Fisheries Committee on Feb. 15th, 2011

[The Vice-Chair, Liberal, Lawrence MacAulay]

I call the meeting to order.

I want to welcome our guests: Michael Peacock, exploration manager with Esso; Anita Perry, vice-president of government and public relations with BP; and also Jean-Sébastien Rioux.

Welcome. What we do is first have ten-minute presentations to the committee. Each of you, I understand, Mr. Peacock and Ms. Perry, is giving a ten-minute presentation. Then we will have questions from the committee.

Ms. Perry, are you ready to proceed?

Go ahead.

[Anita Perry, Vice-President, Government and Public Affairs, BP Canada Inc.]

Mr. Chairman, committee members, my name is Anita Perry, and I'm vice-president of government and public affairs for BP Canada. I'm here today to speak about our relationship with ArcticNet.

ArcticNet is a network of centres of excellence of Canada. It brings together scientists and managers in the natural, human health, and social sciences fields with their partners from Inuit organizations, northern communities, federal and provincial agencies, and the private sector to study the impacts of climate change in the coastal Canadian Arctic. The Canadian Coast Guard ship Amundsen is a scientific research platform used by ArcticNet.

The network of centres of excellence fosters multi-disciplinary, multi-sectoral partnerships between academia, industry, government, and not-for-profit organizations. The partnerships that this initiative cultivates result in ideas that are transformed into economic and social benefits for all Canadians.

BP Exploration Operating Company Limited, or BP, acquired the rights to explore three offshore exploration licenses, EL 449, 451, and 453, in the Canadian Beaufort Sea from the federal government in June 2008. Following a successful seismic program in 2009, BP conducted a scientific field data collection program in open collaboration with ArcticNet during the summer of 2010.

Aligned with the strategic goals of both ArcticNet and the network of centres of excellence, BP executed a collaboration agreement in April 2010 with ArcticNet and Université Laval, which included the following scope of research activities: retrieval and redeployment of eight subsurface oceanographic moorings deployed in 2009 by ArcticNet to collect metocean and ice data; biological sampling at eight biophysical stations to determine baseline contaminant levels and biological productivity; deployment and retrieval of 12 bottom-anchored hydrophones used to detect and track vocalizations of whale species of concern; deployment of a remotely-operated vehicle for a visual survey of the ocean floor; deployment and retrieval of a moored metocean surface buoy for the duration of the 2010 field program; ice thickness and roughness surveys, using the helicopter-mounted electromagnetic induction system; deployment of ice drift satellite beacons on large multi-year ice flows; collection of 42 piston core samples to determine physical soil characteristics; and ocean-bottom mapping.

BP's financial contribution toward these ArcticNet-led sampling activities in 2010 included both cash contributions of over $9 million in the form of research activities, scientific equipment, data analysis, vessel costs, salaries, grants to ArcticNet graduate students and research staff, and in-kind contributions of over $5.5 million in the form of direct and indirect costs of joint research projects, salaries, and transportation. BP also supported the participation of two Inuvik-based high school students in the 2010 ArcticNet Schools on Board program, which took place on board the CCGS Amundsen from August 2-12.

BP's 2010 program support provided an opportunity for ArcticNet to increase the temporal and spatial coverage of sea ice, geological, and environmental data collected in the Beaufort Sea-Mackenzie Shelf-Amundsen Gulf region as part of their continuous multidisciplinary research programs carried out in the area over the last decade. The 2010 research collaboration directly benefited the research work conducted by 21 ArcticNet students and post-doctoral researchers.

The research collaboration between BP and ArcticNet has been very positive. It enables the sharing of assets and expertise; data resulting from the collaboration is transparent and publicly available; and data resulting from the collaboration is available to ArcticNet researchers, BP, the National Energy Board, and other regulatory and government agencies, Inuvialuit organizations, and co-management committees and other research initiatives, such as the Beaufort Regional Environmental Assessment, or BREA.

To further clarify our collaborative agreement with ArcticNet, at no time was there an agreement between BP and the Canadian Coast Guard to lease the CCGS Amundsen. BP's agreement was with the Université Laval, which acts as the secretariat for the ArcticNet research program.

BP has been transparent about our collaboration with ArcticNet, providing newsletter updates on our external website and through community consultation activities with the six Inuvialuit Settlement Region communities.

The collection of the field data informs and educates industry, researchers, government, regulators, and the public as to the sensitivities and challenges of any potential future industrial activity in the area. BP is pleased that we have been able to contribute to advancing the scientific understanding of the physical and biological environment of the Beaufort Sea in this way.

I trust that I have outlined and demonstrated the positive benefits of our academic collaboration and have addressed the concerns of the committee with respect to the committee's motion of November 25.

I would implore members of this committee to support the great scientific work that ArcticNet does.

Thank you.

[The Vice-Chair, Liberal, Lawrence MacAulay]

Thank you very much, Ms. Perry.

Mr. Peacock.

