Natural Resources Committee on June 15th, 2010

[Dick Harris, Conservative, Cariboo—Prince George, BC]

So realistically, at the end of the day, if they say that for cultural or environmental reasons they believe it shouldn't go, it isn't going to go.

Thank you.

Thank you, Mr. Chair. If I have any more time, I'll—

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Harris. You are out of time.

Now to the Bloc Québécois and Monsieur Guimond.

[Claude Guimond, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you, Mr. Chair.

Good morning everyone.

I must say that I am not very reassured by what I am hearing today.

Mr. Corey, you have said a number of times that we have good legislation and regulations. I want to believe you. However, I am convinced that, despite our numerous laws and regulations, we are not immune to disasters such as the Deepwater Horizon spill in Louisiana. Mr. Bowden talked about plans. Mr. Grenier indicated that there were many stakeholders, including the Department of Defence and Transport Canada. I did not have time to note down all the names.

I have a very simple question. If a disaster were to occur—like the one involving BP—which department would assume the leadership role? Who is responsible for contacting everyone? Who will take on the leadership in order to implement all of the disaster mitigation measures? Do you have a response plan? Do you have an emergency plan? Is there a dialogue established between the departments and the private sector in order to develop a comprehensive disaster response plan?

[Mark Corey]

Mr. Chair, I would like to answer that first. Afterwards, Mr. Landry may want to add to that.

If a disaster were to occur,

it's the operators who have the primary first responsibility. They have to have equipment in place, and they have to have a plan in place to deal with it. In the first few hours it would be the operator. The board has the oversight. So for example in any of these cases it would be the board that would also step in and provide direction, but it would be the operator who would be responsible.

If the event grew to the extent that the operator was having trouble dealing with it, the offshore board would then call for assistance from a regional response corporation. This would bring in more resources from other operators and would bring in more equipment. So again it's a tiered response. You would find more equipment and more support coming in. You would find the coast guard; Transport Canada would be playing a role; Environment Canada would be playing a role; Fisheries and Oceans would be brought in. We do have emergency plans in place at the federal level. As an example, I would mention one in Natural Resources Canada. We do have a series of environmental management plans. Plan 9, which is the one dealing with offshore, was updated last September. So our plan on dealing with offshore emergencies in Natural Resources Canada was updated last fall.

We did actually have an exercise on March 25 of this year. It was before the gulf incident. It was one we conducted jointly with the Canada-Newfoundland and Labrador Offshore Petroleum Board. We simulated an incident, and it was what we call a tabletop exercise, where there was nothing actually happening out in the ocean, but we had a walk-through, a number of stages where different information was brought in, different developments. It simulated an actual disaster to see how the participants would respond to it.

If it were a major one, you would find that Public Safety Canada would get engaged. They have an emergency operations centre. Their emergency operations centre would swing into action, as would ours. We have an emergency operations centre in our department.

You would find a network across government that is there and is in place, and that's how the activities of the various departments would be coordinated.

[The Chair, Conservative, Leon Benoit]

Merci, Monsieur Guimond. Your time is up.

We go now to Mr. Allen for up to five minutes.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Thank you, Chair, and thank you to the witnesses for being here today.

The first couple of questions I want to ask are directed to the coast guard.

Mr. Grenier, you talked about the principle of escalation as we go up the steps of a ladder, I guess would be the best way to put it. You have the local, then other regions coordinating other resources, then international agreements on mutual aid and those types of things. What are the protocols for timing as to when you execute those steps of going up the ladder from local to regional to calling in mutual aid? Are there certain criteria you have with respect to the size of the spill or other criteria you have before you execute those steps?

[D/Commr René Grenier]

We're responsible for ship-source pollution. When there are incidents, normally they are dealt with by our regional coast guard people. If they see that they need more equipment, depending on the spill, then they will look for maybe the ROs, the response organizations, to help them out, or contractors. We do have our own equipment, so we would start with our own equipment, and if it were deemed necessary or if they didn't have enough equipment, they would turn immediately to headquarters, and we would make sure that the other regions would provide the equipment that is needed.

There's no timing per se, because it depends on the incident. It would be hard to give a... You know, you have to look at what's going on, but we do have equipment in every region, and some equipment is already prepackaged and ready to be sent by airplane or truck.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

At the regional level, then, those folks know the capacity of that equipment. For example, the region might have the capacity to deal with a 2,000-barrel oil spill, and that's it. Are they responsible at the local level to make that decision to escalate?

[D/Commr René Grenier]

Yes, they would be, because they would be there. They would know first, but before we intervene, it would be the polluter who would intervene and kickstart the intervention. We would be the federal monitoring officers. We would make sure that they're doing the right thing. By doing that, we would ensure that we understand what the spill is and what they're doing about it, and we would also prepare ourselves to intervene, if need be.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Being from Atlantic Canada, I'll ask a specific question. What is the capacity within the coast guard and others to respond to a large-scale spill in the Atlantic region?

