Using Strategic Environmental Assessments to Guide Oil and Gas Exploration Decisions: Applying Lessons Learned from Atlantic Canada to the Beaufort Sea

• Date: 01 April 2013
• Author: Nigel Bankes,Louie Porta,Meinhard Doelle
• DOI: http://doi.org/10.1111/reel.12018
• Published date: 01 April 2013

Using Strategic Environmental Assessments

to Guide Oil and Gas Exploration Decisions:

Applying Lessons Learned from Atlantic Canada

to the Beaufort Sea

Meinhard Doelle, Nigel Bankes and Louie Porta

The Macondo oil spill in the Gulf of Mexico has spurred

renewed global interest in the regulation of offshore oil

and gas exploration, particularly in deepwater areas.

At the same time, many jurisdictions are experiment-

ing with strategic environmental assessment (SEA)

processes to fill gaps in more traditional project-based

decision-making processes. This article explores the

potential of SEA to enhance decision making for explo-

ration in deepwater environments. It does so by exam-

ining the experience with SEAs on the east coast of

Canada, and applying the lessons learned to the Beau-

fort Sea. By looking at the issue in two very different

environments, we can draw lessons that may also

apply to deepwater exploration elsewhere.

INTRODUCTION

The twenty-first century has seen renewed interest in

developing Arctic oil and gas reserves.1The marine

waters of the Arctic Ocean prospectively hold 13%, 30%

and 20% of undiscovered global oil, natural gas and gas

liquid reserves.2The development of Arctic marine

petroleum resources has become a priority for the five

coastal Arctic nations: Canada, Denmark, Norway,

Russia and the United States. Simultaneously, multina-

tional hydrocarbon companies view the Arctic as the

last major oil and gas frontier. Sustainable Arctic oil

and gas exploration and development requires a pre-

emptive, strategic decision-making process that can

effectively guide economic considerations in step with

environmental risks.

Historically, hydrocarbon development efforts focused

on land or shallow water hydrocarbon potential. Since

2008, the industry has shifted its attention to the deep-

water areas of the Beaufort Sea – a region that to date

has experienced limited exploration and no develop-

ment.3In the wake of the huge 2009 Macondo oil spill

in the Gulf of Mexico, Canada’s National Energy Board

(NEB) initiated a public review of offshore drilling in

the Canadian Arctic to ensure the regulatory system

was prepared to handle the unique challenges.4There

was no similar examination of the adequacy and appro-

priateness of Canada’s Arctic oil and gas rights issuance

process. In this article, we argue that a key weakness in

the current procedure is the failure of the government

to apply state of the art strategic environmental assess-

ments (SEAs) as part of deciding where and when

to open new areas to potential oil and gas drilling

activities.

In the past two decades, SEAs have emerged as an

important complement to project-based environmental

assessments (EAs) and other planning tools. The inter-

est in SEAs arises from an understanding of the limita-

tion of project-based EA processes, which are not well

suited to dealing with a consideration of alternatives,

cumulative effects and broader policy issues. Further-

more, project-based EAs are undertaken at a time when

important decisions and commitments have already

been made. SEAs have been used internationally as part

of making decisions on opening new areas to potential

oil and gas drilling activities, and they have also been

used on the east coast of Canada to inform the first

phases of the oil and gas rights issuance process (indus-

try nominations, more formal government calls for

nominations and calls for bids).5SEAs attempt to

outline, integrate, refine and mitigate regional-scale

concerns related to ecologically sensitive areas, multi-

sectoral ocean use and cumulative effects in advance of

project-based EAs. They also have the potential to con-

sider the need, purpose and rationale of a proposed

1Northern Canada is estimated to contain a third of Canada’s remain-

ing potential for conventional oil and natural gas. See <http://

www.aadnc-aandc.gc.ca/eng/1100100037301>.

2D.W. Houseknecht, K.J. Bird and C.P. Garrity, Assessment of

Undiscovered Petroleum Resources of the Arctic Alaska Petroleum

Province (US Geological Survey, 2012).

3Aboriginal Affairs and Northern Development Canada (AAND),

Northern Oil And Gas Annual Report (AAND, 2011), at 9.

4National Energy Board (NEB), The Past is Always Present: Review

of Offshore Drilling in the Canadian Arctic (NEB, 2011), at 3.

5See, e.g., C. Fidler and B. Noble, ‘Advancing Strategic Environmen-

tal Assessment in the Offshore Oil and Gas Sector: Lessons from

Norway, Canada and the United Kingdom’, 34 Environmental Impact

Assessment Review (2012), 12.

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Review of European Community & International Environmental Law

RECIEL 22 (1) 2013. ISSN 0962-8797

© 2013 Blackwell Publishing Ltd, 9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA.

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