[Michael Peacock, Exploration Manager, Imperial Oil Limited]

Mr. Chairman and distinguished members of the committee, my name is Michael Peacock, and I am a geologist by training. I hold the position or title of Canadian exploration manager for Imperial Oil. I am a registered professional geoscientist with APEGGA. APEGGA is the Association of Petroleum Engineers, Geologists and Geophysicists of Alberta.

My colleagues and I are here today in response to the motion from Mr. Blais adopted on November 25, 2010. The motion asked for details about the lease of the Canadian Coast Guard ship Amundsen. The lease was supposedly for petroleum exploration activities in the Beaufort Sea.

Unfortunately, the mistaken understanding that Imperial Oil or Esso and BP leased the Amundsen to explore for petroleum stemmed from incorrect media or news reports. While this record has since been corrected, I hope that our testimony today will result in a better appreciation for the significant benefits of scientific cooperation and collaboration between industry, academia, government, and all of society.

For background similar to what Anita shared with you, Imperial Oil picked up EL 446. EL stands for Exploration Licence 446, also termed Ajurak. It was awarded to Imperial and Exxon Mobile Canada in July 2007 for a work program commitment bid of $585 million. Each company was assigned a 50% working interest in the block.

The Ajurak licence is located approximately 180 kilometres offshore from the town of Tuktoyaktuk. The exploration licence is valid for nine years. When you consider the duration of an exploration licence, it takes at least three to four years to plan and prepare just the regulatory application required to be submitted to the regulatory agency. In this case, the regulatory agency is the National Energy Board, the NEB.

This is a long and thorough process, and it includes the submission of an EIA or environmental impact assessment. A scientific program began in 2008 to collect the necessary data for this submission. This was for the planning of the first exploration, which specifically included the following: one, metocean and geotechnical data to complete and verify the engineering design required for any exploration well; two, development of safe and environmentally responsible drilling operations and support practices; and three, provision of the necessary environmental data to support the environmental impact assessment for the potential drilling of any well.

The requirement to submit an environmental impact assessment is the reason that on May 6, 2009, Imperial Oil executed a service order with the Université Laval in Quebec City to collaborate with ArcticNet in their 2009 research program.

The scope of the work is described in the service order as follows. I will quote the service order:

This service order covers the Imperial Oil share of a research collaboration to understand the environmental and biophysical aspects of the Beaufort Sea in the vicinity of the Ajurak exploration license No. 446. The research collaboration involves a number of scientific disciplines, including sediment, air and water quality, marine birds and marine mammals. It covers fish, plankton, benthic organisms, and geo-technical properties of the seabed. It is also used for hazard identification and for metocean design criteria and to understand the ice conditions of this particular part of the Beaufort Sea. The principal platform will be the Canadian Coast Guard ship Amundsen. The scope of the collaboration includes mobilization to the Beaufort Sea in early July via Point Barrow and the conduct of investigations through to October of the same year. Demobilization costs via the Northwest Passage were not included within the scope of work. Results of this work will be used for the design of the Ajurak exploration well and the preparing of the environmental input assessment required for the drilling operation.

As stated previously, the purpose of the research was to better understand the ecology, the geology, and the ocean environment of the Arctic. Imperial is proud of its contribution to advancing the scientific understanding of the physical and biological environment of the Beaufort Sea through the ArcticNet research collaboration. All of the research is shared with the Canadian public, and it is shared at the annual ArcticNet science meetings, through their publication, and through other public forums.

I ask the members of the committee to consider this: we conducted pure physical, scientific research in the Arctic to better understand the environment; the knowledge we obtained is peer-reviewed, and it is publicly available; we engaged in an undertaking to gain a better understanding of the Arctic environment, in the hope that one day a permit to drill is submitted and the environmental data that forms the basis of the submission is then publicly available for everyone to study and to verify.

Joint research is valuable and beneficial to all Canadians. Imperial agrees with a comment made by the fisheries minister, Gail Shea:

We all benefit from the science that happens, and in this case, what was happening was an examination of the environment to better understand impacts associated with industrial activities.

We hope that this presentation and the exchange we are about to engage in will address the concerns of the committee.

Thank you, Mr. Chairman and honourable members.

[The Vice-Chair, Liberal, Lawrence MacAulay]

Thank you very much, Mr. Peacock.

Our first questioner will be Ms. Murray.

[Joyce Murray, Liberal, Vancouver Quadra, BC]

Thank you, Mr. Chair.

I want to thank the witnesses for coming to help us understand this project. We appreciate hearing about the collaboration and cooperation amongst government, academia, and industry. It's important that we share information. Also, scientific understanding is a hugely important goal, especially when it concerns the ecologically fragile Arctic and some of the possible resource exploitation in that area.

The witnesses may be aware that I represent the Liberal Party of Canada, which has made it clear that we're against further leases and further exploration in the Arctic until such time as a full and thorough understanding of the risks has been acquired.

I want to start off with a question to understand something that was in the letter from BP Canada that was received by the committee. It was mentioned that there was a successful seismic program in 2009. I'm interested to hear whether the seismic program took into account the potential disruption of habitat conditions. The witnesses are probably aware of the recent court ruling with the Suzuki case, that it's not just the geophysical boundaries of habitat for endangered species or species of concern, but it's actually the conditions, such as noise and pollution, as well.

