February 6, 2013
Offshore regulator grilled over oil spill preparedness
The former chair and outgoing CEO of the Canada–Newfoundland and Labrador Offshore Petroleum Board (CNLOPB) says a federal report criticizing the board on oil spill response preparedness is “fair and accurate.”
Released Tuesday, the latest report from Environment Commissioner Scott Vaughan states the CNLOPB is not ready to take over response to a major oil spill offshore if an oil company fails to respond as required.
The CNLOPB — along with the Canada–Nova Scotia Offshore Petroleum Board (CNSOPB) — needs to clarify, step-by-step, the responsibilities and roles of federal responders in the case of a major spill, it states.
“In my view, the boards and their federal partners are not adequately prepared and, although the probability of a major spill in the Atlantic offshore area is relatively low, they need to do more to prepare for one,” wrote Vaughan, whose staff conducted an audit of the board’s operations in 2012.
He made note of the Macondo (Deepwater Horizon) incident in 2010, when 11 lives were lost and an estimated 4.9 million barrels of oil spilled into the Gulf of Mexico. The cost of the Macondo blowout has been estimated at US$40 billion.
“That incident demonstrated starkly the absolute importance of being ready to respond to a spill of that magnitude and the need for strong regulatory oversight to help prevent environmental disasters,” he stated.
He highlighted shortcomings in the local response plan, saying the CNLOPB needs to deal with co-ordination and control issues. Specifically, he pointed to out-of-date and missing agreements between the board and supporting federal entities.
However, the commissioner stated the board has some good practices in place.
The CNLOPB’s acting CEO, Max Ruelokke, said the board has accepted the report’s recommendations for improvement.
“Can we improve the way we do business? Sure. That’s why we welcome the audit,” he said.
The commissioner’s report notes the board began a review of oil company spill response capabilities in 2008 and has yet to complete the task. He recommended it be finished right away. In the CNLOPB’s formal response, the board states the review will be completed by March 31.
Yet, when speaking with The Telegram, both Ruelokke and a spokesman for the board said the review was more of an ongoing process and the document compiling response plans was constantly being updated.
Regardless of concerns, Ruelokke said, emergency response plans have been reviewed for all producing oil projects. In addition, plans are reviewed for any new wells being drilled.
“From an industry perspective, we are definitely ready in the event of an oil spill because the industry has world-class oil spill prevention and response plans in place,” said Paul Barnes, a spokesman with the Canadian Association of Petroleum Producers in Atlantic Canada.
Barnes said, at this point, the oil companies are reviewing the report and waiting to see how government will respond.
Meanwhile, provincial NDP Leader Lorraine Michael said the findings of the audit reinforce her belief in the need for an offshore regulator, separate from the CNLOPB, to deal with issues of safety and the environment.
That regulator would be able to put some pressure on the board and government to get new laws and operational plans in place in a timely fashion when needed, she said.
It would also providing third-party monitoring. Dedicated safety and environment departments within the CNLOPB are just not cutting it, Michael said.
“We have to hold the CNLOPB responsible for making sure that everything is in place. … Their role in monitoring is who they are as a regulator and they have a major responsibility in that role — that plans are in place, they know exactly who is responsible every step along the way (and) that the people responsible are identified in those plans.”
Liberal Leader Dwight Ball referenced the review of oil company response plans started in 2008.
“To me that shows, once again, government is not holding these boards or these operators accountable,” he said.
He said any major disaster offshore would have the potential to cripple the provincial economy.
“We have a significant stake in this,” Ball said of the CNLOPB’s watchdog role in relation to response plans.
Newfoundland and Labrador’s Minister of Natural Resources, Tom Marshall, said he has seen the federal report and it will be reviewed in detail.
“It’s always good to have oversight and there’s always opportunities to strengthen our practices and to make improvements and manage our risk in the offshore better,” he said.
The Nova Scotia board, meanwhile, is distancing itself from the federal commissioner’s criticisms around oil spill response preparedness.
In a statement, the board said the report talks specifically about oil spills and not disasters involving natural gas.
“At present, production offshore Nova Scotia is natural gas, with exploratory drilling that may encounter oil not expected until 2015,” reads the statement.
The look at the CNLOPB and the CNSOPB’s emergency response capabilities and oversight was only one part of the environment commissioner’s latest report.
The full report is available online, through the webpage of the Office of the Federal Auditor General.