Natural Resources Committee on Dec. 4th, 2013

[The Chair, Conservative, Leon Benoit]

Good afternoon everyone.

We're here today, after votes, to continue our study of Bill C-5, An Act to amend the Canada-Newfoundland Atlantic Accord Implementation Act, the Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation Act and other Acts and to provide for certain other measures.

We have two witnesses here today. The first, from the Canadian Association of Petroleum Producers, is Mr. Paul Barnes, manager for Atlantic Canada. Welcome, Mr. Barnes.

We have, as an individual, the Honourable Robert Wells, former inquiry commissioner of the Offshore Helicopter Safety Inquiry. Welcome to you, Mr. Wells.

We'll go ahead as usual. We'll start with a presentation from each of the witnesses, and then we'll start our questions and comments from members.

We'll go with the order on the agenda, starting with Mr. Barnes, manager for Atlantic Canada for the Canadian Association of Petroleum Producers. Go ahead, please, sir.

[Paul Barnes, Manager, Atlantic Canada, Canadian Association of Petroleum Producers]

Thank you.

Good afternoon, Mr. Chairman, and members of the committee.

As you know, my name is Paul Barnes. I am the Atlantic Canada manager for the Canadian Association of Petroleum Producers, or as it's commonly referred to, CAPP. CAPP's head office is located in Calgary, Alberta, but they also have a regional office for Atlantic Canada located in St. John's, Newfoundland, which is where I am based—and I should mention that's where I'm from as well. Given that we have two MPs from St. John's in the room, I figured I'd do a shout out to them.

CAPP represents Canada's upstream oil and gas sector—those companies that are involved in exploration, development, and production of oil and gas. Our members find and develop over 90% of Canada's petroleum resources all across the country. Together they invest over $50 billion annually, and they employ more than 500,000 Canadians. In Atlantic Canada alone, our industry directly employs over 5,600 people and supports over 800 local supply and service companies. Cumulative investment in the region has been totalling close to $40 billion since 1996.

The oil and gas industry also accounts for 30% of Newfoundland and Labrador's gross domestic product, GDP, and there remains significant growth potential in New Brunswick, Nova Scotia, and Newfoundland, both onshore and offshore.

We appreciate the opportunity to offer CAPP's perspectives today regarding Bill C-5, Offshore Health and Safety Act, as it's commonly referred to.

While we believe there are areas where greater clarity in the legislation's wording would be beneficial, we are supportive of the intent and spirit of the legislation. We believe it is another positive step in bringing clarity and efficiency to the regulatory regime that governs the offshore petroleum industry in Atlantic Canada. We have met with provincial and federal government representatives since the bill was introduced and have received additional clarity on some of the legislative language. We expect that more clarity will be provided once regulations associated with this act are drafted. Today I will outline CAPP's views on Bill C-5, and to provide some important context to this discussion, I'll also touch on the overall subject of offshore safety.

With respect to CAPP's views on Bill C-5, over the past several years, CAPP and our members who are active in Atlantic Canada offshore participated in the government's consultation process related to amendments to the accord acts to address occupational health and safety. We appreciate the role the offshore petroleum boards also played in this process, for even though their mandate is not to develop legislation, they did provide considerable expertise and advice on the subject to the legislative writers, which has resulted in what we believe is a comprehensive legal framework that achieves the same protection for offshore workers that onshore workers currently enjoy.

We support government's desires to formalize offshore occupational health and safety legislation as described in Bill C-5. It provides industry with clarity on what government agencies are responsible for regulating occupational health and safety. Joint jurisdiction of the federal and provincial governments of Nova Scotia, Newfoundland and Labrador is now recognized. In this process, consideration has been given to an effective and efficient use of regulatory resources, avoiding duplication and overlap between different governments and different government agencies.

This bill also reflects a hierarchy of responsibility in clarifying the role of governments, the role of regulators, the role of employers, and the role of employees. It recognizes that the oil and gas operator is ultimately responsible for ensuring worker safety in the offshore environment.

