NEXEN ENERGY ULC FLEMISH PASS EXPLORATION DRILLING PROJECT ( )

Transcription

1 NEXEN ENERGY ULC FLEMISH PASS EXPLORATION DRILLING PROJECT ( ) Pursuant to the Requirements of the Canadian Environmental Assessment Act, 2012 Submitted by: Nexen Energy ULC 701A, 215 Water Street St. John s, Newfoundland and Labrador Canada A1C 6C9 Prepared with the assistance of: Amec Foster Wheeler Environment & Infrastructure A Division of Amec Foster Wheeler Americas Limited 133 Crosbie Road, PO Box St. John s, Newfoundland and Labrador Canada A1B 4A5 Amec Fw TF April 2017

2 TABLE OF CONTENTS Page No. 1 INTRODUCTION Overview of the Project Proponent Information Corporate Overview Offshore Experience Health, Safety and Environment Key Contacts Regulatory Requirements and Processes Environmental Assessment The Accord Acts Land Tenure and Licencing Authorizations and Approvals Other Regulatory Requirements and Interests Document Purpose and Organization PROJECT DESCRIPTION Project Location Schedule Key Components and Activities Drilling Vertical Seismic Profiling Well Evaluation and Testing Decommissioning and Abandonment or Suspension Supply and Servicing Potential Environmental Emissions and Their Management Atmospheric Emissions Underwater Sound Drilling Fluids and Cuttings Drilling Cement Other Liquid and Solid Wastes Potential Accidental Events ENVIRONMENTAL SETTING Other, Past Environmental Assessments Physical Environment Geology Bathymetry Climatology Oceanography Ice Conditions Biological Environment Marine Fish and Fish Habitat Marine and Migratory Birds Marine Mammals and Sea Turtles Species at Risk Protected and Special Areas Human Environment Nexen Energy ULC Flemish Pass Exploration Drilling Project ( ) EA Project Description April 2017 Page 2

3 3.4.1 Commercial Fisheries Other Socioeconomic Components and Activities CONSULTATION AND ENGAGEMENT Governmental Consultation Aboriginal Engagement Public and Stakeholder Consultation POTENTIAL PROJECT-RELATED ENVIRONMENTAL INTERACTIONS Potential Project-Related Changes to the Environment Planned Project Components and Activities Potential Unplanned Events Environmental Assessment Scoping Considerations REFERENCES LIST OF TABLES Page No. Table 1.1 Nexen Exploration Licences Where Drilling Activity May Occur Table 2.1 Nexen Exploration Licences off Eastern Newfoundland Table 2.2 Project Area Corner Point Coordinates Table 3.1 Species at Risk or Otherwise of Special Conservation Concern (Current Designations) 40 Table 5.1 Potential Environmental Interactions and Associated Mitigation (Summarized from Amec 2014) Table 5.2 Environmental Components / Issues and Potential Environmental Interactions Relevant to CEAA 2012 Planned Project Components and Activities Table 5.3 Environmental Components / Issues and Potential Environmental Interactions Relevant to CEAA 2012 Unplanned Project Components and Activities LIST OF FIGURES Page No. Figure 1.1 Nexen Energy ULC Flemish Pass Exploration Drilling Project ( )... 7 Figure 2.1 Project Area and Associated Exploration Licences Figure 2.2 Project Area and Associated Exploration Licences (Zoomed in Version) Figure 2.3 Typical Semi-submersible Drilling Unit (Top) and Drill Ship (Bottom) Figure 2.4 Conceptual Diagram of a Typical Offshore Exploration / Appraisal Well Figure 2.5 Existing and Potential Vessel Traffic Routes Figure 3.1 Regional Features Figure 3.2 Protected and Special Areas within and off Eastern Newfoundland Figure 3.3 Commercial Fishing Locations, All Species ( ) Figure 3.4 Commercial Fishing Locations, Fixed and Mobile Gear ( ) Figure 3.5 NAFO Fishing Zones and Foreign Fleet Fisheries Footprint Figure 3.6 Previous Wells Drilled off Eastern Newfoundland LIST OF APPENDICES Appendix A Table of Concordance with the Prescribed Information for the Description of a Designated Project Regulations under CEAA 2012 and the Guide to Preparing a Description of a Designated Project under CEAA 2012 Nexen Energy ULC Flemish Pass Exploration Drilling Project ( ) EA Project Description April 2017 Page 3

4 LIST OF ACRONYMS AND ABBREVIATIONS Accord Acts ACSS Canada-Newfoundland and Labrador Atlantic Accord Implementation Act and the Canada-Newfoundland and Labrador Atlantic Accord Implementation Newfoundland and Labrador Act Atlantic Canada Shorebird Survey ADW Approval to Drill a Well BML Below mud line BOP Blow-out Preventer CEAA 2012 Canadian Environmental Assessment Act, 2012 C-NLOPB Canada-Newfoundland and Labrador Offshore Petroleum Board ( the Board ) CNOOC China National Offshore Oil Corporation CO Carbon monoxide CO 2 Carbon dioxide COSEWIC Committee on the Status of Endangered Wildlife in Canada DFO Fisheries and Oceans Canada EA Environmental Assessment EBSA Ecologically and Biologically Significant Area ECSAS Eastern Canadian Seabirds at Sea EEM Environmental Effects Monitoring EEZ Exclusive Economic Zone EIS Environmental Impact Statement EL Exploration Licence EPP Environmental Protection Plan FFAW-Unifor Fisheries, Food and Allied Workers FLO Fisheries Liaison Officer GHGs Greenhouse Gases HSE&A Health, Safety, Environment & Assurance IBAs Important Bird Areas IMS Integrated Management System ISO International Organization for Standardization MARPOL International Convention for the Prevention of Pollution from Ships NAFO Northwest Atlantic Fisheries Organization Nexen Nexen Energy ULC NL ESA Newfoundland and Labrador Endangered Species Act NL Newfoundland and Labrador Nexen Energy ULC Flemish Pass Exploration Drilling Project ( ) EA Project Description April 2017 Page 4

5 nm No x NRA OA OBIS OL OWTG psi RMA ROV RV SARA SBM SEA So x TSP UK UNGA UTM UXO VC VOC VSP WBM nautical mile Nitrogen oxides NAFO Regulatory Area Operations Authorization Ocean Biogeographic Information System Operating Licence Offshore Waste Treatment Guidelines pounds per square inch Representative Marine Area Remotely Operated Vehicle Research Vessel Canadian Species at Risk Act Synthetic-based Drilling Mud Strategic Environmental Assessment Sulphur oxides Total suspended particulates United Kingdom United Nations General Assembly Universal Transverse Mercator Unexploded Ordnance Valued Component Volatile organic compound Vertical Seismic Profile Water-based Drilling Mud Nexen Energy ULC Flemish Pass Exploration Drilling Project ( ) EA Project Description April 2017 Page 5

6 1 INTRODUCTION Nexen Energy ULC (Nexen) is planning to conduct a program of petroleum exploration drilling and associated activities in the eastern portion of the Canada-Newfoundland and Labrador Offshore Area over the period 2018 to 2028 (hereinafter also referred to as the Project). The proposed Project Area (Figure 1.1) included two Exploration Licences (ELs) in the Flemish Pass region for which Nexen is the operator and sole shareholder, and which have not yet been subject to exploration drilling activity to date pursuant to these licences. The Project will include exploration drilling within these ELs, possible appraisal (delineation) drilling in the event of a hydrocarbon discovery, vertical seismic profiling (VSP), well testing, eventual well decommissioning and abandonment (or suspension) procedures, and associated supply and service activities. The Project requires review pursuant to the requirements of the Canadian Environmental Assessment Act, 2012 (CEAA 2012), as it has been determined to constitute a designated project under the associated Regulations Designating Physical Activities. 1.1 Overview of the Project Nexen s current offshore interests in Eastern Canada include two existing ELs off Eastern Newfoundland (EL 1144 and EL 1150) which were issued by the Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB, or the Board ) effective January 15, 2015 and January 15, 2016, respectively. Nexen is currently the sole interest holder in EL 1144 and EL (Figure 1.1). The purpose of this Project is to explore prospective oil and gas targets within these ELs in order to help determine the potential presence of hydrocarbons in these areas. It is currently planned that the Project will involve drilling between one and possibly up to five wells on each of these ELs, and it may therefore comprise the drilling of up to 10 wells within the Project Area over its duration. The specific number, location and type (exploration or appraisal) of these wells will be determined as Project planning activities continue based on available geophysical survey data, information from previously drilled wells and other applicable information. It is also anticipated that the Project may include associated VSP surveys, well testing and eventual decommissioning and abandonment or suspension activities, and associated supply and service activities required to support drilling activities. Any Project-related onshore support activities are expected to take place at existing onshore supply facilities that are owned and operated by third-party contractors, have been previously approved under applicable regulatory processes, and that provide services to multiple offshore operators. Drilling operations could begin as early as 2018 pending the receipt of required regulatory and corporate approvals, the availability of suitable drilling units, the identification of appropriate drilling targets, and other technical, logistical and commercial considerations. Offshore exploratory wells in the first drilling program on either of the ELs that comprise the proposed Project Area are a designated project and require the submission of a Project Description under CEAA Nexen Energy ULC Flemish Pass Exploration Drilling Project ( ) EA Project Description April 2017 Page 6

7 Figure 1.1 Nexen Energy ULC Flemish Pass Exploration Drilling Project ( ) Nexen Energy ULC Flemish Pass Exploration Drilling Project ( ) EA Project Description April 2017 Page 7

8 1.2 Proponent Information Name of Corporate Body: Nexen Energy ULC 701A, 215 Water Street St. John s, Newfoundland and Labrador Canada A1C 6C Corporate Overview Nexen is an upstream oil and gas company that is responsible for managing its energy resources in Canada and providing management services and oversight to its affiliates including in the UK North Sea, offshore West Africa, and the United States ( manages ). A wholly-owned subsidiary of CNOOC Limited, Nexen manages three principal lines of businesses: 1) Conventional oil and gas, 2) Oil sands, and 3) Shale gas / oil. Although Nexen manages onshore production in several areas around the world, the largest component of the conventional business it manages occurs offshore, with approximately half of the production coming from offshore facilities in the UK North Sea, West Africa, and the Gulf of Mexico. The company is also a significant player in Canada s oil sands industry, and produces shale gas in northeastern British Columbia while also managing working interests in several shale projects in the United States. Further information on Nexen can be found at Offshore Experience Nexen is one of the largest oil producers in the UK North Sea, and is the operating partner of the Buzzard, Golden Eagle and Scott developments. Buzzard is the largest UK North Sea oil discovery in the past two decades, and Golden Eagle was the second largest oil discovery in the UK North Sea since the Buzzard discovery in Recent exploration projects in the region include the UK West Shetlands, and the acquisition of four licenses in the Irish Atlantic Margin. Nexen also has working interest in the Usan development in offshore West Africa, as well as the deepwater Stampede, Appomattox and Norphlet plays in the Gulf of Mexico. Stampede is located 258 kilometers off the Louisiana coast in approximately 1,000 m of water, and Appomattax is located approximately 129 kilometers off the coast of Louisiana in approximately 2,000 m of water. Nexen also has a partnership in the Stabroek License in offshore Guyana, and announced the world s largest oil discovery in 2015, located 193 kilometers offshore in 1,743 m of water. Nexen has extensive experience drilling offshore and deepwater offshore wells in many regions around the world, as both an operator and a partner. As an operator, Nexen has drilled in the following regions over the past 15 years: UK North Sea Shelf, deepwater UK West of Shetlands, Norweigan North Sea Shelf, deepwater West Africa (Nigeria and Equatorial Guinea), West Africa Shelf (Nigeria), deepwater US Gulf of Mexico and the US Gulf of Mexico Shelf Health, Safety and Environment Health, Safety and Environmental protection are core values at Nexen and the success of every activity undertaken by Nexen is measured on the ability to execute work safely each and every day. Nexen s business objectives are to operate safely and responsibly without causing harm to Nexen Energy ULC Flemish Pass Exploration Drilling Project ( ) EA Project Description April 2017 Page 8

