BHP Canada Exploration Drilling Project ENVIRONMENTAL ASSESSMENT REPORT DECEMBER 2020 IMPACT ASSESSMENT AGENCY OF CANADA © Her Majesty the Queen in Right of Canada, represented by the Minister of Environment and Climate Change (2020). Catalogue No: En106-233/2020E-PDF ISBN: 978-0-660-36401-8 This publication may be reproduced in whole or in part for non-commercial purposes, and in any format, without charge or further permission. Unless otherwise specified, you may not reproduce materials, in whole or in part, for the purpose of commercial redistribution without prior written permission from the Impact Assessment Agency, Ottawa, Ontario K1A 0H3 or [email protected]. This document has been issued in French under the title: Projet de forage exploratoire BHP Canada BHP CANADA EXPLORATION DRILLING PROJECT i IMPACT ASSESSMENT AGENCY OF CANADA Executive Summary BHP Petroleum (New Ventures) Corporation (the Proponent) is proposing to conduct an exploration drilling project within its two exploration licences, located approximately 350 kilometres northeast of St. John’s, Newfoundland and Labrador, in the Atlantic Ocean. The Proponent’s offshore exploration licences are located in the Orphan Basin, both inside and outside Canada’s 200 nautical mile exclusive economic zone. The Project would include exploration drilling, possible appraisal (delineation) drilling, vertical seismic profiling, well testing, well abandonment or suspension and associated supply and service activities. Up to two mobile offshore drilling units designed for year-round operations would be used for the Project, as well as supply vessels and helicopters that would travel between the drilling area and an existing supply base and airport in the St. John’s region. The timeline proposed for the Project is between 2021 and 2028. The Impact Assessment Agency of Canada (the Agency) conducted a federal environmental assessment (EA) of the Project based on the requirements of the Canadian Environmental Assessment Act, 2012 (CEAA 2012). On August 28, 2019, the Impact Assessment Act (IAA) came into force and CEAA 2012 was repealed. However, in accordance with the transitional provisions of the IAA, the EA of this Project is being continued under CEAA 2012 as if that Act had not been repealed. The Project would require authorization under the Canada-Newfoundland and Labrador Atlantic Accord Implementation Act and may require authorization under the Fisheries Act. A permit under the Species at Risk Act may be required for effects on species that are listed as endangered or threatened on Schedule 1 of that Act. This report summarizes the assessment conducted by the Agency in consultation with the Canada- Newfoundland and Labrador Offshore Petroleum Board, Fisheries and Oceans Canada, Environment and Climate Change Canada, Health Canada, Natural Resources Canada, and Transport Canada. The Agency’s analysis drew on: information from the Proponent; previous and ongoing EAs of other offshore exploratory drilling projects; geospatial data and scientific information from the Regional Assessment of Offshore Oil and Gas Exploratory Drilling East of Newfoundland and Labrador; and comments from Indigenous peoples and the general public provided on this Project as well as those received on previous and ongoing EAs of other exploratory drilling projects. The Agency analyzed environmental effects on areas of federal jurisdiction, as well as effects related to changes to the environment that are directly linked or necessarily incidental to federal decisions that may be required for the Project. The features of the natural and human environment considered by the Agency were: fish and fish habitat; marine mammals and sea turtles; migratory birds; species at risk; special areas; commercial fisheries; and BHP CANADA EXPLORATION DRILLING PROJECT i IMPACT ASSESSMENT AGENCY OF CANADA current use of lands and resources for traditional purposes and socioeconomic conditions and health of Indigenous peoples. Indigenous groups and members of the public raised concerns about the Project’s potential routine and accidental effects on the marine environment (e.g., marine mammals, fish, birds, special areas), commercial fishing and on related effects on Indigenous peoples and communities. The potential environmental effects of the Project’s routine operations include: effects on fish habitat caused by the discharge of used drilling muds and cuttings to the marine environment; effects on marine mammals, fish and sea turtles caused by underwater sound from well site surveys and vertical seismic profiling operations, and from support vessels and mobile offshore drilling unit operations; effects on migratory birds caused by lights on the mobile offshore drilling unit and platform supply vessels and, if well testing is required, flaring; and interference with commercial fisheries, Indigenous or otherwise, including effects on fishing activity that may be caused by the need to avoid the safety (exclusion) zone around drilling operations. The Proponent’s project planning and design incorporates measures to mitigate the adverse effects of the Project. These include adherence to existing guidelines and regulations and planning to identify, control and monitor environmental risks. Accidents and malfunctions could occur during exploration drilling, including batch fuel and drilling fluid spills and blowouts. Historically, the incidence of large oil spills during exploration drilling is extremely low. The Proponent conducted oil spill fate and trajectory modelling to inform the assessment of potential environmental effects and spill response planning. The Proponent proposed design measures, operational procedures, and dedicated resources to prevent and respond to spills of any size from the Project, and stated that in the unlikely event of a subsea hydrocarbon release, response measures would be undertaken in a safe, prompt and coordinated manner. Response measures could include containment, application of dispersants, mechanical recovery and shoreline protection operations, as applicable. To minimize response times, the Canada-Newfoundland and Labrador Offshore Petroleum Board would require submission of well containment strategies that explore options to reduce response times. The Agency identified key mitigation measures and follow-up program requirements for consideration by the Minister of Environment and Climate Change in establishing conditions as part of a decision statement, in the event the Project is ultimately permitted to proceed. Given the current and potential expansion of activity of the offshore oil and gas sector in the Newfoundland and Labrador offshore, the Agency has recommended that the information gathered through the implementation of these conditions be published online to make it available to Indigenous groups, stakeholders and industry for consideration in future assessments. The Project’s possible impacts on potential or established Aboriginal or treaty rights were also examined. One of the primary concerns raised by Indigenous groups during the EA is the potential for effects on Atlantic Salmon, a species of importance to Indigenous cultures that has experienced declines in recent decades, with some populations classified as endangered or threatened. Recognizing data gaps in BHP CANADA EXPLORATION DRILLING PROJECT ii IMPACT ASSESSMENT AGENCY OF CANADA research on at-sea salmon distribution and migration, and by extension the potential effects on the species from offshore drilling, the industry levy-funded Environmental Studies Research Fund has recently funded a collaborative research project led by Fisheries and Oceans Canada. This project involves 50 partners and collaborators from government, academia, not for profit organizations, and Indigenous groups. The objective is to determine when, where, and for how long Atlantic salmon from three different life stages are present in the eastern Canadian offshore region. Indigenous groups also raised concerns about the potential effects of large-scale spills on fishing for commercial or traditional purposes and associated socioeconomic and health effects. Fishing by Indigenous communities for commercial or traditional purposes is the primary rights-based activity that could be affected by the Project. The Agency is of the opinion that the recommended measures to mitigate potential environmental effects on fish and fish habitat and on commercial fisheries, and to prevent or reduce the effects of accidents and malfunctions, are appropriate measures to accommodate for potential impacts on rights. The Agency is of the view that the Project is not likely to cause significant adverse environmental effects, taking into account the implementation of mitigation measures. BHP CANADA EXPLORATION DRILLING PROJECT iii IMPACT ASSESSMENT AGENCY OF CANADA Contents Executive Summary ................................................................................................. i List of Tables ......................................................................................................... vi List of Figures ........................................................................................................ vi List of Abbreviations and Acronyms .................................................................... vii 1. Introduction ...................................................................................................... 1 2. Project Overview .............................................................................................