The fishing and oil and gas industries: Is a peaceful co-existence possible?

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Effective Date: April 23, 2001

Atlantic Canada Oil and Gas 2001 - Fairmont Newfoundland

[from a presentation by FFAW President, Early McCurdy]

For nearly 500 years, Newfoundland was "the great ship moored near the fishing banks." (Northern Cod Review Panel).

It was fish that brought Europeans here. Around the beginning of the 16th century, the fishing ports of northern Europe were rife with stories of this place and of the fish that were so abundant that the progress of ships were impeded. Fish were so plentiful they were caught merely by lowering a basket over a ship's side.

During the 16th and 17th centuries a substantial migratory fishery was prosecuted on the banks and in the coastal waters of Newfoundland and Labrador.

And soon because of the fish, Europeans began to settle here. Early settlement was determined not just by the sea, but by where the resources were located. (Eg. Bay de Verde was settled long before Holyrood. Fogo before Lewisporte.)

Land was little more than a convenient platform from which to exploit those underwater banks and shoals whose features fish harvesters knew and named as farmers did their fields and pastures. (Northern Cod Review Panel)

For generations and for much of the east coast, fish was the only product sold to the outside world... the only substantial source of export income.

From the early days, we exported salt cod to Europeans markets. And by the mid 1800s, Newfoundland was the world's largest exporter of salt cod.

By then our fishery had developed into three distinct branches:
- those who fished inshore and who settled next to the resource;
- those from the northeast coast of Newfoundland who travelled to the Labrador during the summer and fished as floaters or stationers;
- and those from the south coast of the province where banking vessels (schooners) carried men and dories 100 miles and more offshore to the cod-rich Grand Banks. While there, men would row out in small boats from the mother vessel to catch cod on hook and line.

Today, those banks are still fished and are considered important nursery areas, but fish harvesters are no longer alone on the Grand Banks of Newfoundland. They have been joined by oil rigs, tankers, supply ships and vessels conducting seismic surveys over thousands of kilometres of ocean.

People did not get rich from the fishery. But they survived, endured - despite insurmountable odds, an inhospitable coastline and dangerous work. Generations of coastal people passed on their extensive and intimate knowledge of the northwest Atlantic Ocean and all her moods. They build a fishing society along thousands of kilometres of rugged coastline.

It is a society and an industry worth maintaining, preserving and protecting for many reasons. As was noted in the 1982 Kirby report on the Atlantic fishery: "It is part of the fabric of Canada, part of our history as Canadians, part of our culture as residents of a country with one of the world's longest coastlines."

That's not to say that we should get caught up in some romantic notion about the fishery. While the industry represents a society - "a way of life"- it is also the economic engine of rural Newfoundland and Labrador. It has helped sustain our province for 500 years and it continues to provide jobs for thousands of men and women throughout our province. The fishery remains the reason many of us live where we do and still defines us: culturally, economically, socially and politically.

But we all know that the fishery has changed - dramatically.

We evolved from a salt-cod, European-based market fishery to a fresh-frozen industry that had depended mostly on the U.S. market.

We've grown from a cod-only fishery to a multi-species industry.

We've gone from an industry that employed 90% of the male, paid workforce of the province to one that employs about 15% of the province's entire labour force.

We've suffered through years of over-exploitation, and eventually moratoria on key groundfish stocks. The industry has been restructured and in turn our province has undergone significant changes.

The mostly groundfish-dependent industry has been transformed into a less-labour intensive shellfish-concentrated industry. Rebuilding of our cod and other groundfish stocks has been slower than first thought.

Today's industry is a lot different for many reasons. More and more of today's fishery is conducted offshore as fish harvesters go further afield to prosecute the resources available to them. Traditional inshore fish harvesters have joined their deepsea counterparts on the Grand Banks.

I think it's important to spend some time talking about the moratoria on key stocks because this ban on fishing and the subsequent changes in how we manage fisheries - including an increased focus on conservation and precaution - will also play a role in the future development of the oil and gas industry.

It is stating the obvious to say that during the 1990s, the fishing society - indeed all of rural Newfoundland and Labrador faced a crisis unprecedented in our 500-year history. The magnitude of the calamity that had befallen us was overwhelming.

