Natural Resources Committee on June 17th, 2010

[Dr. Kelly Hawboldt]

I think that's a very good question.

I wanted to say that on the action side of things, it has to be a coordinated approach. It may not look like it, at least in the Gulf of Mexico, but the oil and gas companies are in the best position to figure out what's happening in the reservoir. They know the pressures. They understand the characteristics. In the case of a blowout or a spill, they can actually give technical information. The fishermen and people who work provincially in the area are going to have a very good idea of how the ocean current flows—I'm talking more about Newfoundland and Labrador—or how things might transport in the environment.

To me, it should be multi-pronged. It's the industry, the federal government, the provincial government, and the associated stakeholders.

[The Chair, Conservative, Leon Benoit]

Thank you.

Merci, Monsieur Guimond.

We go now to Mr. Bevington.

Go ahead for up to seven minutes, please.

[Dennis Bevington, NDP, Western Arctic, NT]

Thanks, Chairman.

I want to thank, of course, my fellow territorial people. I just want to say to Minister McLeod that I don't think when we were sitting together in grade 9 science that we actually thought we'd be here in Parliament talking about these kinds of issues, but I'm glad we are. I think it's the wonderful thing about Canada.

On blowouts in the Beaufort, we had a very bad blowout on King Christian Island in the seventies. In the drilling that's taken place there, we've already seen that sort of thing happen. That was one of the longest lasting blowouts. I think it set a bit of a record. Is that not correct?

[Robert McLeod]

That's my understanding. I don't know if it was a record, but it was a very significant blowout.

[Dennis Bevington, NDP, Western Arctic, NT]

The risk factor is there with equipment in these isolated and difficult conditions.

Now my understanding is that the Beaufort basin is one of the worst basins in the circumpolar arctic to work with in terms of the conditions--weather, changing ice conditions. Is that accurate?

[Robert McLeod]

Mr. Chair, in the Beaufort they operate under very harsh conditions. We also have very cold waters. We also have ice conditions. All the drilling in the Beaufort to date has been in the onshore or near shore. There are two leases that have been issued in the deep part of the Beaufort, which are at depths of 700 metres, which is about half of what the blowout well was. I think the blowout well was at 1,200 metres. In the deep part of the Beaufort the conditions are very difficult, because it abuts the ice pack, so you always have to be careful of ice floes moving back and forth.

[Dennis Bevington, NDP, Western Arctic, NT]

In the next while, leading up to perhaps the opening of the drilling, do you think we need to see an increase in monitoring and research into the nature of the changing conditions in the Beaufort? Have we seen that Environment Canada has taken a lead role in starting off this kind of work, given that we gave out these lease arrangements almost, what, two years or a year and a half ago?

[Robert McLeod]

Yes, the leases were issued I think three years ago. The planned drilling was to be after 2014. So there are at least four or five years before any drilling is planned.

With regard to the arctic, I think everybody realizes that the arctic is changing. The ice is melting a lot faster. The Northwest Passage is open a lot longer. Even as a government, we've taken advantage of it by changing our resupply routes. We can now go over the top to resupply our arctic communities. Certainly the Beaufort is changing.

As far as whether enough research is being done, every year there's a large research team that goes up and researches in a number of areas.

Thank you, Mr. Chair.

[Dennis Bevington, NDP, Western Arctic, NT]

Now, regarding the oil spill cleanup capacity in the Beaufort, are you familiar with Alaska's preparedness for oil spills? How would you compare Alaska and its preparedness with the resources it has with what we have right now in the Beaufort?

[Robert McLeod]

I haven't reviewed Alaska's preparedness plan to date, so I'm not familiar with it.

[Dennis Bevington, NDP, Western Arctic, NT]

My understanding of the Alaska plan is that capacity and resources have been allocated there for a fairly extensive plan. My concern, of course, is that we really have nothing in terms of actual resources on the ground: personnel, equipment, and those sorts of things. We had a little more in the seventies, but we seem to have lost that edge. Is that correct?

