Offshore drilling regulations relaxed last year

CanWest News Service
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Oil & gas

Canadian regulators relaxed offshore drilling regulations late last year, giving the energy industry more flexibility when putting in place safeguards against oil spills.

Previously, companies were required to install specific kinds of equipment, such as safety valves and blowout preventers. The old regulations outlined everything from how companies should cement the casing on an oil well, to how they should conduct pressure tests.

Ottawa -

Canadian regulators relaxed offshore drilling regulations late last year, giving the energy industry more flexibility when putting in place safeguards against oil spills.

Previously, companies were required to install specific kinds of equipment, such as safety valves and blowout preventers. The old regulations outlined everything from how companies should cement the casing on an oil well, to how they should conduct pressure tests.

Under the new regulations, well operators must set environmental-protection goals, list the equipment they will use to achieve those goals and disclose their plans for inspecting, testing and maintaining such gear.

However, they are not required to install any specific equipment.

April 20, a fire onboard the Deepwater Horizon rig in the Gulf of Mexico caused its well to explode, unleashing one of the biggest oil spills in recent history. Experts examining the case have been baffled by the failure of the blowout preventer, a widely used fail-safe mechanism that controls the pressure in a well in the event of a mishap.

The new Canadian regulations have been adopted by the National Energy Board, which regulates offshore drilling on the Arctic and B.C. coasts, as well as the Newfoundland and Nova Scotia offshore petroleum boards, joint federal-provincial agencies that oversee drilling off Canada's Atlantic coast.

Modern approach

A spokeswoman for the National Energy Board said the new regulations represent a "modern" app-roach that allows companies to use different environmental-protection technologies, depending on the nature of the project.

"What if we were to specify that there must be a blowout preventer, and some innovation that comes along where there's actually something better?" Sarah Kiley said. "What a goal-based approach allows for is that innovation, that technology advancement."

But Craig Stewart, director of World Wildlife Fund Canada's Arctic program, compared the changes to the deregulation of the U.S. financial sector before the collapse of the subprime mortgage market in 2007.

"The federal government has shifted away from a prescriptive regulatory framework to one that encourages industry to meet soft regulatory outcomes," Stewart said in an e-mail. "This shift is a leap of faith that industry will put the public interest in front of self interest and shareholder profits. It didn't work in the financial services industry, and as shown by the Gulf spill, it won't work in the oil and gas industry either."

In a recent investigation, the Wall Street Journal found that the U.S. Minerals Management Service (MMS), which regulates offshore drilling south of the border, has been gradually shifting safety responsibility to the oil industry.

Nevertheless, drilling regulations enforced by the MMS lay out detailed requirements for what equipment operators must use. For example, a section on blowout preventers dictates exactly what types of preventers are acceptable, and what backup systems must be in place.

The new Canadian regulations came into force in December.

The federal government conducted more than three years of stakeholder consultations into the regulatory changes, beginning in 2005. According to government documents, regulators had been receiving a growing number of requests from companies to use technologies or processes not included in the regulations, creating "increased administrative challenges and costs."

In the House of Commons Monday, the Conservatives continued to defend their government's app-roach.

"Mr. Speaker, all Canadians are horrified with what they are seeing going on in the southern United States," said Transport Minister John Baird. "Our government will continue to enforce strong environmental and safety standards right across this country. Canadian regulators will not allow anything unless they are convinced that the environment will be protected."

Organizations: National Energy Board, MMS, World Wildlife Fund Canada Wall Street Journal U.S. Minerals Management Service House of Commons Conservatives

Geographic location: Ottawa, Arctic, Gulf of Mexico United States Newfoundland Nova Scotia Canada

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Recent comments

  • Maurice E.
    July 02, 2010 - 13:33

    I see that the province has announced that an INDEPENDENT review of prevention and response will be done by a Captain Mark Turner. In the province's News Release, they say that Quote ....we are satisfied with the level of environmental protection. At the same time, an independent review will help us ensure industry is doing everything it can to prevent and respond to any incident in the offshore.... Unquote.

    So how objective will the review be, when in their own News release they are telling the public (and therefore Captain Turner, that the government is already ..... satisfied with the level of protection...., and furthermore, that the review will ..... help us ensure industry is doing everything it can.... ?

    These kind of statements are, in effect, and in advance, telling Captain Turner what the government believes and therefore influencing and making much more difficult for Captain Turner to indeed, truely conduct an OBJECTIVE review. INADEQUATE AND SHAMEFUL

  • Taxpayer
    July 02, 2010 - 13:31

    John Baird was part off the government in Ontario when Walkerton occurred. Yet the intelligent votes of Ontario have voted in Baird, Flaherty and Clement again and again. Even if we have the largest spill in history the fallout will like water off a ducks back.

  • Maurice E.
    July 01, 2010 - 20:22

    I see that the province has announced that an INDEPENDENT review of prevention and response will be done by a Captain Mark Turner. In the province's News Release, they say that Quote ....we are satisfied with the level of environmental protection. At the same time, an independent review will help us ensure industry is doing everything it can to prevent and respond to any incident in the offshore.... Unquote.

    So how objective will the review be, when in their own News release they are telling the public (and therefore Captain Turner, that the government is already ..... satisfied with the level of protection...., and furthermore, that the review will ..... help us ensure industry is doing everything it can.... ?

    These kind of statements are, in effect, and in advance, telling Captain Turner what the government believes and therefore influencing and making much more difficult for Captain Turner to indeed, truely conduct an OBJECTIVE review. INADEQUATE AND SHAMEFUL

  • Taxpayer
    July 01, 2010 - 20:19

    John Baird was part off the government in Ontario when Walkerton occurred. Yet the intelligent votes of Ontario have voted in Baird, Flaherty and Clement again and again. Even if we have the largest spill in history the fallout will like water off a ducks back.