9 employees, contractors, joint venture partners or the communities in which we operate and to minimize the Company s environmental impacts. Nexen is committed to promoting a culture of Safety First; striving for best-in-class health, safety and environmental performance; pursuing a goal of no harm to people; and, minimizing our impact on the environment. The Nexen Health, Safety, Environment & Assurance (HSE&A) Policy commits to: Regulatory requirements, of the jurisdictions in which we operate, shall be met or exceeded to protect employees, contractors, the environment and communities health, safety, security and well-being. A HSE&A focused culture shall be promoted, sustained and continuously improved across the Company. Formal processes for identifying hazards, managing risks and ensuring compliance shall be developed, documented and implemented. Incidents and any departures from planned arrangements shall be promptly and effectively investigated, appropriate actions taken and findings shared to prevent recurrence. HSE&A policies, standards, processes and procedural aids shall be met or exceeded by all employees, contractors and their subcontractors undertaking work. Nexen has developed an Integrated Management System (IMS) that consists of 13 fundamental Elements to enable and assure leading performance in all business units within the organization: 1. Leadership 2. Full Asset Lifecycle Operations 2.1. Explore 2.2. Develop 2.3. Produce 2.4. Market 2.5. Abandon 3. Business Development 4. Risk Management 5. Organization & People 6. Health, Safety, Environment and Assurance 7. Social Responsibility 8. Financial Management 9. Supply Chain Management 10. Information Management 11. Legal 12. Continuous Improvement 13. Change Management The East Coast Canada region s management system will incorporate all of the fundamental elements of the IMS, and will include (but is not limited to) specific regional procedures for environmental management (to ISO 14000), ice management, oil spill response, aviation, emergency response and communications. Nexen Energy ULC Flemish Pass Exploration Drilling Project ( ) EA Project Description April 2017 Page 9

10 1.2.3 Key Contacts The principal Nexen contacts concerning this Project and its Environmental Assessment (EA) review are as follows: Regional Manager: Primary Contact for Environmental Assessment Process: Andrew Hamilton General Manager, Newfoundland Region Nexen Energy ULC 701A, 215 Water Street, St. John s, NL Canada A1C 6C9 . Erin Thomson, P.Eng. Environment and Regulatory Affairs Nexen Energy ULC 801-7th Avenue SW, Calgary, AB Canada T2P 3P7 Tel. (403) Regulatory Requirements and Processes The proposed Project will require a number of approvals and authorizations under applicable regulatory processes, as summarized below Environmental Assessment Proposed oil and gas exploration activities in the Canada - NL Offshore Area may be subject to Environmental Assessment (EA) review pursuant to the requirements of CEAA 2012 and its associated Regulations. The federal EA process under CEAA 2012 focuses on potential adverse environmental effects that are within areas of federal jurisdiction, including: fish and fish habitat, migratory birds, federal lands and other changes to the environment that are directly linked to or necessarily incidental to any federal decisions about a project. CEAA 2012 also has an associated set of Regulations Designating Physical Activities, which identify the physical activities that constitute the "designated projects" that may require a federal EA. These Regulations specify a number of types and scales of oil and gas activities that are subject to federal EA review, including (Section 10): The drilling, testing and abandonment of offshore exploratory wells in the first drilling program in an area set out in one or more exploration licences issued in accordance with the Canada Newfoundland and Labrador Atlantic Accord Implementation Act or the Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation Act. The Minister of the Environment may also require an EA for any project if there is the potential for environmental effects in areas of federal jurisdiction or public concerns about such effects. Nexen Energy ULC Flemish Pass Exploration Drilling Project ( ) EA Project Description April 2017 Page 10

11 If the federal EA process does apply to a proposed project, the review commences with the proponent s submission of a Project Description document. Upon receipt of an adequate Project Description from the proponent of an applicable project, the Canadian Environmental Assessment Agency has up to 45 days (including a 20-day public comment period) to determine whether to require a federal EA. During this "screening" step, government examines whether the project may cause adverse environmental effects on areas of federal jurisdiction or as a result of an associated federal decision. This proposed Project involves environmental components, issues and requirements that fall within areas of federal jurisdiction. This includes, for example, the fact that Project activities are planned to take place within the offshore marine environment, which, as federal waters, are considered federal lands under CEAA CEAA 2012 specifically defines federal lands as including.. (i) the internal waters of Canada, in any area of the sea not within a province, (ii) the territorial sea of Canada, in any area of the sea not within a province, (iii) the exclusive economic zone of Canada, and (iv) the continental shelf of Canada... The Project also has the potential to affect environmental components such as fish and fish habitat, marine / migratory birds, and marine mammals and sea turtles that fall under federal jurisdiction, and a number of relevant permits, authorizations and/or compliance may be required under the federal Fisheries Act, Migratory Birds Convention Act, Species at Risk Act and possibly others. No federal funding has been or will be requested or received by Nexen from any federal authority to support this Project. Petroleum exploration and development activities offshore Newfoundland and Labrador are regulated by the C-NLOPB (see Section below). In addition to EA requirements under CEAA 2012, the C- NLOPB also requires that project-specific EAs be completed in relation to certain types of petroleum activities in the Canada-NL Offshore Area, as part of their required authorizations pursuant to Section 138(1)b of the Canada-Newfoundland and Labrador Atlantic Accord Implementation Act and Section 134(1)b of the Canada-Newfoundland and Labrador Atlantic Accord Implementation Newfoundland and Labrador Act. The C-NLOPB s EA review process typically involves the Proponent completing an EA Report in compliance with a project-specific Scoping Document issued by the C-NLOPB, with associated input from and review by a group of provincial and federal government agencies and nongovernmental organizations. It is anticipated that any required EA review for this Project under CEAA 2012 will involve C-NLOPB participation, and that any Environmental Impact Statement (EIS) completed under CEAA 2012 will also address the C-NLOPB s EA requirements. Given the nature, scope and location of the proposed Project, which will take place in the marine environment over 400 km offshore eastern Newfoundland and will not involve the development of any Nexen owned or operated new on-land or near shore infrastructure, it is not anticipated that provincial environmental regulatory interests will be triggered for this Project. Specifically, it is not expected that EA review and approval will be required under the NL Environmental Protection Act (Part X), or that other provincial or municipal permits or authorizations will be required. This will be confirmed through discussions with relevant provincial government departments and agencies as Project planning and regulatory reviews progress. Nexen Energy ULC Flemish Pass Exploration Drilling Project ( ) EA Project Description April 2017 Page 11

12 1.3.2 The Accord Acts The C-NLOPB is responsible, on behalf of the Governments of Canada and Newfoundland and Labrador, for petroleum resource management in the Canada NL Offshore Area. The Canada- Newfoundland and Labrador Atlantic Accord Implementation Newfoundland and Labrador Act and the Canada-Newfoundland and Labrador Atlantic Accord Implementation Act (the Accord Acts), administered by the C-NLOPB, provide for joint management of the Canada NL Offshore Area and govern all oil and gas activities in the region. The Canada-NL Offshore Area, as defined in the Accord Acts, includes those lands within Canada s 200 nautical mile Exclusive Economic Zone (EEZ) or to the edge of the continental margin, whichever is greater. As illustrated in Figure 1.1, the proposed Project Area includes marine areas (lands) that are located beyond Canada s EEZ on the outer continental shelf. The Board's responsibilities under the Accord Acts include but are not limited to: the issuance and administration of petroleum and exploration and development rights; administration of statutory requirements regulating offshore exploration, development and production; and approval of Canada- NL benefits and development plans Land Tenure and Licencing The C-NLOPB administers a scheduled land tenure system in relation to rights issuance in the Canada-NL Offshore Area. The rights issuance process commences with an initial nomination of sectors, after which there is a period of time appropriate to the cycle for exploration efforts to be undertaken. This is followed by the issuance of an eventual call for nomination of parcels for lands within an identified sector. A Call for Bids is then issued for specific parcels, from which successful bidders are issued an EL. Nominations may otherwise be received for lands that are not offered in a scheduled cycle and a Call for Bids may be issued. Normally, the interest owner of an EL will explore that licence and, upon finding a discovery, be issued a Significant Discovery Licence to further delineate the discovery in anticipation of finding commercial resources which may lead to the issuance of a Production Licence. Of particular relevance to the proposed offshore exploration activities that are the subject of this Project Description, once issued by the C-NLOPB an EL confers: 1) the right to explore for, and the exclusive right to drill and test for, petroleum; 2) the exclusive right to develop those portions of the offshore area in order to produce petroleum; and 3) the exclusive right, subject to compliance with the other provisions of the Accord Acts, to obtain a Production Licence. ELs have a maximum nine year term consisting of two consecutive periods. The interest owner is required to drill or spud and diligently pursue one exploratory well on or before the expiry date of Period I as a condition of obtaining tenure to Period II. Period I may be extended with the filing of a drilling deposit. Table 1.1 lists the ELs operated by Nexen on which drilling may occur. Nexen Energy ULC Flemish Pass Exploration Drilling Project ( ) EA Project Description April 2017 Page 12

13 Table 1.1 Nexen Exploration Licences Where Drilling Activity May Occur Licence Number Interest Holder Expiry Drilling Activity (% ownership) Period I Period II EL 1144 Nexen (100%) January 15, 2022 No drilling has occurred January 15, 2025 EL 1150 Nexen (100%) January 15, 2023 January 15, 2026 No drilling has occurred Authorizations and Approvals The C-NLOPB s regulatory responsibilities also include issuing a number of authorizations and approvals pertaining to offshore oil and gas exploration and development projects and activities in the Canada-NL Offshore Area. Indeed, the issuance of an EL for a particular portion of this Offshore Area does not, in and of itself, authorize the licence holder to carry out physical exploration activities (fieldwork) within that licence area. The drilling of an exploration well, for example, requires various project-specific regulatory approvals and authorizations, through which the Operator must present detailed information on its planned exploration activities, and in doing so, demonstrate that they can undertake such work in a manner that is in keeping with applicable requirements and standards for safety and environmental protection. Before carrying out any work or activity respecting oil and gas operations, an Operator must, for example, obtain an Operating Licence (OL) which is a prerequisite for any oil and gas activity in the Canada-NL Offshore Area that involves fieldwork. Various authorizations and approvals are also required for particular activities and other matters, which may - depending on the specific nature and scope of the activity being planned - include applying for and obtaining an Operations Authorization (OA) from the C-NLOPB. In accordance with the Accord Acts and Section 6 of the Newfoundland Offshore Petroleum Drilling and Production Regulations, prior to the issuance of an OA the following information must be submitted by the Operator and approved by C-NLOPB: EA Report (completed under CEAA 2012, as applicable, or under the Accord Acts, see above); Canada-Newfoundland and Labrador Exploration Benefits Plan; Safety Plan; Transport Canada Letter of Compliance for the drilling installation; Environmental Protection Plan; Emergency Response and Spill Contingency Plans; Appropriate Financial Security; Certificate of Fitness for the proposed equipment / facilities to be used to carry out drilling activities; and Declaration of Fitness. Other required C-NLOPB approvals may also involve the approval of certain documents, plans or other matters as specified by the relevant legislation or regulations, or the approval of specific activities conducted under an earlier authorization. Of particular relevance to this Project, an Approval to Drill a Well (ADW) is required for operations involving drilling within or under the marine environment. A separate ADW is required for each well in a proposed drilling program, with the process involving the provision and review of specific details about the drilling program and well Nexen Energy ULC Flemish Pass Exploration Drilling Project ( ) EA Project Description April 2017 Page 13

