Policy confusion does no one any good #nlpoli

Last week, the Liberal governments in Ottawa and St. John’s unleashed a bold new innovation in political announcements.

Fridays used to be the day when governments buried announcements, they didn’t want anyone to notice.  They’d take out the trash, as the day came to be known, by slipping out a news release without any fanfare.

Not anymore.

A gigantic news conference featuring both the Premier and the provincial representative in the federal cabinet unleashed a pair of significant announcements.

Problem was there wasn’t enough detail for many people to make sense of it all.

Hence, the new concept:

For-Fuck-Sake Friday.

Because it left observers shouting, “For Fuck Sake!” in either bewilderment or exasperation as they tried to figure out what was going on.

Well, fear not, faithful readers.

As we have done for the past decade and a half, SRBP will blow away all the clouds of confusion furrowing brows across Newfoundland and Labrador and tell you what it all means.

No duff.

No guff.

The future will be something #nlpoli

The association representing the province's offshore supply and service businesses paid a consultant from London to look at the potential for development of the oil located in very deep water offshore Newfoundland.

As CBC's Terry Roberts tells us,  the goal of the exercise was to help NOIA members get ready for a possible increase in deep water exploration.  Land sales offshore the past couple of years have been extremely good.  Companies bid huge amounts of money for the chance to explore offshore.

The offshore regulatory board offered 13 parcels this year.  They accepted proposals with a little over $500 million for exploration on about 1.5 million hectares.  In 2015,  the offshore board accepts proposals totalling $1.2 billion on 2.5 million hectares.

That looks really good.  The consultants said so.  Could be a massive boom in exploration, they said.

Same circus #nlpoli

Somewhere in Newfoundland and Labrador,  someone may not have heard the news.

There is oil and natural gas in the ground under water off our coast.

Never mind that this has been widely reported since the 1960s when someone first started exploring seriously out there.  Never mind, either, that we have had oil fields producing oil and filling the provincial government's bank account with billions of dollars since the late 1990s.

Some people might have missed that we have oil and has.  And we have a lot more than anyone is currently producing.

It is out of concern for these couple of folks living in a cave possibly in the Annieopsquotch Mountains that the provincial government has held a news conference to announce the latest estimates of how much more oil might, possibly, theoretically be out there.

Well, either that or it is polling month and the politicians are in deep political trouble this year, like their predecessors were last October when they held a news conference to announce last year's estimates of theoretical future gloriosity lurking somewhere underground. Maybe.

A troublesome and costly pattern #nlpoli

There are so many problems raised by Premier Paul Davis’ zeal to sign an agreement with Statoil for the Bay du Nord that it is difficult to know where to begin.

Perhaps the best place to start is with the deal announced the day before Davis’ oil news.  The provincial government gave $6.5 million in public money to an insurance company to establish a major corporate office in St. John’s. 

Newfoundland and Labrador got the company to move here by engaging in a bidding war with other provinces that were anxious for the business.  Newfoundland and Labrador essentially gave away the most.

That’s what happens when you bargain in a weak position.

An Unwavering Commitment to Inaction, Indecision, and Extra Pork #nlpoli

In 2010, the provincial government appointed Captain Mark Turner to look at the “province’s offshore oil spill prevention and response capabilities.”

He produced the 273 page report and the provincial government dutifully released it along with a lovely news release.

Then-natural resources minister Shawn Skinner committed that the provincial government  would “study the report, and consult with the responsible stakeholders to ensure all recommendations are considered.”

CNLOPB announces 2012 call for bids on offshore parcels #nlpoli

From the offshore regulatory board:

The Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB) announced today the details of a Call for Bids in the Newfoundland and Labrador Offshore Area. Call for Bids NL12-01 (Area "C" – Laurentian Sub-basin) will consist of six parcels, which comprise 1,589,738 hectares.

Interested parties will have until 4:00 p.m. on November 1, 2012 to submit sealed bids for parcels offered in Call for Bids NL12-01. The sole criterion for selecting winning bids will be the total amount of money the bidder commits to spend on exploration of the respective parcel during Period I (the first period of a nine-year licence). The
minimum bid for each parcel offered is $1,000,000.

