; BY JEFF NAGEL FEAR AND GREED dominate any dis- cussion of offshore oil and gas exploita- tion, | oe ‘And those: emotions tend to be exag- gerated out of proportion to reality in de- bates about the pros and cons of lifting the moratorium on drilling off the B.C. coast, one study says. ._ The comprehensive report this year by the Marine Awards Society of Canada says the offshore debate spawns a “confusing interplay of facts perceptions and ‘myths’ — that is fac- tually unsupported popular beliefs.” _ Exaggerated beliefs particularly mark the. fears about environmental risk and hopes off- shore platforms will be the coast’s economic ~~ salvation. - But those beliefs are not to be underestima- ted in their power to influence the outcome. “Myths and perceptions may be ‘wrong’ in some sense, and yet possess a social or politi- cal ‘legitimacy’ because of the fears and other _ mations that they reflect,” the report says. Risk of a catastrophic oil spill — soaking B.C.'s scenic beaches and wildlife with oil as the Exxon Valdez tanker. did to Alaska — fuels fears of the ecological disaster, _ . But the report says the public often confuses the risk of an incident with the severity of its consequences. “Public perceptions paint offshore oil drilling. as one of the main threats -Of ocean oil contamination, But the offshore industry accounts _for only 1.5 per cent of oil contamina- tion of the marine environment, sta- listics show. Natural runoff of oil through seeps and erosion accounts for 7.7 per cent and municipal and in- dustrial. wastes and run-off make up 36.3 per cent. '. Tanker traffic was responsible for some 45.2 per cent of marine hydro- - carbons, but that has declined as a result. of new vessels with double “hulls and other technologies, analysts Say Myth can trump reality in the emotionally charged debate over offshore oil drilling, says one study + ¢ + Second of a two-part special report on offshore oil TILT: The 40-storey tall Petrobras oil platform sank off Brazil on Mar. 21, 2001. Such disasters fuel anxiety about drilling here. into tens of billions of dollars of revenue and jobs for the hard-hit coast. ‘ The study cites Geological Survey of Canada estimates of 10 billion barrels of oi] — potentially three times as much in the Queen Char- lotte basin than in the Hibernia re- serves off Newfoundland. But it notes the geology here is more complex, the exploration risks higher and the actual } amounts of cil unknown. “These scientific estimates are by no means ‘guesswork’, but they are tentative until the resource is a ‘proven’ reserve through explora- tion,” it notes. “The only way to find petroleum is to driil for it.” The undersea geology means much seismic testing and many exploration wells are needed to get better estimates. he Marine Awards paper cites stats on the “small” chances of an offshore oil well blow- “Out contaminating the surrounding waters, - One out of every 180 exploratory wells blow out, it said, and one out of every 380 develop- ment wells blow. _ df 10 wells are drilled in a year, it said, the chances of an extremely large spill exceeding 150,000 barrels of oil would be 0.05 per cent, or one in 2000. But the chances of a large spill — in excess of 10,000 barrels - is higher: 0.15 per cent, or one in 666. There have been fewer large spills due to blowouts in recent years, ~ “While some of the issues have been ad- dressed by industry and technological impro- vements over the last couple of decades have made the industry much cleaner and safer, risk will always exist,” the report notes. ~ Most risk from routine operations comés’ from releasing drilling mud, cutttings and pro- duction water back into the ocean, it said. Canadian regulations are strict and getting stricter, and such effects are likely to be loca- lized and short term, it said. Seismic testing may also cause fish and whales to avoid an area and damage larvae and eggs. But the industry's switch from che- mical explosives to air-gun percussion has “largely eliminated” toxic effects. The greatest threat of major damage is the risk of oil spill from a blowout or tanker fail- ure. “Even with the best practices, technology and regulations, adverse effects are possible, even likely,” the report said. Determining the acceptability of the risk is tricky because of different perceptions and to- ‘lerances for risk to the environment. “While the probability of an oil spill may be low, its severity is high and this fuels a per- ceived high risk involved with offshore oil and gas,” it said. And, the paper concedes boiling risk down to equations and statistics may neglect “a complex psycho-cultural phenomenon that al- ways consists in part of subjective elements.” The gavernment’s perception of acceptabil- ity to the electorate will likely govern any de- cision, it says, and voters may not be as in- formed as scientists. “In a democracy, where everyone has a Tight te express an opinion, however iil-foun- ded, ‘perception’ or ‘myth’ may sometimes prevail over ‘fact’,” the study says. “Statistics on the probability of a blow-out off the Queen Charlotte Islands may not carry the day,” Focussing on worst-case scenarios — which admittedly do happen — may be unnecessarily alarmist, it adds. “Irrational or not, fears remain that the risks involved — environmental, economic and so- cial — are too great to be acceptable.” _ Nuclear plants have good safety records and justifying ihe'sirictést possible controls. “Myths and perceptions may be ‘wrong’ in some sense and yet possess a social! or political ‘legitimacy’ because of the fears and other emotions that they reflect.” “The offshore oil and gas industry of B.C. must follow