Natural Resources Committee on May 13th, 2010

[Lawrence Amos, Treasurer, Inuvialuit Game Council]

Hello. My name is Lawrence Amos. I am a harvester from Sachs Harbour, Northwest Territories. I am also the treasurer for the Inuvialuit Game Council, the land claims body that represents the collective Inuvialuit interests in wildlife.

l am here today on behalf of the chair, Frank Pokiak, who was unable to be here. He sends his regrets.

With me is Norm Snow, executive director, and Steve Baryluk, resource management coordinator.

The Beaufort Sea, our ocean, means everything to the Inuvialuit. It means there is a future for our people to live off. The wildlife in our area is very significant, but so is the ice. The animals that are there need the ice. These animals evolved and adapted to the arctic conditions, and they would have a lot of difficulty living anywhere else. The Beaufort Sea has a lot of wildlife that the Inuvialuit depend on. These include beluga whales, seals, many kinds of fish, polar bears, and all the creatures that make up the ecosystem that they depend upon.

Also important are the bowhead whales. The Inuvialuit last hunted a bowhead whale in 1996, but we still have the right to harvest them if we choose. Our ocean is the summer feeding ground for the bowheads. Our relatives, the Inupiat in Alaska, depend on bowheads as a significant part of their annual food source. We must ensure that they are not impacted by what happens in our waters.

The Inuvialuit know that the ocean is a very difficult place, not only for animals but also for man. We have a lot of respect for the ocean and the animals that live there because we know how difficult it is to live there. These animals that come from the Beaufort Sea have provided clothing, food, and other valuable resources for our survival since we have lived there. There was nothing wasted from harvested animals. Even if animals are struck and do not recover, we know they go back into the cycle of life.

The Government of Canada should respect the Inuvialuit culture to the fullest and try its best to protect this fragile environment. The government should he happy that Canada has a culture that can survive in this harsh environment. Any oil spills or well blowouts would have a devastating impact on the Beaufort ecosystem and on the ability of the Inuvialuit to continue their traditional lifestyle.

We as Inuvialuit are not new to offshore oil and gas development. We experienced the previous cycle of offshore exploration thirty years ago. Many Inuvialuit worked in the offshore industry at that time, but now companies are moving into deeper waters in the Beaufort that have never been worked in before. The same concerns about the risks of oil and gas development that existed back then still exist today. This is why the Inuvialuit Game Council, on January 21 of this year, reaffirmed its position on the existing government's same-season relief well policy for the Beaufort Sea.

The Game Council continues to support the requirement for same-season relief well capability, or an equivalency that would provide an equal or greater level of protection for the environment and wildlife in our region. The Game Council does not support any exemption to the same-season relief well policy, recognizing that it was developed for shallow water drilling.

When the National Energy Board started its hearing process to review the same-season relief well policy, the Inuvialuit Game Council registered as an interested party. We have been involved in consultations with Imperial Oil on their plans for their Ajurak Beaufort drilling program.

They have been assuring the Inuvialuit people that a blowout is very unlikely to happen and that if a kick was experienced, they would have a blowout preventer in place that would prevent a blowout. These blowout preventers are similar to the ones used in the Gulf of Mexico, but with more rams, which provides some redundancy.

To date, we have not heard from BP specifically on what their plans are for their similar drilling program in a licensed area adjacent to Imperial's. We have been given to understand that it would be similar to Imperial's Ajurak project and likely using the same drilling system. With the recent blowout in the Gulf of Mexico, the communities will likely have less faith to take industry at its word.

The council has been dealing closely with the issue of the same-season relief well for the past five or six years, prior to and during Devon's drilling of the Paktoa well in 2005-06. At that time, the developer was required to build an ice pad for a relief well before drilling into the risk zone. The ice pad was unable to be constructed because of the landfast ice forming later that year, likely as a result of the changing climate. The company was granted a waiver on the relief well requirement by the National Energy Board. The Inuvialuit Game Council was not informed that this waiver had been granted, and when we did find out the council was upset. Since that time, the National Energy Board has made significant efforts to fix this issue, is more attentive to the Inuvialuit Game Council and the community concerns, and communicates with us regularly.

With respect to the Gulf of Mexico tragedy, it is clear that the blowout preventer did not work. In the Gulf of Mexico, the capacity to respond to a spill is far greater than anything available in the Arctic, both in terms of equipment and manpower. In light of this, it has really hit home that there is no way that a similar response would be possible in the Beaufort Sea, or anywhere in the Canadian Arctic, should a major oil spill ever happen. This is why the Inuvialuit Game Council has been, and continues to be, very concerned and very supportive of the same-season relief well requirements now in place as a last resort should an uncontrolled blowout occur during offshore drilling.

Quyanainni . Thank you for the opportunity to speak with you today.