The C-NLOPB hereby wishes to inform prospective bidders for parcels NL12-01-01, NL12-01-02 and NL12-01-04 (these parcels are adjacent to the French Exclusive Zone around the islands of St. Pierre and Miquelon,
France) that it has been advised by the Government of Canada that on May 17, 2005, the Government of Canada and the Government of the French Republic signed the Agreement between the Government of Canada and the
Government of the French Republic relating to the Exploration and Exploitation of Transboundary Hydrocarbon Fields (the Agreement). 

The Agreement provides a framework for the conservation and management of hydrocarbon resources in fields straddling the maritime boundary between the two countries.  The Agreement will enter into force on the date on which the Government of Canada and the Government of the French Republic have informed each other that all necessary internal requirements have been fulfilled. While France has ratified the Agreement, Canada is putting in place the domestic arrangements to allow it to proceed with its ratification process.

As a result, the Government of Canada has advised the C-NLOPB that if the Agreement enters into force prior to or during the term of a licence covering any of the above parcels, this necessarily will result in the application of additional terms and conditions for those parcels,
through legislation, regulations, amendments to licences or otherwise, in order to ensure compliance with the Agreement.

The C-NLOPB recommends to prospective bidders that they consult the text of the Agreement, which is available from the C-NLOPB upon request to information@cnlopb.nl.ca.

This Call for Bids contains provisions for rentals during the term of an exploration licence and during the term of any resulting significant discovery licence. This Call for Bids contains a sample exploration licence which incorporates a sample significant discovery licence.

These areas have been previously assessed to identify any mitigative measures that may be required in relation to exploration activity on these parcels.

Subject to Ministerial approval, successful bidders will be issued an exploration licence for a term of nine years; however, during Period I a well must be spudded to validate the licence for the full nine-year term.

Notification of any changes made to this Call for Bids will be posted to the C-NLOPB's website.

For a complete copy of the text of the Call for Bids, visit the C-NLOPB website at www.cnlopb.nl.ca.

- srbp -

* paragraphing changed for online legibility.  SRBP added two links related to the Canada-France agreement on transboundary hydrocarbon resources

Noble gets deep water license in Gulf of Mexico

The United States Bureau of Ocean Energy Management Regulation and Enforcement has issued a license to Noble Energy to continue work on a well located 115 kilometres southeast of Venice, Louisiana, according to the Globe and Mail and other media outlets.

The company started drilling the exploratory well just before last year’s catastrophe.

The Wall Street Journal reports the well is in 6,500 feet of water.

There are six other permits for deep water drilling currently awaiting approval, according to the New York Times.

- srbp -

Offshore regulator opens environmental assessment on Old Harry drilling proposal

Edited version of the Canada-Newfoundland and Labrador Offshore Board news release:

The public is invited to comment on the draft scoping document for the Environmental Assessment of an exploration well being proposed by Corridor Resources within Exploration License 1105 (the Old Harry Prospect) located in the Gulf of St. Lawrence, offshore Newfoundland and Labrador.

The proposed activity includes drilling one exploration well within EL 1105 using a mobile offshore drilling unit (MODU), that is,  semi-submersible drilling rig or drill ship, supply vessels, and offshore helicopters. Vertical seismic profiling (VSP) activities may also be conducted in conjunction with the drilling activities. Corridor Resources proposes to drill one exploration well between 2012 and 2014.

Before any petroleum-related activity can be undertaken in the Newfoundland and Labrador Offshore Area, a detailed and location-specific Environmental Assessment (EA) must be submitted to the Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB). In addition, this project is subject to the federal environmental assessment process pursuant to the Canadian Environmental Assessment Act (CEA Act).

Pursuant to paragraph 18(3) of the CEA Act, the C-NLOPB as the responsible authority for the federal environmental assessment of the project is inviting the public to comment on the proposed draft scoping document prepared by the C-NLOPB.

