Prime Minister Stephen Harper travelled to Sept-Iles, Quebec, last fall to announce a key step toward opening yet another part of Canada to petroleum development. The federal and Quebec governments, he said, had agreed to table legislation launching the search for oil and natural gas in the province’s portion of the Gulf of St. Lawrence.
“Our government wants to ensure the responsible and sustainable development of these resources to benefit all of Canada, and especially Quebec,” Harper said. The agreement, intended to eventually create a Canada-Quebec Offshore Petroleum Board, is “a major milestone” that “will usher in a new era of prosperity.”
In what has become a familiar story – think Northern Gateway, Keystone XL and Energy East – Harper’s announcement raised the temperature of a battle between those aiming to exploit the Gulf’s petroleum resources and critics who want the industry barred from this rich and fragile environment. The latter include First Nations, environmentalists, and many in the fishing and tourism industries.
At issue is whether this is an area that should simply be off limits.
“Whether you are a whale scientist, a fisherman, or you’re on holiday on the shores of the Gulf, this issue and this place touches all Canadians,” says Gretchen Fitzgerald, Atlantic campaigns director for Sierra Club Canada, which is part of Save Our Seas and Shores, a coalition opposing development.
“People who live around the Gulf know its vital importance to their lives, in terms of their economy and their communities. But we need all Canadians to learn about the Gulf and to celebrate this unique and stunningly beautiful place. It’s a place we need to protect and restore, not place on the auction block.”
The Geological Survey of Canada estimates the Gulf holds 39 trillion cubic feet of gas, equal to about half of Canada’s current known reserves, and, conservatively, 1.5 billion barrels of oil, a significant amount although tiny compared with the nearly 170 billion barrels in Alberta’s oil sands.
The search for the resource has proceeded sporadically since the mid-1960s, with 60,000 kilometres of seismic surveys and 10 exploration wells, mainly in the southern Gulf. The drilling produced just one “significant” gas discovery; the other wells were “minor shows” or came up dry.
Five provinces share jurisdiction over the Gulf. Each negotiates with Ottawa to create an offshore board for its zone. The boards are required to conduct open bidding for exploration permits as well as ensure that proposed projects undergo environmental assessments and measures are in place to prevent and respond to spills. Project operators are responsible for cleanup costs and damages up to $1 billion. Each province sets and receives its own royalties.
Nova Scotia and Newfoundland and Labrador got boards nearly 30 years ago to manage development off Sable Island and Newfoundland’s east coast. Quebec, which allows drilling on Anticosti Island and the Gaspé Peninsula but suspended offshore exploration in 1997, agreed with Ottawa three years ago to begin the steps toward a board. The legislation announced by Harper will put that deal into effect. New Brunswick wants to start negotiations. Prince Edward Island has no known offshore reserves.
Driven to drill
While the bureaucratic stage is being completed, petroleum development is proceeding slowly.
A small Halifax-based company, Corridor Resources Ltd., has conducted seismic tests on its undersea block, 80 kilometres off Newfoundland’s southwest corner, and is working on an environmental assessment. It must still undertake an “extensive public consultation,” complete further regulatory steps and find a partner to help finance the $55-million drilling cost.
With drilling more than two years away, the company is seeking a third, indefinite, extension of its exploration permit past the current deadline of Jan. 1, 2016.
Corridor points out that while preliminary evaluations suggest its block could contain up to five billion barrels of light crude oil or seven trillion cubic feet of natural gas, no deposits have been discovered.
Part of the block is in Quebec’s waters, and work can’t proceed there until the new legislation is in place.
Another junior company, Black Spruce Exploration Corp. of St. John’s, along with a couple of partners, plans this year to conduct seismic and other preliminary activity and prepare environmental assessments on three neighbouring blocks estimated to contain about 750 million barrels of light crude.
In November, the Newfoundland board announced it had received no bids on four additional blocks near Corridor’s. While opponents cheered that result as an indication petroleum development might stall, the federal government and the industry remain bullish:
“We do not believe the result of that call for bids is indicative of the prospectivity of the area and certainly not of the wider Gulf of St. Lawrence,” Natural Resources Canada said in an emailed response to questions.
“We wholeheartedly agree” with those who “extol the immense opportunity” and we’re committed to developing our properties, says Black Spruce president David Murray.
“The entire Gulf is an area of interest with potential for a hydrocarbon presence,” says Paul Barnes, Atlantic Canada manager of the Canadian Association of Petroleum Producers.
Still, questions remain about the size of the resource, indicated by the widely differing figures from the Geological Survey and Corridor. “The exact quantity is not known,” Barnes says. The federal estimate “is a ballpark figure.”
Potential players face a labyrinthine regulatory regime and the prospect of a tough legal battle with First Nations demanding a 12-year moratorium to allow consultation and a region-wide environmental assessment.
The industry and its foes agree the Gulf’s environment must be protected. They disagree on the current regulations’ effectiveness and whether protection is possible no matter how stringent the rules.
In a “Strategic Environmental Assessment” issued last May, the Newfoundland board announced: “Petroleum exploration activity generally can proceed in the Western Newfoundland and Labrador offshore area with the application of standard mitigation measures currently applied.”
A spokesperson also says the board has dealt with concerns raised in a 2012 report by the federal Commissioner of the Environment and Sustainable Development, which criticized spill-response and clean-up plans and the lack of policies “related to … obligations under the Species at Risk Act.”
In addition, in response to complaints that Corridor’s environmental assessment was based, unrealistically, on a small spill of light, fast-evaporating crude oil in a calm sea, the board spokesperson says a “worst-case” scenario produced by Environment Canada would be incorporated into the environmental assessment.
