Entries in NGP (2)


Learning from Disaster

Those who cannot learn from history are doomed to repeat it. George Santayana

The final comprehensive report commissioned by President Obama on the Deepwater Horizon Gulf of Mexico disaster was issued in January 2011. Presumably, our Government has had a good look at it. Given the tight budgetary times we live in, and similar strategic resources that the Harper government is determined to exploit as quickly as possible, this document is a gold mine of research on what both the oil and gas industry and government did or did not do to cause the BP disaster and how to prevent another one from happening.

Yesterday, the Harper Government once again exhibited a strangely irresponsible and reckless attitude to the safety of the people in resource industries and the protection of our planet by reducing, again, funding and agencies that exist to ensure both of these. No one doubts that some streamlining and tightening of belts needs to occur at this time but to go so far, is unconscionable, especially when we have a blueprint from the above document on how to move forward in maintaining the balance between resource production and safety.

Here are some of the key findings in the report that relate directly to the recent budget cuts:

The record shows that without effective government oversight, the offshore oil and gas industry will not adequately reduce the risk of accidents, nor prepare effectively to respond in emergencies.

Where is effective government oversight in Canada now? The US, in response to the Gulf Oil disaster, is supposed to be ramping up their oversight while Harper is making it disappear.

It is clear that API’s ability to serve as a reliable standard-setter for drilling safety is compromised by its role as the industry’s principal lobbyist and public policy advocate. API regularly resists agency rulemakings that government regulators believe would make those operations safer, and API favors rulemaking that promotes industry autonomy from government oversight.

That sounds very familiar to us in Canada.The American Petroleum Institute (API) is similar to the Canadian Association of Petroleum Producers (CAPP). CAPP plays the same contradictory role of defending and supporting their members (the industry) and as lobbying government insiders who advocate leaving industry to set it’s own safety standards etc.

For years, API also led the effort to persuade the Minerals Management Service not to adopt a new regulatory approach—the Safety and Environmental Management System (SEMS)—and instead has favored relying on voluntary, recommended safety practices. The inadequacies of the resulting federal standards are evident in the decisions that led to the Macondo well blowout.

There are examples of other industries that have to deal with the possibility of catastrophic accidents: civilian aviation and nuclear power. Do they manage these risks by pressuring government to decrease their oversight and regulations? No, the primary motivation for improving safety in each instance is that neither the public (as consumers and as voters) nor the government would allow such enterprises to operate if they suffered many accidents. Extractive industries, mining, oil and gas have for too long been left to do their own (very destructive) thing.

But even in industries with strong self-policing, government also needs to be strongly present ,as they are in civil aviation and nuclear power, providing oversight and/or additional regulatory control—responsibilities that cannot be abdicated if public safety, health, and welfare are to be protected.

Finally, there is no excuse for this lack of leadership at the Federal level. When the next disaster strikes Canadians will be quick to blame the industry and the report lays out clearly their culpability in the Deepwater Disaster, but really they should remember what Mr. Harper has done to create the conditions for an inevitable and preventable disaster.



The Big Oil Picture - One Puzzle Piece at a Time 

When I was an undergrad one of my favourite ways to decompress was to do a jigsaw puzzle. I bought a new one each term and there it would sit until I needed the distraction. (ok, sometimes it was a major way to procrastinate too!) It has recently dawned on me that the entire oil market is one huge puzzle with most of us focused on just a few pieces: the price we pay at the pump, easy access and maybe, the pollution we cause when we burn it. Depending on your outlook, you may also be concerned about various foreign wars/interventions in oil producing areas.

With each passing decade more of the world increasingly functions on the use of gasoline and diesel. The amount of conventional oil in the Middle East far outstrips what is available anywhere else on the Earth.We don’t know exactly how much oil there is in the Middle East because they are not transparent about anything. Conventional oil flows through a well without stimulation and through a pipeline without processing or dilution. It’s a relatively cheap process.

Global oil production appears to have leveled off. Our economies are based on continued access to cheap oil. There is not enough cheap conventional oil to go around these days.

World demand for oil continues to grow. China is experiencing a large-scale transition away from bicycles and mass transit toward private automobiles.So desperate has our need for oil become, and so willing are we to pay the necessary high price, we are now producing more and more oil from the difficult spots like the deep waters in the Gulf of Mexico, Alberta’s oil sands and shale oil deposits. The oil sands are a thick, viscous mixture of bitumen hydrocarbons combined with water, sand, heavy metals and clay. Not only is this a very expensive way to fill our tanks, it has opened a Pandora’s Box of associated hazards to our natural world and populations that depend on the largess of that natural world. We have a problem.

 China also needs to provide lots of jobs to its citizens. Not interested in just importing ready to use oil and gas China wants to do the upgrading and refining within its’ borders. This means the bulk of the jobs, and the profits from oil production will go to the Chinese. The international corporations who are gaming the oil and gas sector have no particular loyalty to any nation, other than the nation of shareholders and executives they represent.

The Keystone XL and Northern Gateway Pipeline applications are providing an opportunity for Canadians to decide how best to deal with the land locked resource we have.

Regardless of how the Harper government tries to dominate and (re?)direct the oil conversation Canadians will collaborate like no other time in history to have a say in this new oil dilemma. We all want to build the puzzle together. What remains to be seen is how responsive our business and political leaders will be to this new era of engagement.