Mixing Oil and Water, Part II: The Offshore Oil & Gas Industry and MPA Planning

Drilling for oil and natural gas from the seabed is significantly more costly than drilling on land, due to engineering and transportation challenges in the marine environment. But as terrestrial petroleum supplies in many nations near or exceed their peak production, the hunt for oil and natural gas is increasingly taking place on the continental shelf, and even in the deep sea. With this expansion in offshore exploration and development, the opportunities for conflict with other resource users increase, as do environmental concerns related to potential oil spills and other pollution. It is up to resource managers to try to balance these conflicting uses with conservation priorities, including in planning marine protected areas in some cases.

This month, in the second part of a two-part series on offshore petroleum and MPAs, MPA News examines how some resource managers are working to involve the offshore oil and gas industry in MPA planning.

[In the May 2004 issue of MPA News, Part I of this two-part series on offshore petroleum and MPAs examined cases in which MPAs have been used to protect against potential negative impacts of the offshore petroleum industry. It also discussed potential benefits to MPAs from working with the industry.]

Atlantic Canada: Proactive planning by government

The continental shelf of eastern Canada is a hotbed of exploration for offshore oil and gas. Three commercial discoveries are already in production – the Sable natural gas project and the Hibernia and Terra Nova oil projects – while extensive areas of the Grand Banks (off the province of Newfoundland and Labrador) and the Scotian Shelf and Slope (off Nova Scotia) have been licensed to a wide array of companies. Although the region has experienced sporadic exploration for petroleum since the 1960s, there has been a significant surge in seismic surveying and exploratory drilling in the past half-decade.

In 1998, as that surge was beginning, Canada’s ocean management agency took the first step toward protecting a special area on the edge of the Scotian Shelf – “The Gully”, a large underwater canyon that is home to a diversity of deep-sea corals, whales, and other species. In designating the Gully as an Area of Interest under Canada’s Oceans Act, the Department of Fisheries and Oceans (DFO) indicated its intent to study whether the site should be protected permanently as a marine protected area. (This research, which involved the use of multibeam sonar, was described in MPA News 4:2.) On 14 May 2004, following years of study and consultation among DFO, industry groups, and other stakeholders, the Gully Marine Protected Area was formally designated.

Achieving that designation required the balancing of ecological and economic factors. Not only was the offshore oil industry interested in gas reserves on Gully slopes, but fishermen also plied the Gully’s waters for halibut, tuna, and swordfish. To account for these interests, DFO created a zoning system for the 2364-km² MPA. The deep-water core of the canyon ecosystem (Zone 1) is off-limits to all extractive activity, whereas two outer zones (Zones 2 and 3) allow continued commercial fishing by hook and line for the abovementioned species. Other activities, which could include petroleum drilling, may be approved on the shallow, sandy banks of Zone 3, which are already subject to natural disturbance. But such activities will require a rigorous environmental assessment and approval by the Minister of Fisheries and Oceans. As part of the application process, the proponent must demonstrate that effects from the activity will be within natural variation and will not affect other zones.

Derek Fenton of the DFO Maritimes Region says the regulations are fair to all resource users. “The regulations are designed to protect all aspects of the ecosystem and apply to all activities,” he says. “They only allow activities that can be undertaken in a manner consistent with the ecosystem protection objectives and measures for the MPA. This approach is based on potential ecosystem impacts rather than targeting specific industries and activities.” DFO is now crafting a full management plan for the MPA, aided by a multi-stakeholder committee, including oil and gas interests.

Notably, the regulations prohibit activities even adjacent to the Gully MPA when such activities may disturb or damage marine organisms and their habitats inside the protected area. DFO is now working with the Canada-Nova Scotia Offshore Petroleum Board (CNSOPB), a federal/provincial regulatory agency, to develop a protocol for exploratory activities adjacent to the Gully. “The protocol will recognize and build upon codes of conduct and best operating practices that have already been adopted by industry,” says Fenton. There are several codes of conduct and effects-monitoring programs for the Gully area to which oil and gas companies have independently committed, essentially avoiding the area and studying their impact while conducting activities on the Scotian Shelf.

