Part 1: Inside the CNLOPB

For 25 years, the Canada-Newfoundland and Labrador Offshore Petroleum Board has overseen every aspect of this province's oil industry. In a six-part series, Telegram reporter Ashley Fitzpatrick looks at the board's crucial role in oil exploration, production and safety on the high seas.

Ashley Fitzpatrick
Published on February 4, 2012
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Now into his sixth year as chairman and CEO of the province's offshore oil and gas regulator, Max Ruelokke has been the rock against which the seemingly regular waves of negative public opinion have crashed.

During his tenure, there have been claims the board is playing the dual role of regulator and industry promoter.

NDP MHA Dale Kirby - in a call to VOCM's "BackTalk with Paddy Daly" - called the board "primarily a marketing and permit-granting body."

There have been claims the board is not fulfilling its legislated mandate to protect the environment and worker safety. Memorial University professor Bill Montevecchi and others have called on the board to place full-time observers aboard offshore installations to monitor environment and safety matters.

There was the back-and-forth with former Natural Resources minister Shawn Skinner over how the government is notified of offshore incidents, the spotlight on board appointments created with the attempted appointment of Elizabeth Matthews, and a long-standing disagreement with the provincial auditor general.

And there was criticism of the board after the tragic crash of Cougar Flight 491.

As debate has swelled, it's been Ruelokke who has stepped out to address the topics.

In many cases, the questions would have been better aimed at the provincial and federal governments. The board plays no role in appointments, for instance.

Other issues, such as the call for an independent safety board following the Flight 491 crash, are hampered by existing legislation. The board must ensure there is compliance with the legislation governing the offshore, but has no part in its creation or change.

Ruelokke's last day at the head of the Canada-Newfoundland and Labrador Offshore Petroleum Board (CNLOPB) will be Oct. 25.

In an interview with The Telegram, he was asked about the public's view of the CNLOPB and what, if anything, he would like to see clarified before he finishes his term.

"I guess there's two things that are kind of top of mind," he said.

"The first one is the certainty that safety is the most important aspect of our mandate."

He noted the chief safety officer's ability to take action to halt unsafe work, independent of the board.

In addition, while the board provides technical information and advice to the province for marketing of the offshore, the board itself does not do any marketing, he said.

"We don't have any responsibility for sales. We offer up parcels of land for exploration licences and it's entirely up to the industry how they respond to that."

The chairman

In conversations with the staff at the board - not part-time board members, but the full-time personnel responsible for the day-to-day work - the chairman's actual name is rarely used.

If there is a reference to Ruelokke, it is usually "the chairman" or, on rare occasions, his complete name.

When the board's role in offshore safety is raised, there's a standard response: "No one's going to tell Max Ruelokke that safety isn't important."

"I get miffed from time to time," Ruelokke admitted.

"There was a young lawyer from a group called EcoJustice out in Vancouver that was interviewed some time ago, and he posed the question, he said, 'Didn't anybody at the board ever hear tell of something called the Ocean Ranger?' And I'm thinking to myself, Christ, kid, you were probably in school then and I was dealing with it."

Ruelokke started in the oil and gas industry in 1979 as an engineer, commercial diver and business partner in a commercial diving company called Hydrospace Marine Services. The company installed its diving system on the semi-submersible drill rig Ocean Ranger in fall 1980. When the rig sank on Feb. 15, 1982, he lost five employees - "friends and co-workers," he said.

His company took part in the followup investigation.

"It was something that's always been a part of my background and shaped, in many ways, the things that I do and the attitudes that I have," he said.

The board

Unlike the rest of the board of the CNLOPB, Ruelokke was not a political appointment.

Typically, both the provincial and federal governments offer up candidates for the chairman and CEO position and come to agreement on one. However, when they cannot agree - as they could not in 2006 - a panel is struck under the Atlantic Accord to search and make a selection.

"I think there's some benefit in that," Ruelokke said, "because what that situation did do was that it made sure somebody to occupy the chairman and CEO role came from a background - a strong background - in the oil and gas industry and understood the issues and, I guess, the philosophy behind the whole oil and gas industry: what are the things that drive decisions for various activities and what are some of the key factors that need to be considered and how do you incorporate them in the decision-making process?"

Beneath Ruelokke are the provincial and federal political appointees who are paid per diem. Typically, there are three from the province and three from the federal government.

The current board members are Reg Anstey, Ed Drover, Conrad Sullivan, David Wells and Reg Bowers. There is one seat vacant, a seat for the province to fill.

The newest appointment is Reg Bowers, who was now-MP Peter Penashue's campaign manager in the last election.

According to Ruelokke, "the initial phase" of Bowers' introduction to the board - a series of briefing sessions with each key staff department - has been completed.

From here he, as with the rest of the board, will be briefed in depth as issues arise.

It is similar to how a minister within the provincial government might be provided background on an issue or topic arising within their department.

Ruelokke is asked whether the decisions of the part-time board members should be considered reliable if they have little to no experience in the oil and gas industry.

"They should, because the board members never make a decision without the benefit of a staff analysis and a staff recommendation," he said.

That full-time staff of 70 highly skilled workers, most with decades of experience in the industry, operates within various departments: Safety, Operations, Environmental Affairs, Industrial Benefits, Exploration and Resource Management.

More on their work and how they advise the board will be explored later in this series.

The work

The budget for the CNLOPB has steadily increased over the years, as has the number of staff ($7.8 million is budgeted for staff in 2012). The board is funded, for the most part, equally by the province and Ottawa.

While Ruelokke said he has no big asks budget-wise, he does have one request for the provincial government.

"I would love to have had the vice-chair position filled," he said.

There has not been a vice-chair, being a full-time second to the CEO, since Fred Way retired on Dec. 31, 2010.

"It's going to be ... not a great situation for the board to be left in, if they find out they have a new chair and a new vice-chair at the same time," he said.

"Then there's no carry-over of experience, there's no opportunity for succession planning. So, I hope that doesn't happen, but I'm concerned that it might."

For now, to help cover the vice-chair's work, board member David Wells has taken on additional duties and full-time hours in a new role - that of deputy CEO.

The position was developed internally as a means of helping deal with the day-to-day affairs, as Hebron and new exploration projects come online, adding to the workload of the "board executive" - namely Ruelokke.

On Monday, The Telegram looks at the board's safety department, the work of safety officers and the proposed changes to safety regulation offshore.