Offshore Oil and Gas Regulations

Offshore Oil and Gas Regulations

COMMENT: BP Canada’s Scotian Basin Exploration Drilling Project doesn’t have the same level of scrutiny that is applied to offshore projects located off the coast of Norway or the United Kingdom.

FACT: Canada’s offshore oil and gas regulatory framework is similar to that which is in place in Norway and the United Kingdom.

The regulatory framework in each of these jurisdictions is characterized by:

  • Legislative and regulatory requirements for operators to demonstrate that they have identified risks, designed equipment and procedures accordingly, that they have in place trained and competent personnel, and that they can respond to accidents and emergencies.

  • Regulators charged with the responsibility to review operator documentation demonstrating the above for acceptability or approval prior to the commencement of offshore activities, and then to verify compliance through ongoing monitoring and enforcement programs.

A study commissioned by the Center for Strategic and International Studies* following the Deepwater Horizon incident in the Gulf of Mexico in 2010 concluded that Canada’s offshore oil and gas regulatory regime for safety and environmental protection ranks on par with that in place in Norway, the United Kingdom and Australia in terms of its extensive mandate and efficiency.

*Established in Washington, D.C. over 50 years ago, the Center for Strategic and International Studies is a bipartisan, nonprofit policy research organization dedicated to providing strategic insights and policy solutions to help decision-makers chart a course toward a better world.

COMMENT: History, like the Deepwater Horizon incident that occurred in the Gulf of Mexico in 2010, is not being taken into consideration when regulatory decisions are being made in the Canada-Nova Scotia offshore area.

FACT: Regulators worldwide have increased their expectations of operators since the Deepwater Horizon incident. The CNSOPB is no exception. Key improvements that are now required by the CNSOPB, and that are being applied to BP Canada’s proposed drilling program, include both additional preventative control and recovery measures, a description of which can be found on our website here.

COMMENT: Simultaneous relief well drilling, as the primary drilling is taking place, should be a requirement in the Canada-Nova Scotia offshore area as it was for the Hibernia project off the coast of Newfoundland and Labrador.

FACT: The regulations in place pertaining to the drilling of wells for the Hibernia project did not require the simultaneous drilling of a relief well while the primary drilling was taking place.  Regulations dating back to 1980 required operators to ensure that contingency plans had been formulated and that equipment was available to cope with any foreseeable emergency situation during a drilling program, including arrangements for the drilling of a relief well should such become necessary. In other words, operators were required to have in place a contingency plan to address how they would go about drilling a relief well in response to a blow-out event should it occur.  Regulations did not require operators to drill a pre-emptive relief well as a contingency at the same time a primary well was being drilled.

Similar to requirements in place globally, today’s regulations governing drilling in the Canada-Nova Scotia offshore area require operators to have in place appropriate contingency plans, including emergency response procedures, to mitigate the effects of any reasonable foreseeable event that might compromise safety or environmental protection. The CNSOPB published guidance addressing contingency plans for the drilling of a relief well, which set out a number of expectations, including the identification and sourcing of an alternate drilling installation(s) that is capable of drilling a relief well. Furthermore, the plan is to provide a description of the installation’s required operating capability, ancillary equipment, availability, and the schedule for mobilization to the wellsite. The source of supply for a backup wellhead system and all consumables required to set conductor and surface casing for the relief well is also to be identified. Contingency plans must be reviewed and found acceptable by the CNSOPB before any drilling can take place.

COMMENT: The environmental assessment that was conducted by the Canadian Environmental Assessment Agency (the Agency) for BP Canada’s exploration drilling program is insufficient for authorizing a drilling program.

FACT: The completion of an environmental assessment is just one step in the overall regulatory authorization process, and is a prerequisite for the CNSOPB to consider in the granting of an authorization for a drilling program. A vast amount of additional documentation and information is required as part of a drilling program authorization application. BP Canada’s application was no exception. The extensive amount of additional documentation submitted in support of BP Canada’s application was subject to many months of review and revision as necessary, and ultimately was accepted only after it was demonstrated to the satisfaction of the CNSOPB that operations would be conducted in a safe and environmentally responsible manner and in full compliance with legislative and regulatory requirements.

Such documentation included:

  • An Environmental Protection Plan that sets out the procedures, practices, resources and monitoring necessary to manage the hazards identified in the Agency-led Environmental Assessment to ensure protection of the environment.
  • A safety plan demonstrating that all reasonable steps will be taken to ensure the safety of personnel and offshore installations, vessels and support craft.
  • Emergency response, spill response and other contingency plans that will be implemented, should the need dictate.
  • Bridging documents that demonstrate how BP Canada’s systems will integrate with those of their major contractors.
  • A Certificate of Fitness issued by a recognized classification society that certifies that the drilling installation (the Seadrill West Aquarius) is in compliance with regulations, is fit for use and can be operated safely without polluting the environment.
  • A Canada-Nova Scotia Benefits Plan to provide manufacturers, consultants, contractors and service companies in the Province and other parts of Canada with a full and fair opportunity to participate on a competitive basis.
  • Documentation demonstrating that the necessary financial resources are in place to undertake the activity and to respond to any incidents that may occur, including responding to and cleaning up a spill.

Additionally, Ready-For-Operations Audits of the Operator and their key contractors (drilling, vessel and aviation services) were conducted by the CNSOPB. This included on-the-ground inspections and audits of facilities, equipment and arrangements to verify readiness for operations and regulatory compliance, and to confirm:

  • Equipment is fit for purpose;
  • Procedures are appropriate; and,
  • Personnel have the necessary training and competency.