Offshore oil spill readiness report calls for blowout plans, independent audits

Cap on liability should also be raised, it says.

Photo of Terra Nova rig courtesy of Wikimedia Commons.

ST. JOHN'S, N.L. -- A new report says offshore oil operators off Newfoundland should be independently audited and required to have more specific strategies to deal with potentially devastating blowouts.


Capt. Mark Turner, an expert in marine safety and environmental management, assessed the state of oil spill prevention and response at the provincial government's request.

Twenty-five recommendations released Thursday in his 229-page report also include a call to raise liability caps on compensation to be paid if the worst happens.

"Current Canadian law caps a company's potential liability for damages from a spill at $40 million for Arctic waters and $30 million off Eastern Canada,'' Turner wrote.

"This $30 million is very low when compared with potential costs of a large-scale spill and significantly lower than other developed countries.''

Offshore rig operators in the U.S. "face no more than $75 million in liability,'' says the report. "Subsequent to the Macondo spill, legislators are calling for it to be raised as high as $10 billion.''

The Newfoundland and Labrador government asked Turner to review response plans a year ago after the blowout of the BP-operated Macondo well in the Gulf of Mexico killed 11 workers and unleashed the worst oil spill in U.S. history.

The Canada-Newfoundland and Labrador Offshore Petroleum Board is a competent, world-class regulator but it can still improve its standards, Turner concludes. It could start by requiring that oil companies craft more detailed strategies aimed specifically at blowouts, he recommends.

"The plan should encompass a total system approach to blowout control, management response and recovery,'' Turner wrote. It should also "demonstrate an acceptable level of preparedness and the critical resources to manage an incident effectively'' -- from pollution control to information sharing.

Turner also joins a growing chorus calling for more independent safety oversight in the offshore oil industry. Third-party auditing should become normal practice at sites in the North Atlantic, about 350 kilometres southeast of St. John's, he recommends.

Such scrutiny will offer "an unbiased viewpoint,'' Turner wrote.

"Third-party auditing will add credibility to internal audit findings, provide transparency through public disclosure (and) improve company performance,'' while helping to reduce risks and protect the environment, says the report.

Turner further recommends that governments assess the environmental benefits of dispersants and consider pre-approving their use in case of a major spill.

Sean Kelly, a spokesman for the regulatory board, said it will comment on the report once it has reviewed it.

Natural Resources Minister Shawn Skinner said the government supports all 25 recommendations and will work with other provincial and federal agencies that share responsibility for the offshore sector.

He stressed in an interview that offshore operators are required to have blowout response strategies in place.

"Are those plans good enough, well-described enough, to handle a Macondo incident? I don't think anybody expected something of that size when that particular incident happened,'' Skinner said.

Still, the minister stressed that there are oil spill response plans in place.

"I want to give people a level of comfort here. I think we are well-resourced and well-protected and we have good plans as to what we can do. Having said that, if something happened out there, there would be potential for damage. But we would be able to respond to it very quickly and hopefully minimize whatever damage would occur.''

It took five months for engineers to cap and kill the leaking Gulf of Mexico well as millions of litres of tar-like crude fouled huge swaths of coastline. The disaster focused intense scrutiny on safety standards and cosy relations between oil companies and regulators.

Skinner said the province has already supported an earlier call from a public inquiry for a separate offshore oversight agency for Newfoundland.

Critics have long said that the Canada-Newfoundland and Labrador Offshore Petroleum Board is in a conflict of interest. It's tasked both with maximizing oil and gas development while also protecting workers and the environment.

NDP Leader Lorraine Michael said she was taken aback that the detailed blowout plans Turner recommends aren't already required.

"It's a bit of a shock to see that he actually has to recommend that there be a blowout plan covering every step of the way of what a blowout plan should have.

"Blowouts, as we know, can have tremendous impacts both on the environment and on peoples' lives. Let's remember, people died in this Macondo incident, and they're lucky more people didn't die.''

Michael was glad to see third-party audits recommended, but still believes permanent observers are needed at offshore sites to catch flaws that could be missed by sporadic assessments, she said.

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