suit.” Risk tolerance is higher in a more entrepre- neurial, individualistic culture than aboriginal people instilled with highly protective, conser- yationist values, it adds. : “The Haida communities of Queen Char- lotte Sound, with a culturally conditioned re- verence for nature, may find it difficult to be ‘pragmatic’ about orders of probability of blow- outs,” the study says. Nor are myths and inflated perceptions the domain of critics. Advocates of drilling say the oil in the seabed below Hecate Strait would translate ; disasters are rare, it said, but they do ‘happen, —_ z ats te Revenues to B.C. may be as high as US $3 billion per year directly from produc- tion and $15 billion in total “downstream” benefits. If that happened, offshore oil and gas would become B,C,’s second largest industry, ahead of logging but behind tourism at $8.3 billion. But it warns economic benefits are “subject to massive uncertainties,” “Projected socio-economic benefits may turn out to be an “overexpectation’, or limited to a shorter term than anticipate,” it said. “Geological estimates may be inflated by hopes within the industry.” Fears that most money and benefits could bypass local communities are supported by some examples elsewhere in the world, it says. “But this belief is a myth if it ignores the evidence that good. planning can and does ‘avert ‘this’ inequitable outcome,” the paper said. “It should be understood in B.C. that Nor- way, Scotland and now Atlantic Canada have all found it possible to keep a reasonable pro- portion of the economic benefits at the local community level.” Further, the report undermines the idea that offshore oi] could rapidly take hold and reverse the region's economic woes, “Even if the federal and provincial govern- ments decided ‘tomorrow’ to lift the moratoria, © it is difficult to envisage a start-up to offshore production in much less than ten years,” the report said. Delays allow time to ensure drilling is safer and benefits are maximized. . “In the end, even when the moratoria are lifted, the decision to go ahead is purely one to be madé by industry,” it says. “Delays have already forced the industry to look elsewhere,” Jobs and income may flow from drilling, but economic effects may not be entirely positive. “Experiences elsewhere around the world have been both positive and negative.” Other sectors, such as commercial, recrea- tional and aboriginal fishing, tourism and for- estry, could suffer, it said. Ottawa may follow B.C.’s lead on offshore oil ban IF THE province lifts its ban on offshore oil exploration, Ottawa would look seriously at lifting its own federal moratorium, a federal spokesman says. “If the provincial government came to us said we're lifting ours, we want you to lift yours, that from our side would trigger a full consultation process,” said Pat Breton, press secretary to natural resources minister Ralph Goodale. “We would go out and talk to folks, not just the northern communities but the aboriginal communities, folks both on the island and on the mainland, consider those views and then make our decision.” The federal ban on drilling off B.C.’s coast has been in place since 1972. Lifting it would be a cabinet decision, Bre- ton said, with the natural resources minister taking the lead role. ' Environment minister David Anderson — who has strongly opposed drilling ~ would be part of the debate at the cabinet table, but could not on his own veto the idea, Breton suggested. “It would be led by Natural Resources Ca- nada and my minister,” he sald. “The environ- ment minister would kick in on any environ- mental considerations.” “My minister would definitely put il before his colleagues for deliberation.” . Even if cabinet, following consultation in the region, decided to lift the’ ban, much more FEDERAL environment minister David An- derson would be a player in any decision by Ottawa to lift its moratorium. work would then be required. A key issue would be which level of gov- ernment would control development of the new industry and how would they share the flow of royalty revenues from drilling. That, Breton said, becomes a “fairly com- Plicated legal matter.” Also beginning after the initial yes or no decision would be a full and tengthy. environ- mental review. Those processes — plus unresolved aborigi- nal claims — all mean oil companies could face uncertainty for a considerable time even after both the provincial and federal govern-_ ments have lifted their bans. “Industry has shown that they’re not going to invest serious dollars until regulatory frame- works are well established,” Breton said. He said he’s heard estimates it could take five years or more before any serious money is spent by oil companies. The last time federal and provincial offi- cials were talking about lifting the bans and about matters such as revenue cost-sharing and regulation was around 1987-1988, Detailed negotiations had begun leading to- wards the Pacific Accord on federal-provincial issues on the B.C. offshore issue. All that work ground to a halt on March 24, 1989 when the Exxon Valdez oil tanker struck a reef in Prince William Sound. Eleven million gallons of crude oil flowed out of its ruptured hull and into pristine Alas- , kan waters. And with it drained all chances of developing a B.C. offshore industry for more than a decade. Skeena MP Andy Burton said predicted Ot- tawa will lift its ban if it’s assured that oil and gas exploration and exlraction can be done safely, “E think they will, quite frankly," Burton said. “There will be a lot of pressure on them.” Burton said oif and gas exploration is of ex- treme importance to the riding. “['m a firm believe that we have to proceed with this,” he said. “I think there's huge public support.” He thinks opposition will evaporate once - the public realizes just how much safer the technology has become in recent years. The Terrace Standard, Wednesday, October 31, 2001 - AS - ' TIME LINE. | 1913: First on-shore well drilled on Graham Island. Eight more on-shore wells drilled 1949-1971. 