Natural Resources Committee on June 17th, 2010

[The Chair, Conservative, Leon Benoit]

Thank you very much, Minister, for your presentation. I'm sure you'll have lots of questions when we do get to questioning.

We will now hear from our second witness by video conference. The witness is from Memorial University in Newfoundland, Kelly Hawboldt, associate professor, faculty of engineering and applied science.

If you would go ahead with your presentation, please, and if you could present quite slowly, I think the interpreters have a more difficult time when the presentation is by video conference. Go ahead, please.

[Dr. Kelly Hawboldt, Associate Professor, Faculty of Engineering and Applied Science, Memorial University of Newfoundland]

Thank you.

I wasn't quite sure what to say here because it's my first standing committee, and I tend to speak quickly...so I'll do both, I hope.

I'm a chemical engineer. My research is on sustainable and green processing of natural resources; the processing of oil and gas, particularly focused on the offshore in harsh arctic environments; environmental effects, and monitoring and detection when you're in those environments; and biofuels not related to this.

I thought I'd give a few points on the knowledge base in this area and then leave it open to questions. Again, I wasn't quite sure where to go with this.

Oil and gas exploration, as you've probably been hearing over the last few days, is going to more and more unconventional sources. Unconventional just means oil or gas that's tougher to get at because it's deeper, something like the tar/oil sands, and those sorts of things.

With this kind of exploration and production comes environmental impacts, so we have to design our systems a little differently to try to prevent and mitigate the impacts.

When accidents like spills or blowouts occur, the response in the marine environment is more challenging than onshore, because onshore you can contain and remediate, whereas offshore the containment becomes the issue.

The control measures to prevent oil from spreading and the countermeasures to contain and clean up the fluids are critical parts of any emergency response plan that an industry partner puts together. The type of response is really a function of many things: the type of petroleum fluid you're dealing with; the sea state; the location--the open sea versus the shoreline; and the safety of the personnel. It's likely to be multi-pronged, so a boom alone will probably not work.

Once oil is released into the environment—or any petroleum, because you could be talking about anything from condensate right up to a heavy oil—how it transports and transforms the environment is a function of the type of oil you're dealing with. Again, the sea state, the climatic conditions, and all sorts of things have to be taken into account.

The responses can vary: mechanical, which is when they use booms; chemical, which is when they use dispersants; thermal, which is when they light it on fire; or even biological. The type of response will really depend on where you're at. You also have to weigh the risks of one against the other.

That's all I really have to say. I guess I'll leave it open to questions or comments.

I hope I wasn't speaking too quickly, which I tend to do.

[The Chair, Conservative, Leon Benoit]

No. Thank you very much for the presentation.

We'll go directly to questions and comments, starting with Mr. Bagnell.

[Larry Bagnell, Liberal, Yukon, YT]

Thank you.

Peter and Robert, it's great to see you again. We've discussed many things together. I think we're all singing from the same songbook. We asked for a moratorium quite a while ago. The four Inuit groups have all--we agree and you agree, until the safety regulations... We too are excited that the NEB is reviewing the whole safety regime.

A year ago I brought before this committee the fact that scientists have proved there's no way to clean up oil coming under the ice, in the ice, if it's been left for any time. I encouraged the government to follow up and do research on that so we could drill there, and that hasn't been done.

Are you concerned that we're not doing the research required on cleaning up an oil spill if it occurs in the ice, under the ice?

[Robert McLeod]

Certainly in the Beaufort the conditions are very different from anywhere else because of the ice considerations. As far as I understand, there is no proven way to clean up oil from under the ice.

I understand that a previous presenter talked about some of the research that had been done on testing for oil spills under the ice and the recovery. Certainly that is a concern. I think it indicates the requirement to make sure we prevent any blowouts or oil spills.

[Larry Bagnell, Liberal, Yukon, YT]

Do you think we as a government should be better prepared? As you know, Shell has the licence to drill in the Beaufort. I think it's been put off for six months by the President. Mr. Regan and I have asked nine times now in question period if there's a plan to clean that up if it drifts into our waters. Apparently the Government of Canada has no plan, or at least they haven't answered that question.

Do you think we should have a plan, that if it drifts into the waters of the Northwest Territories from the Alaskan Beaufort we should be able to deal with it?

[Robert McLeod]

In my view, my expectation would be that the United States government and their regulatory process would be able to contain on the narrow waters, or their near shore. As the other presenter indicated, onshore or near shore it's a lot easier to contain any spills or blowouts. The drilling in the Chukchi Sea and the American side of the Beaufort is in onshore or near shore waters, and although it's been lumped in with the deep water drilling, it is in fact drilling in the near shores. So my expectation is that any event would be able to be contained.

[Larry Bagnell, Liberal, Yukon, YT]

Well, that's good.

Kelly, my understanding is that the dispersants being used in the Gulf of Mexico are toxic, and in fact they're not even allowed to be used in Europe—the 5000 series, I think. What effects would these have on our fish or our environment in Canada? Should these dispersants be allowed to be used? Are there studies on the effects of them? When I asked the oil company, they actually said there weren't really any studies on these.

[Dr. Kelly Hawboldt]

I'm not a toxicity risk type person. There have been studies on dispersants. I sent, just yesterday, some notes I put together outlining at least some of the references for studies that have been done.