[The Chair, Conservative, Leon Benoit]

Thank you very much, Mr. Amos, for your presentation. It is very much appreciated.

We now go to the last group of witnesses today. From the Nunavut Tunngavik Inc., we have Raymond Ningeocheak, vice-president, and we have with us as well Andrew Dunford, policy adviser on the environment.

Welcome to both of you.

I understand the presentation will be in Inuktitut. It won't make any difference for anyone listening through the interpretation devices, but it may take just a little bit longer.

Go ahead with your presentation, please, sir.

[Raymond Ningeocheak, Vice-President, Finance, Nunavut Tunngavik Inc.]

I am very pleased that you have invited me here this morning to speak on the important subject of offshore oil and gas drilling and production in Canada.

My name is Raymond Ningeocheak, and I'm vice-president of finance for Nunavut Tunngavik Incorporated.

Nunavut Tunngavik Incorporated is the organization that signed the Nunavut Land Claims Agreement in 1993. We represent Inuit living in Nunavut, and that is about 85% of the population of our territory. I'll speak to that later on.

As an organization, it is our responsibility to ensure that our land claims agreement is implemented and that Inuit interests are protected and advanced.

Nunavut is a maritime community. The word itself means “our land”, but with the possible exception of Baker Lake, all Nunavut communities are coastal regions. I want to emphasize this.

I will not speak too long, but I will give some geographic facts to you.

Our shores make up 35% of the world’s arctic coastline--twenty times more than Alaska. We include three of the ten largest islands in the world. Our northern tip is only 770 kilometres from the north pole.

Inuit are traditional and current harvesters of the resources of the sea. This reality is reflected in the Nunavut agreement. We need to remember that the preamble states that Inuit assert an aboriginal title to the Nunavut settlement area “based on their traditional and current use and occupation of the lands, waters and land-fast ice therein”.

Later, the preamble states that one of the objectives of the Nunavut agreement is:

to provide for certainty and clarity of rights to ownership and use of lands and resources, and of rights for Inuit to participate in decision-making concerning the use, management and conservation of land, water and resources, including the offshore;

There are 42 articles in the Nunavut agreement, and 14 of these refer directly to marine areas. Article 15 is the most obvious, because its title is “Marine Areas”, but there are direct references to marine areas in 13 other articles.

In other words, marine areas are at the heart and centre of the Nunavut agreement. The facts are there.

The articles are as follows: article 5, “Wildlife”; article 6, “Wildlife Compensation”; article 8, “Parks”; article 9, “Conservation Areas”; article 11, “Land-Use Planning”; article 12, “Development Impact”; article 15, “Marine Areas”; article 16, “Outer Land Fast Ice Zone--East Baffin Coast”; article 23, “Inuit Employment Within Government”; article 24, “Government Contracts”; article 25, “Resource Royalty Sharing”; article 27, “Natural Resource Development”; article 33, “Archaeology”; and article 34, “Ethnographic Objects and Archival Materials”. So you can refer to those.

Sometimes we wake up only when something happens. We don't think about it until something disastrous happens. Right now, we have seen the Gulf of Mexico oil spill that is really serious. When is it going to be cleaned up? How long is it going to take and how long is it going to have an effect on the resources and on the Inuit of the north?

We are lucky that nothing like this has happened so far in the Arctic. We know what happened with Exxon Valdez in Alaska. We were not prepared for the Exxon Valdez spill, and 20 years later it is still affecting the environment and the animals up there.

In the Arctic, our infrastructure is undeveloped. Our remoteness and lack of local resources mean that any spill would be much more difficult to respond to, in a timely way, than further south.

As someone said earlier, the ice pack up north makes it more difficult, too, because they're not up there right now. There has never been any training or education in case of a large-scale spill in the Arctic. The Department of Fisheries and Oceans is currently planning a small-scale exercise in conjunction with “Operation Nanook”, but as I mentioned, this is small-scale.

Our closest response team would be in Goose Bay, Labrador, in terms of air support from the Department of National Defence and wherever the closest coast guard might happen to be.

We are very concerned about the spill in the Gulf of Mexico today.

I'm having difficulty with my eyes. I'm trying to hurry, so I made a mistake here. I'll have to go back to where I missed. Thank you for your patience, Mr. Chairman.

We are really looking at this from the Nunavut perspective. As I said, the presence of sea ice would make any effective response even more difficult.

We understand that in Canada the National Energy Board commenced the consideration of drilling policy applicable to the Beaufort Sea in February, but broader consideration is required. This is a broad question, and events in the Gulf of Mexico show that spillage has effects far beyond the energy sector. As well, there are international considerations. The spillage has effects beyond us.