Thousands of people living in hundreds of coastal communities felt the impact resulting from the closure of 14 east-coast fisheries. Most people in the fishery accepted these drastic measures -- an interruption of hundreds of years of history -- in order to try to rebuild hope for the future.

What they won't accept is a lack of recognition of what they have endured so that fish stocks can recover for future generations. Indeed, the people of the fishery will in no way tolerate a disregard of their efforts or a takeover of their traditional stomping grounds. They will not see their efforts wasted for the sake of short-term economic gains from the oil and gas industry.

Short-term? Offshore oil and gas, as a non-renewable resource, will have a limited lifespan - 20, 40, maybe 50 years. That's no comparison to the fishery, a renewable resource, which for 500 years has played a key role in our economy.

And despite troubling times, we know that the fishery will continue to play an important role in our economy and must be preserved at all costs for future generations. The question remains: How can a non-renewable resource be extracted in such a way as to enhance the long-term stability of our most important renewable resource, whose centuries-old stomping grounds you now share?

There's little doubt that fish harvesters, especially those who fish offshore in 3L - the location of Hibernia, Terra Nova and White Rose developments- believe they have squatters' rights. This place - 300 kilometres off the east coast of St. John's - is traditional stomping grounds for the offshore fishery since the days of the schooner fishery.

Historically, offshore trawlers fished in the area of 3Lt where drilling is currently taking place for Hibernia and Terra Nova. But it is also an area where smaller boats (65-footers) have fished for generations. It is home to American Plaice (flounder) which spawn throughout the area. Up until 1992, American plaice was a key fish stock that provided year-round work for hundreds of fish harvesters and thousands of plant workers (from Trepassey to Harbour Breton) along the south coast of the province. Other important species fished in the area include yellowtail, crab, cod, scallops, swordfish, and tuna. In fact the crab resource in this area has proven to be quite healthy and lucrative.

Overall, today's fishery still employs more than 20,000 people (harvesting and processing) in hundreds of coastal communities. Another 7,000 people are employed indirectly as a result of the export-based fishing industry. The fishing industry contributes to Canada's overall balance of trade and makes up 37% of the province's goods manufacturing sector.

The big question is can the two industries operate side by side?

The short answer should be yes, but a lot more effort must be made with respect to communications and discussions between the two industries. In addition, the oil and gas industry has a responsibility to ensure its activities have minimal impacts on fish stocks and habitat. That responsibility involves more than a statement that your activities will not have 'significant effects on fish and fish habitat." (Page 36, White Rose Comprehensive Study Report, October 2000)

It is also unacceptable to assume, as was done by Husky Oil in its Comprehensive Study Report on White Rose, that "potential effects to fish and fish habitat as a result of construction, operation and decommissioning at White Rose are predicted to be not significant. (And) In addition, any effects to fish will not be directly transferred to fisheries because additional variability will be introduced by changing fishing practices and management regimes. Therefore, any resulting effects on fisheries are anticipated to be of low magnitude." (Page 76)

Just because fishing patterns or activities may be forced to change because of oil and gas development does not mean that development won't have an impact on those fisheries and the people who depend on them.

The report also states that "the commercial fisheries of the Grand Banks are diverse and extensive and have contributed to effects on fish populations in the area. Assuming that the commercial fishery resource is managed in a sustainable manner by the resource agencies, the cumulative effect of the fishery and offshore development on fish and fish habitat will not be significant."

Of course, there is little resource agencies can do with respect to protection and management in the event of a major oil spill or drilling accident. That's not to say the resource agencies - such as the Department of Fisheries and Oceans - don't have a role to play. They have a very important role to play - a role that up to this point has been too hands off to be effective.

Newfoundland's offshore oil and gas industry has not been developed in the same way, for example, as the Norwegian industry where environmental impacts are assessed at each stage of oil and gas exploration, development, operation and decommissioning. Each stage is also subjected to extensive public scrutiny.

On the east coast of Canada, there has been lukewarm attention given to the impacts oil and gas exploration and development on the Grand Banks can have on fish stocks and fish habitat. Detailed environmental assessment (with public scrutiny) doesn't occur until the development stage when the oil company or proponent is required to conduct an Environment Impact Statement as has just been done for the White Rose project.

