Environmental assessment uncertainty
The contentious subject of proposed changes to the environmental assessment process arose in nearly every session and individual presentation offered at this week’s 40th annual Noia conference in St. John’s.
While the federal government is considering changes and additions that could make the process more robust, the industry’s chief concern is about how it will affect project timelines.
Nexen Energy, for example, acquired licences for two blocks in the Flemish Pass over the past 18 months. Siefried Joiner, the company’s vice-president of exploration and appraisal in the Americas, says he’s heard from other operators about challenges in lengthening approval terms.
“If those approvals terms lengthen out too much, our licence periods are only six years and you can’t even drill without having an environmental assessment in place and (that) still doesn’t get you quite there, you have to have an operational authority to be able to go out and drill a well,” Joiner told The Telegram.
“We’ll follow the process as prescribed, but we are concerned with some of the reports we’ve heard.”
Siobhan Coady, the province’s minister of Natural Resources, says Ottawa is aware of those concerns and is taking them into consideration.
“The bigger picture, and the longer-term challenge for the industry and us as regulators, is to somehow reconcile the tension between an increasing global and international industry and the need and the obligation under the Atlantic Accord regime to optimize local content and local benefit,” Tessier said.
On its end, he said the board is designating more contracts for direct oversight, fostering increased communication between operators and the supply and service sectors, and working with governments, noting an optimism in the new Oil and Gas Industry Development Council.
Preparing for rebound
Behind its own doors, Tessier said, even with the downturn, last year was one of the busiest, if not the busiest, for the board as it handled roughly 500 regulatory review, licensing, auditing and authorization activities.
At the same time, staff has been kept busy with implementing new legislation and regulations, operation health and safety act amendments, and the federal frontier and offshore regulatory renewal initiative.
As regulation evolves and becomes more complex, and in the event oil prices climb and activity increases, Tessier said, the board will need more staff and be ready for a move to a performance-based regulatory review.
“That’s actually more challenging for regulators because you move away from our beloved check lists and rely more on regulatory judgment and we need to be technically excellent to deliver that in a way that’s in keeping with public expectations.”