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Regulating oil and gas development in the Canadian Arctic

1 October 2018

This article originally appeared in The Circle: Arctic biodiversity in the spotlight. The Circle shares perspectives from across the Arctic, and the views expressed here are not necessarily those of WWF. See all Circle issues here.

In 2012, the Kulluk, a Royal Dutch Shell offshore exploratory rig, ran aground in the Chukchi and Beaufort seas in the Arctic Circle.

Early in 2018, Husky Energy’s SeaRose floating production storage and offloading operation was shuttered after a close call with an iceberg off Newfoundland and Labrador. It had 340,000 barrels of crude oil on board.

In summer 2018, the expedition cruise ship Akademik Ioffe, carrying tourists and scientists, struck land near Kugaruuk, Nunavut. Its hull was breached and water began to seep in.

There were no lives lost or oil spilled in these incidents. But that’s not the point, says Mark Brooks, an Arctic oil and gas specialist with WWF-Canada: the point is that any incident has the potential to cause extreme consequences, and better regulation is needed. We spoke with Brooks about the risks that increased traffic and exploration pose to biodiversity in the Arctic and what WWF is trying to do about it.

What are the risks of an oil spill in the Arctic on a day-to-day basis?

That depends how you define an oil spill. As the industry likes to point out, there’s a very low risk of a major blowout along the lines of the Exxon Valdez, which released 11 million gallons of oil into waters near Alaska. But when you talk about risks, you have to talk about consequences. In the Canadian Arctic, there’s almost no infrastructure, no response capacity. Communities are small and Coast Guard response vessels are few and far between. The consequences of an uncontrolled spill or major shipping accident would be catastrophic. That’s why we feel strongly that the risk has to be minimized to the greatest extent possible—approaching zero.

As Arctic ice thaws, will the risk of an incident go up?

Yes. Right now there’s really no oil and gas activity in the Canadian Arctic because the economics don’t make sense. But that could change. The price of oil could go up again or the Canadian government could lift the moratorium on new licenses. And once you start getting more traffic—even just shipping and marine traffic—it will affect biodiversity in the Arctic by changing migration patterns, wildlife availability, hunting and fishing. Any single ship or oil well would run the same risk of a catastrophic accident, and the more of them you have in play, the greater the overall risk.

What technologies are available that could help prevent oil spills?

Industry likes to say technology is always improving, but oil and gas operations are also taking more chances. We’re seeing deeper and deeper wells drilled in riskier environments. Companies are pushing technology to its limits. That’s why government needs to step in: to ensure regulators are forcing companies to improve their technologies and make their operations as safe as possible. But that’s not the case right now in Canada’s offshore environment. We don’t have a world-class regulatory system in place to keep accidents from happening, so we continue to see accidents or near misses.

For example, same-season relief wells (SSRWs) are now an essential part of the safety regime. In the Deepwater Horizon incident, an explosion on a semi-submersible offshore drilling rig in the Gulf of Mexico caused a blowout that could not be plugged until a relief well was finally drilled. Yet Canada is now allowing alternatives to SSRWs. Having a capping stack on hand or nearby is also crucial in the Arctic, but not required under Canadian regulations.

What biodiversity impacts would you expect to see from an oil spill in the Arctic?

We would expect to see mortality, ecosystem disruption and profound impacts on marine wildlife and migration patterns. Canada is totally unprepared to deal with a major shipping spill or a well blowout. We just don’t have the capacity to respond to an accident of that magnitude in an extreme environment like the Arctic. We’ve seen what happened with the Exxon Valdez spill in Alaska, where most of the oil could not be cleaned up.

Canada says it is modernizing its regulatory framework. What would you like to see?

As it stands, they’re only modernizing small pieces of the framework—just a few regulations under the Canada Oil and Gas Operations Act. We’ve been asking the government to take a much more holistic view, including Indigenous consultation and a carbon reduction strategy. Those are not being considered at all, so we’ve decided to try to do it ourselves. We’re organizing a symposium this fall that will bring together a panel of experts from around the world to figure out what a truly world-class, gold-standard offshore regulatory regime would look like in the Arctic. We hope to come out with a series of recommendations for the Canadian government by the end of 2018 that will minimize risk to the greatest extent possible.

What’s the bottom line when it comes to Arctic oil and gas development?

Even with the latest technology, and despite industry assurances, things do go wrong. And if it could happen once, it could happen again—and next time, in the Arctic, the environmental damage could be catastrophic. There is a clear threat to marine wildlife, biodiversity and ecosystems in the north if this activity goes ahead under existing regulations.

Mark Brooks
Specialist, Arctic oil and gas