Despite the importance of the fishing industry to our province - over $1 billion last year - governments and other regulatory agencies have done little to ensure this exploration and development will have minimal impacts on our fisheries. Research in this area has been dismal.

The deficit hysteria that gripped the country in the 1990s and subsequent cuts to government programs have resulted in minimal research in the area of impacts of oil and gas exploration and development on fisheries as well as what, if any, impact offshore oil and gas exploration and development may have on stock recovery. There are too many unanswered questions.

There are many aspects of oil and gas exploration and development which are cause for concern to fish harvesters, including no-fishing zones, seismic activity, spills, drilling, damage to fishing gear and the fishing grounds, marine transportation and the potential impact that such activity might have on fish stock rebuilding.

Stepped-up oil and gas activities on the Grand Banks and in the Gulf of St. Lawrence off the Port au Port Peninsula increases the risk of seismic impacts as well as a spill or drilling accident. West coast fish harvesters share the concerns of their east coast counterparts with respect to the impact of oil and gas development on fisheries, such as the affect seismic activities may have on migratory stocks like cod.

Inshore fish harvesters are also concerned with seismic surveys taking place during spawning periods (April and May) in Bay St. George. They believe an exclusion zone should be implemented during major migration and spawning times.

In addition, west coast fish harvesters are extremely concerned about the potential impacts of an oil spill. Drilling here takes place close to shore and could have detrimental impacts on local lobster and crab stocks. This area happens to be home of the province's greatest lobster fishery. The value of the entire shellfish fishery in this Port au Port Peninsula area is critical to dozens of communities and hundreds of fish harvesters and their families.

In our opinion, environmental assessments conducted by oil companies involved in exploration and development on the Grand Banks and other east coast areas have downplayed the potential impacts of their activities on fisheries and fish habitat. Why would we expect any different? It is not in the proponent's self-interest to undertake an impartial assessment. It is not human nature, let alone corporate behaviour, to prepare your own indictment. Cigarette companies didn't develop the warnings on their products. The information provided is biased and selective in nature. It is our opinion that in the interests of public policy, environmental impact assessments should be conducted by an independent, impartial body.

Seismic Activities

Oil and gas companies carry out seismic surveys to help them identify undersea oil and gas reserves (i.e. the presence of hydrocarbons.) Seismic is derived from "Seism," a Greek word for earthquake. Sound waves are created by the explosive release of compressed air from air guns towed behind seismic vessels. Seismic testing is part of the exploration phase which often also includes exploratory drilling.

According to the Newfoundland Department of Mines and Energy, since 1966, more than 190 wells have been spudded and about 1.2 million km of seismic data have been collected in the province's offshore. According to the Canada Newfoundland Offshore Petroleum Board, seven companies conducted offshore seismic testing throughout last year between March and December. This work was carried out by four seismic vessels in various parts of the offshore including the Jeanne d'Arc Basin, the Ridge Complex, the Flemish Pass and the southern Grand Banks. High levels of seismic exploration are expected to continue this year. In fact, according to the province's oil and gas 2001 report, seismic exploration is proceeding at "record levels."

The loud sounds used in seismic surveys can have a broad range of effects on living creatures, depending on how close to the source they are. Sound, as we know, travels through water and can travel a considerable distance from the seismic source.

Seismic surveys can affect fish and shellfish populations as well as migration patterns and their distribution in the ocean. Eggs and larvae may be killed by the underwater air-gun blasting and it has been noted that catch rates in an area decline following seismic blasting.

Fish harvesters involved, for example in the groundfish and crab fishery, have noticed this in 3L (nose of Grand Banks) where significant seismic blasting and drilling have been taking place.

While some attention has been given to the effect on fish and fish habitat as a result of construction, operation and decommissioning, the overall impact of seismic activities on fish, fish recruitment, migration patterns, etc. has not been sufficiently addressed by those conducting the surveys. That's because much of the seismic work is completed before an oil company applies for development privileges and is required to conduct an environmental assessment.

Last September, a workshop was held in Nova Scotia around the issue of research on the effects of seismic exploration on the east coast fishery. After years of exploration off the east coast and 1.2 million km of seismic surveys, it has been decided that the Environmental Studies Research Fund - which is funded from levies applied against the oil and gas industry - will fund studies to examine the effects of seismic exploration on east coast fisheries.

