regulations fall far short in ensuring safety and environmental protection.

In fact, the new rules do not even require the use of the best available and safest technologies on offshore installations and spill response equipment.

The new proposed regulations are notable for their inadequate provisions and for the critical issues they omit — most glaringly, climate change, drilling in ecologically or culturally sensitive areas, and Indigenous rights.

There are no requirements to ensure that a major oil spill could be contained within a specified timeframe.

In Alaska, spill containment equipment such as oil well capping stacks must be onsite within 24 hours of an accident.

And after the 2010 Deepwater Horizon blowout, the use of safety equipment (such as double shear rams) is now required in the Gulf of Mexico to provide backup in the event of equipment failure.

No such requirements exist in Canada’s proposed regulations.

The regulations also inexplicably do not prevent oil companies from drilling in ecologically sensitive marine ecosystems or in culturally important or high-risk areas. The North Atlantic has sensitive and unique ecosystems that are vulnerable to disturbance and many communities depend on a healthy marine environment for their subsistence, as well as their social, spiritual and cultural well-being. These areas should be off-limits to drilling.

If a major accident does occur in the offshore, Canadians could be on the hook for billions of dollars in clean-up costs. Current regulations cap operator liability at $1 billion, whereas the Deepwater Horizon spill reportedly cost $62 billion in damages, and some studies have estimated the actual cost at $145 billion.

In Canada, liability is unlimited only if the operator is proven to be at fault. But if a serious accident were to take place as the result of a chance occurrence — such as a severe storm or iceberg collision, both made more likely by climate change — it’s not clear who would be responsible for the damages. The UK, Russia and Greenland have unlimited liability for offshore oil and gas operators, meaning the operator is liable for pollution damage regardless of the reason.

Given the risks of a major offshore spill in the Atlantic, there can be no justification for companies to use cost as an excuse for not taking every necessary measure to reduce risk when effective and immediate oil spill response is in doubt. Norway’s citizens are informed about risk levels and individual company practices through a government web site, so why aren’t we?

There are also no requirements in the new regulations to ensure that decisions about offshore oil and gas activities are consistent with Canadian carbon reduction commitments and Indigenous rights and agreements.

The regulator will not be obligated to recommend the rejection of a project that has an inadequate strategy to minimize or eliminate greenhouse gas emissions.

Meanwhile in Greenland, the government must consider any negative impact on the climate when it decides on the granting of an offshore license. This has led to the country’s recent decision to ban all future offshore oil exploration on environmental grounds.

Finally, the Atlantic offshore petroleum Boards will continue to be in charge of both ensuring the “maximum recovery of petroleum” and regulating the industry for safety and environmental protection.

Investigations into previous offshore accidents have highlighted the critical importance of separating responsibilities for production and safety under different agencies.

Canada is far behind other countries in ensuring that offshore oil and gas activities can be carried out safely with the lowest possible risk to local communities and the marine environment. We must do better.

Public comments on the newly proposed regulations can be submitted to the government here on or before Monday, July 18, 2022.