On Wednesday, Aug. 28, the National Energy Board (NEB) became the Canada Energy Regulator (CER). For further information please visit our Implementing the Canadian Energy Regulator Act information page
Fact Sheet: NEB’s Role in Arctic Offshore Seismic Exploration
The National Energy Board (NEB or Board) regulates offshore seismic in the Arctic, which is done through a life cycle approach. This includes assessing the application, monitoring and inspecting during operations, and reviewing data and reports (up to and including post project). Throughout this process, the NEB works with federal government departments including Fisheries and Oceans Canada, Environment Canada, Transport Canada and other federal, territorial or provincial authorities.
Applications for geophysical projects are assessed to ensure that they meet strict safety and environmental standards and requirements. Marine seismic vessels undergo a safety inspection prior to issuance of the Geophysical Operations Authorization (GOA) and these are typically coordinated with Transport Canada. NEB staff may also conduct inspections or attend kick-off meetings in order to verify compliance with regulatory requirements and any conditions of the authorization.
GOA’s typically include conditions that require the company to provide the Chief Conservation Officer (CCO) with various reports and plans. Some plans and reports are required prior to the commencement of a program such as environmental commitments tracking tables, fishing gear compensation plans, and Inuit Qaujimajatuqangit (IQ or traditional knowledge) reports. Other reports are required on an ongoing basis throughout the duration of the project such as Marine Mammal Observer reports, weekly status reports and community meeting reports.
Companies are required to contact the Chief Safety Officer (CSO) and the CCO in the event of a serious incident or accident. The CSO and a CCO would conduct an investigation into serious incidents or accidents that occur during a geophysical program.
What is Offshore Seismic?
Offshore seismic surveys are conducted to collect information on the geological conditions below the sea floor. Air guns on ships create sound waves by sending compressed air streams through the water into the layers of rock beneath the ocean floor. Differences in the density of the rock cause the sound waves to be reflected back differently to the surface where information is recorded by instruments such as geophones. The information is processed into an image from which geoscientists can gauge the depth, location and structure of oil and gas resources that lie beneath the surface.
The NEB has extensive experience providing regulatory oversight for offshore seismic operations. In the past ten years seismic activity has focused in the Beaufort Sea and in the Davis Strait and North Labrador Sea. The NEB on average has overseen the completion of two to four programs per year.
An operator must have a valid Operator’s Licence and must obtain a GOA before it can conduct seismic activities. The authorization can be issued by the Board or the Chief Conservation Officer. An authorization is not granted until an environmental assessment process has been completed. In addition, the Board must receive confirmation from Indigenous and Northern Affairs Canada (INAC) and/or Natural Resources Canada (NRCan) that a Benefits Plan has been completed, or the requirement has been waived prior to issuing an authorization. As part of the environmental assessment process, the Board expects the applicant to consult with persons or groups who may be affected by a proposed project.
The Board is developing filing and reporting requirements that will specify the information to be submitted to the Board in support of an application for an authorization for the following activities: geophysical, geological or geotechnical operations and seabed surveys (collectively referred to as Geoscience Programs). The applicant must demonstrate to the Board that it has complied with applicable legislation and regulatory requirements.
Environmental Assessment Requirements
Seismic activities are not captured under Canada Environmental Assessment Act 2012 (CEAA 2012) and therefore no longer require a CEAA environmental assessment. However, the NEB will continue to conduct its own environmental assessment during its review of applications to meet the protection of the environment responsibilities under the Canada Oil and Gas Operations Act (COGOA).
How does the NEB consider seismic impacts on marine life?
The application assessment process examines the potential impacts of the proposed activity on the environment and the significance of those effects. The Board will consider factors such as the potential impacts of the program on marine life as part of the application assessment process.
- At a minimum, companies are expected to comply with Fisheries and Oceans Canada’s Statement of Canadian Practice with Respect to the Mitigation of Seismic Sound in the Marine Environment (the Statement). The Statement contains a set of mitigation measures which can assist in minimizing the potential adverse impacts of seismic activity that use air source arrays. The mitigation measures contained in the Statement were developed based on available scientific knowledge and can be considered to be the current best practice for minimizing potential adverse impacts of seismic activity that use air source arrays.
- Companies are expected to consult with Fisheries and Oceans Canada to determine if any further mitigation measures are required for their specific project.
- Marine Mammal Observers (MMO’s) are employed on seismic vessels to monitor the presence and activities of marine mammals and birds, as well as ensure mitigation measures are implemented (such as ramp ups and shut downs).
How are companies held responsible in the event something goes wrong?
Companies are responsible for reporting spills to the NEB and must take all reasonable measures to manage the emergency response and clean up the spill. Under COGOA, operators are required to provide what is called “proof of financial responsibility” to make sure that there are funds available if there is loss from a spill or debris. This is usually a form of security such as a letter of credit as required by the Board. The Board can pay claims relating to loss caused by spills and debris from this deposit up to the absolute liability limit, without waiting for a court to determine fault or negligence. The Board is working on a framework that will outline financial responsibility requirements for all regions covered by COGOA.
Under COGOA, a company carrying out work that results in a spill or debris is liable for any actual loss or damage and costs incurred by others up to the prescribed limit of absolute liability, currently set at $40 million. Absolute liability means there is no need to prove that the company was at fault or negligent.
Any party whose fault or negligence caused or contributed to actual loss or damage from the spill or debris is liable to the extent of their negligence or fault. When the party has been found to be at fault or negligent by the court, there is no limit on the amount for which the party is responsible.
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