It is generally accepted that there are large gaps in the present knowledge of the effects of seismic testing on fisheries, although some studies have been conducted in this area indicating that seismic activities reduced catchability of cod.

Controversy over seismic activities has also heated up in Norway where fishing and oil and gas interests (including government and research agencies) have agreed to hold annual summits to deal with seismic survey plans. This came about after Norwegian herring fishermen demanded that a survey vessel shooting off western Norway stop work. Fish harvesters were concerned about the lack of information held by the oil company about the number of nets in the area and the fact that the seismic survey was taking place during the breeding season. The survey was halted. But the incident forced the two industries and government agencies to work out a plan to deal with future seismic surveys.

Marine biologists in Norway are demanding seismic-free zones to cover breeding grounds in the breeding season and migration routes for fish before they breed. They too are concerned that two and three-dimensional underwater shooting can affect migration patterns and distribution of fish.

We must also re-examine how and when seismic surveys are conducted. For example, should environmental assessments be conducted before seismic tests can take place? Should areas be subjected to seismic surveys over and over again or should we try to minimize impacts by sharing seismic data as is done in Norway where a large part of the seismic work is conducted on behalf of the government and not a private oil corporation? Are there times of the year (fishing season) or areas (spawning) which should be excluded from seismic testing? Should private seismic companies be allowed to conduct seismic tests on spec without exploration licences? Should seismic surveys be subjected to more government control?

In our province, seismic surveys are usually conducted for oil companies or on spec by seismic companies hoping to sell their results to the oil industry.

You don't need an exploration licence to conduct seismic tests. The CNOPB reviews any proposal for seismic testing and conducts an internal screening process or review. This review is not subjected to the same type of public scrutiny as later stages of oil and gas development. Although in recent years, those conducting seismic surveys have had to identify potential areas of fishing activities where physical contact may occur.

If seismic surveys are positive and the operator has an exploration licence, a drilling project is the next stage. While more documentation is required at this stage than the seismic phase, the area of exploratory drilling is also dealt with "in-house." It is only after a discovery has been made and several more delineation wells have been drilled that the development stage begins and with it public hearings.

In Norway which has a thriving oil and gas industry, as well as a successful fishing industry, great efforts have been made to protect the environment and the fishing industry from harmful effects of oil and gas exploration and development.

Before the Norwegian Petroleum Ministry will open an area to activities, "thorough analyses are carried out to see how harmful exploration will be on the environment." (Petroleum Ministry) The law there states that environmental studies must be completed and the public consulted before exploration activities can take place. Only then is a report presented to Norway's legislature for debate.

The Norwegian legislature undertakes an overall evaluation of environmental considerations, fishery interests, and the interests of other affected industries. The Norwegian government may also impose requirements in areas open to exploration such as limits on when drilling can take place and specific emergency measures to limit damage from spills.

Special impact studies have been carried out for the Norwegian Sea and the southern Barents Sea because of the abundance of fish, fish habitat and fishing activity.

In Norway, once an area is opened to exploration activities, blocks in the area can be advertised. Before development occurs, participants must then submit a plan for development and operation as well as a plan for construction and operation. As part of this process, the company must also submit a study covering the impact the development and operation will have on nature and the environment. This is also circulated for extensive comments from interested groups and the public.

Exploration occurs here after the Canada-Newfoundland Offshore Petroleum Board issues a call for bids, accepts bids and then hands out nine-year exploration licences.

Last year, the petroleum board selected 10 exploration bids. The bidders agreed to spend $88.6 million in the first five years of exploration. According to the CNOPB, "the sole criterion for selecting winning bids will be the total amount of money the bidder commits to spend on exploration.... during the first five years." (CNOPB News Release March 2000) Have we no other yardstick at our disposal?

Oil Spills

It is generally agreed that in the context of oil and gas development that a major spill represents one of the most serious dangers to the environment.

Everyone is familiar with the 1989 Exxon Valdez oil spill at Prince William Sound. Eleven million gallons of oil was spilled - enough to fill 125 Olympic-sized swimming pools. The clean-up and fines involved with this spill cost Exxon $3.5 billion.