CAPP also welcomes the establishment of an advisory council that will include representatives from industry, government, and employees to provide advice on matters related to occupational health and safety. We look forward to providing industry representatives with seats on such a committee. We also understand that governments will be consulting industry as they continue to process the drafting of regulations related to these amendments, and CAPP and our members look forward to being consulted as part of that process.

I now wish to provide some context for what is meant by safety in the offshore oil and gas industry.

Safety comes to mind first in the oil and gas industry. In the offshore, where factors like harsh weather, icebergs, and remoteness of work locations provide added challenges, our members are diligent in equipping workers with the skills and tools needed to keep themselves and their co-workers safe. All of our offshore operations are guided by comprehensive health and safety plans that must be developed before any offshore activity is approved.

The Canada-Nova Scotia and the Canada-Newfoundland and Labrador offshore petroleum boards audit these company health and safety plans, and frequently inspect offshore work locations. The boards have the power to shut down operations that are unsafe.

Our industry is committed to continuous improvement. We support research to test and advance new safety equipment and regularly assess the safety equipment and training provided to offshore workers as new research and technology becomes available.

We work to eliminate or control potential hazards and to keep our workplaces and employees safe. We must also ensure that our employees are ready to respond effectively in an emergency situation. Offshore workers receive comprehensive safety training focusing on emergency response and survival, which must be repeated at regular intervals to ensure that they have the skills required to effectively handle an emergency situation.

The industry views training as a critical component of emergency preparedness and response. Working with regulators, drilling companies, offshore worker representatives, and training institutions through the Atlantic Canada training and qualifications committee, our industry regularly assesses our training standards and ensures that processes are in place to ensure that the training available in Atlantic Canada meets the intent of the standard and is of good quality.

We also work to ensure that the safety equipment designed for and provided to offshore workers in Atlantic Canada is the best available for the offshore environment they are working in.

One example is the introduction of the helicopter underwater emergency breathing apparatus, also known as the HUEBA. In 2009 the offshore petroleum industry in Atlantic Canada implemented this device, which is mandatory for travel by helicopter offshore. The HUEBA gives the user an additional capacity of breathable air so that he or she has more time to escape from a partially or totally submerged helicopter in an emergency situation. The HUEBA is basically a compressed air device, like the small scuba tank used in diving. This is just one example of a tool that has been implemented by the offshore industry to enhance safety.

A more recent example, in fact one that is ongoing right now, relates to the helicopter passenger transportation suits that are worn by offshore workers when travelling by helicopters offshore. In 2012 the Canadian General Standards Board published a revised standard for helicopter passenger transportation suits.

CAPP and our members participated fully in the CGSB review of this standard, which resulted in an improved published standard for future suits, as it requires suits to be tested in more realistic conditions such as colder water, amongst other things. Oil and gas operators in Newfoundland and Labrador and Nova Scotia are at the end of a process now to select a contractor who will develop these helicopter passenger transportation suits for Atlantic Canada offshore, built to this new standard.

CAPP and our members engage the offshore workforce through joint occupational health and safety committees on every offshore installation to ensure that worker feedback is part of the process of revising safety and training standards and introducing new equipment. This process has proven to be an important aspect of how CAPP advances important safety files and ensures that workforce feedback is part of the process.

As an industry, we will continue to advance research and will continue to challenge ourselves to continually improve performance.

To conclude, I want to reiterate CAPP's support for Bill C-5. From industry's perspective, the amendments provide greater clarity related to who's responsible for regulating offshore occupational health and safety. This has now been formalized into legislation.

The proposed legislative amendments will also further strengthen Canada's leadership in offshore safety.

As an industry, we will continue to work to ensure that our workplaces are as safe as possible; will continue to focus on training as an essential component of our safety plans and programs; and will continue to assess the safety equipment and tools we provide to our workforce in order to reduce or eliminate hazards and to ensure they are fully prepared to respond in the event of an emergency.

I'd like to thank you for the opportunity to present to you today. I look forward to any questions you may have afterwards.

[The Chair, Conservative, Leon Benoit]

Thank you very much, Mr. Barnes, for your presentation.

