Shell Canada and Nova Scotia petroleum board quizzed on oil spill risks

Executives from Shell Canada and Nova Scotia's Offshore Petroleum Board were quizzed this week by the legislature's resource committee on the oil company's plans in the event of a blowout at an offshore drilling site nearShelburne.

"We feel privileged that we've been allowed to drill exploration wells in Nova Scotia but we take our responsibilities extremely seriously and we are very focused on ensuring that a spill doesn't happen," said Christine Pagan, Shell's Atlantic Canada venture manager.

Shell began drilling for oil 250 kilometres southwest of the Town of Shelburne on Oct. 23.

Over the next 10 months, the company plans to drill two wells despite concerns fishing groups have expressed that an accident could lead to contamination of lucrative fishing banks about 300 kilometres away.

Pagan told a meeting of the Nova Scotia Legislature's Resources Committee, the 2010 Macondo blowout in the Gulf of Mexico was "a wake up call for the industry that stopped drilling around the world."

Since then, Pagan said there hasn't been a single blowout at an exploration well because the technology used to build preventers has improved. Companies like Shell now use backup blowout preventers during drilling that are tested on a weekly basis.

"The blowout preventer or BOP is the most critical part of the safety program," said Pagan.

But if an incident happens offshore Nova Scotia, she says Shell would immediately call to bring in a capping stack from Norway, estimated to arrive in nine daysin clear weather.

Probability of blowout

The Canada Nova Scotia Offshore Petroleum Board (CNSOPB) is responsible for protecting the environment. As a backup to the blowout preventers, the board has ordered Shell to move a capping stack to its Cheshire well within 12-13 days should an accident happen.

Stuart Pinks, the board'sCEO, said models prepared for the regulator estimate the probability of a blowout at Shell's exploration well accompanied by a major spill of 1.5 million barrels of oil at half of one per cent (0.0055).

Pinks estimated the probability of oil reaching the Nova Scotia shoreline from a blowout at Cheshire at oneper cent.

That didn't ease concerns expressed by Sterling Belliveau, a lobster fisherman and veteran MLA for Shelburne. Belliveau questioned why Shell couldn't pay to park cap-stacking technology nearer the well site.

"If you look at Nova Scotia west of Halifax, that is Canada's most productive fishing industry,"Belliveau told Shell Canada executives.

"Over 60 per cent of the landed value is in that general area 300 kilometres from where you are exploring. You are asking us to accept the risk and having the infrastructure on another continent."

Belliveau comparedthe scenario to waiting for an ambulance to arrive from another jurisdiction.

Only a few cap-stackers in the world

Scott Jardine, Shell Canada's health, safety and environment manager, says the marginal risk doesn't justify a capping stack for the operation.

"On a daily basis, for example, in the last five years there's been upwards of 75,000 medium size oil tankers transiting Atlantic Canadian waters which I would suggest is a significantly higher risk of an environmental incident," he said.

"The scenario [blowout] we are talking about is extremely low probability and there are multiple mechanisms and barriers in place to prevent it. We also have immediate response capability at the drill site in the first hours of any incident."

Shell says the capping stack technology to bring wells is new since BP's Deepwater Horizon disaster in the Gulf. The cap-stacker in Alaska is custom-built for Arctic drilling and can't be moved elsewhere. The other four in the world are positioned in high-drilling areas such as the North Sea, Brazil, Gulf of Mexico and Asia.

The CNSOPB's CEO Stuart Pinks told politicians a cap-stacker costs between $20-30 million to build and the cost to rent the specialized ship to move it is about $200,000 a day.

"When we talk to other jurisdictions around the world who have capping stacks located closer, they still say to successfully cap a well takes between 10 and 30 days," said Pinks.

"Mr. Belliveau talks about an ambulance. To have the ambulance thereimmediately is probably not going to do anything for you, because all this other work has to go on first."

Other methods

The use of dispersants in the event of an offshore oil spill also came up for discussion at the Resources Committee meeting. Whether the chemicals help or hurt the environment during an oil slickcleanupis controversial within scientific circles.

The federal government changed a rule last summer that now leaves the decision around using chemical dispersants up to the CNSOPB.

Pink said the chemicals "would only be considered on a case-by-case basis and Shell would require an approval from the Board's chief conservation office."

The board's environmental advisor says that determination should be possible within about 24 hours of an accident.

Belliveau also wanted to know if the CNSOPB will respond to a call from the Clean Oceans Action Committee led by John Davis (formerly of No Rigs). Davis wants the Board to set up a group to deal with fishing industry concerns that tendered offshore leases will encroach on the tip of Browns Bank and within 100 kilometres of the Georges Bank area under moratorium.

"That would certainly be something that would be looked at in a production scenario," said Pinks.

"For a single well, I think all reasonable measures have already been demonstrated for this program."