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Home > Environment > Environment - Questions and Answers

Environment - Questions and Answers

• Arctic Drilling
• Substitution of Environmental Assessments

Arctic Drilling

1. What is the NEB's role with respect to Offshore Drilling?

The NEB regulates oil and gas exploration and production on the West Coast, in frontier areas in northern Canada and those regions on the East Coast that fall outside the jurisdiction of the Canada-Newfoundland and Labrador Offshore Petroleum Board and the Canada-Nova Scotia Offshore Petroleum Board.

A company wishing to explore and drill in these areas must apply to the NEB for authorization. A company seeking this authorization must provide contingency plans, safety plans and environmental protection plans which are carefully scrutinized by the Board's expert staff.

Each application is also subject to an environmental assessment under the Canadian Environmental Assessment Act. Additionally, for authorizations in the Beaufort Sea region, an environmental assessment is also conducted under the Inuvialuit Final Agreement. These environmental assessments contemplate the potential impacts from accidents such as crude oil spills.

Prior to an authorization being approved, a company must provide financial security which would cover some of the costs of responding to a potential spill. These funds may also be used for settling outstanding claims from affected third parties. The NEB determines the amount of security required on a case-by-case basis.

If the NEB approves a company's application, the company is granted an authorization to drill.

2. What safety regulations exist for companies drilling in Canada and specifically the Arctic?

Oil and gas companies operating in Canada, in areas where the NEB has jurisdiction, must adhere to the National Energy Board Act, the Canada Oil and Gas Operations Act and the Canada Petroleum Resources Act. Operators must also adhere to the Canada Oil and Gas Drilling and Production Regulations and other regulations under COGOA. These regulations focus on three main themes:

1. safety;
2. environmental protection; and,
3. the conservation of resources.

Drilling will not occur unless the NEB is satisfied that drilling plans are safe for workers and the environment.

3. What does the NEB do to minimize the chance of an accident?

The first step in ensuring safety and environmental protection takes place when the company applies for approval of its program. The Board conducts a rigorous evaluation of the equipment, procedures and methods proposed by the company. The Board will only approve the work if it is convinced that the chances of an accident have been minimized by the approach proposed by the company.

The NEB has a rigorous compliance program to ensure that operators comply with all applicable regulations. To do this, the NEB inspects drilling equipment and audits the training of personnel. All rigs must have a certificate of fitness.

The NEB has a comprehensive Emergency Management Program in place and is ready to respond to an emergency situation any time of day or night. Regulated companies are required to file and maintain up-to-date Emergency Response Plans that are carefully scrutinized by the NEB. Each company must also conduct safety drills and emergency response exercises which the NEB monitors.

The NEB works with the operators of offshore drilling platforms and other regulators to proactively share information related to safety and environmental protection.

4. What does the NEB do in the event of an accident?

The NEB's top priority in any emergency is to make sure that people are safe and the environment is protected. In the event of a major incident at an NEB-regulated project, the NEB would work with the company in a unified command structure to enable an effective response.

NEB staff would be onsite to monitor and oversee the company's immediate response and the eventual clean-up. If the NEB is not satisfied that the proper emergency response is being undertaken, the NEB can take over management of response efforts and require another company to manage the response.

The NEB also works with its federal, provincial and territorial partners to coordinate the regulatory response and will request advice from the Environment Canada-led Arctic Regional Environmental Emergencies Team as needed.

The NEB maintains an Emergency Operations Centre in Calgary to coordinate field staff at the incident site and to provide situation reports to the Government of Canada's Emergency Operations Centre in Ottawa. The Board investigates and reports on incidents to help prevent them from happening again.

5. Will the NEB respond to all spills in the Beaufort Sea?

The NEB is the lead federal agency for responding to an oil spill in the Canadian Arctic if the spill comes from a drilling platform while it is engaged in drilling activities. If the spill occurs from a drilling platform that is not engaged in drilling activities, for example if the rig is being towed to a location, the lead response agency would be the Canadian Coast Guard.

6. Who pays for cleaning-up a spill?

NEB-regulated companies are fully responsible for anticipating, preventing, mitigating and managing incidents and oil spills of any size or duration.

