This is Part 5 of a paper written following the BP Oil Spill in 2010 regarding US offshore safety. In this chapter, we take a look at the history of offshore drilling, offshore safety, and offshore policy in Canada, including a brief look at the Ocean Ranger disaster.
When examining incidents that can be compared to the Macondo spill, it is invaluable to look at Canada’s example. In many ways, Canada’s offshore industry shares countless parallels with that of the United States. Just as the United States federal government must share many powers with the states, much of Canada’s regulatory framework is also federalist, with the federal government mandated to share power with individual provinces.
Just like the UK and Norway, much of Canada’s history with offshore drilling has been shaped by disaster. The Ocean Ranger was a semi-submersible rig that began operations off the coast of Newfoundland in 1980. On February 15, 1982, tough weather conditions caused the rig to capsize, killing all 84 crew members. The accident ultimately revealed significant design and structure flaws in the rig, as well as a lack of any formal safety procedure. The crew also lacked any safety training or equipment.
Following the disaster, a Canadian Royal Commission spent two years looking into the incident and developing suggestions for a stronger and more powerful regulatory regime. The commission ultimately concluded that there were significant design and structure flaws in the rig, alongside gaping holes in the national regulatory regime.
In addition, the Royal Commission recommended that significant changes be made to the national regulatory regime for offshore drilling; however, much like the United States’ response, the bulk of these regulations were again prescriptive in nature. Ultimately, many of these changes to the regulatory system were outlined in the Atlantic Accords between provincial and federal Canadian governments- in particular, this ensured that there was one, central authority governing the safety of Canadian offshore drilling, instead of the myriad of different agencies that had controlled drilling in the past. In addition, the incident instigated the creation of the Offshore Safety and Survival Center, offering training as well as yearly funding into research and development for emerging technologies.
Unlike Norway and the United Kingdom, Canada did not follow up on the disaster with any particularly significant transformation in its regulatory regime, continuing its emphasis on prescriptive regulations. However, just last year, in 2009, the Canadian legislature passed groundbreaking legislation that move towards significantly more goal-based regulation. In this sense, the Canadian government decided to follow the success of similar regimes in Norway and the United Kingdom.
As Gaétan Caron, Chairman and CEO of the National Energy Board has stated, “The new regulations require companies to demonstrate that they can operate safely in specific situations, using the most advanced technology tailored to their circumstances. The onus is on industry to demonstrate to us that they can protect their workers, the public and the environment. If the operator cannot demonstrate this, they cannot drill.” Just like the countries that operate in the North Sea, this new regulatory system has aimed to move the burden on to the companies to develop stringent safety standards and ensure low accident risks.
One of the most interesting aspects of Canada’s offshore drilling regime is a requirement regarding the drilling of relief wells. The Canadian policy mandates that a company must be able to demonstrate the ability to drill a same-season relief well in the Arctic, before drilling may commence. They do not need to actually drill the well; they just need to successfully demonstrate that they have the capability to drill one.
While Canada has followed a very different path from Norway and the UK, and while their movement to results-based regulation is not directly the result of an accident, their similarities to the United States make their experience a very powerful one to study.