Introduction and Decision Makers
In an era of increasing global oil scarcity and incredible advances in technology, the north has become a subject of interest to oil developers looking to drill in Arctic waters. Canada’s Arctic in particular has become a hot spot for ocean activity following the rapid recession of Arctic ice (“Beaufort Sea”, 2011). Tentative exploration has been met with mixed reactions among local communities as stakeholders struggle to find a balance between jobs, the environment and Arctic culture.
In Canada, there are few actual decision-makers in the Arctic offshore drilling dispute. The federal government is the main decision-maker, with a division called the National Energy Board created to license and regulate the natural resource industry. There are many stakeholders that hold influence over the decisions that are made, but do not have true authority as the federal government does.
Governance Framework
The politics surrounding oil are complex and often involve international conflict. There have been several pushes in the 20th century to restrict oil production through international agreements, but the most significant change is the creation of the Organization of the Petroleum Exporting Countries (OPEC) in 1960. It is a conglomeration of several oil exporting nations that was created in order to establish greater government sovereignty over the oil market. OPEC has been hugely influential on the price of oil (Gately, 1984) and on places where oil is more expensive to produce, such as Canada.
Within Canada, the federal government regulates oil and natural gas production. There are several pieces of legislation put in place by parliament that legalize regulations put forth by the government. These are broad in scope and outline the safety measures required for resource extraction projects. The Canada Oil and Gas Operations Act is first and foremost a document outlining the duties of both the government and developers in a project. It covers all possible aspects of development projects, from government tariffs to waste management (Canada Oil and Gas Operations Act, 1985). The Canada Petroleum Resources Act has a focus on the resources themselves. This Act furthers government leverage by enabling them the ability to grant licenses to interested developers. Additionally, this act enables the collection of royalties from the resources (Canada Petroleum Resources Act, 1985).
The last broad piece of legislation is the National Energy Board Act. This act gives legal authority to the National Energy Board and outlines its mandate (National Energy Board Act, 1985). The NEB conducts reviews and consultations with stakeholders in order to weigh the needs of all stakeholders against the needs of the Canadian population (National Energy Board [NEB], 2011). The agency’s objective is to ensure that all energy extraction ventures are neutral or beneficial to the surrounding communities and environment. The federal government operates separately from the NEB and pursues the interests of the political party in power.
Remarkably there are very few to no provincial agreements in place in the Canada’s Arctic. This has largely to do with the fact that the northern area of Canada is composed of territories rather than provinces. There is an established government in each territory to deal with matters specific to the area, but this power is an extension of the federal government (Territorial Lands Act, 1985). The lack of provincial jurisdiction is a huge gap in provincial governance and has resulted in poor representation of smaller communities.
There is one exception to this gap. The entirety of Nunavut is part an Inuit land claim agreement, the largest in Canadian history. Inuit have equal representation with the federal government and have a range of rights and title across the territory. Again, despite the co-governance, the federal government has jurisdiction over crown land and can push resource extraction initiatives, the caveat being that some of the royalties must be passed to the Inuit of Nunavut (Nunavut Land Claims Agreement Act, 1993).
Similar to the Nunavut case, other Inuit groups have decision-making power on the lands they have claims to and their agreements often include the rights to oil resources. Within territories there are smaller regional land claim agreements in place (Fenge, 2007). The federal government has made several agreements with Inuit groups in the Arctic: The Northern portion of the Yukon manages land collaboratively with the the Vuntut Gwitch’in, and The Inuvialuit Final Agreement in the Western Arctic sets aside several areas for protection as national parks.
These agreements represent a shift in power towards Aboriginal groups. In modern Canadian society, respect towards Aboriginal communities has become paramount. With a now progressive focus on an inclusive Canadian image, Aboriginal groups have more influence than ever, though it is informal. Many Inuit communities have expressed hesitance in allowing oil companies to commence drilling in the north. Although they might not have final decision-making authority, their ability to command respect and prior land-claim agreements might be enough to sway Arctic resource management decisions.
Governance Practices
In practice, the Canadian government does not make a full effort at transparency. While most of the legislation is now available for review online, it can be difficult to find and the sheer length and complexity of the legal documents can be challenging for the public. There have been no further attempts by the government at making the acts accessible to the greater Canadian population. On the other hand, government legislature has been available for over 10 years, with records for each amendment. The documents themselves are confusing but interested parties have ample to time to examine them.