[D/Commr René Grenier]

In the Atlantic region the response organizations have to be prepared for a spill of a magnitude of 10,000 tonnes. After that, the coast guard would kick in with more equipment. The four response organizations told Transport Canada recently that among themselves, with all their capacity, they have enough equipment to respond to a spill of about 30,000 tonnes. The coast guard does not have as much as all the ROs combined, but almost as much, so we would have that capability.

It's not all in one place. It's across Canada, so we would have to cascade all the equipment from wherever it is to wherever the situation is.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Once a decision is made to go to another region, how quickly can that region respond and have equipment there?

[D/Commr René Grenier]

It depends on the equipment. It's hard to say. It has to be trucked or sent by air, so it really depends on what you're asking for. If it's for booms and so on, I'd say they should be on site within 48 hours.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Okay.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Allen. Your time is up.

We go now to Mr. Bains. You have up to five minutes.

[Navdeep Bains, Liberal, Mississauga—Brampton South, ON]

Thank you very much, Chair.

We hear time and time again that BP cut corners. We just don't know what those corners are right now. One key issue that keeps on coming up is the relief well, and that's considered a viable solution. We're 58 days into this catastrophe.

I would like clarification from you about page 6 in your presentation, Mr. Corey. One of the things that you indicate for the approval is that a relief well is absolutely mandatory. Is that correct?

[Mark Corey]

Yes.

Mr. Chair, actually I can give even more specifics on that. I think this has been a subject of some misinterpretation in the past.

On June 10, the chairs of the three boards in an unusual step got together and jointly signed a letter to the Ottawa Citizen to correct the record. If I could just quote from their letter, this is the three heads of the boards:

Relief wells are a proven method of regaining well control and neither the Canada-Newfoundland and Labrador Offshore Petroleum Board, the Canada-Nova Scotia Offshore Petroleum Board, nor the National Energy Board would authorize companies to conduct any drilling or production activity if the contingency plans did not adequately address the drilling of a relief well.

So the boards have all been very clear, and I think we've tried to set the record straight. They require a contingency plan for drilling a relief well before any permits are issued.

[Navdeep Bains, Liberal, Mississauga—Brampton South, ON]

The second question is with respect to your presentation, Mr. Corey, page 13. The remark from the minister that you have at the bottom, the last line is “If a project does not meet these requests, it won't go through”, and it talks about the approval process. Of course, going forward the minister wants to be very vigilant. Is there any reassessment of previous approvals? Is there any direction given to the boards of previous approvals and a retroactive assessment, based on what's happened?

[Mark Corey]

I would ask Eric to then fill it out a little bit more.

Governments are very careful not to instruct any of the boards. They are independent--

[Navdeep Bains, Liberal, Mississauga—Brampton South, ON]

I know they're arm's length, but I mean...

[Mark Corey]

We're very careful that we do not actually instruct them. There are some things, for example the Atlantic boards, that require the ministers' joint authority. Those are called fundamental decisions. But the regulation is really the responsibility of the boards.

Eric, did you have anything to add?

[Navdeep Bains, Liberal, Mississauga—Brampton South, ON]

The next question is with respect to absolute liability. I know there has been some discussion about it this morning, but I just want a clarification on changing the threshold. If there were a regulation to say we want to increase the threshold in the amounts that you have indicated or in a higher amount in light of the costs associated with the local businesses and local communities with major oil spills, what kind of impact would that have for the approval process? What if we increase the threshold to say billions of dollars or whatever the amount would be determined to be reasonable, in order to recuperate the costs for local businesses and communities?

You say absolute liability, but when people want to pursue this liability they have to go to court and it keeps dragging out for years. Of course a large corporation has means and resources to deal with small business and drag this process out. As you've indicated, you've got certain amounts, but if there's a higher threshold to quickly pay out, that would obviously be beneficial to local businesses and communities. Is that correct?

[Mark Corey]

Yes.

Let me be quite specific on this one. There are two different levels for the threshold for absolute liability. In Atlantic Canada and the two port areas it is $30 million and in the north it's $40 million. To be really clear on this thing, it is a form of security. It's a letter of credit, an indemnity bond, a guarantee from a financial institution. The board has direct access to that money and the board can access it and give it out to other parties. There is no requirement for any fault or negligence to be proven and it's sort of--

[Navdeep Bains, Liberal, Mississauga—Brampton South, ON]

Can we increase that? That is my question.

[Mark Corey]

Yes. Again, to the extent that there is a cost to the company for carrying that, to the extent that you increase it, it increases the costs to the company.