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Deep Panuke Blog

Day Five, Friday, March 9, 2007

On the Final Day of Deep Panuke Hearings, Sierra Club Canada Team “Arguably” Goes Out Swinging

We could try to pick out the pithiest segments of the document we finally submitted as Sierra Club of Canada’s final arguments to the NEB (National Energy Board)/CNSOPB (Canada-Nova Scotia Offshore Energy Board) Deep Panuke panel, but we’re so darn proud of the whole thing, we decided to reproduce it here in its entirety. 

As this last installment of the Deep Panuke Blog is being written (by Mark Dittrick), Alan Ruffman and Bruno Marcocchio are furiously scribbling notes for the side comments they’ll be making in a matter of minutes when they take turns reading our arguments to the panel.

For the full transcript, go to and click on “Transcripts”.

Hearing Order GH-2-2006


Sierra Club of Canada


Deep Panuke Coordinated Public Review
of the EnCana Corporation
Deep Panuke Offshore Gas Development Project
Sable Island Bank, Nova Scotia

Friday, March 09, 2007

Sierra Club Canada would like to thank the Commissioner for the CNSOPB and the National Energy Board (NEB) for the opportunity to participate in the joint regulatory and environmental assessment review of the proposed Deep Panuke gas development.

The process was well organized, the secretariat and NEB staff were very helpful in organizing the hearings and no doubt the regulatory requirements of the CNSOPB and NEB were well served by the efficient hearing process.

The process however did not serve the environmental assessment function well. Environmental assessment should be about encouraging full public participation and evaluating the project within the policy frameworks of the federal and provincial governments.

The legal nature of the process with very formal procedural and evidentiary protocols makes the process daunting and makes meaningful public input difficult if not impossible. Most Non Governmental Organizations (NGO’s) either did not engage or submitted written comments to the joint review. Individual concerned citizens were effectively completely shut out of the process.

Despite the latitude given the in section 36.5 of the NEB Act to extend the mandate of the NEB to permit discussion of the policy implications of the proposal, the joint chairs chose to deny the request to ask NS Department of Energy questions pertaining to climate change policy or accept into evidence a February 2007 report by the Intergovernmental Panel on Climate Change (IPCC) entitled “Climate Change 2007: The Physical Science Basis, Summary for Policymakers. These procedural limitations have narrowed the EA function of this process to the point where the intent of the Canadian Environmental Assessment Act has been undermined. Furthermore the lack of any formal involvement by the Canadian Environmental Assessment Agency (CEAA) in this hearing is troubling.

The scope of the factors to be considered by the EA as set out by CEAA (scope of Environmental Assessment-Deep Panuke Project) directs the EA to take into account any significant changes in the environment…and any significant new information relating to the environmental effects of the project. The IPCC report and discussion of the ratified Kyoto accord were both deemed to be outside the scope of this regulatory process. CEAA may well need to conduct further studies to fulfill these requirements deemed outside the scope of the current process.

Sierra Club Canada requests that the regulators conducting this process recommend that this dual regulatory and Environmental assessment experiment, not be allowed to take place again in the future. The regulatory and EA processes are very different with respect to requirements for public participation. There is nothing “Smart” about a process that excludes meaningful public input and discussions of the policy implications of fossil fuel development or the formal involvement by CEAA in this process at a time when an absolute scientific consensus about anthropomorphic climate change is now beyond dispute.

Mercury Deposition in the Marine Environment

EnCana cite the Payne et al 2006 article (Can. Tech. Rep. Fish. Aquat. Sci. 2679: 28 p.) as proof that WBM are non-toxic to fish or plankton.   The issue here is not toxicity but contamination of the food chain with mercury. In other words,  mercury in WBM might not kill fish, but it might make fish unsafe to eat. And to make (healthy) fish unsafe to eat by humans contravenes the Canadian Fisheries Act .

On the issue of the bio-availability of mercury in marine sediments,  EnCana cites the work of Trefry (1996, 2002) .

Trefry, J.H., R.P. Trocine, M.L. McElvaine and R.D. Rember. 2002. Concentrations of Total Mercury and Methylmercury in Sediment Adjacent to Offshore Drilling Sites in the Gulf of Mexico. Final Report to the Synthetic Based Muds Research Group, 46 pp. + appends

These authors work were partially cited. The Trefry  references should have included the  author’s affiliation which is the American Petroleum Institute. (Trefry, J. H., Trocine, R. P., McElvaine, M. L., Re mber, R. D., 2002. "Concentrations of Total Mercury and Methylmercury in Sediment Adjacent to Offshore Drilling Sites in the Gulf of Mexico." Final Report to the Synthetic Based Muds Research Program. American Petroleum Institute, Washington, DC. 46 pp.)

SCC used the Parker 2003 reference in our initial brief to calculate mercury loadings from WBM.