14 design. An ADW covers the operations on a well up to, and including, the termination of the well, which itself could include suspension, abandonment or completion. A wellsite-geohazard seabed survey must be completed prior to the issuance of such an ADW. Other approvals, notifications or records are also required to undertake well testing, abandonment, suspension, completion or termination, or to alter the condition of a well. Another important aspect of the C-NLOPB s mandate is the administration of the various provisions of the Accord Acts that pertain to industrial and employment benefits resulting from the exploration for, and development of, oil and gas resources in the Canada-NL Offshore Area. This includes the creation and optimization of such benefits for Canada in general and the Province of Newfoundland and Labrador in particular. The Accord Acts require that before any work or activity is authorized in this area, a Canada-Newfoundland and Labrador Benefits Plan must be submitted to, and approved by, the Board. This Plan must identify and describe the measures to be taken regarding the employment of Newfoundlanders and Labradorians and other Canadians, as well as providing manufacturers, consultants, contractors and service companies in the province and other parts of Canada with full and fair opportunity to participate on a competitive basis in the supply of goods and services to such a project. Nexen is committed to creating and optimizing opportunities and benefits for Newfoundland and Labrador and Canadian workers and companies as part of its activities and operations in the Canada-NL Offshore Area, and to carrying out its business in full compliance with relevant Canada-Newfoundland and Labrador Benefits Plan Guidelines and other applicable requirements. As such, Nexen will develop and implement a Canada-Newfoundland and Labrador Benefits Plan applicable to this exploration drilling project. There are also a number of associated Regulations under the Accord Acts which govern particular exploration or development activities, as well as various Guidelines (some of which have been jointly developed with other agencies) that are intended to address specific environmental, health, safety and economic issues related to offshore petroleum exploration and production. Of particular relevance to this Project and its EA are the Offshore Waste Treatment Guidelines, Offshore Chemical Selection Guidelines for Drilling and Production Activities on Frontier Lands, Environmental Protection Plan Guidelines, Drilling and Production Guidelines, Canada-NL Benefits Plan Guidelines, and various others. It is again expected that any EIS that may be required for the Project under CEAA 2012 will be carried out with the involvement of the C-NLOPB and will address the Board s EA requirements under the Accord Acts Other Regulatory Requirements and Interests Various other federal and provincial government departments and agencies also may have regulatory responsibilities, information and advice and/or other interests regarding the proposed Project and its environmental setting and potential effects, pursuant to their associated legislation and mandates. These include the following: Fisheries and Oceans Canada (DFO); Environment and Climate Change Canada; Transport Canada; Department of National Defence; NL Department of Municipal Affairs and Environment; Nexen Energy ULC Flemish Pass Exploration Drilling Project ( ) EA Project Description April 2017 Page 14

15 NL Department of Fisheries and Land Resources; and the NL Department of Natural Resources Legislation and associated regulations that are or may be relevant to the Project and its EA therefore include the: Accord Acts and associated Regulations and Guidelines (as discussed above); Fisheries Act; Canadian Environmental Protection Act; Oceans Act; Navigation Protection Act; Canada Shipping Act; Migratory Birds Convention Act; and the Species at Risk Act (Canada) and Endangered Species Act (NL). In planning and conducting its oil and gas exploration activities, Nexen will comply with these and all relevant provincial and federal legislation, regulations and guidelines, as well as applicable international conventions and standards. As described in Section 1.2.2, the Company also has in place its own comprehensive environmental policies, plans and procedures for planning and conducting its oil and gas exploration and development activities, and requires its contractors to adhere to these as applicable. 1.4 Document Purpose and Organization This document comprises a Project Description under CEAA 2012, and has been prepared and submitted by Nexen (as Proponent) for review by the Canadian Environmental Assessment Agency and other relevant departments, agencies, organizations and the public to help inform a governmental decision regarding whether a federal EA review of the Project is required. It is also intended to assist other government departments and agencies, Aboriginal and stakeholder groups and the public to determine their potential interest in the Project and any such EA review. The document is structured as follows: Chapter 1 (this Introduction): Provides a general overview of the Project, identifies the Proponent, outlines the regulatory context for the Project and its EA, and describes the purpose and overall organization of this Project Description document. Chapter 2 (Project Description): Presents an overview description of the proposed Project, including its planned location, equipment, activities and schedule, as well as various associated environmental planning and management considerations. Chapter 3 (Environmental Setting): Provides a summary description of the existing biophysical and socioeconomic environments that overlap and may interact with the proposed Project, including relevant components of the physical (geology, climate, oceanography, ice), biological (fish and fish habitat, marine and migratory birds, marine mammals and sea turtles) and human (fisheries and other activities) environments that characterize the proposed Project Area and surrounding marine environments. Nexen Energy ULC Flemish Pass Exploration Drilling Project ( ) EA Project Description April 2017 Page 15

16 Chapter 4 (Consultation and Engagement): Describes a number of engagement initiatives that have been undertaken or are being planned in relation to the proposed Project, including discussions with relevant government departments and agencies, Aboriginal groups, stakeholder organizations and interested members of the public. Chapter 5 (Potential Project-Related Environmental Interactions): Provides an overview of some of the potential environmental issues and interactions that may result from the proposed Project and a discussion of some relevant items and considerations related to the scope of any EIS that may eventually be required for it. This Project Description has been developed in accordance with, and contains the prescribed information set out in, the Prescribed Information for the Description of a Designated Project Regulations under CEAA 2012 and associated guidance (see Appendix A). Nexen Energy ULC Flemish Pass Exploration Drilling Project ( ) EA Project Description April 2017 Page 16

17 2 PROJECT DESCRIPTION The following sections present an overview description of the proposed Project, including its planned location, equipment, activities and schedule, as well as various associated environmental planning and management considerations. This overview is based on, and reflects the current stage of the planning and design of this multi-year offshore exploration program, and will therefore be subject to continued definition and refinement as the EA process moves forward. The Project will include exploration drilling within EL 1144 and 1150, possible appraisal (delineation) drilling in the event of a hydrocarbon discovery within those ELs, VSP, well testing, eventual well decommissioning and abandonment (or suspension) procedures, and associated supply and service activities. 2.1 Project Location The Project will take place in a marine area offshore eastern Newfoundland, the western edge of which is over 400 km east of St. John s NL. The Project Area (Figures 2.1 and 2.2) covers approximately 10,634 km 2 and incorporates a number of recently awarded ELs in the Flemish Pass region where Nexen may conduct exploration drilling activities between 2018 and 2028 (Tables 2.1 and 2.2). This includes ELs 1144 and 1150 for which Nexen is currently the sole working interest owner and is therefore operator. Current Project plans would involve drilling between one and five wells on each of the ELs, up to a maximum of 10 wells (exploration or appraisal), with specific wellsite numbers, types and locations being determined as Project planning activities continue. The Project Area also includes a 20 km buffer area surrounding those licences to (conservatively) accommodate the location and extent of ancillary activities that may be carried out in support of such drilling activities. These may include, for example, any Project components or activities that are required to extend beyond the immediate boundaries of the ELs themselves, such as the required temporary presence and movement of the drill rig(s) or support vessels and aircraft during initial mobilization and set up or eventual demobilization from the drill site, as well as any required non-drilling activities that could conceivably extend to outside the EL (such as any planned walk-away VSP, see Section 2.3.2). All drilling operations carried out as part of the scope of this Project will, however, be conducted within the defined boundaries of the ELs. Table 2.1 Nexen Exploration Licences off Eastern Newfoundland Exploration Approximate Distance Licence Area Approximate Water Depth (m) License from St. John's NL (hectares) Max Min EL km 163,008 1, EL km 169,578 1, Table 2.2 Project Area Corner Point Coordinates Point Latitude Longitude Easting Northing A 47 58' 8.5" N 47 15' 46.3" W B 47 57' 23.1" N 45 46' 27.9" W C 47 3' 5.7" N 45 47' 6.1" W D 47 2' 40.6" N 47 4' 7.0" W E 47 30' 32.5" N 47 3' 50.7" W F 47 30' 56.4" N 47 16' 11.5" W Note: UTM Coordinates in NAD83 UTM Zone 22N. Nexen Energy ULC Flemish Pass Exploration Drilling Project ( ) EA Project Description April 2017 Page 17

18 Figure 2.1 Project Area and Associated Exploration Licences Nexen Energy ULC Flemish Pass Exploration Drilling Project ( ) EA Project Description April 2017 Page 18

19 Figure 2.2 Project Area and Associated Exploration Licences (Zoomed in Version) Nexen Energy ULC Flemish Pass Exploration Drilling Project ( ) EA Project Description April 2017 Page 19

20 As part of its planned, overall program of oil and gas exploration activities off Eastern Newfoundland, Nexen is also proposing to carry out an Eastern Newfoundland Offshore Geophysical, Geochemical, Environmental and Geotechnical Program ( ), which is undergoing concurrent but separate EA review under the regulatory requirements of the C-NLOPB pursuant to the Accord Acts. As the proposed survey activities that comprise that separate project are initiated and completed and their results are analysed and interpreted, possible wellsite locations may be identified and evaluated further through wellsite surveys. These site investigations may be carried out using 2D high-resolution reflection seismic, sub-bottom profilers, side-scan sonar, multi-beam echosounder and/or magnetometers, and are included within the scope of that project and its separate EA review by the C-NLOPB. As shown in Figure 2.1, the Project Area is located entirely within the Study Area for the Eastern Newfoundland Strategic Environmental Assessment (SEA) completed by the C-NLOPB in August 2014 (Amec 2014). The location and spatial extent of a Study Area for any required EIS for the Project will be determined as part of the planning and design phase of that assessment. This will be defined based on consideration of the nature and extent of the various environmental components that may be affected by the Project and upon which the EIS is focused, as well as the potential geographic zone of influence of Project components and activities (both planned and potential accidental events) and their environmental interactions. 2.2 Schedule As noted previously, ELs issued by the C-NLOPB have a maximum nine year term (consisting of two consecutive periods), where the interest owner is required to drill or spud and diligently pursue one exploratory well on or before the expiry date of Period I as a condition of obtaining tenure to Period II. The planned temporal scope of this Project, which covers an 11 year period from 2018 to 2028, has been defined so as to address the terms of the two ELs identified previously (within which EA and other associated regulatory approvals must be obtained and drilling planned and commenced within that timeframe), as well as to allow for the associated stages of well drilling, testing, and decommissioning and abandonment or suspension as required. Within this period, the planned exploration activities that comprise this Project may occur at various times of the year for each and all years of the proposed drilling program. Detailed planning and procurement processes for the Project will commence in 2017 and continue throughout the life of the Project. Pending the receipt of applicable regulatory and corporate approvals, the identification of suitable drilling targets and other technical, logistical and commercial considerations, exploration drilling could commence on one or both of these ELs as early as Upon completion of these first well(s) and based on its results, additional wellsite locations may be identified. It is currently anticipated that up to five wells (exploration and possibly appraisal) may be drilled over the term of each of the ELs, for a total of up to 10 wells being drilled as part of the scope of the Project. It is expected that each well will require approximately 75 to 115 days for drilling and evaluation, which will be followed by well decommissioning and abandonment or suspension. There may at times be up to two drilling units working in different parts of the Project Area simultaneously. The temporal boundaries established for any future EIS for the Project that may be required will include and encompass the overall timing of Project related activities in the offshore environment, as Nexen Energy ULC Flemish Pass Exploration Drilling Project ( ) EA Project Description April 2017 Page 20