Even before DFO named the Gully as an Area of Interest six years ago, the federal and provincial governments had been interested in its conservation: the CNSOPB, for example, has not allowed petroleum activities in the Gully since 1997. Nonetheless, there is a license held in principal by petroleum company Shell Canada that confers development rights in part of what is now Zone 3 of the MPA. Although the natural variation requirements of Zone 3 do not eliminate the possibility of petroleum activity, Shell Canada has pointed out that it may be difficult to access the site due to strict environmental controls and anticipated public opposition to development in the area. The company has indicated its interest in working with the CNSOPB to redress the situation, including the potential for a land swap or a buy-out of the license.

Several hundred kilometers to the east, on Canada’s Grand Banks, DFO currently has no Areas of Interest or MPAs designated under the Oceans Act. However, amid the region’s burgeoning oil and gas activity, the department is taking proactive steps toward developing a systematic planning approach to ocean conservation. Namely, DFO is mapping overlaps between petroleum license areas on the Grand Banks and various ecological factors, such as demersal fish populations. A report on the latter study is available online in PDF format at http://www.dfo-mpo.gc.ca/Library/273513.pdf.

Jason Simms of the DFO Newfoundland and Labrador Region, who co-authored the demersal species report, says such analyses are a sensible step toward integrated ocean management planning. “The results, combined with information on oceanography, habitat, and areas of high biodiversity would contribute to assessing what, if any, appropriate protection is required, like MPAs,” says Simms. “Socio-economic factors would also be considered, such as commercial fishing, oil and gas activities, and shipping lanes.” DFO has also mapped spawning times and locations for commercially important fish species on the Grand Banks, and has encouraged the petroleum industry to avoid the areas of highest intensity spawning when conducting its seismic exploration activities.

Southeast Australia: Conflicting user groups help plan MPAs

The Australian government is building a national representative system of marine protected areas, a major goal of the nation’s Oceans Policy. Since the late 1990s, Australia has declared six MPAs totaling nearly 250,000 km² throughout Commonwealth waters. Now the government is taking a systematic approach to filling in the gaps in its coverage: it has combined the building of its representative MPA system with a process to plan Australia’s entire ocean territory, one region at a time. This approach, say officials, will result in the most comprehensive national system of MPAs in the world.

It also poses a significant challenge to planners, who face a nation of stakeholders with varied interests and concerns, including with regard to the issue of MPAs. Although the marine plan for southeast Australia – the first region to undergo planning (MPA News 5:3) – was released in its final version last month, the process to propose candidate MPAs in its waters is ongoing. Key nongovernmental stakeholders in the process include the offshore oil and gas industry, the commercial fishing industry, and conservation groups, as well as shipping, recreational fishing, and indigenous interests.

When Australian government officials asked leaders of these sectors to design a candidate MPA site within each of two broad geographic areas of interest, the result was multiple suggestions that aimed to minimize impacts on each sector’s own interests, while also meeting biodiversity objectives. (The biodiversity objectives involve a set of 10 specifications concerning representativeness and special and unique features.)

The sectors’ suggested options for candidate MPAs, despite their variety, provided a starting point, says Leanne Wilks, assistant director of the Marine Protected Areas Taskforce for the Australian Department of the Environment and Heritage (DEH). “Using these options as a basis for further consultation, the Australian government, led by the DEH, worked alongside key stakeholder groups to produce two candidate MPAs to be advanced as proposals for declaration,” she says. The two candidates represent a degree of compromise for each sector, she notes. Regulations have yet to be worked out, which may pose another challenge for planners looking to balance interests. “These candidate sites require further consultation between government and the sector groups as well as socioeconomic impact assessment and risk assessment to settle on boundaries, management, and zoning arrangements,” says Wilks.

There also remain nine more broad areas of interest (BAOIs) in the region for which the marine plan seeks representative MPAs. The government is examining ways to streamline the remainder of the planning process, namely by grouping the nine BAOIs according to shared biodiversity and economic issues. Stakeholders would then address each group of BAOIs in parallel with the other groups. Once the full system of candidate MPAs has been identified, a scientific peer review will assess it against the established objectives of a comprehensive, adequate, and representative MPA system.