The Deepwater Horizon spill in 2010 resulted in a shift in the way the federal government handled consultation (NEB, 2010). The NEB proceedings were inclusive, involving numerous stakeholders and were remarkably more transparent than the original government legislature. The technology used at Deepwater Horizon was the same technology proposed by BP for use in the Arctic. The proportion of the disaster resulted in the NEB scheduling additional consultation with the affected stakeholders in the Arctic. Full documentation of the consultations was published online in using well-written, simple language.
The NEB serves as the venue for stakeholders to voice their concerns. Outside of lands they hold title to, Inuit groups have no decision-making power, even though resource extraction activities can have an effect on their traditional hunting grounds. Concerns about the impact of drilling on the locals’ way of life have caused many to participate in consultations (NEB, 2011). Ultimately, the federal government and the NEB hold the final authority over resource decisions on Crown land; the impact of community participation can be difficult to quantify.
The variety of land claims around the Arctic shifts accountability depending on the area. For example, the Inuvialuit Final Agreement gives oil developers absolute liability for any incidents during the resource extraction. There has been a general consensus that “there is a need for accountability by all, including industry and regulators” (NEB, 2011). The overwhelming authority of the federal government and the NEB holds them accountable for their decisions by default. Proposed drilling projects would take place outside any claimed areas, in the Beaufort Sea. While the federal government has signed a memorandum of understanding with the Inuvialuit concerning fish management in the Beaufort Sea (“Beaufort Sea”, 2011), the agreement does not concern other natural resources.
Conclusions
Governance concerning drilling in the Arctic is a complex issue that grows even more difficult in the context of world politics and markets. One of the main issues behind the offshore drilling debate is the overwhelming power of the federal government. The lack of authority given to territorial government translates to a general disorganization of agreements at lower levels.
The gap in governance has resulted in an unequal representation of Canadians whose communities are at the core of this debate; they have had to rely on influence, not authority, to protect their lands. Consultations with the National Energy Board are broad and inclusive, but the true value of stakeholders’ input into the final decision are unknown and it is entirely possible for the government to proceed according to its own will.
Finally, because offshore drilling is currently in the consultation stage, there are no true examples of federal accountability. There have been some historical agreements made in the Arctic, many of which have yet to be replicated in other parts of Canada. The government has made substantial strides over the years to collaborate on a government-to-government basis with the Inuit (Broadhead, 2010). However, the fact remains that the federal government holds nearly all of the authority over this matter and their accountability in future endeavors will be an expectation, not a question.
References
Beaufort Sea commercial fishing banned. (2011, April 15). Retrieved from http://www.cbc.ca/news/
Broadhead, L. (2010). Canadian sovereignty versus northern security: The case for updating our mental map of the Arctic. International Journal: Canada’s Journal of Global Policy Analysis, 65(4), 913-930. Retrieved from http://ijx.sagepub.com/
Canada Oil and Gas Operations Act, R. S. C., c.O-7 (1985). Retrieved from http://laws-lois.justice.gc.ca/eng/acts/O-7/index.html
Canada Petroleum Resources Act, R.S.C., c. 36 (2nd Supp.) (1985). Retrieved from http://laws-lois.justice.gc.ca/eng/acts/C-8.5/index.html
Fenge, T. (2007). Inuit and the Nunavut Land Claims Agreement: Supporting Canada’s Arctic Sovereignty. OPTIONS POLITIQUES. Retrieved from http://irpp.org/wp-content/uploads/sites/2/assets/po/the-mood-of-canada/fenge.pdf
Gately, D. (1984). A Ten-Year Retrospective: OPEC and the World Oil Market. Journal of Economic Literature, 22(3), 1100–1114. Retrieved from http://www.jstor.org/stable/2725308
National Energy Board. (2011, December 1). Review of offshore drilling in the Canadian Arctic. Retrieved from https://www.neb-one.gc.ca/nrth/rctcffshrdrllngrvw/2011fnlrprt/index-eng.html
National Energy Board Act, R.S.C., c. N-7 (1985). Retrieved from http://laws-lois.justice.gc.ca/eng/acts/N-7/index.html
Nunavut Land Claims Agreement Act, S.C., c. 29 (1993). Retrieved from http://laws-lois.justice.gc.ca/eng/acts/N-28.7/
Territorial Lands Act, R.S.C., c. T-7 (1985). Retrieved from http://laws-lois.justice.gc.ca/eng/acts/T-7/index.html