1959: B.C, issues claims submerged lands belong under provincia! jurisdiction. 1966-68: The federal government asserted its claim to seabed by authorizing 14 Shell Ganada offshore wells, six off Vancouver Island and eight in Hecate Strait. Results inconclusive, drilling ceases. 1972: Feds ban Alaskan super-tanker traffic from using waters of Hecate Strait and inside Passage. |t also bans alfshore exploration. Today cil barges and smailer tankers routinely ply these waters. 1980: Ottawa steps up incentives for developing offshore oll and gas reserves. 1981: In response, B.C. restates its claim to all submerged lands and places a moratorium on ex- ploration in parts of south coast. 1983: Ottawa and Victoria agree to establish a re- view process lo assess potential environmental and socio-economic impacts of offshore exploration. 1984/85: Environmental assessment panel con- ducts public hearings alt alang the coast with more than 300 residents participating. ' 4986: The federal-provincial panel issued the re- port of its consultation process, indicating offshore oil and gas could praceed if 92 conditions. are met. 1987: The federal-provincial governments issued a response to the panel report, accepting 80 of the recommendations and tabling three.. ° 1987/88: Talks between the federal and provincial governments on the management of future off- shore oil and gas development begin (known as the Pacific Accord). 1989: In response to public concerns aver the Nestucca and Exxon Valdez incidents, the B.C. government places a five-year moratorium on off- shore oil exploration and drilling. Ottawa withdraws from federal-provincial negotiations on the Pacitic Accord. 1994: The province extends the 1989 moratorium for another five years. 1997: North Coast Oil & Gas Task Force, com- prised of private citizens in Prince Rupert, lobbies to re-examine the moratorium. 1998: Geological Survey of Canada revises its as- timate of potential paaes ’ oil and gas re- serves in BC EK coastal waters to 9.8 billion barrels of oil and 25.8 tril- lion cubic feet of gas. Estimates on how much can be recovered vary. 1999: The BC Al- liance for the Pre- servation of the Moratorium on Offshore Oil and B Gas is created by a coalition of envir- onmental, fishing, and First Nation ed groups. a 1999: Prrovince JOBS created by Hiberniua in names ‘the North- Newfoundland helped fuel ern Development new interest in B.C.'s offshore. Commission (NDC) to begin ciscussions/interviews with North Coast re- sidents on the moratorium. 2000/01: As a recommendation of 1999 discussions/interviews, the NDC names a team to develop recommendations for a public consultation framework in regard to the present moratorium. ’ 2001: The Haida and Tsimshian Nations issue a joint position on the present moratorium. July 2001: New Liberal provincial government an- nounces plans for an accelerated probe of offshore oil, replacing the northern development process. October 2001: A technical study finds no insur- mountable obstacles to offshore drilling. Victoria names a three-member scientific panel to further examine environmental issues, November 2001: Public forums to take place along the coast. January 2002: Provincial government target for a decision on litting the moratorium. From front Quakes, storms add to hazards here: study The more common danger of major storms off the coast are “of significant concern” but are generally jess severe than those experienced by offshore platforms elsewhere in the world. Prior investigations have suggested exploration only proceed if metereclogists can give six hours warning of a severe storm io allow time for a platform to safely dis- connect from its wellhead, the report noted. The waters surrounding the Queen Charlotte Islands are commonly reported as the windiest in Canada, it added, generating large waves and storms with gusts es- timated as high as 225 km/h, But it noted the offshore industry in the Gulf of Mexi- co routinely deals with hurricane-strength tropical cy- clones, The northern waters present a “complex physical en- vironment”, it concludes. One plus for west coast is that it does not face the risk to offshore structures posed by icebergs off New- foundland, “The net effect of high uncertainties in the physical conditions under which offshore activities are to occur is to increase the cost of offshore activities and reduce the economic feasibility of a given project, rather than to limit the technical feasibility of offshore exploration,” the report says. The report notes the industry has been shifting from fixed platforms to floating structures tethered to the wellhead, When major spills occur -- as took place in Prince William Sound in Alaska ~ damage to wildlife and habi- tat fades over time, it suggested, “Studies have shown that the environment has re- sponded with remarkable ability to rejuvenate itself, al- though there are still lingering after effects.” The report cautions that hopes, particularly in com- munities that stand lo benefit, can become overinflated. “Managing expectations of everyone involved is very important,” the study said. "Part of this is to be realistic about what is pessible in a world competitive business.” “Experienced observers caution not to expect too much too soon as it will be an evolutionary process,”