Date ArticleType
11/30/2017 Member News
OPINION: Don't Water Down Offshore Regulatory Oversight

OPINION: Don’t water down offshore regulatory oversight

Published November 28, 2017 - 7:12pm

The Clean Ocean Action Committee (COAC) and many other ocean industry and environmental groups recently learned that the Federal Department of Natural Resources is leading a federal-provincial partnership called the Frontier and Offshore Regulatory Renewal Initiative (FORRI).

FORRI’s goal is to modernize the regulatory framework governing oil and gas activities in Canada’s frontier regions, including our important fishing and spawning grounds on Canada’s East Coast.

We have grave concerns with both the process and the content of what is being proposed.

First, we did not hear about these changes until DNR was in the third and final phase of deliberations. This lack of transparency is not acceptable. These proposed changes are too sweeping to be carried out without proper consultation.

Second, FORRI’s planned changes to the Canada Oil and Gas Operations Act, which oversees exploration, production, processin and transportation of oil and gas in federal marine areas, are massive and unwarranted.

Our primary concern is DNR’s intention to move away from specific “prescripted” regulatory oversight toward more “performance- based” regulation. This is a move that the oil and gas industry lobby strongly supports, but COAC, other stakeholders and affected communities that are dependent on our oceans’ renewable resources are convinced that performance-based regulation is not appropriate for high-energy environments including the Scotian Shelf, Georges Bank and the Bay of Fundy.

These changes are being proposed at a time when other jurisdictions are demanding greater specificity and tighter regulatory controls of the offshore oil and gas industry. Since the 2010 Deep Water Horizon disaster in the Gulf of Mexico, the U.S. regulator have tightened and enhanced regulatory oversight in the offshore and particularly the Arctic. Although more could be done, these actions have made offshore oil and gas activities a safer proposition.

Our reading of the FORRI Phase 3 document (available online) indicates that the Canadian government will no longer prescribe technologies that operators must use. The new regulations will only state the objectives that operators must meet. Unlike prescriptive regulation, which demands specific technologies and timeframes, FORRI regulations would simply propose measures such as responding to an oil spill “as soon as circumstances permit,” or to “minimize spill duration and environmental effects,” or t reduce risk to “as low as reasonably practicable.”

The proposed FORRI changes eliminate requirements to use specific subsea containment equipment, such as the U.S. implemented in the wake of Deep Water Horizon. The U.S. changes also included tightened rules on blowout preventers and on t design of undersea wells.

Under proposed FORRI regulations, in Nova Scotia it will be up to the Canada Nova Scotia Offshore Petroleum Board (CNSOPB)
to interpret this new language and decide if the operator will be able to meet the intended goals. This introduces another area of concern.
For example, the FORRI Phase 3 document utilizes the concept of “As Low as Reasonably Practicable” (ALARP) when referring t risk reduction. We cannot find a definition of ALARP in the proposed FORRI regulations. This infers that the CNSOPB understand what ALARP entails and is capable of both conveying their interpretation to industry and of enforcing their interpretation without th benefit of a clear regulatory framework.

We see problems arising when industry decides that some technically practicable/achievable safety measures are not “reasonabl practicable” (i.e. too expensive or not convenient). We are concerned that ALARP, depending on how it is interpreted by the CNSOPB, could become a tool to avoid important safety measures for economic or convenience reasons.

If no minimum safety standards are in place we will have to put our trust in CNSOPB’s ability to ensure that the operators’ plans w in fact align with the government’s policy intentions. Our experience here on the East Coast does not indicate that this is a reasonable assumption.

This is a concern shared by others. In its submission to FORRI, the International Association of Geophysical Contractors address this same point: “Individual boards’ interpretation of (the) regulations may not align with the policy intent of FORRI, especially whe the initiative’s intent is not specific, but ambiguous.”

As stated above, the FORRI proposal moves away from specific minimum safety standards and specific requirements to use the best available technologies. Everyone who is concerned about the health and well-being of our oceans should be alarmed.

COAC believes that the FORRI process must be stopped until there is full participation of all offshore and Arctic stakeholders. As citizens of affected coastal communities who are dependent on the renewable resources provided by Canada’s offshore, we have formally made this request to the minister of natural resources.

In a recent article published in Offshore Magazine, the oil and gas industry gives us even more reason to be concerned. The articl titled Risk Management (October 2017), consists of recorded questions and answers from a roundtable discussion. The roundtabl was led by several of the oil industry’s most knowledgeable process safety consultants and senior managers.

There is nothing in the article that indicates that the offshore oil and gas industry is capable of functioning in a “performance-base regulatory regimen. In fact, the experts indicate that a prescriptive regulatory regimen is beneficial. Please note the offshore oil industry’s clear conflict between safety and construction costs expressed in the first answer. Article excerpts are as follows:

Question: Industry regulation is at an all-time high. Every operator is committed to safety and risk avoidance. So why do you think incidents and accidents still happen?

”When it comes to offshore facilities, there has never been a more critical need in the industry to address risk management. The design of offshore structures forces a compromise between safety and construction costs. Not controversy, just a fact.” -- Mike Ne president, Petrotechnics USA, Former BP

Question: Is there a gap between what process safety known performance indicators (KPIs) and operational management system are telling us and the feeling on the front line?