Both Trefry et al and Parker’s opinion on the non- bio-availability of mercury in marine sediment seem to have been contradicted by data on mercury fish contamination in the Gulf of Mexico and more recent studies on the bio-transformation of elemental mercury to methylmercury in marine environments

Ache et al  (2 Ache, B.W., Boyle, J.D., and Morse, C.E. 2000. A Survey of the Occurrence of Mercury in the Fishery  Resources of the Gulf of Mexico. Prepared by Battelle for the U.S. EPA Gulf of Mexico Program, Stennis Space Center, MS. January 2000.)  have published a study on mercury in the fishery resources of the Gulf of Mexico.  A table (table 15) from this study shows high levels of contamination in pelagic fish species. 

The Gulf of Mexico has received, via barite drilling muds, an estimated 800 kg per year for at least the last  15 -20 years (MMS 2003).

Let it be noted that most fish species in table 15 have mean mercury levels above the Canadian level of fish for commerce of 0,5 ppm..

In the report to the President of the United Sates, (Methylmercury In The Gulf Of Mexico: State Of Knowledge And Research Needs, 2004) the  National Science and Technology Council has stated that :

“It has recently been suggested that mercury may be methylated in the deep ocean. (…) better understanding of the methylation process in marine environments is critical not only for the Gulf of Mexico region, but globally as well.”  (…)  Information for a few of the major estuaries of the U.S., including San Francisco Bay, Florida Bay, Long Island Sound, and Chesapeake Bay, demonstrates active mercury methylation in estuarine sediments.…More research is needed on methylation mechanisms in estuarine and marine environments and in coastal wetlands.”

It seems that the science is there to demonstrate that indeed elemental mercury in marine environments can be methylated and get into marine fish at levels that might make then unsafe to eat. Sierra Club Canada is recommending that zero discharge of drilling muds be permitted in the marine environment from this proposal. Shore based disposal is indicated and should become standard practice for all offshore fossil fuel development.

Marine Noise

Sierra Club Canada recommends that an exclusion zone of 500 m radius be monitored for marine mammals at least 30 minutes before the start of pile driving in compliance with the Joint Nature Conservation Committee (JNCC) guidelines. If marine mammals enter the exclusion zone pile driving should be suspended until they have left the area.

ESSIM Participation

Encana has failed to justify the claim that no significant impacts are expected on juvenile fish and fish eggs and larva by dismissing without evidence the designation of Priority Area 21as` identified in a 2006 report compiled by WWF and the Conservation Law Foundation-US. The area has the characteristics that qualify the area as a possible Environmental and Biologically Significant Area (EBSA). The CEAA scope of the factors to be considered directs the project be examined in the context of the draft East Scotian Shelf Integrated Ocean Management Plan. The proponent has not complied with this CEAA requirement. Sierra Club of Canada requests that the proponent be directed to engage with the ESSIM initiative as a full partner in the EBSA process in particular. If required by the ESSIM process the proponent should be directed to comply with the ESSIM outcomes.

Choice of Options vis-à-vis the Offshore Pipeline

EnCana has asked for approval of the two options: the SOEP Option, involving a 15-km subsea pipeline (or a pair of pipelines) that will tie into the existing ExxonMobile export pipeline that runs from the Thebaud Production Platform to the gas plant in Goldboro, Nova Scotia, or the M&NP Option that will run 173 km beneath the ocean to land in Goldboro and run a further 3 km to skirt the ExxonMobile gas plant so as to tie directly into the M&NP just beyond the gas plant gate.

The SOEP Option has the shortest length of pipe, requires the least disruption of the seafloor and is at least $110 million cheaper. The M&NP Option requires an entirely new pipeline running generally in the same pipeline corridor as the ExxonMobile export line built in about 1998. The SOEP Option requires EnCana to pay a toll to ExxonMobile whereas the M&NP Option allows EnCana to avoid the ExxonMobile toll charges entirely.

Encana failed to reach agreement with ExxonMobile to share the capacity of the SOEP export line when they submitted their original Comprehensive Study Review in 2002, and now, over five years later, they still have not reached an agreement on the toll to be charged by ExxonMobile to carry EnCana’s gas. In the meantime, the gas volumes being shipped from Thebaud to Goldboro have steadily declined by as much as 35% to 45% and the ExxonMobile export line is operating at well under capacity.

EnCana has made a “key request” “that it be allowed to determine which pipeline option is most suitable for Deep Panuke on technical and commercial terms” (line 369, Volume 1, transcript).