21 well as the likely timing and duration of any resulting environmental interactions and effects. In conducting the environmental effects assessment, consideration will be given to the relevant temporal characteristics of the affected environment, including the timing of presence of relevant environmental components (e.g., species and activities) within the EIS Study Area, any particularly sensitive or critical periods, likely response and recovery times to potential effects, and any natural (without- Project) variation in the baseline environment. 2.3 Key Components and Activities The objective of this proposed exploration project is to help determine the potential presence of hydrocarbons within various ELs offshore eastern Newfoundland that are currently held by Nexen. The key components and activities of the Project are exploration drilling, possible appraisal (delineation) drilling in the event of a hydrocarbon discovery, VSP, well testing, eventual well decommissioning and abandonment or suspension procedures, and associated supply and service activities. Exploration and appraisal wells are drilled to confirm the presence, or delineate the extent, of oil and gas resources at particular locations. Exploration wells are drilled to determine whether areas of interest identified from previous geophysical surveys and other information contain oil and gas resources. Depending on the results of these wells, an operator may then drill appraisal wells into different parts of the identified hydrocarbon accumulation to confirm its size and the characteristics of the hydrocarbons found Drilling The Project may involve the drilling of up to 10 wells (exploration or appraisal) within the two ELs that comprise the Project Area over its 11 year duration. Specific wellsite locations are not currently defined, and will be selected as Project planning and design activities move forward. Wells may be drilled using either a harsh environment semi-submersible drilling unit or a harsh environment drillship (Figure 2.3). The type of rig chosen is often based primarily on the characteristics of the physical environment at the proposed drill site, particularly water depth, expected drilling depth and expected weather and ice conditions and associated mobility requirements, as described below (CAPP 2006, cited in Amec 2014). Semi-submersible Drilling Units are typically used in relatively deep waters (either on anchor or using dynamic positioning systems at greater depths) or in areas where increased mobility is required due to ice or other factors and operational risks. These units can either be towed to the drill site or move under their own power, and are designed for drilling in rougher seas. The main deck of the unit is supported by a series of vertical columns, which in turn sit atop steel pontoons that float below the water surface during operations. The pontoons are filled with water so that the unit floats with the main deck above water and the remainder below the surface, and the platform can be raised or lowered by adjusting the amount of ballast water they contain. Because much of the mass of the rig is below water, these units are relatively stable in rough seas. On site, these drilling units will either be moored to the bottom with a series of large anchors, or in deeper waters will utilize a dynamic positioning system in which thrusters position the vessel and keep it steady (Figure 2.3). Drill Ships are the most mobile type of drilling installation, and are also typically used in areas of relatively deep water. These are ships which contain complete drilling systems, and are almost Nexen Energy ULC Flemish Pass Exploration Drilling Project ( ) EA Project Description April 2017 Page 21

22 entirely self-contained and can therefore operate at remote sites with limited support. Drill ships can be anchored to the bottom in shallower water depths, but most commonly use dynamic positioning systems to maintain position at the well site. Drill ships typically have a derrick near the centre of the vessel hull which contains and operates the drilling equipment, where a moon pool provides access from the deck surface through the centre of the ship to the water surface (Figure 2.3). Figure 2.3 Typical Semi-submersible Drilling Unit (Top) and Drill Ship (Bottom) Source: Amec (2014) After the drilling unit arrives and is positioned above the planned well location, a seabed clearance survey will be conducted. This seabed clearance survey typically is conducted using a remotely operated vehicle (ROV), sonar (multi-beam or side scan) or other relevant equipment, and is deployed for a visual inspection of the seabed prior to initiating drilling activities. The offshore exploration well is then drilled in sections over a period of one to several months, where each section is gradually reduced in size. Once the sections are drilled, steel pipe or casing is installed and cemented into place to stabilize the well bore, isolate pressure / fluids and prevent drilling fluid losses: Nexen Energy ULC Flemish Pass Exploration Drilling Project ( ) EA Project Description April 2017 Page 22

23 1) Riserless Hole Sections: For the first two to three hole sections, there is no closed loop circulating system in place (no riser) so the drilling fluids and cuttings are circulated onto the seabed. The drilling fluid is used to cool the bit and transport the drilled cuttings to the seabed, and typically seawater and/or water-based mud (WBM) is used during the drilling of these riserless hole sections. The riserless hole sections are comprised of the following activities: a) The largest hole section, approximately 1 m in diameter, is drilled to approximately 100 m BML (below mud line). b) The conductor casing and low pressure wellhead housing are installed on a landing string. The conductor casing is cemented into place. Generally, the top of cement is brought to the mudline. c) Sometimes a second conductor hole section is drilled below the conductor casing but this is not usually required in this region. d) Next, the 660 mm surface hole section is drilled, generally to depths of 700 to 1,000 m BML. e) The surface casing and high pressure wellhead housing are installed on a landing string. The surface casing is cemented into place. Generally, the top of cement is brought to the mudline. f) The blowout preventer (BOP) is run on the marine riser pipe and is connected to the wellhead system, creating a conduit between the drilling unit and the well. The BOP comprises a system of high pressure valves that prevent water or hydrocarbons from escaping into the environment in the event of an emergency or equipment failure during drilling. 2) Riser Drilling: Once the riser is installed, the remainder of the hole sections may be drilled with WBM or synthetic-based mud (SBM). The riser creates a conduit for the circulation of drilling fluids down the drill string, through the bottomhole assembly / drill bit, back up the open hole / casing annulus to the riser annulus and back to the drilling unit. Drilled cuttings are also transported back up the annulus to the drilling unit for processing. At various intervals, depending on pore pressure, formation fracture gradient and presence of geohazards, intermediate casing strings or liners are installed and cemented in place. Drilled cuttings and drilling mud fluid use, treatment and eventual disposal are discussed further in a later section of this Chapter. Figure 2.4 provides a generalized schematic of a typical offshore well. For the planned exploration drilling activities being undertaken as part of this Project there will be no excavated drill centers and no required underwater construction activities. Throughout the duration of an offshore drilling program in the Canada-NL Offshore Area, other marine vessel traffic is restricted within a defined area surrounding the drill unit as a safety precaution. As specified in the Newfoundland Offshore Petroleum Drilling and Production Regulations, this safety zone is usually the greater of either the area within a 500 m radius of the drill unit or, if the unit is anchored, a zone 50 m from the anchor pattern, as per the requirements of the Collision Regulations under the Canada Shipping Act (2001). Notices to Mariners and other measures are also used to communicate the presence and nature of these drilling activities and associated safety zones to other vessels and marine operations in the area (see Chapter 5). Nexen Energy ULC Flemish Pass Exploration Drilling Project ( ) EA Project Description April 2017 Page 23

24 The proposed Project may also include batch drilling activity, in which the riserless sections for multiple wellsites are initially and consecutively drilled, after which the drill rig returns to these sites to complete the remaining portion of the wells. Figure 2.4 Conceptual Diagram of a Typical Offshore Exploration / Appraisal Well NOTE: For general illustration only, Drilling unit and well components not to scale. (Additional intermediate casing strings / liners may be installed, depending on well specific conditions and detailed well design) Nexen Energy ULC Flemish Pass Exploration Drilling Project ( ) EA Project Description April 2017 Page 24

25 2.3.2 Vertical Seismic Profiling A VSP (which is also referred to as a check-shot survey) is often undertaken following completion of drilling to obtain accurate time-to-depth ties to correlate seismic data to well depth. The VSP is undertaken by placing a string of receiver (geophones) down the well at pre-determined depths, with a seismic source (usually mid-sized airguns) suspended from the drilling unit. Walk-away VSP surveys may also be undertaken, which involve placing a sound source on a vessel which then moves away while firing the seismic source at pre-determined distances from the borehole receiver. The checkshots are recorded at multiple intervals down the well, and the resulting information assists in determining and confirming the depth of the drilled well and for reconciling drilling information with that obtained through seismic survey work. VSP surveys are typically short-term activities (usually several days duration), with seismic source firing often limited to just a few hours Well Evaluation and Testing If there is an indication of significant hydrocarbons being found during an exploration drilling program, a well flow test may be conducted to sample and identify formation fluids (which may contain hydrocarbons and/or water) and to measure produced flow rates. During such testing, produced fluid is flowed back to the drilling unit, where hydrocarbons are separated from any produced water and samples are collected and analysed. Produced hydrocarbons and some produced water are flared using high-efficiency burners supplied by a third party company. If there is a significant amount of produced water, it will be treated in accordance with the relevant regulatory requirements prior to ocean discharge. The duration of any such well testing is dependent upon various factors and is typically in the order of several days, although this may be of longer duration depending on the particular characteristics of the hydrocarbons found and the analysis being undertaken. If required as part of this Project, flaring activities will be kept to a minimum. Section provides a discussion of the various atmospheric emissions that may be associated with the Project, including any required flaring activity Well Decommissioning and Abandonment or Suspension Once drilling and any associated well testing is completed, offshore wells are typically then decommissioned and abandoned. These activities involve the isolation of the well bore by placing cement plugs, potentially in combination with mechanical devices, at various depths, with the casing then being cut and removed just below the surface of the seafloor and all equipment removed. Wellheads are often removed from the seafloor using a mechanical casing / wellhead cutting device. An ROV or other equipment is then used to inspect the seabed to ensure that no equipment or obstructions remain in place. Well decommissioning and suspension or abandonment for this Project will be carried out as per Nexen s standard internal procedures for same, as well as applicable industry practice and in compliance with relevant regulatory requirements. These activities will adhere to the requirements set out under the Newfoundland Offshore Petroleum Drilling and Production Regulations. In the event that planned, conventional well abandonment techniques such as those described above are ineffective for a particular well, alternative approaches may be required and will be investigated and implemented in consultation with relevant regulatory authorities and in compliance with applicable authorizations. Wells will be monitored and inspected in accordance with applicable regulatory requirements at the time of abandonment. Nexen Energy ULC Flemish Pass Exploration Drilling Project ( ) EA Project Description April 2017 Page 25