The oceans wash on all shores. Not long before the Gulf of Mexico blowout, on March 31 of this year, President Obama said he would allow the development of oil and gas leases off the coast of Alaska, notably in the Chukchi and Beaufort seas. In the east, Greenland recently licensed approximately 12 offshore exploration licences in Davis Strait, near Baffin Island.

Besides reviewing our own drilling regulations and requirements, we must ensure that we are comfortable with the practices of neighbouring countries. Minister Prentice is quoted on CBC Radio news on May 10 as saying that he has discussed Greenland's exploration licences with the home rule government and that the environment will be protected.

We are pleased to hear that the issue has been raised with the Greenlandic government, but we would like more information on exactly how the environment will be protected. We are not comfortable with simple assurances. The terms and conditions under which development occurs in the Arctic from exploration to drilling to shipping must ensure the protection of our environment and the continuation of our traditional way of life.

We must not endanger opportunities in other emerging industries, such as commercial fishing. There is a lot of fish up there between Greenland and Canada. There is a lot of harvesting in that area, so of course we are concerned about this.

Nunavut Tunngavik urges the committee to do the following things.

One, endorse the general principle that any future offshore oil and gas drilling and production in the Arctic should proceed only on the basis of the most rigorous international environmental standards available. This would need to include adopting best practices from around the world.

Two, beyond this general principle, support the adoption of supplementary environmental protection measures that address unique Arctic circumstances and vulnerabilities.

Three, reject the Canadian government's December 2009 relaxation of mandatory offshore drilling regulations. There was a decision, as reported in the Ottawa Citizen of May 11, to ensure that environmental management of oil and gas drilling and production contain mandatory and reliable safeguards applicable to all projects.

Four, endorse the proposition that the timing and pace of development of oil and gas should balance two primary considerations: the energy security of Canadians and the socio-economic well-being of Inuit and other permanent residents of the Arctic, and should contribute to a larger Canadian and global strategy to reduce dependence on hydrocarbons and thereby mitigate climate change impacts.

Five, recognize that the participation of Canadian Inuit, who have local knowledge of unique and fragile Arctic conditions and geography, is vital to decision-making on Arctic emergency response--for example, on site selection for placement of remote response infrastructure.

Six, review, in light of recent oil spills, the adequacy of the ship-source oil pollution fund as set out in the Marine Liability Act.

And seven, carefully review and consider the recommendations in the Arctic Council's Arctic marine shipping assessment 2009 report.

For western Arctic people living up there, the current is slower than the eastern Arctic Ocean. In the Kivalliq and Qikiqtarjuaq regions it is very much faster, considering the environment is different, and we also need to consider the icebergs.

Thank you for this opportunity, Mr. Chairman. If you have any questions with regard to this presentation, we are here.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Ningeocheak.

We will now get directly to questions. We'll have to shorten the time to six minutes each.

We will start with Mr. Bagnell, from the official opposition.

[Larry Bagnell, Liberal, Yukon, YT]

Thank you. Ullaakut.

Inuvialuit Game Council and NTI, your presentations were very helpful and, I think, self-explanatory. Nakurmiik.

For Ms. Drinkwater--if it could be really short answers, as I want to get all my questions in during this shortened time--could you briefly compare the Canadian and the American systems, both of which you're applying to for wells? Is it roughly the same type of safety, or is one more stringent than the other on what you would have to do to drill a well?

[Anne Drinkwater]

I haven't carried out a detailed comparative evaluation of the two regulatory regimes, so it would be inappropriate for me to respond to that question.

[Larry Bagnell, Liberal, Yukon, YT]

Could you get back to us on that? Thank you.

As you probably heard earlier, when we asked NEB why the Beaufort well was safer, they said it was because they required relief well drilling equipment right there. It could have been done right away, quicker than the Gulf of Mexico.

Considering that, why would you have asked for an exemption--if that was the case in the one well that's been drilled, that we referred to--why would you ask for an exemption from NEB for drilling a relief well in the same season?

[Anne Drinkwater]

Let me be clear about our position on that.

The NEB commenced the same-season relief well review, and as a participant in that review, BP registered. In that registration, we said that BP is not rejecting the option of a relief well, but we are acknowledging the challenge of drilling a relief well within the same season, which is a reason for the NEB to carry on and do the full review.

[Larry Bagnell, Liberal, Yukon, YT]

So even after you see what happened in the gulf, you're withdrawing that request to review an exemption from building a relief well in the same season.

[Anne Drinkwater]

The submission we made was to be a participant in the hearing. We haven't rejected the option of pursuing a relief well. I think it's very important, with the investigations going on, to allow those investigations to conclude, and then for ourselves and the industry to take the lessons learned from those investigations and apply them in the specific and very unique circumstances of the Beaufort.

[Larry Bagnell, Liberal, Yukon, YT]

Okay. And that might lead to your withdrawing.