The short 15-km tie-in to the SOEP export pipeline minimizes the amount of seafloor that must be disrupted, minimizes the amount of pipe left exposed on the seafloor as a potential hazard to fishing gear (zero along the proposed dedicated platform-to-shore route), minimizes the amount of pipeline that may have to be removed from deep water at the end of the project’s life if the decision is made to remove the pipeline on abandonment (again zero along the dedicated route) and reduces the amount of pipeline that may have to be removed from 173 km to 15 km (i.e. less than 10%). The shorter route means that there is no temptation to institute the suggested Clearwater Seafoods Limited plan to remove the entire population of quahogs along the pipeline route, a population that would take some 15 years to become reestablished. The shorter tie-in route also means that if permission is given to abandon the pipeline there are 158 km of large-diameter pipeline that will not last for several hundred years on the seafloor and will remove entirely any residual hazard that it might pose.

It is quite clear that EnCana wishes the two options, SOEP and M&NP to be approved so as to avoid having their negotiating position with ExxonMobile undermined. This EnCana issue should be of no concern to the Coordinated Public Review Panel. Sierra Club of Canada recommends that the panel not entertain EnCana’s request for approval of both pipeline options. We further recommend that the panel approve the shorter, and more environmentally sensitive, 15-km SOEP Option.


The lifetime of the EnCana Deep Panuke project, baring significant new discoveries, is estimated to be 13 to 17 years. It could be as little as 7 years if EnCana encounters bad luck with the proposed new wells. EnCana’s second “key request” is that they wish to be given present approval for their proposed decommissioning program—i.e. that they wish what they call “conceptual approval” since formal application has yet been made. The proposed decommissioning program is to flush all pipelines and flowlines, flood them with saltwater and leave them on the ocean floor forever. EnCana wants approval now for this plan so that they do not need to budget for pipeline removal and so that they will not need to tie up funds in any bonding requirements. EnCana’s witness panel also indicated that by leaving the pipeline on the ocean floor they would expose fewer human workers to possible dangers in removing the pipe, especially in deeper water.

Well, first let us refer back to the above section on the choice of pipeline options. If one does not build the unnecessary dedicated export pipeline 173 km to shore, there will be only about a tenth as much pipeline to remove. There will be none to remove in deep water, and only the flowlines and 15 km of the tie-in pipeline(s) would be left. All of these lines are in the relatively shallow water of Northern Spur where their removal would be relatively simple and less hazardous to the workers involved.

None of us, including EnCana, know what technologies may be available in 7 to 17 (or more) years to remove seafloor pipelines, buried or unburied. Furthermore, what is presently “industry practice” may not be “industry practice” in 7 to 17 (or more) years. At one time it was common to dump all bent and outdated drill pipe over the side, but not any more. At one time, oil-based muds were used were then occasionally dumped into the sea. Not now. In fact, water-based muds are now the norm and this hearing has heard about the newer muds that are being “heavied-up” with salt.

This panel should not give preapproval to the presently prepared decommissioning plan. It should indicate that it believes that such a decision should be made at the time when EnCana formally applies for decommissioning in 7 to 17 (or more) years. Just because the Nova Scotia government and CNSOPB allowed the Cohasset Panuke field to alter its development plan to leave two flowlines buried on the site two years ago should not in any way be presumed to be the view of the regulators some 9 to 19 years later.
Acid Gas Injection

Table 4.1 of the Project Summary (last entry) indicates that the dedicated injection well will inject 130,000 cubic meters (4.5 MMscf) of waste gases back into the Missisauga Formation. This gas is about 70% CO2 and 30% H2S. All the CO2 is CO2 that is taken out of the produced gas. Thus, the CO2 comes up one well, is separated out, then is reinjected down a second well. This CO2 represents 18% of the project’s CO2, according to EnCana.

EnCana has referred to this as “sequestration” and we do not believe that this is the correct use of the term. EnCana should not be given carbon credits for this reinjected CO2. In fact, none of the project’s other 82% of CO2, which is a product of the operation of the platform, is being removed. It all goes into the atmosphere and none of it is being “sequestered”.

We were concerned that the statement in Volume 4, Table 5.2, page 5-11, item 3 contained a major error. The table stated, “The estimated contribution of the Deep Panuke Project to total estimated GHG by all Canadian human-made sources is extremely small (0.3% of 2003 Canadian totals)”. After two rounds of questioning and on the day following our original question concerning the accuracy of the statement, EnCana indicated that the statement should have stated that the CO2 contribution was for estimated 13-year life of the project. Even if the original statement was accurate, using a comparison between two such widely different time frames to apparently attempt to diminish the impact of the project’s GHG emissions is, if nothing else, quite inappropriate.

One last final comment on today’s (and the week’s) proceedings comes by way of a note passed to me by Alan Ruffman at 2:29 this afternoon with a quote from Roger Hunka’s rather lengthy argument on behalf of the Native Council of Nova Scotia: “Good thing I didn’t write this down or I would have left a lot out.”  Our kinda guy!


Offshore Oil and Gas Links

Deep Panuke Coordinated Public Review

SCC protecting marine areas from offshore oil and gas page

Atlantic Canada Chapter's Oil and Gas campaign page

Sierra Club of Canada National Office