26 In some circumstances, the well may not be abandoned but suspended for future re-entry. The same cement plugging program would be implemented, ensuring isolation of all hydrocarbon-bearing intervals. The casing / wellhead may be left in place for future use Supply and Servicing Supply vessels and helicopters are used to transport personnel, equipment and materials to and from a drilling rig during an offshore drilling initiative. Supply vessels typically make regular trips to the drilling unit throughout a drilling program, and a dedicated stand-by vessel will attend to the rig throughout the drilling program. Personnel are usually transported to and from the drilling rig by supply vessel or helicopter, according to work schedules and rotations, workforce numbers, distances and other factors. It is expected that offshore supply vessel and aircraft (helicopter) services for the Project will be based in St. John s NL. Existing facilities in eastern Newfoundland are expected to be utilized for these purposes for this Project, as well as for the supply and disposal of materials such as drilling fluids, for fueling and other supply, support and logistical functions. Aircraft support for the Project will be based at the St. John s International Airport. These shore-based facilities are owned and operated by independent third party service providers, service multiple operators and their activities, and were developed and operate in accordance with relevant regulatory requirements and approvals. They are also certified as compliant port facilities under the Marine Transportation Security Act. Third party services and support will be procured through a competitive bid process in accordance with the requirements of the Accord Acts. The Project will not require or result in any Nexen owned / operated or Nexen-specific upgrades to any such facilities, nor the development and use of new infrastructure at these established shore base facilities. It is anticipated that with a single operating drilling unit there will be two to three return transits per week by the supply vessels during the course of the Project. In the case that two drilling units are operating at the same time, the number of offshore supply vessels could increase to between four to five trips per week. It is estimated that there would be one to three helicopter transits per day to the drilling unit, which would increase proportionally in the event that two rigs are being used simultaneously (i.e. two to six transits per day). These services will again be procured from existing, established third party suppliers that service the offshore oil and gas sector. Supporting vessels that are involved in Project activities will travel in an essentially straight line between a drill rig operating within an EL in the Project Area and an established port facility in Eastern Newfoundland, a practice which is common in the oil and gas industry that has been active in this region for several decades. Figure 2.5 illustrates a number of key supply and support vessel traffic routes related to the existing oil production facilities off Eastern Newfoundland, as well as a potential traffic route that may be used for this Project. This is provided for general information and illustrative purposes, recognizing that specific routes may vary at times based on the particular location of the active drilling unit(s), the facility being used, environmental conditions (including weather and ice), and other logistical factors. All drilling units and vessels that are used for this Project will meet the operational and environmental capabilities needed for the associated exploration activities, including for implementing relevant environmental mitigations and safety and emergency response procedures. All vessels will be in compliance with applicable legislation and regulations, and will be inspected by Transport Canada and approved for operation by the C-NLOPB before beginning any Project-related work. They will have appropriate oil spill / pollution prevention and emergency response plans in place, and each will be MARPOL compliant. Nexen Energy ULC Flemish Pass Exploration Drilling Project ( ) EA Project Description April 2017 Page 26

27 Figure 2.5 Existing and Potential Vessel Traffic Routes Nexen Energy ULC Flemish Pass Exploration Drilling Project ( ) EA Project Description April 2017 Page 27

28 2.4 Potential Environmental Emissions and Their Management Potential environmental emissions and discharges that may be associated with offshore exploration drilling programs include noise, light and other atmospheric emissions (exhaust), liquid discharges, and other waste materials associated with the offshore drilling unit and support vessels and aircraft. The following sections provide a further overview of a number of environmental emissions, discharges and waste materials that will or may be generated over the course of Project activities, as well as a description of how these will be managed Atmospheric Emissions Atmospheric emissions during Project activities may include exhaust from the drill unit(s), support vessels and associated equipment (such as on-board power generators), as well as emissions from the storage and flaring of hydrocarbons associated with well testing (if and as required). The primary air emissions, including greenhouse gases (GHGs), that would result from these Project activities would occur from: Drill rig, vessel and aircraft traffic (carbon monoxide (CO), nitrogen oxides (NO X ), total suspended particulates (TSP), volatile organic compounds (VOCs), GHGs); and Power generation (CO, NO X, TSP, VOCs, sulphur dioxide, GHGs). During any formation flow well testing there could also be short periods of flaring and associated emissions of associated gases (CO, NO X, VOCs, TSP, GHGs). These air emissions will be in keeping with relevant regulatory requirements and standards, including the Canadian Environmental Protection Act, National Ambient Air Quality Objectives and the Newfoundland and Labrador Air Pollution Control Regulations for specified criteria air contaminants, as well as relevant regulations under MARPOL. For the purposes of this Project Description, a very general and preliminary estimate of potential GHG emissions that may be associated with the drilling of a well as part of this Project is provided. Assuming that it could take in the range of days to drill a well, including evaluation activities, it is estimated that CO 2 equivalent emissions associated with active drilling and associated vessel traffic could be in the range of 5,000 to 20,000 tonnes CO 2 per well. It is currently anticipated that the number of wells drilled in each year of the Project could range from zero to three wells, which would result in total CO 2 emissions ranging from 0 to up to 60,000 tonnes CO 2 annually. It should be noted that these are preliminary estimates only, and specific emission types and volumes will depend on a variety of factors, including drilling unit and support vessel types and classes, time of year, the duration of active drilling, and other considerations. An estimate of, and analysis regarding, potential Project-related GHG emissions will be calculated and discussed as relevant and required in the EIS. Noise emissions into the atmospheric environment associated with an offshore drilling program include those associated with drilling and other activities on the drilling unit itself, as well as from supporting vessel and aircraft traffic. Light emissions from the drilling platform include platform lighting as well as those which may be associated with any flaring that is required during well testing operations. Light will also be generated by the support vessels, which will be comparable to that from other ships of similar size operating off eastern Newfoundland and elsewhere. Lighting will be kept to a minimum to the extent that it does not affect crew and vessel safety. Nexen Energy ULC Flemish Pass Exploration Drilling Project ( ) EA Project Description April 2017 Page 28

29 2.4.2 Underwater Sound Underwater sound will be generated as a result of the planned Project activities, which will include the noise generated by the drilling unit and supply and supporting vessels as well as the sound energy from the source array for any associated VSP data collection. In the case of the former, this will include the sound emitted into the marine environment by the drilling activity itself, as well as from the platform while operating in dynamic positioning mode. Underwater sound generated during VSP operations are periodic and of short term duration (up to several hours or days), with source array volumes ranging from 450-2,400 in 3 with operating pressures of approximately 2,000 psi, producing approximate peak-to-peak pressures of 100 to 180 bar-m Drilling Fluids and Cuttings Drilling muds are fluids which lubricate and cool the drill bit and hole, circulate cuttings and carry them back to the surface, and help to maintain appropriate hydrostatic pressure in the well to overbalance formation pressure, providing the primary barrier for well control (BOP forms part of the secondary barrier). A number of types of drilling muds will be utilized, WBMs primarily being used for the riserless sections of a well. SBMs are generally used once the riser has been installed, and WBMs can also be used in certain applications. The primary component of WBMs is seawater, with other additives including bentonite (clay), barite, and potassium chloride. Other approved chemicals are also added as required to achieve and control the required mud properties. The initial riserless sections of the well bore are generally drilled using WBMs in which case the mud and cuttings are returned to the seabed as permitted by, and in accordance with, the Offshore Waste Treatment Guidelines. Once the conductor and surface hole sections are completed and the riser and BOP are installed, the deeper sections of the well bore are then typically drilled using SBMs, which are returned to the drilling unit via the riser. Once onboard the rig, drilled (rock) cuttings are removed from the drilling mud in successive separation stages. The fluids are reconditioned and reused until the well is abandoned, when the spent SBM is returned to shore for disposal. SBM-associated drill cuttings may be discharged at the drill site, in accordance with the Offshore Waste Treatment Guidelines, provided they are appropriately treated prior to discharge in accordance with proven and practicable best available technologies and practices Drilling Cement Drilling cement is pumped into the casing / wellbore annuli after the casing is installed. Prior to installation of the marine riser and BOP, any excess cement is discharged on the seabed surrounding the wellhead. Cement returned to the drilling unit will be transported back to shore and disposed of at an appropriate facility. During commissioning and testing of a cement unit, small volumes of cement may be discharged into the sea Other Liquid and Solid Wastes Liquid wastes generated by the proposed Project activities may include storage displacement, bilge, ballast, cooling, gray and black water, and possibly other materials. Allowable chemical properties for offshore disposal to the marine environment and associated reporting requirements are also specified in the Offshore Waste Treatment Guidelines. Any liquid discharges that do not meet the applicable standards for ocean disposal will be transported back to shore for disposal at an existing and Nexen Energy ULC Flemish Pass Exploration Drilling Project ( ) EA Project Description April 2017 Page 29

30 approved facility. Domestic waste materials will be generated by personnel on-board the drilling unit and support vessels. All solid and domestic waste will be collected in dedicated waste receptacles and disposed of on a regular basis, with materials being separated and recycled where possible. Food wastes will be disposed of in compliance with MARPOL 73/78 Annex V (Food Waste Regulations). Solid wastes that are intended for disposal will be stored in dedicated waste containers that will be collected onshore by an approved waste contractor for transportation to an existing and approved waste disposal facility. Hazardous waste materials that will or may be generated during Project activities include spent and waste chemicals, chemical containers, spent absorbents and oily rags, batteries, and biomedical waste. These will be stored in dedicated and appropriate waste receptacles for transportation to shore and eventual disposal at an existing and approved facility. The key regulatory guidance pertaining to emissions and offshore discharges, disposal and treatment for these types of offshore activities is contained in the Offshore Waste Treatment Guidelines. Offshore waste discharges for this Project will also be managed in strict compliance with these Guidelines, as well as the International Convention for the Prevention of Pollution from Ships (MARPOL). Nexen is committed to the establishment of safe and environmentally responsible procedures for the generation, storage, handling, transportation, treatment and disposal of all waste materials generated throughout the course of this Project. Nexen will reduce, reuse and recycle liquid and solid waste and reduce liquid and atmospheric emissions to the extent practicable and in compliance with applicable regulation. All onshore and offshore waste discharges will be managed and disposed of as per the Project s Environmental Protection Plan, Offshore Chemical Management Plan and the Waste Management Plan. Waste types and volumes will be documented as per relevant regulatory requirements. 2.5 Potential Accidental Events During an offshore oil and gas exploration program, an accidental event or malfunction is an unlikely occurrence, for which there are multiple systems in place to prevent their occurrence or, if required, to respond to such an incident and address the potential environmental effects of same. Accidental events that may be associated with offshore drilling programs include potential well control incidents as well as other possible spills of hydrocarbons or other substances from the drilling unit and/or associated vessel activities, which may vary considerably in terms of their nature, scale, duration and potential environmental consequences. Oil spill prevention is a key focus of Nexen s plans and activities. Oil spill prevention, response and overall preparedness approaches for the Project will be further developed and defined as the various regulatory review and approval processes move forward. The Operator will develop and implement a Project-specific Emergency Response Plan and Oil Spill Response Plan, both of which will be submitted to the C-NLOPB as part of the OA application process described in Chapter 1. Ice management is also a required activity that is part of normal offshore operations during the ice season offshore eastern Newfoundland. Should ice pose a threat to the drilling platform and/or other Project equipment, personnel or the environment, an emergency situation may be initiated. The ice management process will be documented in Nexen s Ice Management Plan for Operations, and will be implemented in the case of an emergency situation. These ice management processes will include established procedures for iceberg towing and deflection, and if required, procedures for the safe disconnect and movement of the drilling unit while leaving the well in a safe and stable condition. Nexen Energy ULC Flemish Pass Exploration Drilling Project ( ) EA Project Description April 2017 Page 30