Could you tell me, from BP, whether the seismic program took into account noise and other impacts on critical habitat?

[The Vice-Chair, Liberal, Lawrence MacAulay]

Thank you, Ms. Murray.

Ms. Perry.

[Anita Perry]

During the seismic program, what we mean by successful is that it was executed; we were able to get some seismic. That's what we mean.

We had a very safe program. While collecting geoscience and doing the seismic, we also had Inuit spotters on board to watch for whales, to see whether there were any whales in the area in which we were operating. But we also were testing some acoustic equipment to hear and listen for whales or species in the area. We conducted that all at the same time.

I don't have that report with me today, but that report is public. It has been filed with the stakeholder, which is the six Inuvialuit communities.

[Joyce Murray, Liberal, Vancouver Quadra, BC]

My understanding is that if whales were spotted visually, then the seismic activity would be shut down—

[Perry]

While they're there, yes.

[Joyce Murray, Liberal, Vancouver Quadra, BC]

—but there wasn't a way of identifying whether that seismic activity could be impacting the habitat, the habits, the health of species of concern that may not have been spotted by sight.

[Anita Perry]

I'm not really sure.

Mike, you have been more involved than I have.

[Michael Peacock]

Maybe I can help you with some of the background so you have a context.

[Joyce Murray, Liberal, Vancouver Quadra, BC]

With respect, it sounds as though the answer is no, and I have some other questions and a short amount of time.

I appreciate that the witnesses are saying they didn't directly commission the Amundsen from the coast guard. Had the representative of the coast guard been here today for this set of questions, that would have been helpful, but I think this is relevant in either case.

The coast guard is badly stretched in terms of its ability to respond to spills. With regard to the activity that takes place during the course of this research, was there any due diligence done by the companies involved in terms of potential responses to spills should there be an accident or a dumping of barrels of diesel overboard by accident or an unforeseen incident with the boat or with any of the equipment that this expedition carried?

[The Vice-Chair, Liberal, Lawrence MacAulay]

Mr. Peacock.

[Michael Peacock]

Thank you.

When we acquire seismic--and we acquire marine seismic globally--we use our global experience to help us with these seismic problems. One of the things we do is to have a boat sail, and behind this boat we have eight streamers, and they collect the seismic data. In other areas of the world, these streamers are filled with gels because there are no issues with ice. In the Arctic environment, we use a different type of streamer. It's much more complex, but we use it to mitigate the environmental risk of Arctic operations. We use what we call solid phase streamers, so that if a piece of ice the size of the jug here hits that streamer, and if that streamer is damaged, the only thing that is left is the inert biodegradable plastic that's used.

[Joyce Murray, Liberal, Vancouver Quadra, BC]

Thank you. I was thinking more about spill response, but I appreciate the caution that was being taken.

A concern I also have with the use of the Amundsen for pre-drilling purposes is that the Office of the Auditor General and the Commissioner of Environment and Sustainable Development has made it very clear that this government is not at this point able to ensure Canadians that it can prevent or respond to spills. So there are no consistent or systematic assessments and no formal processes to assure that risks are being assessed. Knowledge of risks in Canada regarding ship-source oil spills is neither complete nor up to date. Emergency plans essentially don't exist. The coast guard doesn't have the systems necessary to ensure that its training and exercise programs can be delivered...and the list goes on.

So there are huge gaps. Was there any concern or consideration that if one of the coast guard's limited assets, this boat, part of its capacity to do what it's responsible for doing, was taken that this would actually further weaken the coast guard's ability to do its job?

[Anita Perry]

Again, ArcticNet contracted the Amundsen. When we do a program, such as the seismic program we did, through our procurement supply chain management organization--to address your concern first about spill mitigation or whatever--we have our own processes to assess what we would do if a barrel of diesel spilled or even if some waste from the ship spilled or anything like that. So when ArcticNet tells us who they've contracted, we do our assessment.

As far as taking the coast guard away from its duties goes, ArcticNet contracted the Amundsen and it was up in the area. So I don't know if I can respond to that.

[Joyce Murray, Liberal, Vancouver Quadra, BC]

Do I have time, Mr. Chair?

[The Vice-Chair, Liberal, Lawrence MacAulay]

You have one minute and 20 seconds.

[Joyce Murray, Liberal, Vancouver Quadra, BC]

The increase in our knowledge about that area and its ecology is very important. Could you tell me how the data and the information that these expeditions have been securing is made public? Is it on a website? Anybody can have access to that information...? It has been collaboratively secured through cooperation with government and academia. Is it is fully and openly available for the public's use?

[Michael Peacock]

Yes, it is. It's shared with ArcticNet and it's shared with all the members of the ArcticNet consortium. We've also shared it with local communities. We've shared it at conferences. We will continue to share it with any federal agency that requires it.

[Joyce Murray, Liberal, Vancouver Quadra, BC]

Is there a website where it's posted so that anyone can have access to that full set of information?

[Michael Peacock]

Yes.

[Anita Perry]

I don't have the web address with me, but I can get it to you.