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Indeed, in a November 2009 speech to the CIM Petroleum Society, Miller said $15-billion departs Quebec every year to import oil “without the economic benefits of the development of that oil.”
Old Harry’s potentially rosy economics aside, that doesn’t change the fact that relations between Quebec and Newfoundland and Labrador are testy.
The Parti Québécois expressed fears earlier this spring that by drilling a well on the Newfoundland sector of Old Harry, Corridor Resources will siphon Quebec’s resources through Newfoundland and end up leaving the province short of billions of dollars in royalties. “We don’t want Old Harry to become payback for Churchill Falls,” PQ critic Alexandre Cloutier said at the time.
A master’s research paper prepared for Memorial University this past May examined the factors impeding the development of Old Harry. Sean Kelly, author of the paper, says that the industry has not evolved because of the level of uncertainty around things like the resource itself, environmental impacts, the management and regulatory regime, royalties, and the offshore boundary. He states that, “The problem that we see in the Gulf is a real catch 22. Industry will not invest without regulatory certainty, and governments are reluctant to create regulatory certainty without a significant discovery.”
The paper, which is dated prior to the blowout in the Gulf of Mexico, found that the lack of a Canada-Quebec joint management and revenue sharing agreement is a major impediment to industry development. If management issues were resolved through an Accord like the Atlantic accords, then the lack of a boundary agreement would not preclude exploration and development from taking place in some parts of the Gulf.
Even though the Atlantic Accords were signed in the mid-1980s, the offshore boundary between Nova Scotia and Newfoundland and Labrador was not settled until 2002, when an arbitration panel appointed by the federal Natural Resources minister under the Atlantic Accords Implementation Act was established to resolve the matter.
This past spring the Quebec legislature passed an all-party motion by a vote of 101 to one to support a Canada-Quebec offshore accord. In fact, industry sources indicate that the federal and Quebec governments have already initiated preparatory Accord talks.
The public, however, has never been more sensitive to oil and gas exploration in light of the oil spill in the Gulf of Mexico, described as the biggest environmental disaster in U.S. history. The Deepwater Horizon rig exploded and sank April 20th, killing 11 workers and threatening the Gulf Coast from Louisiana to Florida. The leak may not be plugged until August.
Still, Miller, who plans to retire from Corridor Resources on Oct. 1, doesn’t think Old Harry should be measured by the same yard stick as the BP catastrophe. He said the ultra-deep well in the Gulf is about three times deeper than the Old Harry prospect. “Thousands of well have been drilled at the depths we’re looking at,” he said. “And drilled safely.”
alexandre cloutier said “we don’t want old harry to become payback for churchill falls “. sure sounds like he knows how unfaier and immoral the churchill falls fiasco is.
an easy fix would be to make the churchill falls deal fair and equilable and there would be no reason to worry about “payback “.
The 1964 agreement was not recognized by the federal government either. A federal arbitration on the validity of the agreement in 2001 found it to be lacking the necessary parts to be considered a legal agreement. One of the main reasons was that the boundaries were included as a general proposal to the federal government for the provinces claim on sub sea rights. In 1967 the provinces lost and the Trudeau government refused to implement their proposal for sub sea rights and the boundaries that went with them. In reality, the UN Convention on the Seas clearly awards islands that do not follow the natural shoreline of a state a 22.5 km territorial sea, and a 22.5 km contigous zone – which would leave Old Harry outside the Magdelan Islands and therefore out of Quebec’s jurisdiction. There are many facts that are being ignored in this dipute at the moment that will come to the fore. It would be wise to recognize them in advance. Yours sincerely, Brad Cabana.
It would be wise to postpone drilling, as Québec is doing. That nasty BP spill could happen here if we aren’t careful, and here we are about to destroy an environment. What of our fisheries? Do they not matter? Do I as a fisherman not matter to the goals of my province?