The Newfoundland and Labrador Regional Assessment of Offshore Exploratory and Gas Drilling: One Year Later

March 2, 2021

Things have changed dramatically since February 29, 2020. On that date, while the global COVID-19 pandemic escalated, the Final Report of the Regional Assessment of Offshore Oil and Gas Exploratory Drilling East of Newfoundland and Labrador (“Newfoundland Offshore RA”) was published. This was Canada’s first regional assessment (RA): a new type of federal environmental assessment created through the Impact Assessment Act (IAA) structured to study and assess multiple potential or ongoing activities in a region and their environmental risks. RAs are intended to guide future decision-making in the region, accounting for cumulative effects of natural processes and anthropogenic activity.

The Regional Assessment process proved controversial. One year on, that controversy persists: since then, ministerial regulations were created exempting exploratory drilling from impact assessments; two judicial review applications were launched challenging the Offshore RA Final Report and the regulations; and the impact of the precedent set by the Offshore RA for upcoming regional assessments in other parts of the country, including Ontario’s Ring of Fire region and Quebec’s St Lawrence River, remains uncertain.

     Judicial Challenges

In May 2020, an application for judicial review (JR) was filed in Federal Court by the Ecology Action Centre, the Sierra Club Canada Foundation, and WWF-Canada. The application seeks an order quashing and sending back the Newfoundland Offshore RA for not complying with the IAA or its initial Agreement. The application alleges the Committee failed to adequately examine all the issues within its mandate as listed in the Terms of Reference, particularly cumulative effects (in keeping with the purpose of the IAA). On June 3, both a motion by the government to dismiss and a motion by the applicants for an interim order prohibiting any regulations based on the Final Report were denied. Later that month, another JR application was made by the same applicants challenging the legality of the Ministerial regulations created following to the Regional Assessment; these applications have since been consolidated.

If the judicial review challenge to the Newfoundland Offshore RA is successful it would not only alter the situation for offshore oil and gas exploration in Newfoundland and Labrador but would also inform how Regional Assessments will be implemented across the country. For example, the application raises the question of how the Final Report “scoped out” the consideration of certain cumulative effects. Even though much has been made of the fact that the new IAA contains a “climate test”, greenhouse gas (GHG) emissions were only considered for exploratory drilling, with no analysis of the potential emissions from production drilling and their effect on national GHG emission targets. If the Federal Court were to side with the applicants, it would likely expand the scope of cumulative effects under regional assessments to include such an analysis. 

     Regulations and Follow-Up Program

The Final Report was followed by Ministerial regulations which came into effect on June 4, 2020. The Regulations Respecting Excluded Physical Activities (Newfoundland and Labrador Offshore Exploratory Wells) were made under the IAA and allow for proposed exploratory oil and gas projects within the area of the RA to be exempted from impact assessments, subject to satisfying the prescribed conditions. The regulations quickly came into effect (after a brief public comment period), such that the RA is now enabling projects within the region to be fast-tracked, rather than setting a framework that could inform and strengthen project-specific assessments, as intended by the proponents of RA. In November, BP Canada Energy Group made a successful bid for an offshore parcel, becoming the first project to proceed under the new regulations. The parcel in question overlaps with a quarter of the Northeast Newfoundland Slope Closure, one of the region’s largest marine refuges: despite many fishing activities being banned in the Closure to protect its sensitive species, exploratory drilling activities have been given the green light.

In late October, the draft terms of reference (TOR) for the RA Follow-up Program  were made available for public comment. The purpose of the Program is to “monitor and report on the implementation and effectiveness of the various outcomes of the Regional Assessment” and regularly update the information collected. It proposed that the Follow-up Program will be led by a Steering Committee which includes the Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB) and is supported by an Advisory Committee including Indigenous representatives, non-government organizations, and academics (selected by members of the Steering Committee).

If the regulations suggested a hands-off approach for any further assessment of the impacts of offshore oil and gas projects, the Follow-up Program all but confirms it. The TOR only vaguely addresses many critical points and once again fails to clearly set out what cumulative effects analysis will look like. The C-NLOPB’s Steering Committee membership also potentially presents a conflict of interest. Furthermore, Indigenous communities have criticized the TOR for offering no Indigenous representation on the Steering Committee. Thus, while the TOR and the regulations have yet to be finalized, they raise real doubts about the usefulness of Regional Assessments in environmental protection.

     Upcoming Regional Assessments

In 2021, two new RAs could soon commence: one in Ontario’s Ring of Fire region and one in Québec along the St. Lawrence River. There are no TOR for either yet, though individual project assessments within the areas of concern are in progress in both cases. While the contexts for the RAs differ dramatically in terms of proposed activities and areas affected, there are common issues and ways in which the lessons learned in the Newfoundland Offshore RA could be applied. Concerns have been voiced over exemptions for project-specific assessments, the need for Indigenous leadership, and inadequate  cumulative effects analysis. Such concerns are valid, given the precedent set by the Newfoundland Offshore RA.

Clearly a divide exists between the expectations that have been building up around the concept of RA in the newIAA and the reality of how it has been implemented thus far. This gap can be closed by learning from Newfoundland’s example. Comprehensive planning at the early stage, decision-making in full partnership with Indigenous communities, and restrictions on what exemptions can be produced afterward, would make a world of difference. If nothing else, the past year has shown just how much can change in 365 days.

Neil MacIsaac

Neil joined us for the 2020-2021 academic year through a placement course offered by the Environmental Justice and Sustainability Clinic at Osgoode Hall, York University.