As the Inuit said, and actually as I mentioned in question period, the most clear and present danger is the Greenland drilling in the next few months.

David, I was shocked that you said there's no response equipment in the north at the moment. If the oil spill from there or from the American drilling were to drift into our waters, and we have no equipment in the north to respond to that, it could be disastrous.

[David Pryce]

The Canadian industry isn't active in the north, and therefore it does not have its own equipment in the north. I can't speak for the American industry. I would expect, though, that they would have requirements to have their own response capability for their own waters.

[Larry Bagnell, Liberal, Yukon, YT]

No, I wasn't referring to the Canadian industry, I was referring to the Canadian government. When it comes into Canadian waters, obviously someone has to clean it up. It's not going to be a Canadian company, because they're not doing the drilling. It's Greenland, or American.

So we have no equipment in the north; that's very frightening, actually.

[David Pryce]

Let me clarify: the Canadian industry does not have equipment in the north. I can't speak to what the Canadian government would have. I would expect that the coast guard and perhaps Transport Canada may have some assets. I don't know that.

[Larry Bagnell, Liberal, Yukon, YT]

Okay. It would be a good thing for our committee to know.

Ms. Drinkwater, or CAPP, Mr. Regan wanted to know why you would not have drilled a relief well in the Gulf of Mexico when you built the original well. In the Beaufort, if you can't build it in the same season, why would you not drill a relief well at the same time as the original well--as opposed to letting oil spill out for an entire year?

[Anne Drinkwater]

In BP, in concert with the entire industry, our first focus is on prevention, so that is preventing any incidents from taking place. Clearly, in this instance the fail-safe device, the blowout preventer, did not work.

Our second response is one of spill response and cleanup. With regard to the Arctic, I think it's very important that we wait for the study and for the investigations to complete and as an industry take the results and findings from those investigations into the review of the same-season relief well policy.

[Larry Bagnell, Liberal, Yukon, YT]

I only have a few seconds left. I'd just like industry and NEB to mull around my thought of a goal-oriented regime but with mandatory minimums.

Also, in this hearing so far, no one except the Inuit has really talked about ships or any other way; I mean, the oil has to get from the rig to somewhere else. I think we have to look at that.

Finally, to BP, do you agree with the scientists who say there's no way, technically, to clean oil up under ice at the moment, or a major spill under ice cover?

[Anne Drinkwater]

I'm sorry, but was that a question for the NEB or for me?

That was a question for me. Okay.

I'm not an expert in oil spill techniques in an Arctic environment, so I would have to defer to other experts on that.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Bagnell.

We go now to the Bloc Québécois.

Madame Brunelle, you have up to six minutes.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

Good day, gentlemen, Madam.

Ms. Drinkwater, you stated that your number one priority was to shut off the flow of oil. You indicated in your presentation that you would be drilling a relief well, and later a second relief well.

Is it not true that you would like to stop the NEB from approving the drilling of relief wells? In French, we have two expressions, a “puits de secours” and a “puits d'appoint”. Is there a difference between the two? In my opinion, you should reverse your position where relief wells as concerned. If there is a difference between these two types of wells, could you please explain it to me?

[Anne Drinkwater]

I want to be very clear that in our submission to the National Energy Board, we were very clear that we're not rejecting the option of drilling a relief well. We are citing the challenge of drilling a relief well within the same season.

Clearly, there is good cause for the NEB to look at the current provisions as they relate to relief well policy; the specific and very challenging attributes of the unique circumstances of the Arctic; and to consider how, as an industry, under their auspices, we do safeguard the environment there.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

Is this the first time that BP Canada has managed a disaster of this magnitude? If so, how have you gone about this task? In the wake of the incident, have you prepared a specific plan of action to do things differently? At times, we get the feeling that your company officials are like sorcerers' apprentices. You respond, but you don't really have a clear plan of action in place should a disaster strike.

[Anne Drinkwater]

The action plan we're following is a very well-set-out action plan, and it sits within an overall spill response plan that was designed at the time we applied for the well. So it also sits within an instant command system structure that exists in the United States. These plans are set out and are well resourced, and they are precise in some areas in terms of shore protection, and they also have flexible elements to allow for the rapid staging up of any response effort.

So I believe our plans are very solid. They've been applied from day one, and as the coast guard has noted, this is one of the most massive efforts that has been put on by any industry participant.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

You may have a clear plan of action, but it's not working, at least for now. I hope that you do find some solutions.

Mr. Barnes, you represent the Canadian Association of Petroleum Producers. I was surprised to hear you say in your opening remarks that when explosions occur, there are some lessons to be learned. These are not very reassuring comments.

Have you improved your procedures? Have recent events prompted you to change your way of doing things? Did an internal alarm sound, telling you to do things differently?

[The Chair, Conservative, Leon Benoit]

Mr. Pryce, go ahead.