But Exxon Valdez is just one of many oil spills worldwide in the last decade during which time one billion gallons of oil have been spilled.

We know from research that fish larvae are quite sensitive to hydrocarbon contamination. The question is can an oil spill destroy enough larvae and small fish to negatively impact recruitment? What about the impact of toxins on fish and fish habitat? Some research has indicated that oil spills are even more harmful to shellfish than finfish.

Given, Newfoundland's reliance on shellfish, any spill could cause not only problems for the resource in the area of the spill, but could harm markets for Newfoundland seafood, not to mention lost access to the fishing grounds and damage to fishing gear. The long-term impact on the Newfoundland and Labrador economy and the tainting of the province's most important renewable resource would be considerable.

Since the Newfoundland and Labrador fishery is currently breaking new ground in terms of marketing quality, a large (or even small spill) could spell disaster. Declining markets could be accompanied by lower prices which will affect the viability of boats and plants, causing layoffs and bankruptcies.

Major oil spills, while considered unlikely by the oil and gas industry, nevertheless happen. The Exxon Valdez spill is widely considered the number one spill worldwide in terms of damage to the environment, but there have been 34 larger oil spills.

While the Exxon Valdez spill received considerable attention. Other spills have caused hardship for those who have had to deal with their aftereffects. In January 1997, coastal fishing villages in northwestern Japan braced for economic and environmental catastrophe as oil slicks from a sunken Russian tanker coated beaches and threatened lucrative shellfish beds. Some 5,200 tonnes of oil had leaked from the tanker. Just a few months later a supertanker struck a shallow reef in Tokyo Bay, a famed fishing ground, leaking an estimated 1,500 tonnes of crude oil.

In January 1998, Nigeria suffered from its largest oil spill as a result of a ruptured pipeline. Communities complained that fish had been poisoned and fishing nets destroyed as a result.

In December 1999 in France a tanker accident resulted in 15,000 tonnes of oil being leaked in to the Atlantic. Strong winds and currents and the heavy texture of the oil hampered the clean-up process. (Not unlike what could happen on the Grand Banks where weather, ice and current conditions are nasty on the best of days.) Wind helped to spread the oil over hundreds of kilometres of coastline threatening fisheries.

In July, last year, 14,000 gallons of oil were spilled off Rhode Island. A ban on fishing was put into place as a result... just four years after the worst spill in Rhode Island history when 828-thousand gallons spilled, killing more than 10 million lobsters and prompting a ban on fishing for more than five months.

And of course, the most recent oil spill was the result of the world's largest rig sinking 120 km off the coast of Brazil. Containers holding 1.2 million litres of diesel fuel and 295,000 litres of crude oil sank with the rig. While Brazilian scientists claimed the spill would have minimal environmental impact, it must be pointed out that the spill is part of a larger problem.

Jacques Cousteau noted that oil spills are like smoking - the problem is the cumulative effect over time.

Oil spills then are of concern for many reasons, not the least of which is the potential long-term impact (as pointed out by Cousteau) a spill can have on fisheries and fish habitat, such as a reduction in fish stocks, or fish recruitment.

While some experts note that oil spills are "unlikely to have serious impacts on fish populations," it is difficult and dangerous to generalize, especially when considering fragile fish stocks that may be dependent on one or two year classes for survival.

As noted by DFO, "there is also the special question of impacts on juvenile flatfish should large uncontrolled spills contaminate sediments. For instance, destruction of 20% of a population of juvenile American plaice would be expected to have a much greater potential for affecting recruitment than destruction of an equivalent percentage of larvae."

Indeed, increased tanker activity poses an increased risk of an oil spill in which case the impact on fish stocks, fish habitat as well as other marine life will depend on where the spill takes place. Even the proponents of the White Rose oil development admitted in its Comprehensive Study Report that "the residual effect of a major oil spill on fisheries is predicted to be adverse and significant." In addition, the study report noted that "cumulative effects on fisheries might occur as a result of the Hibernia, Terra Nova and White Rose oilfields, general marine transportation, seismic testing and exploration drilling."

Once again there are a lot of unanswered questions. Like seismic activities, the impact of oil spills on fish and fish habitat on the Grand Banks, and the south and west coasts is an area where research is required.