The issue with dispersants is they're really a short-term solution. You don't want to be applying dispersants over a long period of time. They're meant more for just trying to break up the sheen and increase the biodegradation so they have a larger surface area of oil to deal with. Any time you apply a dispersant, it's because I would say you are trying to weigh the fact that oil is both physically and chemically toxic and dispersants are more on the chemical toxicity side.

On their impact on the environment, that would be so hard, especially on the open ocean, because they're dispersed. So I would say probably the only way—and again biologists are going to jump all over me—would be to actually go out and do environmental effects monitoring, where you take samples of fish, or things maybe that don't move in the area, like crustaceans or clams or oysters, and test for levels of the dispersants in them.

I don't know if that really answers your question.

[Larry Bagnell, Liberal, Yukon, YT]

I have two more quick questions. One is, if you were on the National Energy Board, would you allow drilling in the arctic based on the problems that I outlined earlier? Those are that there's no science to clean up oil spills under ice, and the oil companies have said they can't drill a relief well in the same season, which would mean an Exxon Valdez every four days would go for over a year.

On my second question, we asked for a spill plan on the new well on the offshore on the east coast. They told us it would be available in a week, redacted, and many weeks have gone by and it still isn't present. Don't you think that should be public?

[The Chair, Conservative, Leon Benoit]

You have about 30 seconds to answer the question. Go ahead, please.

[Dr. Kelly Hawboldt]

I was going to ask if that was a job offer for the NEB, but apparently not, then.

[Voices]

Oh, oh!

[Dr. Kelly Hawboldt]

Listen, I really can't comment on the NEB part because I don't have all the information in front of me. I think if you do anything out there, there has to be mitigation, control, and countermeasures in place. The whole issue of under the ice requires some research on how to deal with that. The whole idea is prevention—don't have it happen in the first place.

The second part, on the oil spill part, I think they should be public. I think that's just... Any emergency response plan should be public.

[The Chair, Conservative, Leon Benoit]

Thank you very much.

We go now to the Bloc Québécois. Monsieur Guimond, for up to seven minutes.

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

Thank you, Mr. Chair.

Good morning, sir and madam.

The thing that has struck me since the committee began discussing this issue is how many stakeholders there are when a tragedy such as the one in the Gulf of Mexico happens. As recently as Tuesday, someone from the Canadian Coast Guard told us that in the event of an incident, the Department of Transport could be involved, as could the Department of National Defence and the contractor. That is a lot of people. There are also the territorial representatives, such as yourselves, and the provincial ones. We know that Quebec could have a stake, given its shore.

In your wildest dreams, what would be the best possible contingency scenario to deal with a crisis? Should the federal government manage the crisis? If not, should that role be left to the private corporation, as is happening right now in the Gulf of Mexico?

[The Chair, Conservative, Leon Benoit]

Is that question to the minister?

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

Yes, it is for Mr. McLeod.

[The Chair, Conservative, Leon Benoit]

Go ahead, Minister.

[Robert McLeod]

Thank you, Mr. Chair.

That's a very good question. In the Northwest Territories, we don't have a lot of infrastructure. If you look at the Gulf of Mexico, they're drilling, on average, 4,000 wells a year. In the Northwest Territories, two near-shore wells have been drilled in the last 10 years. When I compare it to the Gulf of Mexico--you talk about the same season and relief drilling wells--there are a lot of drilling rigs or drilling platforms in the gulf that could be used in the north, unless you specifically require another drill rig to be there as part of the process. You might have to go a long way, and it would take a long time, to get another rig in there.

In my view, and in our government's view, the clean-up cost has to be the responsibility of the operator, or whoever has the lease and is responsible for the drilling. I think it has to be combined with the government, which has the responsibility to make sure there is some infrastructure that would allow them to deal with a spill or an incident. In the Northwest Territories, on the Beaufort side, we don't have any ports, we don't have any oil spill clean-up equipment, so whatever is done would be something the regulators would have to require the operators to provide. And certainly I think the government has a role to play by ensuring that there is infrastructure that would facilitate dealing with any incident.

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

Thank you for your answer. It is very interesting. It could help guide us in our actions, especially in the Beaufort Sea and in your area.

You were asked to appear before the committee in Ottawa today. With everything going on right now, do you get the sense that there is a willingness, do you feel that the federal government sees you as an important player in gas exploration? As a territory and as a region with tremendous development potential, do you feel adequately involved in the creation of a contingency plan or the review of the legislation?

[Robert McLeod]

There are a number of processes in place. As you know, a territory is different from a province. On the offshore, in every instance, the federal government has responsibilities for the offshore.

In the Northwest Territories, we're involved in a process of negotiating devolution and resource revenue-sharing. As part of that, we would negotiate our role in the co-management of the offshore. As such, the NEB is undertaking a review of all the best practices and the regulations to control the offshore. We have been invited to participate, if we see fit that in our government's view we should be a participant, and we will be going through the process to seek intervenor status in that review.

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

Thank you.

[Dr. Kelly Hawboldt]

Could I just comment on actions?

[The Chair, Conservative, Leon Benoit]

Go ahead, Ms. Hawboldt.