i i I OFFSHORE HYDROCARBON EXPLORATION t. Report and Recommendations Offshore Exploration of the West Coast Environmental Assessment Panel April 1966
OFFSHORE HYDROCARBON EXPLORATION Hippa Island. Queen Charlotte Islands Report West Coast Offshore Exploration Environmental Assessment Panel April 1986
0 Minister of Supply and Services Canada 1966 Cat. No. En 105-370966 ISBN O-662-54426-5
c ISI Government of Canada Gouvernement du Canada Province of British Columbia c u The Honourable Tom McMillan The Honourable F.C. Austin Pelton Minister of the Environment Minister of Environment The Government of Canada Government of British Columbia I Ottawa, Ontario Victoria, B. C. and and m The Honourable Pat Carney The Honourable Tony Brummet Minister of Energy, Mines Minister of Energy, Mines and and Resources Petroleum Resources The Government of Canada Government of British Columbia u Ottawa, Ontario Victoria, B. C. Dear Ministers: I V u In accordance with the Terms of Reference provided to the West Coast Offshore Exploration Environmental Assessment Panel a public review of possible offshore hydrocarbon exploration off Canada s West Coast has been completed. We are pleased to submit the Panel Report for your consideration. As requested, we have assessed the potential environmental and socio-economic effects, identified broad terms and conditions for seismic surveys and exploratory drilling, specified information and investigative requirements for the respective stages of offshore activity, and identified issues that should be examined before possible development and production occurs. Respectfully yours, I u \ Ewan Cotterill Chairman West Coast Offshore Exploration Environmental Assessment Panel
TABLE OF CONTENTS EXECUTIVE SUMMARY................. 1. BACKGROUND............ Mandate... Review Process.................... Withdrawal of Proponent................. lntervenor Funding............ External Issues......... 2. 3. 4. 5, 6 OFFSHORE OIL AND GAS EXPLORATION........ Prqlosal...... History............................. West Coast Moratorium.................. The F,,tt,re........................ REGIONAL SETTlNG............... Physical Environment............... Bi&ygical Environment.............. Commercial and Sport Fisheries...... The Native Food Fishery.............. Other Resource l.,ses............ People.......... Administration...........................,SS ES AND KEY RECOMMENDATIONS... Environmental Risk of Offshore Hydrocarbon Exploration... Public Involvement in Management of Offshore Hydrocarbon Exploration...... Aboriginal Cc,,,cems....................... Compensation.............. Research.......................... SE,SM,C SURVEYING............ Effects of the Physical Environment... Biological Effects of Seismic Operations......... Operatio l C deratio s......................... ROUTINE EXPLORATORY DRILLING AND SUPPORT OPERATIONS..... 39 Rotary Drilling Te&nique 39 &farlne Operati s... 41 Support Oper ti s.............................. Environmental Considerations................. SOC,O-ECONOMIC EFFECTS OF ROUTINE OPERATIONS..... Managing S~~i~.E~~n~mic Effects........... Regional ~~~n~~i~ Benefits... Community Effects...................... HYDROCARBON BLOWOLJTS........ T... We,, Contrc,, Ted, &,gy............... Incidence and pdxbility............. Gas Cc,,,&, sak B,,,wo,,ts........... Tanker Sp,,,s... Case Histories of Representative Blowouts... 9 9 9 9 II 13 I3 17 20 21 23 23 24 29 29 31 32 33 34 35 36 36 37 43 44 51 51 53 54 57 57 58 59 59 59
9. THE FATE AND EFFECTS OF OIL IN THE MARINE ENVIRONMENT..... The Behaviour of Oil Released by Blowouts........ Biophysical Effects of a Blowout........... Socio-Economic Effects of a Blowout............ Protection of Nearshore Waters........ IO. OIL BLOWOUT CONTINGENCY PLANNING AND COUNTERMEASURES..... Contingency Planning..... Countermeasure Operations... I I. COMPENSATION...... Compensable Losses and Damage.............. Public Concerns and Issues........ Present Mechanisms for Compensation........... Offshore Compensation Programs in Other Jurisdictions........... Compensation Policy and Programs..... 12. DEVELOPMENT AND PRODUCTION CONSIDERATIONS..... Development and Production Systems..... Transportation of Hydrocarbons......... Shorebase Facilities... Socio-Economic Issues.............. Environmental Issues........ 13. MANAGING FOR ENVIRONMENTAL PROTECTION........ Experiences Elsewhere........... Existing Management Systems.............. Proposed Management System........... 14. ACTION PLAN........ IS. SUMMARY OF RECOMMENDATIONS...... 61 61 63 66 67 69 69 71 75 7s 7s 76 76 77 79 79 80 80 80 81 83 83 85 85 89 93 APPENDICES............ A. Panel Terms of Reference............. 101 B. Panel Member Biographies... 103 C. Technical Specialists Biographies......... 105 D. Events in the Review Process........... 107 E. Hearing Participants... 109 F. Reports, Background Documents and Miscellaneous Material Received by the PanelL 115 9. glossary of Terms..... 119 H. Acknowledgements..,...,...,... 123
EXECUTIVE SUMMARY In June 1984, the federal and British Columbia Ministers of Environment appointed a five member Environmental Assessment Panel to conduct a public review of the environmental and related socio-economic effects of a potential renewal of a program of petroleum exploration off the west coast of Canada, north of Vancouver Island. The West Coast Offshore Exploration Environmental Assessment Panel was asked to develop recommendations on the terms and conditions under which petroleum exploration could proceed in a safe and environmentally responsible manner. During the course of the review, the Panel gathered information on the environmental and related socioeconomic effects of the proposed offshore exploration program and held two series of public forums. These were public information meetings held in November 1984 and public hearings held in September, October and November 1985. Opportunities