Natural Resources Committee on June 3rd, 2014

[Geoff Regan, Liberal, Halifax West, NS]

Is there any reason to think that a worst case—

[The Chair, Conservative, Leon Benoit]

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

In the five-minute round, we have three people who will be questioning or making comments: Mr. Leef, Ms. Crockatt, and Ms. Moore.

Go ahead, please, Mr. Leef, for up to five minutes.

[Ryan Leef, Conservative, Yukon, YT]

Thank you, Mr. Chair.

Welcome to all our guests today.

What did the Commissioner of the Environment say about the increase in the liability limits?

[Jeff Labonté]

If I remember right, there were two reports, so it was the report around environmental liabilities in late 2012. I think the commissioner had established in his report that across a range of areas, the offshore and nuclear in particular, that the amounts of $75 million in nuclear and $30 million and $40 million in the offshore were set in the mid-to-late 1980s and that those levels were too low and didn't reflect what would be expected in a modern regulatory regime and in comparison with other countries.

[Ryan Leef, Conservative, Yukon, YT]

In respect to the $1 billion limit, did the commissioner make any comments on that as a final number?

[Jeff Labonté]

We didn't speak with the commissioner about the $1 billion limit. I think he was here before committee.

Do you have any updates, Sam, that you could pass along?

[Samuel Millar, Senior Director, Frontier Lands Management Division, Petroleum Resources Branch, Energy Sector, Department of Natural Resources]

We're not aware that he commented specifically on the $1 billion in his report, but I believe that he expressed his comfort with the legislation.

[Ryan Leef, Conservative, Yukon, YT]

Offshore boards are being made the responsible authorities. Why have we gone with that? We've been looking, over the course of time, to reduce the number of responsible agencies for red tape reduction and in the name of responsible resource development. Why the shift to go with offshore boards as responsible authorities?

[Jeff Labonté]

It's a good question.

I would recognize, of course, the move to reduce the number of responsible authorities across the regulatory regime to kind of streamline and to make more efficient reviews and to focus on the best-suited regulator, if you will. In this particular instance, the act provides that they may be designated by the Minister of the Environment; so there's a step here that the government may or may not designate. I think it's been stated publicly in the House and in other places that the government intends to move in that direction.

From our perspective, the offshore boards have been in existence for over 30 years, have demonstrated their environmental bona fides, if you will, in terms of their ability to manage environmental assessments and to be best placed to look at the environmental impacts associated with the development of the mitigating circumstances and the environmental aspects related to an offshore development project.

Of course, and I don't mean this to be trite, but in any environmental assessment there are actually a number of actors involved. Even when, if you will, the National Energy Board today, or the Canadian Environmental Assessment Agency performs an environmental assessment, a range of federal actors and provincial actors also play roles, whether it's the Department of Fisheries and Oceans, or whether it's Environment Canada, or Transport Canada. There's the lead, if you will, but each of the different players play their respective role in contributing to that environmental assessment.

In our sense, there's a strong view that the offshore boards, as a shared management with the provincial context and with the most experience, are best suited to perform the environmental assessments. I'd say as well, just for the sake of reference, in terms of the offshore, there are not dozens and dozens and dozens of projects. There are a very limited number of projects, so the number of environmental assessments is, I think, fairly limited.

[Ryan Leef, Conservative, Yukon, YT]

The regions, provinces, and industry are comfortable with that regime.

[Jeff Labonté]

If my provincial colleagues were here, they would probably say that they were expecting it to happen.

[Ryan Leef, Conservative, Yukon, YT]

Fair enough.

[Jeff Labonté]

Given that we share the management, there's a very sensitive...that we manage jointly together, so it gives a feeling that if the offshore boards are responsible, it's much more shared than, if you will, jointly exercised.

[Ryan Leef, Conservative, Yukon, YT]

That's a fair point, thank you.

You mentioned in your comments around the spill-treating agents, “when there's a net environmental benefit”. Could you just expand on where, when, and how spill-treating agents might be used?

[Jeff Labonté]

Sure. Currently in Canada, spill-treating agents would be considered unlawful, although the evidence base is demonstrated, I think, from a number of incidents around the world, most notably in the gulf, that spill-treating agents did have a net environmental positive benefit. It's a determination that has to be made very far in advance of any incident and done in a way that's, if you will, a mitigating planned sense.

The first step is that the Minister of the Environment would need to designate specific agents as acceptable and would have to do so in regulation. The next step would be that a company would have to develop an emergency response plan and outline the specific circumstances when they would expect to use the agent and what they would expect the behaviour and the response to be. That has to be registered with the board. The board would have to approve that plan and the agents. Then in the event of an incident, the board would have to provide the conservation officer the ability to authorize the use of the agents, given the circumstances that were pre-described were present, whether it was of such a nature, at such a time, and such environmental conditions.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Leef.

We go on to Ms. Crockatt, for up to five minutes, please.

[Joan Crockatt, Conservative, Calgary Centre, AB]

Thank you to the officials for being here again. It's always edifying.

I want to explore where we sit in Canada in terms of other countries. I think we've indicated that we're kind of.... We have one of the better regimes, but where do we actually sit? Can you be a little bit more specific so Canadians know how our industry compares here in Canada?

[Jeff Labonté]

I think our view of it and our analysis of it would suggest that we're world-class in terms of being.... We have a strong regulatory environment, a strong legal framework, a strong regulator who's independent, a record that has not seen any significant incidents of large proportions, and a record that demonstrates that the companies have operated consistently, safely, and with concern for the environment and the development, one that's brought benefits to the country.

There was an assessment done by a consulting firm for the Gulf of Mexico in the wake of the Gulf of Mexico spill that established essentially the degree to which the regulatory system was extensive, the degree to which it made its decisions, and the speed at which those decisions were made. In this particular account, Canada, the U.K., and Norway had kind of all clustered together as being quite extensive, having significant decision-making, but taking the time to make the decisions. One of the findings in the United States example had been the speed at which the decisions were made. If the regulator doesn't respond within a certain period of time, it is deemed approved.

There was a view that, while it took time in Canada to do things, we did things right and we looked extensively at things. The record has, I think generally speaking, been quite significant in terms of demonstrating that.

[Joan Crockatt, Conservative, Calgary Centre, AB]

It's among the top three or four in the world according to that study.

[Jeff Labonté]

Yes.

[Joan Crockatt, Conservative, Calgary Centre, AB]

You did mention too that our record has been quite stellar. I'm wondering, has there ever been a significant oil or gas spill from offshore operations in Canada?

[Jeff Labonté]

That's a good question.

There have been a few spills of oil in the offshore. The most significant one was back in 2004 when about 1,000 barrels of oil were spilled in the Terra Nova offshore development.

[Joan Crockatt, Conservative, Calgary Centre, AB]

What was the next largest spill that we've had in Canada?

[Jeff Labonté]

Of oil? Thirty-eight barrels.

[Joan Crockatt, Conservative, Calgary Centre, AB]

Thirty-eight barrels was the next largest. That may put something in context.

What would be the average size of spills that we see in Canada?