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East Coast offshore oil regulation fraught with federal-provincial bickering

Newfoundland Premier Danny Williams

Jeff McIntosh/THE CANADIAN PRESS/Jeff McIntosh

Like so much in this country, regulation of the East Coast offshore oil industry has been fraught with federal-provincial bickering.

When Chevron discovered oil at Hibernia in 1979, both Ottawa and St. John's claimed jurisdiction. After years of federal-provincial battles, then prime minister Brian Mulroney and premier Brian Peckford signed the Atlantic Accord, an agreement to share management of Hibernia and future developments. The accord established the Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB).

Each government appoints three board members, and must agree on a chairman. But that agreement can be hard to achieve, particularly in the venomous political atmosphere of Newfoundland's small capital.

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Premier Danny Williams came to power in 2003 promising to derive more benefits from offshore oil - and he wanted a political ally at the helm of the C-NLOPB. A year later, he tried to appoint his political ally, Andy Wells, then mayor of St. John's. Federal natural resources minister John Efford - no friend of Mr. Williams - rejected the suggestion, arguing Mr. Wells did not have the required experience.

Current chair Max Ruelokke emerged as a compromise candidate, but Mr. Williams was not interested in compromise. Eventually, it took a court ruling to award Mr. Ruelokke the job.

The Premier appointed Mr. Wells to the board, and the voluble politician quickly became a constant critic of Mr. Ruelokke, accusing him of being "a flunky for the oil companies" and an incompetent "bureaucratic hack."

Mr. Wells moved on two years ago, but his belittling of Mr. Ruelokke as an industry toady served to undermine public confidence in the board. Mr. Ruelokke complained that Mr. Wells' attack was undermining the public perception of impartiality at the board.

The board needs all the credibility it can muster now, as it struggles to reassure the public that a Gulf-like incident could not happen here, and that it can protect worker safety while managing economic benefits from offshore oil.

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About the Authors
Global Energy Reporter

Shawn McCarthy is an Ottawa-based, national business correspondent for The Globe and Mail, covering a global energy beat. He writes on various aspects of the international energy industry, from oil and gas production and refining, to the development of new technologies, to the business implications of climate-change regulations. More

European Correspondent

Paul Waldie has been an award-winning journalist with The Globe and Mail for more than 10 years. He has won three National Newspaper Awards for business coverage and been nominated for a Michener Award for meritorious public service journalism. He has also won a Sports Media Canada award for sports writing and authored a best-selling biography of the McCain family. More

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