Wilks says that amid this ambitious planning process, it has been essential that government be straightforward with the stakeholder groups. “The key lesson is to keep the process scientifically credible and open to stakeholder input,” she says. “This allows us to build in sectoral interests and support at the earliest stages of MPA design.” Given the limited information available on the deep ocean waters of the southeast, she notes, the MPA design process has been supported by information provided by marine resource users through the consultation process, as well as the best available scientific and technical advice from Australia’s leading marine science institutions.

Mauritania: Trying to open a debate on offshore oil

International petroleum companies have poured billions of dollars into West Africa in recent years to develop its offshore oil and gas reserves. The region now supplies the US with 15% of its oil imports. The money flowing to West Africa has provided a strong incentive for governments in the region to emphasize further exploration and drilling in their marine waters, to the chagrin of regional conservationists concerned about the related threat of pollution.

Nonetheless, government ministers in the region do recognize the importance of the marine environment. In 2003, a coalition of environment and fisheries ministers from six West African nations agreed on a strategy to establish a network of national and transboundary MPAs in the region, aiming to restore fisheries to sustainable levels, among other goals (MPA News 5:1). The Regional Strategy for Marine Protected Areas in West Africa seeks to enable harmonization of protection efforts, based on a common vision of sustainable development and poverty reduction. It cites threats to existing marine and coastal national parks in the region that must be addressed. Among these threats, it says, is offshore oil exploration and potential oil spills.

Pierre Campredon coordinates the joint program responsible for implementing this regional strategy. (The program is known as PRCM by its French acronym and is managed by the same organizations that planned the strategy: IUCN, WWF, Wetlands International, and Fondation Internationale du Banc D’Arguin, a French NGO). Campredon says that to address the oil pollution threat, the governments need to consider restraining exploitation to some extent until adequate management systems are in place. He adds, however, “The states are not prone to open this debate.”

Campredon says Mauritania – one of the six West African nations whose ministers signed the strategy – is a country where oil development is “going very fast” at the moment: an Australian petroleum company, Woodside, is scheduled to start drilling there in 2005. “There are several problems associated with offshore oil exploitation,” he says, citing reported pressure by Woodside on the Mauritanian government to allow the use of single-hulled tankers for oil storage, among other issues. “A very large part of the population depends on a natural resource economy, including fisheries. An oil spill would have a strong negative impact on local livelihoods.”

PRCM is taking several steps to encourage the Mauritanian government to address the oil spill threat. “PRCM and its partners have met with the Mauritanian president to tell him we are ready to help national authorities to draft legislation and strengthen national capacities,” says Campredon. “We also plan to organize a workshop in collaboration with national authorities and Woodside to inform the general society about the situation.” In addition, PRCM seeks to convince the government to apply to the International Maritime Organization for Particularly Sensitive Sea Area (PSSA) status for the country’s waters (MPA News 3:8), which would likely entail some restrictions on unsafe shipping practices. Campredon says PSSA status for the entire eco-region could come later. In the meantime, he points out, processes to create new MPAs under the regional strategy are underway throughout the region, including in Guinea, Cabo Verde, and Mauritania.

For more information:

Derek Fenton (FentonD@mar.dfo-mpo.gc.ca) or Paul Macnab (MacnabP@mar.dfo-mpo.gc.ca), Oceans and Coastal Management Division, Bedford Institute of Oceanography, Department of Fisheries and Oceans, B500, 5th Floor Polaris, P.O. Box 1006, Dartmouth, Nova Scotia B2Y 4A2, Canada. Tel: +1 902 426 2201

Jason Simms, MPA Program, Department of Fisheries and Oceans, Northwest Atlantic Fisheries Centre, P.O. Box 5667, St. John’s NF A1C 5X1, Canada. Tel: +1 709 772 8014; E-mail: SimmsJa@dfo-mpo.gc.ca

Leanne Wilks, Department of the Environment and Heritage, GPO Box 787, Canberra ACT 2601, Australia. E-mail: Leanne.Wilks@deh.gov.au

Pierre Campredon, IUCN Mauritania, B.P 4167, Nouakchott, Mauritania. Tel: +222 529 0977; E-mail: pierre.campredon@iucn.org

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