It's good to get a reminder that the oil and gas industry isn't only in the four western provinces. It's also in eastern Canada. Thank you for being here on behalf of the Canadian Association of Petroleum Producers.

We go now to the next witness today, who's here as an individual, the Honourable Robert Wells, a former inquiry commissioner for the offshore helicopter safety inquiry.

Welcome to you, sir. Please go ahead with your presentation. You have up to ten minutes.

[Robert Wells, Former Inquiry Commissioner, Offshore Helicopter Safety Inquiry, As an Individual]

Thank you, Mr. Chairman, and members, for inviting me to be here in front of the committee to talk about offshore matters generally.

I've had an opportunity in the last three or four days to examine the bill. The bill is a complex piece of legislation. Somebody has worked hard—more than one person, I suspect—on this bill. I know that it's been under consideration for a number of years. Quite honestly, I think it's a good job and I think it will help to formalize some of the concepts that people knowledgeable about the industry and the regulatory people have thought about for some time. To see it enshrined—I hope to see it enshrined—in legislation is a good thing.

A couple of things impressed me most. One is that the bill talks about and mandates the involvement of workers in the processes of safety. That was something that was important to me during the two years and three or four months that I was the inquiry commissioner. In my report, the theme that workers must be involved emerges constantly. Now, I was concerned with helicopters, not safety on the offshore installations, but in both cases workers must be involved, and the fact that there's legislation going to involve them formally, I think, is a very, very good thing.

Another thing impressed me. I have great confidence in the wisdom of non-experts. We need experts in this complex age very much, but experts should be advisers. There's no better illustration probably than Parliament itself, which has expert advice on many things, but in the end decisions are made by governments and parliaments that are not necessarily expert in particular fields.

The idea of advisory committees, to me, is a very welcome thing to see in this. My own report recommends that advisory committees be established to have expert advice but nonetheless to guide the experts, if you like, or guide the decision makers, more importantly, in the important decisions that they have to take. Maybe I get this from years of dealing with juries as a counsel and as a judge, but I have the greatest respect for the wisdom that ordinary men and women have that comes forth when they're asked to consider things. These two things I mention.

Of course, the other thing this act does is to bring the offshore into the fold of occupational health and safety generally, because the offshore has been off on its own in the past. This brings them into the broader context of occupational health and safety. That's important in another way also, in that it helps in the development of a safety culture or safety cultures. Safety cultures are one of the most important things. They're hard to define. Some of the writers on safety have described them simply as the way we do things around here—but that's an extremely important component of safety. I think the offshore involvement with other safety cultures will both strengthen other safety cultures and allow them in the offshore to be strengthened by that involvement. That's extremely important, I think, in the safety field.

I won't say more about this in the short time in which I'm making general remarks, but I want to pay tribute to the people in the Canada-Newfoundland and Labrador Offshore Petroleum Board for the progress that has been made in the last four and a half years since the tragic accident in March 2009.

Perhaps the most important in my mind has been the raising of the search and rescue capability provided by the operators to the world-class standard, because at the time of the accident it wasn't at the world-class standard. There was no dedicated helicopter. The regular transport helicopter had to be refitted, seats taken out, and hoists put in to become a search and rescue helicopter. On the day of the accident, that took about 50 minutes, so the search and rescue helicopter didn't get in the air for about 50 to 55 minutes. That's a long time in search and rescue when people are in the North Atlantic, either as a result of a crash or a ditching.

At any rate, that was so important to me as I began to learn in the inquiry process that, as you probably know, I made an interim recommendation that a start on that process should be made immediately. The C-NLOPB responded and the oil operators responded and last spring.... It took a lot longer than I thought, taking about a year. You can't buy one of these helicopters as you can buy a car, for example. Then you need other things. You need an important hangar with all the facilities. You need facilities from bedrooms to cooking facilities to whatever in the hangar because you're going to have people there 24/7 when they're on duty. Then one needs permission to build a new hangar.

All this was expensive, but the oil operators came through and last spring was a very significant day, and for me personally, too, when I went to the opening of that facility, because that marked a transition. It brought the Canada-Newfoundland and Labrador Offshore Petroleum Board to a world-class standard with a 20-minute response time. I think that was a marvellous thing and I congratulate C-NLOPB, the oil operators, and the industry generally for making that happen.