Comments must be received by the C-NLOPB no later than Monday, March 28, 2011. Interested persons may submit their comments in the official language of their choice to information@cnlopb.nl.ca or to the following address:

Public Comments – Old Harry Project

Canada-Newfoundland and Labrador Offshore Petroleum Board

5^th Floor, TD Place

140 Water St., St. John’s, NL A1C 6H6

(709) 778-1400

- srbp -

New gas find offshore Israel

Funny the things that slip by.

Over Christmas the Globe and Mail ran a story on new oil and natural gas finds in Israel.  The twenty trillion cubic feet of natural gas in one set of offshore finds will reshape the Middle East and more energy finds could reshape global energy supplies.

Estimated to contain 16 trillion cubic feet of gas – equivalent to more than a quarter of Canada’s proven reserves and enough to meet Israel’s domestic demand for 100 years – the Leviathan field is believed to be the largest such deep-water gas discovery in a decade.

The find actually dates from  June 2010 as a story in the Jerusalem Post shows.

In January 2009, the discovery of the natural-gas field 90 kilometers offshore from Haifa, known as Tamar, in which Noble Energy has a 36% working interest, was made by the US-Israel consortium including the Delek Group, through its subsidiaries Delek Drilling and Avner Oil Exploration, Isramco Negev 2, Dor Gas Exploration. Tamar is the largest exploration discovery in Noble Energy’s history, which last year also discovered a natural-gas field at Dalit with gas reserves estimated at 500 billion cubic feet.

“The Leviathan exploration has the potential of being twice the size of Tamar, which was the largest gas discovery globally in 2009,” Richard Gussow, a research analyst at Deutsche Bank, said Thursday.

In addition, there’s been a major oil discovery onshore as well of a field roughly the size of Hibernia with additional prospects offshore.

- srbp -

Offshore #oilspill review gets indefinite extension

A provincial government review of offshore oil spill response that was supposed to be done with 90 days will now have an indefinite extension.

The initial news release  - issued May 12 - said that the “consultant will meet with the Department of Natural Resources to develop a work plan to complete the scope of work within 90 days.”

That means that under the original deadline, the commissioner was supposed to hand in his report on August 12.

In a news release issued on August 9, natural resources minister Kathy Dunderdale said he would now have an extension.  She didn’t indicate the new deadline.

Dunderdale said the the extension came at the request of the commissioner. She did not say if the extension came as a result of the consultation that was supposed to happen three months ago in order to ensure the work was done by the original deadline or if it came more recently.

- srbp -

Polling month update: This post was written based on the news release issued by the department on 09 Aug 10.

While Dunderdale didn’t think it was important enough to mention in the news release, both the Telegram and CBC are reporting that Dunderdale expects to receive the report in November.

November is the next polling month. How convenient.

But how firm is that deadline?

Offshore board releases complete #oilspill response plans

From the Canada-Newfoundland and Labrador Offshore Petroleum Board:

“The CNLOPB wishes to advise that Operator Oil Spill Response Plans will be available to the public upon request, and the plans will include oil spill trajectory model information and oil spill response management information that had previously been redacted.

Redaction of this information had been done based on advice given to staff, but the decision to release the information now is being made in the interest of the public’s right to know.

The CNLOPB committed to make Oil Spill Response Plans available to the pubic and to redact only the information that falls within a classification of being either personal, proprietary or security sensitive information.

Copies of the plans are available on request by e-mailing information@cnlopb.nl.ca”

- srbp -

Drill, baby, drill: Dunderdale rebuffs Quebec concerns about border, offshore oil spills

In a letter to Quebec natural resources minister Nathalie Normandeau, Newfoundland and Labrador deputy premier Kathy Dunderdale said that the provincial government had no plans for a moratorium on oil drilling offshore and dismissed any question about the interprovincial border in the Gulf of St. Lawrence.

The Montreal Gazette reported Wednesday on the exchange of correspondence between the two ministers in a story that highlights the border dispute and its impact on oil exploration in the Gulf.

According to the Gazette, Normandeau wrote Dunderdale to ask what measures were contemplated in light of the disaster in the Gulf of Mexico.

Dunderdale replied that Newfoundland had adopted "new oversight measures," had no plans for a moratorium on offshore drilling, and noted Normandeau's reference to a " 'cross-border geological structure,' by which I assume you are referring to the Old Harry prospect."

