"Old Harry" Environmental Assessment

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"Old Harry" Environmental Assessment

September 6, 2011

By Michael Simms, at McInnes Cooper

On August 15, the Federal Minister of the Environment announced that he would not follow the recommendation of the Canada-Newfoundland Offshore Petroleum Board that the environmental assessment of a proposed oil and gas exploration well in the Gulf of St. Lawrence be referred to a review panel or mediation.

In February, 2011, Corridor Resources Inc. (“Corridor”) filed a project description pursuant to the Canadian Environmental Assessment Act (“CEAA”) respecting its plan to drill an exploration well in the Gulf of St. Lawrence on a prospect commonly known as “Old Harry” (the “Project”). Later that month, the Canada-Newfoundland and Labrador Offshore Petroleum Board (the “Board”) published a draft scoping document respecting the assessment and invited the public to comment. The Board received over 50 comments from interested individuals and groups, more than it had ever received in respect of any exploration well in its 26-year history.

As a result, the Board wrote a letter to the Federal Minister of the Environment (the “Minister”) recommending referral of the environmental assessment to a mediator or review panel pursuant to subsection 25(b) of the CEAA. In making its recommendation, the Board indicated that it had no evidence that the Project was likely to cause a significant adverse environmental effect, however, because of the “level and nature” of the comments, the Board was of the view that a mediator or review panel was warranted.

In deciding to not follow the recommendation of the Board, the Minister noted that a large number of the concerns related to the broader policy issue of whether there should be oil and gas activities in the Gulf of St. Lawrence, and the potential environmental effect of such activities at the regional level. The Minister stated that an environmental assessment regardless of if it is a screening or a review panel, is not the most appropriate mechanism to consider and address generalized issues that go beyond the scope of the project being reviewed. The Minister did indicate that, in order to address the broader public concerns about oil and gas activities in the western offshore area of Newfoundland and Labrador, the Federal and Provincial Ministers of Natural Resources would work with the Board to update the strategic environmental assessment for that area, which was last updated in 2007.

In making his determination, the Minister noted that proceeding by way of a screening is consistent with regulatory amendments made in 2005 that removed offshore exploratory drilling projects from the Comprehensive Study List Regulations under CEAA.

The environmental assessment of the Project will, therefore, proceed as a screening by the Board.

The Minister’s decision sends a strong message that environmental assessments of individual offshore exploration projects under the CEAA are not the appropriate venue in which to consider broader policy issues as to whether there should be oil and gas activities in a particular area, or to assess potential environmental effect at the regional level.

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We want to hear from you: Did we delight you with great service or a timely insight? Did we miss the mark? Are you looking for legal advice? If so, we want to know. Just type a few lines into our form, send an email to client.service@mcinnescooper.com, or call 1-855-622-6668.

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