Province touts record offshore bids of $1.38B, but lots to be done yet

While the Newfoundland and Labrador government has proudly announced a record-breaking bid for the province's offshore oil industry, people shouldn't expect to see an immediate influx of money.

There are a number of environmental, safety and resource-based concerns about further drilling in the deep waters far from Newfoundland's shores that, ideally, wouldneed to be addressed before work happens.

Natural Resources Minister Siobhan Coady announced this week a total of $1.38 billion in bids, and a record single bid of $621 million from Australian-based company BHP Billiton Petroleum.

In my opinion, it's a wonderful, wonderful investment.- Rob Strong

"It certainly shows our continued growth and development in our offshore," Coady said.

But that doesn't mean the moneywill be coming in any time soon, or in one large chunk, either.

"What happens with these bids is, that's a commitment to spend over the bidding process, so a commitment to spend in exploration over a period of time," said Coady.

That period of time is about nine years, during which the exploration will go through multiple stages to determine whether the oil companies will, in fact, drill the area.

Spend money to make money

Rob Strong, an oil industry watcher for about 40 years, said the seismic work of the oil and gas arm of Crown agency Nalcor Energy helped make the bids happen.

"In my opinion, it's a wonderful, wonderful investment," he said.

"It cost you and I as taxpayers $20 million, but guess what? It attracts some of the top players in the world."

While the news is good to people like Strong, it's going to be quite some time before the benefits are realized.

"Our problem in offshore Newfoundland of course is the time from discovery to first oil," Strong said.

An example he points to is the six drilling projects right now waiting for approval from the Canadian Environmental Assessment Agency.

"One of those applications has been before this body for over a year, so it takes a long time to get it approved environmentally," he said.

"I would suspect what normally happens in the first maybe three years' time they'll have all their approvals in place and they'll start drilling then, and then depending on what they find, they have to delineate to find out how thick the reservoir is. So you're probably 10 to 15 years before we get first production."

Safety should be 1st priority

But that's a wait that's well worth it for people who want a deeper dive into the environmental and safety factors of offshore drilling.

In the House of Assembly, NDP Leader Gerry Rogers said these new wells, if drilled, would be further out into the Atlantic Ocean, meaning more dangerous travelfor rig workers.

Rogers called on the province to bring in an outright ban on overnight flights, and the establishing of an independent commission to work solely on ensuring worker safety.

"Companies committing money for exploration is tangible expression of the interest in our resources. However, there is still plenty of work to do to ensure we get this right," Rogers said.

"We need to ensure we protect our workers, who will be working in even more dangerous conditions, and we must ensure we move forward in the most environmentally responsible way possible."

NDP MHA Lorraine Michael also pointed to scientific studies she's seen that states there is a spike in seabird mortality due to oil rigs, despite measures taken by the Canada-Newfoundland and Labrador Offshore Petroleum Board to try to mitigate the issue.

Michael wants the provincial government to require installation of light reflectors on all oil rigs to protect against seabird fatalities.

Andrew Parsons, who was acting environment minister prior to a cabinet shuffle later on Thursday, said he hadn't seen or heard anything about seabirdsbut he would ensure the province included that in further discussions with the oil industry.

Limit fish? Limit oil, too

And among concerns about the five new successful bids is the Fish, Food and Allied Workers' Union, who said two of the five parcels of land identified fall within a marine refuge area that restricts all fishing activity while oil and gas work proceeds unencumbered.

"Oil, gas and seismic activity is continuing completely unrestricted in these supposed protected areas," FFAWpresident Keith Sullivan said in a news release Friday.

"This is understandably frustrating for harvesters who have given up considerable fishing grounds in the name of conservation."

Sullivan said if fishing industries are going to be restricted in the area, so, too, should other industries thathave an effect on marine life.

"The government has shown a clear disregard for the interests of fish harvesters by prioritizing oil and gas over the fishing industry and conservation efforts," Sullivan said.

"It's time for the government to stop shutting harvesters out while letting oil and gas in."

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