Role of Government and Government Agencies

Clearly, the federal and provincial governments have a major role to play with respect to the impact of offshore oil and gas development on fisheries.

The federal government, through the Department of Fisheries and Oceans, has a clear responsibility to protect fish stocks and fish habitat and through the Canadian Coast Guard to play a lead role in an oil spill clean-up.

The Oceans Act speaks to the precautionary approach, or erring on the side of caution. This principle can not only apply to fish harvesters, it must also apply to other users - such as the oil and gas industry.

In addition, the federal minister of fisheries has a responsibility to ensure pollution prevention as well as a national system of oil spill preparedness and response. We have to question though, how well such a system can work when the government continues to cut back on Canadian Coast Guard services such as surveillance.

Of course, the Canada-Newfoundland Offshore Petroleum Board also has a key role to play with respect to protecting the marine environment. The Board's Environmental Affairs branch "has the responsibility to ensure that offshore oil and gas industrial activities proceed in an environmentally acceptable manner." According to the Board, it reviews proposals for offshore activities from seismic surveys to production projects "to identify their potential effects upon the natural environment or upon other users of the environment such as the fishery."

In general, the relationship between the fishing and oil and gas industries has lacked communication. In order to address all the challenges that face the two industries - which are a little like two solitudes - we need special initiatives that can help us establish a peaceful co-existence.

The extent of offshore oil and gas activity, including seismic testing, exploration and production, adds a very real element of additional risk to the already risk-laden business of fishing. Normally, people expect some kind of benefit in return for accepting a risk to the stability of their livelihoods.

Peaceful co-existence... What needs to happen?

First of all we need to establish an oil and gas industry-funded, effective fisheries liaison office to be kept abreast of offshore oil and gas activities and to report to the fishing industry. There is a need for a formal process whereby the oil and gas industry reports on its activities.

In addition, the oil and gas industry should have to prove that their activities - from seismic blasting to construction, operation and decommissioning of an oil rig - will not have an adverse impact on fish stocks and fish habitat - or at the very least minimal impact.

Secondly, we need to re-examine the Environmental Studies Research Fund which is headquartered in Alberta and was established under the Canada Petroleum Resources Act in 1983. This fund is administered by a small secretariat and resides in the National Energy Board office and is directed by a government/industry/public management board. Its funding is a result of levies on oil and gas licence holders.

The fund is currently involved in two major study areas:
1. The possible impacts of seismic testing on fish, fish habitat and fish behaviour, as well as any effects on shellfish;
2. The cumulative impacts of oil and gas exploration and development on the marine environment off Canada's east coast.

What we are proposing is an independent research foundation/centre that caters strictly to east coast oil and gas activities and its impact on fisheries and the environment - funded in the same way as the ESRF. We are also recommending that the fishing industry have a much larger role to play in directing the research and that the Research Foundation be set up in this province.

Thirdly, a compensation program must be negotiated between the two industries to cover off any losses incurred by fish harvesters as a result of a major oil spill or accident or loss of traditional fishing grounds. This program should also include recognition of and compensation for the significant risk fish harvesters assume by sharing their traditional hunting grounds with a new, intensive industry that affects their long-term security as well as their shorter-term working activity.

Fourthly, the federal government must strengthen its role with respect to research, enforcement and ensuring the principle of erring on the side of caution is followed by all the ocean's users.

Effective committee structures with representatives from both industries dealing with issues such as tanker routes, exclusion zones, oil-related activities and spawning areas, as well as a host of day-to-day operational and environmental matters are also required. These structures would assist in developing proper education programs that would allow both industries to learn from and about each other.

Conclusion

The goal for all of us must be to ensure that our oceans and marine environment, including fish resources are protected for future generations.

As the Union representing most of the province's fishing industry, we believe building a working relationship between the fishing and oil and gas industries is long overdue.

We understand that the oil and gas industry will play a significant role in the province's economic future. That role can not and must not come at the expense of the fishery.

The two industries have worked side by side in other parts of the world such as Norway and we must examine what those jurisdictions have done to ensure a peaceful co-existence.

Ultimately, we must remember that the fishery, if protected, will provide for generations to come and will be around long after the last barrel of oil is drilled from the Grand Banks.