Other things have also happened in the last three or four years. There has been greater worker involvement in committees, particularly in safety forums, which are ongoing. I've been to two of them. I went to one two or three weeks ago. I was invited to go and the discussion was very fruitful and important and worker involvement was there. I'm glad to see in Bill C-5 that workers and their unions and representatives of safety committees are involved. These are good things.

Survival suits, as Mr. Barnes has said, have been improved substantially, and that is a good thing. The other important thing that has been done is that the C-NLOPB has now got top-notch aviation expertise in-house, and also outside the house that it can call on. That is of fundamental importance because up to then, the C-NLOPB had no expertise in aviation. It relied on the operators. It relied on Transport Canada, and that's fine as far as it goes, but in a dangerous offshore environment, which we have in the North Atlantic, you need expert advice and knowledge right at the scene of aviation of what's possible and what should be and on what C-NLOPB, as an institution, has to watch for and be on top of.

These are good things that have happened. There are many more just in the training.

When I took the training it was in a pool with a temperature of probably 20 degrees or something like that, and it was calm. That didn't make it much easier to go into the dunker, which is an experience for anyone. But now, after ExxonMobil—if I'm correct—provided $3.8 million to bring the training facility up, I visited it after the work was done and it was quite something, with simulated thunder and lightning, waves, storms of rain and wind. It was as realistic as anything could be. If I had been invited on that day to take the training, I might not have done it.

We have made a lot of progress, and this is probably the first time in a formal setting such as this that I, as the former commissioner, have been able to pay tribute to what has been done.

Now, I doubt if you will be asking me all that many questions on the bill itself. If you do, I'll do my best to answer them, if you give me the reference and what to look at, but something that took 10 years to prepare can hardly be digested in three, four, or five days. Anyway, that's that.

I suspect you have other questions for me in other areas, which I'll do my best to address. But thank you very much for this opportunity to make an opening statement.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Wells.

Just before we go to questions and comments, there are a couple of other things I want to mention.

I want to mention that the clerk had invited other witnesses who couldn't come on short notice. We did have short notice.

As well, Monsieur Gravelle has indicated that he wants to bring his motion up at the end of this meeting, so we'll have to end the meeting about 15 minutes before the normal ending time.

Mr. Julian.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Thanks, Mr. Chair.

I just want to confirm that Lana Payne, who is one of the witnesses we put forward, is in Ottawa on Monday and she will be available to come to committee.

[The Chair, Conservative, Leon Benoit]

We have arranged the meeting for Monday, and I don't remember who is actually going to be here, but we'll have at least a full slate.

One other thing just quickly is whether we could approve the budget for the study of Bill C-5. That's been passed around.

Let's get on with the business of the meeting. We'll start with Ms. Crockatt for the seven-minute round, followed by Mr. Harris and then Mr. Regan.

Go ahead, please, Ms. Crockatt.

[Joan Crockatt, Conservative, Calgary Centre, AB]

Thank you very much, Chair.

Thank you both very much for being here today, and for your work, Justice Wells, in the offshore inquiry. We very much appreciate the chance to talk with you further about it today.

You've lived and breathed this for two years and three or four months, as you said. I appreciated you telling us we've made a lot of progress.

I wonder if you can tell us if you believe this bill will improve the health and safety of offshore workers.

[Robert Wells]

I think it will, because when things are formalized in legislation, rather than being decisions of boards and people and operators and unions, they become very real and they must be followed and you can't depart from them. You can't depart from legislation that comes from the Parliament of Canada in these matters, so yes, I think it will make a difference.

[Joan Crockatt, Conservative, Calgary Centre, AB]

In your analysis of the bill—and I appreciate that it is very complex and takes a lot of reading and sifting through and you haven't had it for a long period of time—do you feel that the advice you provided is reflected in it in a robust way?

[Robert Wells]

That's a good question. In a way, yes it is. Some of the themes that have come up in this legislation—and I suspect a lot of this was formulated before I became commissioner—are familiar to me because they came through the inquiry process.

