Proposal to retool environmental assessments rattling nerves in Newfoundland's offshore

There's cautious optimism in the air as a long-running oil and gas conference gets underway in St. John's this week, but there's a layer of uncertainty about how proposed reforms of the environmental assessment process might affect the industry's potential for future growth.

The Newfoundland and Labrador Oil & Gas Industries Association — NOIA — is meeting in the wake of celebrations related to Hebron and the West White Rose wellhead platform projects. 

But already in the air are concerns linked to the possible creation of a so-called "super regulator" for major projects in Canada, one that critics say has the potential to gum up the approval process and prompt oil companies to look elsewhere for places to spend exploration dollars.

What we don't want to have happen is for any slowdown in the environmental assessment process.- Siobhan Coady

This comes as the lobby to once again make the Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB) the "complete" regulator for the offshore continues.  

"What we don't want to have happen is for any slowdown in the environmental assessment process," Natural Resources Minister Siobhan Coady told CBC News.

"We want to make sure it's thorough and well done, like it has been done over the last 30 years."

Assessments could be expanded

Coady and others are concerned about the contents of a report released in April by an expert panel tasked by the federal Liberal government to review the environmental review process .

One of the recommendations is the creation of an impacts assessments commission that would conduct reviews of major projects, including oil exploration and production in the offshore.

The panel recommends that environmental assessments be renamed "impact assessments," and that the scope of these assessments be dramatically expanded to determine whether they meet the five pillars of sustainability: environmental, social, cultural, health and economic.

One of the goals of the review is to restore public confidence in the assessment process, but critics say this recommendation has the potential to create significant uncertainty, with some going to so far as to say that development may grind to a halt.

Coady and some industry leaders in Canada's most easterly province are lobbying against this proposal, and say the C-NLOPB is best suited to regulate the province's offshore.

"They have 30 years' experience in our offshore. They know the environmental requirements. They know what needs to be done," said Coady.

Assessment process has slowed, say critics

The C-NLOPB was created with the mandate of regulating the offshore oil industry on behalf of the federal and provincial governments, and for years was the responsible authority for all environmental assessments in the offshore.

But that changed in recent years, with the Canadian Environmental Assessment Agency now taking the lead on assessing projects such as exploration drilling campaigns.

Groups like the Canadian Association of Petroleum Producers, NOIA and Nalcor, Newfoundland and Labrador's Crown energy corporation, have lobbied for the C-NLOPB to once again become the responsible authority.

"They can do this in a timely fashion to encourage economic development, to encourage growth in our offshore oil and gas industry, and to keep things in a timely process," Coady said, adding that the reputation of the C-NLOPB is "exceptional."

We're going to push that activity and the benefits from it out into the future, and the more in the future, certainly the less certain it will happen.- Bob Cadigan

Industry players like NOIA's Bob Cadigan say the assessment process has slowed as a new layer of regulations was added, and approvals that once took 12 to 18 months can now take up to two years or longer.

That's bad news for prospective new basins such as the Flemish Pass and the Orphan Basin, he said, where there's the prospect of billions of barrels of recoverable oil, and untold economic benefits for the province.

Oil companies have committed to spend billions in exploration in the coming years, but Cadigan said that could all be threatened.

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"We're going to push that activity and the benefits from it out into the future, and the more in the future, certainly the less certain it will happen," said Cadigan.

Meanwhile, the federal government has not yet commented on the expert panel's report, but Cadigan says the issue will be a topic of discussion at NOIA's annual conference, which opens Tuesday and concludes on Thursday.