[Robert McLeod]

In the seventies and eighties, as I referenced, we had a whole marine fleet. I think we had ships that outnumbered the navy, so they were prepared for every eventuality. But to be fair, I should point out that there's been no drilling in the deep part of the Beaufort Sea for the past few years. There's none anticipated for another four or five years, and the NEB has indicated they will not be approving any applications until such time as they have completed their review. My understanding is that when and if any drilling is required, the expectation would be for industry to provide a large part of that oil spill containment equipment.

[Dennis Bevington, NDP, Western Arctic, NT]

Now when it comes to the National Energy Board, they are going to hold some hearings. If these hearings are held with CEAA, there would be intervenor funding guaranteed. Do you think it's very important that these National Energy Board hearings that are going forward in the next while provide decent intervenor funding for the many groups who will want to comment on the conditions and the difficulties of working in the arctic?

[Robert McLeod]

When I look at the stakeholders, I think most of the stakeholders who would want to participate could pay their own way, but there are communities, and likely individuals, who would want to participate, and I would think that providing intervenor funding would be a good idea. Certainly my preference would be for all of the hearings to be held up in the north, or the majority of hearings.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Bevington.

Mr. Minister, when you were together with Mr. Bevington in grade 9, do you think that if he'd maybe paid more attention in class, he might be here as a Conservative instead of a New Democrat?

[Voices]

Oh, oh!

[An hon. member]

That's a neutral chair!

[The Chair, Conservative, Leon Benoit]

I rule that question out of order.

Anyway, we're going to Mr. Anderson, for up to seven minutes.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

I'd certainly like to welcome Mr. Bagnell and Mr. Bevington here today, and we'd certainly welcome Mr. Bevington to come over to this side if he wants to.

I want to thank you for coming as well. It's good to have you here today. We crossed paths in Calgary a few months ago, so it's good to see you again.

I want to ask you a question. You are satisfied with the review process to this point and the way you see it going. I'm just wondering if you can explain a little more about what your role is and how you see your territories' participation in the review process.

[Robert McLeod]

Thank you.

Yes, to date we're satisfied. Initially, before this spill occurred, the idea was to review the same-season drilling well requirement in the Beaufort, which is different from other parts of the offshore in Canada. But following the incident in the Gulf of Mexico, it was decided to pull back and now focus on a review. We think that's very important.

As I mentioned to some other colleagues here, a territory is different from a province. The federal government—at least in the Northwest Territories—still has the responsibility for oil and gas, which is different from the Yukon, which has obtained devolution.

So we are satisfied with our ability to participate as an intervenor, if we choose to do so, and we will be making representation to do exactly that.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

Greenland has been committed to drilling a couple of wells. We work well internationally. The minister has collaborated with their minister as well. The news reports say that we'll be allowed to station an NEB person in Greenland in order to work with them on this. Is that something that meets with your approval?

[Robert McLeod]

Certainly. We've practised that in the past, domestically, between Alberta and the Northwest Territories on some other development projects. I think that's a good move.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

Can you talk a little bit about how the petroleum exploration issue for you is related to the success of the Mackenzie project? You mentioned there aren't ports in the Beaufort Sea. Can you talk a little bit about the link between those two things?

[Robert McLeod]

We don't see a link between the two. The Mackenzie pipeline project has been undergoing a regulatory process that has been very extended. It's taken up to six years and counting. We expect the government response to the recommendations of the joint review panel to be out in September 2010.

All of the business case for the Mackenzie pipeline project is focused on three fields that were drilled in the 1970s or 1980s. They're all either onshore or in the near shore. My view is that there are no implications for the Beaufort offshore, although if there is a view to expanding it in the future to develop or access some of the significant discoveries that are already offshore, then I think at that time there would be some consideration required.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

Do you want to tell us a little bit about the economic benefits or economic opportunities that would come out of, first, the Mackenzie project, but then also the development of the offshore oil and gas? Have you done any analysis within your government?