In the event of an accident, the company is liable for the clean-up costs and is responsible for paying third party claims up to an amount listed in the Spills and Debris Liability Regulations. Depending on where the accident occurred, a company could be responsible for $10 to $40 million (if a spill occurs in the Arctic the company would be responsible for $40 million). This amount is payable without proof of fault or negligence.

If a company is found to be at fault for the accident, the company is responsible for all actual loss and damage associated with the spill.

Substitution of Environmental Assessments

1. How are environmental assessments for energy projects changing?

As a result of the 2010 Budget announcement, the NEB will now be responsible for completing the environmental assessments for projects within its jurisdiction that normally would have been assessed by a joint review panel established under the CEA Act.

2. What is the new role of the NEB in terms of assessing a project?

Currently, for such projects, a joint panel process is established. In practice, the panel review occurs through the NEB hearing process, and the panel includes members appointed by the NEB and by the Minister of Environment under the CEA Act.

Under a substituted process, the NEB will now be responsible for completing the environmental assessments for projects within its jurisdiction that normally would have been assessed by a joint review panel established under the CEA Act.

The NEB will continue to work closely with its federal partners in the scoping and delivery of environmental assessments. The process will remain subject to the requirements set out in the CEA Act and approval will still be required from Cabinet.

3. Will I still have an opportunity to provide comments on an environmental assessment?

Yes, the NEB regulatory review process allows the public to provide their feedback on a project application in a number of ways.

First of all, the NEB requires an applicant to demonstrate in their application that they engaged and consulted with the people and Aboriginal groups most likely to be impacted by their project.

In addition, the public can get involved in the hearing process in one of three ways. They may submit a letter of comment; make an oral statement; or become an intervenor. More information on this process is available on our website under Public Participation and Land Matters.

4. Will participant funding be available?

The NEB’s Participant Funding Program provides financial assistance to support the timely and meaningful engagement of the public, including Aboriginal groups, landowners, and incorporated non-industry not-for-profit organizations NEB's oral hearing process for facility applications filed under the NEB Act.

For more information refer to the Fact Sheet and FAQs.

5. What is "substitution"?

The CEA Act substitution process was established by Parliament to reduce assessment process redundancies and jurisdictional overlap with other federal regulatory bodies such as the NEB and CNSC. The provisions are not new; they have been part of the CEA Act since it came into force in 1995.

6. Has substitution ever been used before?

Substitution provisions under the CEA Act were used in 2006 with the Emera Brunswick Pipeline Project. The assessment of this pilot was that the process was an efficient way to deliver a review panel.

7. What sort of energy projects are impacted by substitution?

The substituted process specifically relates to projects already in the NEB's jurisdiction, such as the construction and operation of pipelines that cross international or provincial borders.

8. How will using substitution improve the regulatory process?

By reducing duplication and overlap between the environmental assessment process under the CEA Act and the environmental assessment processes of the NEB, it is anticipated that project review timelines could be reduced significantly, by as much as one year.

The fundamentals of the NEB's environmental assessment process remain unchanged. The substituted process will continue to be rigorous and accessible to the public. In addition, the NEB can attach environmental conditions to project approvals which it can then monitor and enforce throughout the lifecycle of the pipeline, from project approval to abandonment.

9. Will projects currently undergoing an environmental assessment be referred to the NEB?

Projects currently undergoing a panel review under the CEA Act will not be affected. There is currently one joint Agency-NEB project (Northern Gateway Pipeline Project) undergoing a panel review under the Act.

10. Does the NEB have the expertise to take on this role?

Since its inception in 1959 the NEB has always considered the environment when making regulatory decisions. The NEB is considered to be a leader within the federal government in this regard. The NEB has also been conducting environmental assessments under the CEA Act since it came into force in 1995.

The NEB currently has approximately 50 environment, socio-economic, lands and stakeholder engagement specialists on staff. Currently the NEB conducts about 20-30 screening-level environmental assessments per year, and has conducted several higher-level assessments, including comprehensive studies, joint review panels and a substituted review panel.

 

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Date Modified:

2011-10-28