There’s no clear indication when the letters flew back and forth but the provincial government’s position has been clear since the Deepwater Horizon rig exploded in late April.

Premier Danny Williams dismissed calls for an offshore drilling moratorium in early June.  As in his remarks in early May, Williams focused on three fields in the north Atlantic.  He ignored other areas including the Gulf of St. Lawrence where the Old Harry field promises to match or dwarf Hibernia in size.

Williams referred to meetings he held in Calgary with officials of two companies operating offshore Newfoundland and Labrador.  As CBC reported,

The premier said he's confident the companies are doing everything possible to prepare in case a similar situation ever happens off the province's shores.

"I also asked them to elaborate for me on what additional measures have been put in place and am actually in the process of preparing a list and would only be too delighted to provide a list of the safeguards that were in place and the additional safeguards that are being put in place," Williams said…

It was not clear from the context of his comments if he was meeting with them in his capacity as premier of the province or as their de facto partner in offshore oil development. In some respects that wouldn’t matter since under some conditions of the Hebron agreement, Williams is legally obliged to follow the position dictated by the oil companies to oppose any new regulations that would  - in the opinion of the oil companies – adversely affect Hebron development.

Corridor Resources holds exploration permits from Quebec and from the Canada-Newfoundland and Labrador Offshore Petroleum Board for the Old Harry field.  Work on the permits has been hampered by a dispute over the border between Quebec and Newfoundland and Labrador and by the absence of a jurisdiction arrangement between the Government of Quebec and the Government of Canada over the seabed resources in the Gulf.

While Danny Williams has been focusing his public comments on the distant offshore – and downplaying the implications as a result -  a spill from any future Old Harry development could have disastrous consequences.  This map, produced earlier this year, shows a map of the British Petroleum spill superimposed on Old Harry.

The dashed lines represent interprovincial boundaries but, for Newfoundland and Labrador,  only the one between the province and Nova Scotia is formally in place.  The boundary with Quebec shown in this map has never been formally adopted.

- srbp -

Special oversight for deep water drilling offshore Newfoundland and Labrador

From the Canada-Newfoundland and Labrador Offshore Regulatory Board:

“It is prudent practice for a regulator to conduct an internal review following an incident like the one in the Gulf of Mexico to determine if more can be done from an oversight perspective to address concerns about the risks of offshore drilling. Chevron’s plan to drill the Lona O-55 exploration well in the Orphan Basin, which was spudded on May 10, 2010, has undergone two levels of environmental assessment in accordance with C-NLOPB’s requirements and the company has met the regulatory requirements for drilling in the Newfoundland and Labrador Offshore Area. However, in light of the situation unfolding in the Gulf of Mexico and heightened public concern over drilling operations currently underway in the Newfoundland and Labrador Offshore Area, the C-NLOPB has taken the following measures for overseeing well operations at Chevron’s Lona O-55 well. We have met with Chevron in St. John’s and advised them of these measures, which are in addition to requirements contained in the Drilling and Production regulations and associated guidelines. Chevron has confirmed that they will facilitate the C-NLOPB’s oversight.

A team has been established within the C-NLOPB to provide regulatory oversight of Chevron’s operations. This team is comprised of the Chief Safety Officer, the Chief Conservation Officer, members of the Board’s Management Team and selected senior staff with extensive experience in the regulatory oversight of drilling programs. Chevron is expected to ensure the timely posting of daily reports (seven days a week) so that up-to-date information is always available to this team.

Chevron is required to meet with the C-NLOPB’s oversight team every two weeks to review matters of interest. The Board’s Chief Safety Officer will chair these meetings.

Chevron is required to provide the C-NLOPB’s Well Operations Engineer with copies of the field reports prepared in respect of the following: testing of the blowout preventer (BOP) stack; function test of the acoustic control system; function test of the Remotely Operated Vehicle (ROV) intervention capability and function test of the automode function (AMF) system, together with an assessment of the readiness of the ROV system in terms of equipment, procedures and spare parts.

Chevron is expected to monitor developments at the Deepwater Horizon incident and provide periodic assessments on the impact of any lessons learned from that situation to operations at Lona O-55, in particular any lessons learned with respect to well operations, BOP equipment or spill response readiness.

