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September-October 2010

Why Canada is at risk of a BP-style deepwater drilling oil disaster

Robert McCandless

The Q4000 burns off oil and gas in a huge flare at the BP Deepwater Horizon blowout site in the Gulf of Mexico July 10, 2010. BP is changing the device capturing oil from the leaking well and plans to have a new, more efficient device in place in seven days, though in the meantime oil is gushing unchecked from the well. UPI/A.J. Sisco. Photo via Newscom

Public anxiety about allowing offshore drilling has been around for a long time, rising to panic levels during accidents and spills, and for good reason. The continuing environmental disaster off the Gulf coast was the result of poor regulation and should prompt Canadians to question our own regulatory regime for offshore exploration. More specifically, we need to address our inability to manage risks that accompany technological advances and ensure that knowledge about our country’s resource potential is used in the public interest.

Offshore drilling started in the Gulf of Mexico over 60 years ago. In fact, the recent Louisiana spill is remarkably similar to the blowout at Mexico’s offshore IXTOC 1 well in 1979. That accident was caused by failures aboard a Canadian-built oil rig, which, like the recent BP accident, also burned and sank, releasing half a billion litres of oil into the ocean—10 times the size of the Exxon Valdez spill.

A decade before, that same rig had been used to drill the last hole in Shell Canada’s program off the coast of British Columbia. At that time, the infamous Santa Barbara, California, spill was alerting Canadians to the hazards of offshore drilling, but it hardly mattered, because Shell ended its program as planned, in August 1969.

Oil engineers have had 40 years to learn about preventing offshore blowouts. Rather than question their expertise, a better response would be to ask why government monitors seem unable to anticipate and prevent such events. Disasters caused by new technology occur when a small number of engineers monopolize technical knowledge and fail to protect the public. A prescient 1976 study by the British Council for Science and Society entitled “Superstar Technologies” analyzed this problem.

Frailties of intellect may lead engineers to believe their skills are sufficient for the job; or to work within isolated silos of expertise, ignorant of the skills of others. Frailties of conscience may make them yield to boredom, neglect routine safety measures, or let them be bullied out of more cautious or dissenting opinions. The higher the risk, the greater the need for monitoring, but explicit federal policy cripples its capacity to apply the critical scrutiny necessary to protect our environment.

With the notable exception of Health Canada, federal departments do not recognize provincial licensing for professionals. Self-regulation is the public’s first line of defence. Federal engineers and geoscientists are accountable only to their minister, and not to their peers. Secondly, federal regulators must be attentive to political direction filtering down to their level. If a regulator wanted redundancy in an aspect of blowout prevention and the company engineer replied, “We can’t afford that,” the regulator would be risking his or her chances for promotion by withholding approval. Corporations complain to the political level if their desires are thwarted, and the embattled public servant always hears about it, inevitably acquiescing.

Current drilling of Chevron’s deep well Lona 0-55, off Canada’s East Coast, has made everyone very nervous. The regulators said they balanced this project’s higher risk with more operational requirements and monitoring, but we can’t assess the truth of this statement. Long-standing rules for petroleum rights allow companies to withhold release of their offshore seismic and drilling results for five to 10 years. Arguably, the unexplored Orphan basin off our East Coast needed drilling to define its geology, but Chevron gains the knowledge, not the public. That’s still a problem on our West Coast.

Canada first issued offshore permits for the West Coast in 1961. Shell was the sole bidder, and two years later, the company started a six-year exploration program. After the 1968 discovery of oil on Alaska’s North Slope, everyone saw tankers carrying Alaskan oil to the Lower 48 as a pollution threat. The federal Liberal cabinet then attempted to ban tanker traffic to help its advocacy of a new pipeline for Alaska oil across the continent. By then, the government knew Shell had not found oil.

Preventing oil spills was the government’s rationale when it started the “moratorium” on offshore exploration in 1971. This action exempted Shell from obligations like annual permit fees or releasing geological information. Promises to cancel the permits were not kept, so even today the company pays nothing for its rights, which remain preserved like fossils in bureaucratic amber.

It’s unlikely there is oil off Canada’s West Coast. The moratorium lets Shell sit on what it knows, but it published some hints in 1971. Most of Canada’s oil originated in shallow seas of the Cretaceous era, but rocks of that origin are notably absent on the western continental shelf. Overlying, younger rocks were found to be “tight,” meaning they have poor ability to store any oil or gas squeezed up from older rocks. More ominously, Shell reported drilling into “hard geopressures,” where the rock has higher fluid pressures than the weight of overlying rock would predict. Such conditions make blowouts even more likely.

One might wonder what additional requirements regulators assigned to Chevron’s Lona 0-55, to be equipped to handle “hard geopressures.” If the public has only limited and long-delayed access to facts like these, to understand the geological realities, it cannot properly assess the diligence of the monitors.

Technology seems always one step ahead of our evolving capacity to protect the environment. We should insist that the regulation of offshore development include true independence of the monitoring agency, critical scrutiny by licensed professionals, and complete disclosure, to ensure that the interface between rocks and dollars is managed in the public interest.

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