29 February 2012

Hebron review complete #nlpoli

The review panel appointed by the offshore regulatory authority to review the Hebron development issued its report on Tuesday with a set of 64 recommendations attached.

Among them (bolding added):

  • Helicopter safety should be the top priority of the C-NLOBP. Guided by the rulings of the Transportation Safety Board of Canada, Transport Canada, the Federal Aviation Administration and the European Aviation Safety Agency, the C-NLOPB Chief Safety Officer must ensure that the Category A helicopters operating in the NL offshore comply with existing and revised regulations.
  • The derrick equipment set module should be constructed in the province. This is a $100 million project that can add considerably to the local benefits from the project. The government has agreed that the Proponent may build the utilities and process module (UPM), which constitutes two thirds of the topsides tonnage, outside the province. The Proponent should therefore make every effort to assure a facility is found to build the derrick equipment set locally and that local suppliers are trained and exposed to the UPM  requirements so that they have the skills for ongoing servicing and maintenance.
  • The Benefits Plan for Hebron needs a specific schedule of types and numbers of skilled labour required for construction. The Hebron Diversity Plan needs to set more aggressive targets over and above existing percentages already in the general workforce. Training the workforce, growing the apprenticeship program and reaching new levels of diversification for our province should be attainable outcomes of the Hebron Project.
  • Procurement information from the Hebron Proponents needs to be fully disclosed and continually updated. The prime contractors’ tender calling processes and the Proponents’ need for skilled labour should be more clearly articulated to the industry, labour, and government.  Benefits monitoring, labour preparedness and industry growth largely depend on lead time, planning and accurate information.
  • First consideration and fair market pricing should be specifically defined. Evidence before the Commission and in material associated with prior commissions and panels shows multiple interpretations of these terms. The proponent and the industry have very divergent  interpretations. The Accord Acts and the C-NLOPB Benefits Plan Guidelines and associated legal rulings have been carefully analyzed by the Commission. The C-NLOPB should revisit the history of the evolution of the interpretations and provide new guidance.
  • Model testing for new design characteristics of the proposed Hebron GBS needs to be completed prior to final sanction and rationalized against the same ocean weather parameters as installations currently in operation. The Grand Bank and the Continental shelf are subject to extreme conditions for waves, wind and ice. While advances in knowledge and engineering are important and new variables might be acceptably applied, historical evidence of successful and safe structures operating in extreme weather conditions provide an important standard for comparison.
  • Produced Water processing for the Hebron Project must conform to current international regulations to mitigate environmental risks. Produced Water associated with extracting and processing heavy oil, the type found in the Hebron project, is both greater in volume and impurities than the produced water associated with the sweet crude of other NL offshore projects.
  • The environmental questions surrounding sea bird mortality on the NL offshore should be the subject of a publicly transparent process leading to the undertaking of necessary research amongst the Canadian Wildlife Service, industry partners and the wider seabird research community. A review of the previous intervention by environmentalists has revealed that the same outstanding questions remain unanswered after twenty years of public
  • The Socio-Economic Impact Statement and Sustainability Report needs to be upgraded in content and upgraded in importance within the Development Plan Guidelines. There is a requirement for greater socio-economic research. Two very important issues, diversity and skills training, are important within the short- and medium-term labour shortage, but also must be considered in terms of long-term sustainability. The C-NLOPB should have dedicated socioeconomic expertise. When viewed in terms of cumulative effects, including those stemming from prosperity and population increase, this project and all those preceding it significantly impact communities in the eastern and Avalon regions of the province.
  • Research and Development/Education and Training Fund guidelines need to be more flexible to permit the approval of projects pertaining to the socioeconomic impacts of the project and considerations of sustainable development. At present, the guidelines are too influenced by pure or applied research that fails to recognize the research needed on socio-economic matters.
  •  The C-NLOPB Benefits Plan Guidelines need to be rewritten to be more specific, including templates to outline the precise types and formats of benefits information that must be provided by Proponents. In reviewing the previous three oil and gas developments, the Commission observed significant inconsistencies in presented material which made evaluation of benefits very difficult. This will provide more measurable objectives for monitoring by the C-NLOPB and, and, in the long term, allow for better comparisons between projects.

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