The frequency of audits and inspections onboard the Stena Carron will be approximately every three to four weeks. Normally, audits and inspections are conducted on offshore operators every 3-4 months.

Prior to penetrating any of the targets, Chevron must hold an operations time-out to review and verify, to the satisfaction of the Chief Safety Officer and the Chief Conservation Officer, that all appropriate equipment, systems and procedures are in place to allow operations to proceed safely and without polluting the environment.

Prior to penetrating any of the targets, Chevron should assure itself and the C-NLOPB that all personnel and equipment for spill response identified in its oil spill contingency plan are available for rapid deployment.

Chevron must also make arrangements for a representative of the C-NLOPB to be onboard the Stena Carron to observe the cementing operations of the last casing string set prior to entering any target zones. The observer will also be present to witness the BOP testing, well control drills, and results of the pressure test of the cementing job.

In the case of the BOP testing, a representative of the Certifying Authority will also be present.

In due course, Chevron must provide, for review and assessment by the C-NLOPB’s oversight team, a copy of the proposed well termination program to be issued to field personnel for implementation.

Chevron must also make the necessary arrangements for a representative of the

C-NLOPB to be onboard the Stena Carron to observe the well termination program.”

-srbp-

Hebron deal may affect future offshore spill response #oilspill

Premier Danny Williams assured the people of the province on Monday that his administration will ensure that “the necessary policies, procedures and processes are put in place…” to deal with an offshore oil spill like the one in the Gulf Of Mexico.

During Question Period in the provincial legislature, Williams also said that “the people of the Province can be assured that we will adopt the best practices in the world. As we come to this process now in the Gulf of Mexico, if there are any new devices or methodologies or technologies that are developed, we will make sure that they are adopted in our offshore.”

Williams said that offshore petroleum board “is responsible primarily for any offshore problems. If it comes to any leakages or seepages that come from tankers or ship transports, then that is the responsibility, of course, of Transport Canada.”

Williams also told the legislature that “we are dealing with a heavy crude oil out there, so from a fishing perspective, there is less likelihood that it would affect the fishery although it would certainly affect the gear.”

But as Bond Papers noted exactly one year ago, under section 5.1 of the Hebron financial agreement, “The Province shall, on the request of the Proponents…support the efforts of the Proponents in responding to any future legislative and regulatory changes that may be proposed by Canada or a municipal government in the Province that might adversely affect any Development Project, provided such action does not negatively impact the Province or require the Province to take any legislative or regulatory action respecting municipalities.”

In other words, should the federal government – Transport Canada, for example – try to beef up offshore regulations, the provincial government would be obliged to oppose such changes if the oil companies felt they would “adversely affect” the Hebron development and asked the provincial government for support.

That intervention might be much easier in a situation involving heavy oil if, as the Premier asserted, “there is less likelihood that it would affect the fishery although it would certainly affect the gear.”

Of the fields in production or under development, only the Hebron field contains heavy oil.  The producing fields – Hebron, Terra Nova and White Rose – all pump light, sweet crude of about the same weight compared to water (API) as the oil currently spilling into the ocean in the Gulf of Mexico (API 34).

While prevailing winds and currents may not bring the oil from any of those fields to shore in Newfoundland and Labrador, there’s no public indication of how far across the Atlantic a spill might go and what impact it might have in Europe. 

Williams also did not discuss an contingencies to deal with an oil disaster on the south coast of the island, the coast of Labrador or in a Gulf of St. Lawrence development such as one potentially at Old Harry.

Williams did say that, as far as the provincial government’s offshore equity stakes go,  “the Government of Newfoundland and Labrador stands behind the environmental liabilities no different than the Abitibi situation. When environmental disasters happen, we go to our primary source of responsibility and then the government, of course, is the backup at the end of the day.”

-srbp-

Underwater duster

ConocoPhillips’ first well in the Laurentian sub-basin turned out to be a dry hole, according to The Telegram.

The company will continue with its exploration program using seismic surveys but there is no word on future drilling plans.

-srbp-