31 3 ENVIRONMENTAL SETTING This Chapter provides a summary description of the existing biophysical and socioeconomic environments that overlap and may interact with the proposed Project. This includes relevant components of the physical (geology, climate, oceanography, ice), biological (fish and fish habitat, marine and migratory birds, marine mammals and sea turtles) and socioeconomic (commercial fisheries, other human components and activities) environments that characterize the proposed Project Area and surrounding marine environments. 3.1 Other, Past Environmental Assessments Portions of the Canada-Newfoundland and Labrador Offshore Area, including the proposed Project Area, have been subject to previous EAs and other environmental studies that would be relevant to this Project and any EIS that may be required. Offshore oil and gas exploration and development activities have been occurring off Newfoundland and Labrador for several decades, and the environmental studies and analysis that have been carried out in relation to these projects and activities over that period provide important and valuable sources of information on the existing environmental setting in the region, as well as the potential environmental issues and interactions that may be associated with these activities. Of particular relevance to this Project and its EA review, in 2014 the C-NLOPB completed a Strategic Environmental Assessment (SEA) for the Eastern Newfoundland Offshore Area (Amec 2014), which involved identifying, reviewing and presenting regional environmental baseline information (physical, biological and socioeconomic), and completing a review and analysis of likely environmental issues and mitigation and planning approaches as input to future exploration licencing decisions by the C- NLOPB in this area. This SEA provides a key source of regional environmental information for the subsequent, project-specific EAs of individual proposed oil and gas exploration and development projects in this area, and will serve as such for any required EIS for this Project. It is Nexen s understanding that the Project will not take place on lands that have been subject to a regional study as described in Sections 73 to 77 of CEAA A large number of previous, project-specific EAs have also been completed or are in progress for proposed projects and activities off eastern Newfoundland, including parts of the proposed Project Area and in other adjacent regions. These include the recent and on-going EAs listed below (available on the C-NLOPB s EA website which can be consulted for additional information), and others that pre-date those identified here: Multiklient Invest AS Newfoundland and Labrador Offshore Seismic Program, ; ExxonMobil Canada Limited Eastern Newfoundland Offshore Exploration Drilling Project ; Husky Energy Exploration Drilling Project ; Statoil Canada Ltd. Flemish Pass Exploration Drilling Project ; Polarcus UK Ltd. Eastern Newfoundland Offshore 2D, 3D and 4D Seismic Program, 2016 to 2022; Seitel's East Coast Offshore 2D 3D 4D Seismic Program ; CGG Newfoundland Offshore 2D 3D 4D Seismic Program ; Nexen Energy ULC Flemish Pass Exploration Drilling Project ( ) EA Project Description April 2017 Page 31

32 ExxonMobil Canada Eastern NL Geophysical Program ; WesternGeco Canada Eastern Newfoundland Offshore Seismic Program, 2015 to 2024; Suncor Energy s Eastern Newfoundland Offshore Area 2D/3D/4D Seismic Program, ; Bridgeporth Holdings Ltd. and JEBCO Seismic Company North Flemish Pass Gravity Survey, 2015 to 2019; Hibernia Management and Development Company Ltd. 2D/3D/4D Seismic Projects for the Hibernia Oil and Gas Production Field, 2013 to Remaining Life of Field; GX Technology Canada Ltd. GrandSPAN Marine 2d Seismic Gravity and Magnetic Survey ; MKI Southern Grand Banks Seismic ; Electromagnetic Geoservices Canada, Inc. (EMGS) Controlled Source Electromagnetic (CSEM) Survey ; Husky Oil Operations Limited White Rose Extension Project; Multi Klient Invest AS Northeast Newfoundland Slope Seismic Program, ; Husky Energy Jeanne d'arc Basin Flemish Pass Regional Seismic Program ; Statoil Canada Limited Jeanne d Arc and North Ridge/Flemish Pass Basin Geophysical Program; Chevron Northern Grand Banks Regional Seismic Program; ExxonMobil Hebron Field Geohazard Survey Program; Petro-Canada Jeanne d Arc Basin Exploration Drilling Program; Hibernia Management and Development Company Ltd - Hibernia Drill Centres Construction and Operations Program; StatoilHydro Canada E&P Inc. Jeanne d'arc Basin Seismic Survey Program; StatoilHydro Canada E&P Inc. Exploration / Appraisal / Delineation Drilling Program; Husky Energy Jeanne d'arc Basin Exploration Drilling Program; Petro-Canada Terra Nova VSP Program; and Husky Energy Drill Centres. In addition, and as summarized briefly in the sections that follow, there have been numerous other environmental studies and surveys completed on relevant components of the existing biophysical and socioeconomic environments within and adjacent to the Project Area, which provide a useful and informative description and understanding of the existing environmental setting of the region. Nexen submits that the existing and available information that is provided through these past EAs and other environmental studies in the region comprises adequate and appropriate environmental baseline information for the Project Area for EA purposes. As a result, no additional and dedicated environmental field work is considered to be required or is being planned in relation to this Project and any EIS that may eventually be required for it. Nexen recognizes that should an EA be required under CEAA 2012, the scope of the Project and its EA will be set by the Canadian Environmental Assessment Agency. Nexen Energy ULC Flemish Pass Exploration Drilling Project ( ) EA Project Description April 2017 Page 32

33 3.2 Physical Environment This section gives an overview description of relevant aspects of the physical environment of the Project Area, including its geology, bathymetry, climatology, oceanography and ice conditions Geology The geology of the marine area off eastern Newfoundland is complex and dynamic, and the current bedrock and surficial characteristics of the Project Area and surrounding regions have been shaped by various natural and human factors and processes over time. Located on the eastern continental shelf, this area was formed by extension during the breakup of Pangea and the opening of the Atlantic Ocean during the Late Triassic to early Tertiary and is underlain by pre-rift basement rocks (Fader et al 1989). Rifting, combined with salt tectonics in some areas, created a complex series of Mesozoic rift basins that are separated by basement highs along the central to outer shelf. The resulting combination of stratigraphy, structure and timing have been conducive to hydrocarbon generation and entrapment (Bell and Campbell 1990). The main sedimentary basins off eastern Newfoundland include the Orphan, Flemish Pass, Jeanne d Arc and Carson Basin (Fader et al 1989). The primary reservoirs are located in the shallow marine and fluvial sandstones deposited during the Late Jurassic and Early Cretaceous periods of the Mesozoic Era. The Late Jurassic Egret member of the Rankin Formation is a world-class source rock that is recognized as the primary source of the oil and gas discovered in the Jeanne d Arc Basin, which is the only basin off eastern Newfoundland containing presently developed producing oil fields. This rock type has also proven to be widespread in the Flemish Pass Basin (G&G 2003). The surficial geology of the region is highly variable, but generally in deeper water, such as the slope of the Flemish Pass, the seabed generally consists of Holocene silty mud. On parts of the floor of the Flemish Pass, winnowed sands are present (Murillo et al 2016a). The coarser-grained sediments are found through the center and western side of the Flemish Pass while the finer-grained sediments are concentrated predominately on the eastern side of the Pass, including the terrace (Marshall et al. 2014). Quaternary sediments in the Flemish Pass include turbidite sands and muds and proglacial muds derived from the Grand Banks of Newfoundland, ice-rafted and proglacial plume deposits transported southward in the Labrador Current, and debris-flow deposits. These have been described as follows by Piper and Campbell (2005). In the northern Flemish Pass, deposits up to 120 m thick have been recognized and are interpreted as debris-flow deposits that are thought to be derived from sediment failures that have left scarps both on the southeast side of Sackville Spur and on the northwest side of the Flemish Cap. Sediments recovered from this area are generally lean silt to lean clay and are considered to be consolidated. The western slopes of the Flemish Pass is comprised mainly of muds with some coarse-grained ice-rafted detritus. Interbedded sandy turbidites are most abundant between 2 and 3.5 metres below sea floor. On the floor of the central part of the Flemish Pass, successions of silty muds with ice-rafted detritus, thin sand and mud turbidites overlie thick bedded sand turbidites. On the eastern slopes of the Flemish Pass, sediment consists primarily of mud with sparse ice-rafted detritus. Canada s eastern continental margin is tectonically passive and seismicity is relatively quiet throughout much of the region. Natural Resources Canada (NRCan 2016a) estimates that approximately 450 earthquakes occur each year in Eastern Canada, with seismicity generally occurring randomly along the Grand Banks margin (NRCan 2016a, 2016b). The most recent edition of the Seismic Hazard Map prepared by NRCan (2016b) indicates that the Project Area has been Nexen Energy ULC Flemish Pass Exploration Drilling Project ( ) EA Project Description April 2017 Page 33

34 classified as having a low seismic hazard. According to the National Earthquake Database (NRCan 2016c) there have been no seismic events recorded within the boundaries of the Project Area during the period Bathymetry The bathymetry of the Project Area and surrounding regions is generally well known (Figure 2.2, Figure 3.1). The Flemish Pass itself has water depths of almost 1,300 m and on the Flemish Cap, a large bathymetric feature of about 50,000 km 2, depths rise back up to about 130 m (Amec 2014) Climatology Existing and available climatological information for sites within and around the Project Area (as summarized in Amec 2014) indicate that the prevailing winds over this region are from the west to northwest in winter and from the south and west in summer. Extreme wind gusts greater than 100 knots (51 m/s) have been measured in winter and in association with tropical and post-tropical weather systems (based on available climatology MSC50 data created by Oceanweather, see Amec 2014). Air temperatures in the region are coolest in February and warmest in July. In the Flemish Cap area and surrounding region, the data again indicate that most of the observed precipitation events are in the form of rain or, in the winter, snow, while other precipitation types, such as mixed rain and snow, freezing rain, and hail, occur far less frequently. The monthly frequency of rain events is lowest in July and August. The snow occurrence frequency is at its peak in January and February. Maximum rain frequency occurs in October and November, and minimum snow frequency from June to October. Freezing rain and drizzle are relatively infrequent, occurring less than one percent of the time in any given month. There is a year-round potential for thunderstorms and hail, with the highest frequency of occurrence in July (Amec 2014) Oceanography The cold Labrador Current dominates the general circulation of water off Eastern Newfoundland. Labrador Current is divided into two streams: 1) an inshore branch that flows along the coast on the continental shelf; and 2) an offshore branch that flows along the outer edge of the Grand Banks. The Labrador Current inshore branch tends to flow mainly in the Avalon Channel closely along the coast of the Avalon Peninsula but may sometimes also spread farther out on the Grand Banks. The offshore branch flows over the upper Continental Slope at depth, and through the relatively deep Flemish Pass. Near the Project Area, in the vicinity of the Flemish Pass, the Labrador Current bifurcates, with the main branch flowing southwards as slope water current and the side branch flows clock-wise around the Flemish Cap. The cores of the currents are located at an average depth of 100 m (Amec 2014). Sea surface temperatures generally average about 3.4 C in February to 12.8 C to 16 C in the August / September period (Amec 2014). Nexen Energy ULC Flemish Pass Exploration Drilling Project ( ) EA Project Description April 2017 Page 34

35 Figure 3.1 Regional Features Nexen Energy ULC Flemish Pass Exploration Drilling Project ( ) EA Project Description April 2017 Page 35