Corridor is equally sanguine: “There have been issues with respect to people bringing up concerns,” says president and CEO Steve Moran. “But we’ve done an awful lot of work in that regard and we’re very comfortable that it can be done safely.”
No laughing matter
Critics say this optimism overstates the industry’s ability to manage the Gulf’s many risks while understating its significance and fragility.
They describe the Gulf, which covers about 250,000 square kilometres from the mouth of the St. Lawrence River out to Newfoundland and Nova Scotia, as a biologically diverse and productive “global ecological treasure.”
Strong currents and tides mix fresh and salt water and nutrients over a wide variety
of underwater features, creating ideal habitats for more than 4,000 species, from tiny krill to massive blue whales. This bounty and the beauty of the surrounding land support a $1.5-billion fishing industry and $800 million in tourism activities. Salmon, shrimp and snow crab stocks provide food and income for 40 First Nations.
The Gulf is already stressed by pollution, oxygen-depleted dead zones and species loss and has qualities that make it an especially hazardous, potentially ruinous, place to drill for oil and gas.
It’s a semi-enclosed sea in which the tides, winds and counter-clockwise currents not only create precarious operating conditions for petroleum development, but also would quickly spread spilled oil and other pollutants. Since it takes a year for the water to flush out into the open Atlantic the widespread damage would persist. If a spill happened when ice covered the Gulf, cleanup would be next to impossible.
The critics say spill impacts would likely be far worse than even those from the 2010 Deepwater Horizon blowout in the Gulf of Mexico, because that body of water is six times larger than the Gulf of St. Lawrence and flushes far more quickly.
An example of the risk, they say, is that Corridor’s block, known as Old Harry, sits within the 470-metre-deep Laurentian Channel, the sole passageway in and out of the Gulf for migrating blue whales and leatherneck sea turtles, both endangered species, as well as myriad other fish and marine mammals.
They’re amused that while Old Harry was named for a community on the nearby Magdalen Islands, it’s also a sailors’ term for the Devil.
The rest, they insist, is no laughing matter.
Development decisions disregard their concerns as well as gaps in knowledge about species and their interactions, they say.
“We don’t have enough science,” says Mary Gorman, who heads Save Our Seas and Shores. “According to the precautionary principle, this exploration can’t proceed because we don’t even know the harm we’re doing. How can you mitigate when you don’t have enough science to know what has to be mitigated?”
Environmentalists can’t even seek legal protection for blue whales and other endangered species because their “essential habitats” haven’t been mapped, as required under federal law, notes Sylvain Archambault, of the Quebec-based St. Lawrence Coalition, another group pushing for a moratorium.
As well, critics complain, the regulatory system divides the Gulf into areas of provincial jurisdiction when, in fact, it is, ecologically, a single body of water and must be managed as one.
“Only a complete picture of the social, environmental and economic impacts would allow for an enlightened decision regarding the future of the Gulf, which must be studied from every angle, instead of the piecemeal approach based on the administrative boundaries set by men, as is presently the case,” says “Gulf 101,” a report published last summer by the St. Lawrence Coalition.
Furthermore, says Gorman: “The laws favour the petroleum industry, and allow regulators to both protect marine habitat and issue licenses. It’s an inherent conflict of interest.”
Testing treaty rights
First Nations not only fear the environmental impacts of petroleum development but also are angry about inadequate consultation, says Troy Jerome, executive-director of the Nutewistoq Mi’gmawei Mawiomi Secretariat. The secretariat represents Quebec’s Mi’gmaq nation and, along with Maliseet and Innu groups, threatens legal action, based on treaty rights, if the demand for a moratorium is ignored.
“Why are we continuing to move forward with these kinds of developments without consulting with the people who would be directly affected? We have a clearly defined constitutional right.”
Oil and gas can’t be safely exploited with current technology, Jerome says. Whether that might change in 12 years, “I can’t say yes or no. We need to see the results of a proper study.” Such a review, he adds, would take at least a decade.
“You can’t just study the Gulf for a year. The patterns can change. We’re looking at a complex food chain. All the species create an environment … a lot of things occur that allow others to survive. A spill there would cause irreparable harm. It’s not like you’re cutting a tree down and the tree will grow back.”
The federal government was evasive when asked about the moratorium call: It “recognizes the importance of the Gulf … to Canadians, and offshore development will not proceed unless it is safe for Canadians and safe for the environment,” Natural Resources Canada said in its email. “Independent, arm’s-length regulators will not allow any offshore activity unless it can be done safely for workers and the environment.”
If the issue went to court, the First Nations would rely on Supreme Court of Canada rulings that have progressively enhanced aboriginal rights to be consulted and accommodated about development on territories where they’ve submitted land claims.
Archambault notes some progress among regulators, particularly toward understanding that “water and fish don’t recognize provincial boundaries.” A report for the Quebec government said the Gulf should be studied as one area. Two Prince Edward Island Legislature committees made a similar recommendation. During its Strategic Environmental Assessment, the Newfoundland board held hearings in each Gulf province.
Still, industry opponents insist the search for oil and gas must stop.
The priority should be restoration, with the moratorium leading to establishment of a network of marine protected areas and integrated management of the entire Gulf by the federal and provincial governments, states “Gulf 101.”
So the lines are drawn: Corridor will persevere, Moran says. “Our mandate is to keep following along through the regulatory process.”
And on the other side: “If you don’t stop the industry before they start … it’s game over,” Gorman says. “We just keep on keeping on. The only thing they can’t control is the passion of the people. Their biggest problem is that some of us can’t be silenced.