for full public participation were key elements in the review process, and included the scheduling of many of the public meetings in the north coast communities of British Columbia that could be most directly affected. Both Chevron Canada Resources Ltd. and P&o-Canada Inc., who acted as proponents for the purpose of this review, hold rights to exploration licences in the coastal waters between northern Vancouver Island and the border between Alaska and British Columbia. A governmentimposed moratorium on all exploration drilling in the region has been in place since the early 1970 s. However, consideration is now being given to lifting the moratorium so that exploration programs can be pursued. Chevron participated fully in the Panel review process, however, Petro-Canada withdrew from the review in November 1984, explaining that it had other and higher priorities. Chevron s proposed exploration program consists initially of two years of seismic surveys followed by a two-well drilling program, using,a semi-submersible anchored drill unit. Depending on the results of this initial program, a more intense exploration or delineation program might be undertaken consisting of additional seismic surveys and drilling more exploratory wells. The areas proposed for exploration include Queen Charlotte Sound, Hecate Strait, Dixon Entrance and some of the coastal waters west of Graham Island. The area is rich and diverse in natural resources, is subject to extreme weather conditions and is sparsely populated. Aside from the major population centres of Prince Rupert and Port Hardy, a sizable percentage of the area s population are native people. Most of these people have strong cultural and economic ties to the ocean and its resources. Many of the smaller native communities rely almost exclusively on the sea and its resources for their sustenance which comes from commercial fishing and from the extensive use of locally gathered seafoods in their diets. The most important industry in the region is the fishing industry. This provides employment in the commercial harvest and processing of many species. Indeed the size and distribution of the region s population has been largely maintained by fishing. In addition to the commercial fishery, the region also has an important sport fishery and will probably, in the future, support a strong maricultore industry. During the course of the review, participants raised a variety of concerns relating to the potential environmental and related socio-economic effects of renewed offshore oil and gas exploration. The major concerns were the biophysical and socio-economic impacts associated with the level of risk and potential occurrence of a major oil well blowout. Other significant concerns and issues raised included: -social and cultural impacts on the area s residents; -biophysical effects associated with seismic surveying and routine exploratory drilling operations; -compensation programs for losses and damages resulting from a major oil blowout; -additional study and research needed to properly understand interactions between proposed exploration and the region s environment; and --government s tion program. ability to manage an offshore explora- After careful consideration of these and other issues and concerns, the Panel has reached the following main conclusions : 1. a two year seismic survey program such as that _ proposed by Chevron may proceed providing certain terms and conditions are met; however, other programs should not be permitted until monitoring results from the initial program are analyzed to better determine the effects of seismic operations on fish eggs, larvae and juvenile fish;
2 Executive Summary 2. exploratory drilling may not take place within an exclusion zcme of 20 km from any point of land, to minimize potential impacts on sensitive nearshore areas from routine operations or from an oil well blowout; 3. additional information leading to a better understanding of the environment of the exploration area and the potential impacts of an exploration program must be gathered and provided to the regulatory authority prior to the commencement of offshore drilling; 4. exploratory drilling outside the specified 20 km exclusion zone must be initially confined to the months of June to October inclusive, at least until further operating experience is obtained and weather forecasting capability is improved; 5. the major source of so&economic impact of an offshore exploration program is likely to arise from the limited ability of residents of the area, including the native people, to participate in decisions relating to the management of the area s resources; 6. an effective ongoing environmental management structure must be put in place that is capable of managing decisions relating to the environmental and swio-economic considerations of offshore hydrocarbon exploration and of possible development and production as it may evolve; and 7. an effective compensation program that applies to all losses and damages resulting from an oil blowout or from routine operations should be established before the start of offshore exploration activity. The foregoing major conclusions are reflected in the detailed recommendations in the Panel report. These recommendations include appropriate terms and conditions which should be put in place before and during the exploration program to minim& adverse effects and to address issues requiring further investigation and study. Also included in the Panel report are recommendations on the establishment and structure of an appropriate management system to deal with the environmental and socio-economic matters associated with west coast offshore hydrocarbon exploration and eventually development and production. West Coast Offshore Exploration Environmental Assessment Panel (from left) Allen Milne, Charles Bellis, Ewan Cotterill (Chairman) Peter Gelpke, and Norman (Sonny) Nelson.