36 3.2.5 Ice Conditions The proposed Project Area is, like the rest of the marine environment off eastern Newfoundland, subject to seasonal intrusions of sea ice and icebergs, as well as vessel icing during particular meteorological conditions. Ice conditions may vary considerably each year and by location. The iceberg season offshore eastern Newfoundland traditionally lasts from about January through August with occasional sightings into the Fall period (Amec 2014). Existing and available data for this region indicates that sea ice may not be present at the Flemish Cap and surrounding areas until the second half of March, and when sea ice does occur there (of which the frequency is typically once every six years or less), it typically persists for just several weeks. The sea ice begins to retreat over the entire Eastern Newfoundland offshore area by mid-april, and by the beginning of May is generally ice free over the Flemish Cap and Southern Grand Banks and surrounding regions (CIS 2011). 3.3 Biological Environment The following sections present an overview of relevant aspects of the biological environment of the area including fish and fish habitat, marine birds, and marine mammals and sea turtles Marine Fish and Fish Habitat Marine ecosystems are comprised of biological and physical elements that interact to form complex and variable patterns across a seascape. Biological ecosystem elements span primary producers such as phytoplankton to consumers such as zooplankton, benthic invertebrates and fish. The Eastern Newfoundland SEA (Amec 2014) provides a detailed overview of marine fish and fish habitats that are known or considered likely to occur within the overall Project Area and surrounding environments, including plankton, benthos, deep-water corals and sponges, and fish, based on relevant, existing information and datasets. The Project Area and surrounding areas are known to be inhabited by a variety of marine biota, within which the presence, abundance and distribution of specific fish species varies considerably based on habitat characteristics (both abiotic and biotic) and variability across this marine environment, which includes parts of the Flemish Cap and adjacent slope and deep-water habitats. Within these areas and associated habitat types, a variety of fish species and assemblages occur with shallow water groups (e.g., yellowtail flounder, Atlantic cod, redfish and skates) giving way to slope assemblages (e.g., Greenland halibut, roughhead grenadier, wolffish) and finally to deep slope-abyssal assemblages (e.g., lanternfish, grenadiers, blue hake, dogfish). Within such depth zones, habitat complexity can also be a determining factor of species presence and prevalence. Benthic community structure on the Flemish Pass and Flemish Cap have been surveyed through commercial bycatch logs and NAFO scientific trawling (Murillo et al 2012, 2016a; Vàzquez et al 2013) and NEREIDA research survey program camera stations and scientific trawling (Barrio Frojàn et al 2012; Beazley et al 2013 Beazley and Kenchington 2015). Murillo et al (2016a) also modelled the substrate based on available box corer sediment sampling data from the area. The Flemish Cap is predominantly covered in sand and silty-sand with areas of gravel, becoming increasingly covered in silty-sand along the slopes ( m). In deeper areas (500-2,000 m) of the Flemish Cap and Pass, the substrate is increasingly silty-clay or mud at greater depths (Murillo et al 2012; 2016a). The highest diversity of benthic species on the Flemish Cap was observed between 500-1,000 m depths with corals and sponges as the most dominant trawl captured taxa followed by echinoderms, Nexen Energy ULC Flemish Pass Exploration Drilling Project ( ) EA Project Description April 2017 Page 36

37 arthropods, and molluscs (Vàsquez et al 2013; Murillo et al 2016a). Epifaunal communities of the Flemish Pass were characterized by Beazley and Kenchington (2015) who identified 527 species from 400-1,400 m depths. Sponges and cnidarians represented the highest number of taxa followed by arthropods, echinoderms, and molluscs. Deep-sea corals, sea pens, and sponges are often of particular environmental interest due to the habitat-forming capacity aspects of these benthic invertebrates and their relative sensitivity to anthropogenic stressors. Bottom trawling and video surveys have identified over 50 species of corals and sea pens along the shelf of the Flemish Cap, Flemish Pass and northeast slope of the Grand Banks (Wareham 2009; Murillo et al 2011; Beazley et al 2013, Vàzquez et al 2013; Baillon et al 2014a, 2014b; Beazley and Kenchington 2015). Modelling of coral distributions against environmental parameters indicated the association of coral species to specific depth ranges, particularly on shelf slopes (Guijarro et al 2016). The Flemish Cap has a relatively higher coral richness than other parts of the Project Area and surrounding marine environments, likely owing to the diversity of habitat types and depth gradients in comparison to other areas (Murillo et al 2011, 2016a). Coral biomass is mainly distributed along the slopes of the Flemish Pass and Flemish Cap with fewer observations on the adjacent Grand Bank Shelf and on top of the Flemish Cap (Murillo et al 2011). Coral biomass within and near the proposed Project Area was highest between m along the northern Flemish Cap and Flemish Pass and was associated with warm, more saline waters with silty sand substrates (Murillo et al 2011; 2016a). These environmental conditions may support primary production and food supply levels, which are important predictive factors of coral biomass (Guijarro et al 2016). While coral distributions are present along the slopes, there are few observations in deeper waters (1,500-4,000 m) (Gates et al 2008; Beazley et al 2013). Several dozen species of sponges have also been observed in and adjacent to the proposed Project Area (Murillo et al 2012, 2016b; Beazley et al 2013; Knudby et al 2013; Beazley and Kenchington 2015). Of the identified species, many have wide depth ranges of 100-1,500 m indicating they can occupy slope and shelf areas in the region. Sponge surveys by Murillo et al (2012), for example, indicated that the highest sponge biomass was located on the Flemish Cap, followed by the Flemish Pass and Tail of the Grand Banks. Biomass was highest on the Flemish Cap (950-1,400 m) on the southeastern area slope (Murillo et al 2012). Areas of high sponge presence were also observed on the north slope of the Flemish Cap and in the Sackville Spur area in relatively deep waters (1,000-1,500 m) (Murillo et al 2012). A variety of existing and available sources therefore provide relevant and useful information related to marine fish and fish habitat in and around the Project Area and other portions of the marine environment off eastern Newfoundland. These include published and unpublished reports, available datasets and other sources, many of which were reviewed and are summarized in the recent SEA completed for this region (Amec 2014). This includes information and mapping describing the presence, distribution and abundance of fish species in the area from the recent DFO Research Vessel (RV) surveys that cover part of the Project Area, as well as NAFO RV surveys that cover the Flemish Cap (Saborido-Rey and Vazquez 2003; Murua and de Cardenas 2005; Altunai et al 2013; Casas and Troncoso 2013; Knudby et al 2013; Nogueira et al 2016, 2017; Murillo et al 2016a), and other literature that describes marine fish and habitats in other areas (often on a species-specific basis). Information is also available on plankton (e.g., Dalley and Anderson 1998; Maillet et al 2004; Head and Sameoto 2007; Bradbury et al 2008), and benthic invertebrates (Schnieder et al 1987; Kenchington et al 2001; Dawe et al 2012; Barrio Frojan et al 2012, 2015; Beazley et al 2013; Altunai et al 2013; Beazley and Kenchington 2015) which has included associated seabed sampling and Nexen Energy ULC Flemish Pass Exploration Drilling Project ( ) EA Project Description April 2017 Page 37

38 video surveys in various areas. Environmental surveys, predictive habitat modelling and other analysis related to the presence and distribution of corals, sea pens and sponges have also been completed and are reported in the available literature (e.g., Edinger et al 2007a, 2007b; Wareham and Edinger 2007a, 2007b; WGEAFM 2008; Gilkinson and Edinger 2009; DFO 2010; Murillo et al 2011, 2012, 2016a, 2016b; NAFO 2011; Baker et al 2012; Beazley et al 2013; Knudby et al 2013; Guijarro et al 2016) Marine and Migratory Birds A variety of avifauna species occur within the Project Area and in adjacent marine and coastal regions, including seabirds and other marine-associated birds that inhabit the region at particular or extended periods for breeding, feeding, migration and other activities. A number of important habitats for birds have also been identified at locations along the coastline of eastern Newfoundland, well outside of the proposed Project Area. As key components and indicators of ecosystem health, seabirds are often considered to be of high intrinsic ecological importance. Further, they are of socioeconomic importance in Newfoundland and Labrador both in terms of tourism and as a food source. Generally speaking, seabirds are long-lived species with low fecundity, delayed recruitment and relatively low rates of population growth. A diverse assemblage of seabirds can be found in the marine waters off eastern Newfoundland at all times of year, including gannets, phalaropes, large gulls, kittiwakes, terns, alcids (auks), jaegers and skuas, fulmars, petrels and shearwaters (Amec 2014). The nutrient-rich Grand Banks and Flemish Cap regions off eastern Newfoundland, for example, serve as a major feeding area for dozens of marine bird species throughout the year, particularly during the summer months. Many seabird groups such as cormorants and terns tend to have a more coastal distribution, and are therefore rarely observed this far offshore. Waterfowl occur in large numbers in marine habitats off eastern Newfoundland, especially during the winter months, but they prefer open water in coastal areas and are thus not likely to frequent the offshore environments that characterize the Project Area (Amec 2014). The eastern coast of Newfoundland is also home to several major colonies supporting tens of millions of seabirds, which travel long distances offshore from their nest sites to forage for themselves and their chicks. The region also contains several designated Important Bird Areas (IBAs) which provide important habitat for nationally and/or globally significant numbers of birds and/or for avian species at risk, and there are various other sites of provincial and regional significance to birds. Although none of these areas or sites occurs within the Project Area itself, some of the bird species that make use of these designated habitats may spend some of their time in the Project Area. A variety of existing information sources are available related to the characteristics, presence and distribution of marine / migratory birds within and around the proposed Project Area. The Eastern Newfoundland SEA (Amec 2014), for example, includes a detailed overview of the presence, life histories, and spatial and temporal distributions of marine avifauna within and around the region. Other existing and available sources such as the current Eastern Canadian Seabirds at Sea (ECSAS) dataset, records from the Atlantic Canada Shorebird Survey (ACSS) and other available literature and datasets provide additional information and insights on key species, times and locations for use in the EIS should one be required. Nexen Energy ULC Flemish Pass Exploration Drilling Project ( ) EA Project Description April 2017 Page 38

39 3.3.3 Marine Mammals and Sea Turtles The waters off eastern Newfoundland support a diverse assemblage of marine fauna that includes some 20 marine mammals and several sea turtle species, many of which are considered to be at risk or otherwise of special conservation concern (see Section 3.3.4). The Eastern Newfoundland SEA (Amec 2014) summarizes the distribution and abundance of marine mammals and sea turtles in the region, and describes these species relevant life history characteristics. The existing and available information indicates that marine mammal (cetacean) species that are known or considered likely to occur within the Eastern Newfoundland Offshore Area include a number of mysticetes (baleen whales), odontocetes (toothed whales and porpoises) and pinnipeds (seals), and several sea turtle species have also been observed. These differ considerably in their likelihood of presence and in the particular locations and habitat types that they utilize and the times at which they occur in or pass through the region. Key feeding grounds such as the Grand Banks are of particular importance to marine mammals and turtles, and several Ecologically and Biologically Significant Areas (EBSAs) have been identified due in part to their known importance to a number of marine mammal species (Templeman 2007). Given that a number of these species have been designated as species at risk under Canadian legislation or are otherwise considered to be of conservation concern, they are typically a key consideration in the EA review process for projects and activities off eastern Newfoundland. Again, there are a number of existing and available information sources that provide information on the characteristics, presence and spatial and temporal distribution of marine mammals and seabirds in and around the proposed Project Area. These are summarized in the Eastern Newfoundland SEA (Amec 2014), and include, for example, the current DFO marine mammals sightings database, data from the Ocean Biogeographic Information System (OBIS) (which incorporates data from a variety of sources for the period between 1913 and 2012), other available literature and available (published) marine mammals sightings data collected by operators working in the area Species at Risk The Canadian Species at Risk Act (SARA) provides for the protection of species at the national level to prevent extinction and extirpation, facilitate the recovery of endangered and threatened species, and to promote the management of other species to prevent them from becoming at risk in the future. Designations under the Act follow the recommendations and advice provided by the Committee on the Status of Endangered Wildlife in Canada (COSEWIC). There are currently a number of schedules associated with the SARA. Species that have formal protection are listed on Schedule 1, which includes the following potential designations: Extirpated: A species that no longer exists in the wild in Canada, but exists elsewhere; Endangered: A species that is facing imminent extirpation or extinction; Threatened: A species that is likely to become endangered if nothing is done to reverse the factors leading to its extirpation or extinction; and Special Concern: A species that may become threatened or endangered because of a combination of biological characteristics and identified threats. Nexen Energy ULC Flemish Pass Exploration Drilling Project ( ) EA Project Description April 2017 Page 39