Yes, there are some things that dovetail. There were a lot of things, of course, that I wouldn't be involved in because I wasn't involved in offshore installation safety, although I did learn a bit about it during the process, and this deals with all sorts of aspects of offshore safety.

I would make one comment about safety offshore. If you think about it, the oil operators as much as anybody else want to see and have a safe operation, because if it's not safe, and if accidents and tragedies occur, they are very much under the gun. So they want to see it. I think the history worldwide has been that, in recent years particularly, oil operators have ensured safety in their operations. It was described by people in the industry to me in the hearings that in the last say 25 years—let's say since Piper Alpha in the North Sea—safety on the installations has improved hugely.

Where I think danger might lurk is not on the operators' own installations, but when contractors perhaps are engaged to do certain work over which the operators have a lesser degree of control. For instance, there have been two tragedies with helicopters in the Newfoundland and Labrador offshore. One was in 1985 when six people died after a helicopter crashed into the ice and disappeared. Then of course there's the one we're all familiar with when 17 people died and only one person was saved. These were done by contractors.

Now I hasten to say that the cause of the 17 deaths and the tragedy off Newfoundland four years ago didn't emanate from within Canada, in my view, and I can elaborate on that if anybody wants me to. Nevertheless it happened.

[Joan Crockatt, Conservative, Calgary Centre, AB]

I wanted to ask you this. We have heard testimony that 28½ of your 29 recommendations have been followed through with either having been implemented or are now underway.

Your recommendation 29 had two parts to it, (a) and (b). Part (b) states that if part (a) is not feasible at this time, it's recommended that both governments consider four other actions including creating a separate safety division of C-NLOPB, establishing an advisory board to support the safety division, ensuring that the safety division has the ability to engage expert advisers to assist in the regulatory tasks, and transferring the powers of the chief safety officer to the new safety division.

So even though part (a) was not enacted, are you satisfied with the way part (b) has been agreed upon?

[Robert Wells]

I'll need three or four minutes, okay?

[Joan Crockatt, Conservative, Calgary Centre, AB]

Go ahead.

[Robert Wells]

Where did I learn what had happened? It grew out of the Piper Alpha disaster when Lord Cullen made certain recommendations. Out of that came the concept, which was adopted in the U.K., and shortly afterward in Norway, of a separate safety entity, call it an authority, or what you will. Then it went to Australia and they adopted that.

It's interesting. Do you remember the presidential commission following the Deepwater Horizon disaster in the Gulf of Mexico that was headed by Senator Bob Graham and William K. Reilly? I've spoken to both of these men and we've exchanged reports. They also felt and recommended that there should be a separate safety authority rather than the authority that deals with the operators on a day-to-day basis, granting permission to operate, to explore, to bring an operation into being.

These are the things that make made me feel that a separate safety authority was a good thing, but I was perceptive enough to realize that not everybody might agree, and I hold no grudge about that. Therefore I put in the second thing. Canada's offshore is Newfoundland and Nova Scotia. It is a small offshore compared with the North Sea or the Gulf of Mexico, or other parts of the world. So I thought at the time that the powers that be—I suppose you are the powers that be, in some sense—may not feel that a separate safety authority was needed or that it was time for one, and therefore I put in the second part (b), that if it's not felt this is the right way to go, then here is a fallback way. I am happy to say that I think that fallback way has been adopted and good has come from it, which pleases me as an individual very much.

[The Chair, Conservative, Leon Benoit]

Thank you very much, Ms. Crockatt.

We will go now to Mr. Harris for up to seven minutes. Go ahead, please.

[Jack Harris, NDP, St. John's East, NL]

Thank you, Chair.

Thank you to Mr. Barnes.

I'll call you Justice Wells as a courtesy title although you are retired and are in private practice, which is nice to know.

Thank you, both of you, for your work on the offshore, particularly Justice Wells, for your diligent work with this helicopter safety inquiry.