40 Schedule 1 of SARA is therefore the official federal list of species at risk in Canada. Once a species is listed, measures to protect and recover a listed species are established and implemented, including the development of a Recovery Strategy. Action Plans summarize the activities required to meet recovery strategy objectives and goals, and Management Plans set goals and objectives for maintaining sustainable population levels of one or more species that are particularly sensitive to environmental factors. At the provincial level, the Newfoundland and Labrador Endangered Species Act (NL ESA) provides protection for indigenous species, sub-species and populations considered to be endangered, threatened, or vulnerable within the province. These potential designations under the legislation are defined as follows: Endangered: A species that is facing imminent extirpation or extinction; Threatened: A species that is likely to become endangered if nothing is done to reverse the factors leading to its extirpation or extinction; and Vulnerable: A species that has characteristics which make it particularly sensitive to human activities or natural events. Designations are based on recommendations from COSEWIC and/or the provincial Species Status Advisory Committee (SSAC). Habitat that is important to the recovery and survival of endangered or threatened species can also be designated as critical habitat or recovery habitat, and protected under the NL ESA. Table 3.1 provides a listing of identified species at risk and species of conservation concern that are known or considered likely to occur off eastern Newfoundland, indicating their current designations under applicable legislation and by COSEWIC. Comprehensive and up to date information on the protection and current designations of these species at risk and any associated Recovery Strategies, Action Plans and Management Plans (including any identified and designated critical habitat) is available from the relevant sources and will be used in any required EIS for this Project. Table 3.1 Family MARINE FISH Anarhichadidae Anarhichadidae Anarhichadidae Species at Risk or Otherwise of Special Conservation Concern (Current Designations) Species Federal Scientific SARA Status COSEWIC Provincial Common Name Name (Schedule 1) Designation Atlantic wolffish Northern wolffish Spotted wolffish Anarhichas lupus Anarhichas denticulatus Anarhichas minor Special Concern Threatened Threatened Special Concern Threatened Threatened Anguillidae American eel Anguilla rostrata Threatened Vulnerable Cetorhinidae Gadidae Basking shark Atlantic cod (Newfoundland Cetorhinus maximus Gadus morhua Special Concern Endangered Nexen Energy ULC Flemish Pass Exploration Drilling Project ( ) EA Project Description April 2017 Page 40

41 Family Common Name Species Scientific Name SARA Status (Schedule 1) Federal COSEWIC Designation and Labrador population) Gadidae Cusk Brosme brosme Endangered Lamnidae Porbeagle Lamna nasus Endangered Lamnidae Lamnidae Macrouridae Macrouridae Phycidae Pleuronectidae Rajidae Rajidae Rajidae Salmonidae Scombridae Scorpaenidae Shortfin mako White shark Roughhead grenadier Roundnose grenadier White hake (Atlantic and Northern Gulf of St. Lawrence population) American plaice (Newfoundland and Labrador population) Smooth skate (Funk Island Deep Population) Thorny skate Winter Skate (Eastern Scotain Shelf Newfoundland) Atlantic salmon (South Newfoundland Population; Outer Bay of Fundy population) Atlantic bluefin tuna Acadian redfish (Atlantic population) Isurus oxyrinchus Carcharodon carcharias Macrourus berglax Coryphaenoides rupestris Urophycis tenuis Hippoglossoides platessoides Malacoraja senta Amblyraja radiata Leucoraja ocellata Salmo salar Thunnus thynnus Sebastes fasciatus Endangered Threatened Endangered Special Concern Endangered Threatened Threatened Endangered Special Concern Endangered Threatened (South Newfoundland Population); Endangered (outer Bay of Fundy population) Endangered Threatened Scorpaenidae Deepwater Sebastes Threatened Provincial Nexen Energy ULC Flemish Pass Exploration Drilling Project ( ) EA Project Description April 2017 Page 41

42 Family Squalidae MARINE BIRDS Laridae Scolopacidae Species Scientific Common Name Name redfish (Northern mentella Population) Squalus Spiny dogfish acanthias Ivory Gull Red-necked Phalarope Pagophila eburnea Phalaropus lobatus MARINE MAMMALS AND SEA TURTLES Blue Whale - Balaenoptera Balaenopteridae Atlantic musculus Population Balaenopteridae Balaenidae Ziphiidae Ziphiidae Delphinidae Phocoenidae Dermochelyidae Cheloniidae Fin Whale - Atlantic Population North Atlantic Right Whale Northern Bottlenose Whale - Davis Strait, Baffin Bay, Labrador Sea population; Scotian Shelf population Sowerby s Beaked Whale Killer Whale (Northwest Atlantic / Eastern Arctic population) Harbour Porpoise (Northwest Atlantic population) Leatherback Sea Turtle Loggerhead Sea Turtle Balaenoptera physalus Eubalaena glacialis Hyperoodon ampullatus Mesoplodon bidens Orcinus orca Phocoena phocoena Dermochelys coriacea Caretta caretta SARA Status (Schedule 1) Federal COSEWIC Designation Special Concern Provincial Endangered Endangered Endangered Endangered Special Concern Endangered Endangered (Scotian Shelf population) Special Concern Endangered Special Concern Endangered Special Concern Endangered Special Concern (Davis Strait, Baffin Bay, Labrador Sea population); Endangered (Scotian Shelf population) Special Concern Special Concern Special Concern Endangered Endangered Nexen Energy ULC Flemish Pass Exploration Drilling Project ( ) EA Project Description April 2017 Page 42

43 3.3.5 Protected and Special Areas A number of onland, marine and coastal areas within and off eastern Newfoundland have been designated as protected under provincial, federal and/or other legislation and processes, or have been formally identified through relevant forums and processes as being otherwise special or sensitive due to their ecological, historical and/or socio-cultural characteristics and importance. Given its location over 400 km offshore, the Project will not occur within, or otherwise interact directly with, any of the existing provincial or federal Parks, Ecological Reserves, Wildlife Reserves, Marine Protected Areas, Migratory Birds Sanctuaries, IBAs or other locations that have been designated as protected on or around the Island of Newfoundland (Amec 2014). The Project Area likewise does not overlap with either of the identified Ecologically and Biologically Significant Areas (EBSAs) or Preliminary Representative Marine Areas (RMAs) off Eastern Newfoundland (Figure 3.2). As illustrated in Figure 3.2, the Project Area does overlap with small portions of NAFO Fishery Sponge, Coral and Seapen Closure Areas, for which there are no associated prohibitions of marine activities such as those being proposed as part of this Project. The Project is expected to have little or no potential to result in adverse environmental effects upon the area and its associated ecological features. Nexen Energy ULC Flemish Pass Exploration Drilling Project ( ) EA Project Description April 2017 Page 43

44 Figure 3.2 Protected and Special Areas within and off Eastern Newfoundland Nexen Energy ULC Flemish Pass Exploration Drilling Project ( ) EA Project Description April 2017 Page 44

45 3.4 Human Environment The following sections provide a brief overview of relevant aspects of the socioeconomic environment of the area, with a key focus on commercial fishing activity as well as other human uses of the marine environment Commercial Fisheries Fisheries are an important component of the socioeconomic environment of Newfoundland and Labrador and other parts of Canada, including the various communities and regions that extend along the coastline of eastern Newfoundland. Commercial fisheries in this region are extensive and diverse, with the Project Area overlapping a number of NAFO Divisions and Unit Areas, and thus, fishing activities that involve a range of species, gear types and other characteristics at various times of the year. Commercial fisheries data are provided by DFO Statistical Services in Ottawa, ON, including landings (weight and value) statistics and geospatial information illustrating the overall location and timing of fishing activity. The mapping information is provided by DFO as an aggregated data set which gives a general indication of fishing areas (by species, gear types and other pre-determined categories and data classes) for individual grid cells that are approximately 6 x 4 nautical miles in size. The DFO datasets record and report domestic and foreign fish harvests that are landed in Canada. Figures 3.3 and 3.4 provide annual, locational summary information for commercial fishing activity in the Project Area and surrounding region for the 2011 to 2015 period, based on the above described DFO datasets up to and including the most recent year (2015) for which such data are available from DFO. The Figures include relevant and representative maps showing overall fishing activity by year, as well as for the various categories of gear types (mobile and fixed gear). The available data indicate that key species that are fished in the region include snow crab, redfish, Northern shrimp, turbot / Greenland halibut, American plaice, yellowtail flounder, Atlantic halibut and others. Fishing activity occurs year-round, but is concentrated primarily in the May-July period. There are also various regulatory jurisdictions that pertain to marine fish and fisheries within and around the Project Area. While the Government of Canada has jurisdiction over fish stocks and fishing activities within the 200 nautical mile limit (EEZ) and for benthic invertebrates (such as crab) across the entire continental shelf, NAFO manages groundfish activities and other resources beyond that 200 mile limit. The NAFO Regulatory Area (NRA) is some 2,707,895 km 2 in size (or 41 percent of the total NAFO Convention Area) and comprises that part of the Northwest Atlantic high seas located adjacent to Canada s 200 mile EEZ. Fishing activity in the NRA targets a range of species, including cod, redfish, Greenland halibut, shrimp, skates, and other finfish, and has an approximate landed value of $200 million annually across all members (NAFO 2014). As a result of the 2007 United Nations General Assembly (UNGA Res. 61/105, paragraph 83) request that Regional Fisheries Management Organizations regulate bottom fisheries, NAFO undertook an exercise to identify bottom fishing areas in the NRA, and in doing so, to identify and map NAFO s bottom fishing footprint in the area. The NAFO fisheries footprint is 120,048 km 2 in size, and its location and relationship to the current Project Area is illustrated in Figure 3.5. Information on fishing activity by the NAFO members that fish in the NAFO Divisions that overlap with the Project Area are available from various sources, including the STATLANT21A Databases (NAFO 2015). Nexen Energy ULC Flemish Pass Exploration Drilling Project ( ) EA Project Description April 2017 Page 45

46 Figure 3.3 Commercial Fishing Locations, All Species ( ) Nexen Energy ULC Flemish Pass Exploration Drilling Project ( ) EA Project Description April 2017 Page 46

47 Figure 3.4 Commercial Fishing Locations, Fixed and Mobile Gear ( ) Nexen Energy ULC Flemish Pass Exploration Drilling Project ( ) EA Project Description April 2017 Page 47