I will also take advantage of the point made by Mr. Benoit, the chair, that this is a good opportunity to recognize the incredible value and importance of the offshore oil and gas regime in Newfoundland and Labrador and off Nova Scotia, and its contribution to Canada's economy as well as to that of our region.

Safety, of course, is important. One question I have, first of all, is this. The recommendation that you made for a separate, dedicated helicopter was actually made by the Ocean Ranger inquiry after that great disaster.

[Robert Wells]

It was.

[Jack Harris, NDP, St. John's East, NL]

It took a second disaster, and a second recommendation—

[Robert Wells]

And 25 years....

[Jack Harris, NDP, St. John's East, NL]

—and 25 years for that to be implemented. I'm wondering why you think that is. Why don't we actually act fast enough on important recommendations such as the one that you called your most important recommendation, which was recommendation 29?

[Robert Wells]

I can't really say why the Ocean Ranger recommendation, which was quite clear, was not adopted. I suspect it was because it was during the exploration stage. Then things changed; exploration ceased and about 15 years ago production started. When the Ocean Ranger happened there was no Canada-Newfoundland and Labrador Offshore Petroleum Board. New people came on the scene and new institutions, new companies, and I suppose the Ocean Ranger recommendation, in that regard, must either have been forgotten or not considered important enough to do.

It's unfortunate, but I can't give any explanation more than that.

[Jack Harris, NDP, St. John's East, NL]

Obviously one of the explanations would involve the actual costs of doing that, which you alluded to.

I suspect it's also a factor in two of the issues that became very clear during your inquiry: the lack of a 30-minute run dry capability in the helicopters being used offshore; and the concern, which you shared and issued a recommendation on early on, about night flights over very long distances and the increased danger of loss of life if a helicopter goes down then. We still have helicopters without 30-minute dry run capabilities operating in the offshore. We have a very significant push to go back to night flights, and I know Mr. Barnes's organization is heavily involved with that. Both of these are also cost factors. You can get other helicopters that do have the capability and you could avoid night flights by having more helicopters.

I'm wondering, in light of your recommendation 29, if it is possible that an independent regulator would have more leeway and not perhaps be as concerned about what the industry would have to say or about the operation side, and be more able to deal with that.

I'll give you a second example, because I'm not sure what's going to happen to my time.

A recent incident came to light only after the Transportation Safety Board reported. A helicopter lost engine power, was dropping very fast, managed to be saved because it was in daylight and they physically saw the ocean and were able stop and change direction. That was never reported as such to the C-NLOPB, which is now the regulator. The contractor reported it to the operator as a loss of power, but with no details, and then the operator reported it to the C-NLOPB in a similarly ambiguous way. It wasn't until the Transportation Safety Board...and the C-NLOPB said they didn't know anything about it, but that the Transportation Safety Board is investigating.

That set of circumstances bothers me. You now have the C-NLOPB taking information, not from the person running the helicopters but from the operator, and C-NLOPB is leaving it to somebody else. It seems to me this is a danger—the lack of a separate, independent safety regulator that has one and only one role.

Would you care to comment on both of these issues? One, the cost of doing a good job, and two, the circumstances I just mentioned.

[Robert Wells]

I'd like to comment first on the helicopter. It went down backwards toward the ocean and it got to within 38 feet or something before the pilot recovered control.

I didn't know and had not heard that the C-NLOPB had made a statement. When I was contacted by the media, I said we should have known more about this before the Transportation Safety Board reported. C-NLOPB got in touch with me and said they did report the incident but didn't know all the details. It took an organization like the Transportation Safety Board to provide the full details, which we didn't know before, and perhaps the operators didn't know. They knew something went wrong but not exactly what it was. When the Transportation Safety Board reported, everybody knew and with details that hadn't been known before.

[Jack Harris, NDP, St. John's East, NL]

If I may add, one of the concerns was that during this period—this was a daytime incident—there were negotiations under way with the CAPP, the C-NLOPB, and everybody involved, to resume night flights. But those facts about this situation being saved because the crew could see the ground wasn't known to anybody involved in this. Certainly it wasn't known to the C-NLOPB, it wasn't known to the workers, and it wasn't known to the representatives.