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Comprehensive Study Report

Socio-Economic Effects Assessment


Socio-Economic Effects Assessment

The following sections provide an overview of the existing socio-economic conditions in the various study areas, as well the potential effects of the White Rose project on each of the socio-economic VECs under consideration, including mitigation measures, cumulative effects, residual effects, and follow-up. An extensive overview of the existing socio-economic environment, and a detailed effects analysis, is provided in Part Two of the Comprehensive Study. As noted in Section 1.3 of this report, a number of the socio-economic VECs (i.e., business and employment, community social infrastructure and services and community physical infrastructure) will be addressed primarily through the Development Application review process pursuant to the Atlantic Accord Acts. As part of this process, the Commissioner appointed by the C-NOPB will be empowered to receive comments from the public concerning any matters associated with the Development Application, including these socio-economic issues.

5.1 Business and Employment

5.1.1 Existing Conditions

The 1990s were something of a "roller coaster" for the provincial economy. Positive developments in the offshore oil industry (Hibernia) were offset by the declaration of moratoria on fishing for northern cod and other groundfish species. A major consequence of the fishery closure has been a declining population, particularly in rural Newfoundland and Labrador (Statistics Canada 2000). In 1999, however, Newfoundland posted the strongest economic growth of any province for the second year running. Economic gains included increases in offshore oil activity, crab and shrimp landings, construction activity, tourism and manufacturing (Department of Finance 2000a). The oil industry was the leading contributor to this growth in the provincial economy.

The St. John's area has shared the economic success enjoyed by the province, and is currently enjoying a boom in economic growth and activity. Recent years have seen increasing employment in the region, due, in part, to the important contribution the offshore oil industry is making to the St. John's area's economy. St. John's has been the primary location for administrative, engineering, regulatory, training, supply base, air transportation and service activities for the east coast oil industry. Economic conditions in the Isthmus of Avalon area have fluctuated over the years, reflecting changes in the provincial economy, fishery and major industrial projects within and close by the region. The Isthmus area has been involved with the offshore oil industry over the past decade (through, for example, the Bull Arm construction and fabrication facility and the Newfoundland Transshipment Terminal). The economy of the Marystown area has also fluctuated over the years, depending on fishing, fish processing and the shipyard. The Marystown shipyard is the largest shipbuilding and repair facility in the province, and has resulted in Marystown being involved in the Newfoundland oil industry since its early years.

Further information on business and employment activity in these regions is provided in the Comprehensive Study (Part Two, Chapter 3 and Section 4.2).

5.1.2 Effects Assessment

White Rose will have a range of economic effects throughout the construction/installation and operations phases in particular, but also in terms of its cumulative effects in conjunction with other offshore and industrial projects. These potential benefits include direct, indirect and induced employment activity. The positive effects anticipated reflect, in part, the proponents' commitment to Canada-Newfoundland benefits, which will ensure that a broad range of business, employment and industrial benefits result from the project during both the development and operations phases. A full discussion of project approach and the benefits associated with the project is included in the Development Plan and Canada-Newfoundland Benefits Plan was provided to C-NOPB as part of the Development Application process (Husky Oil 2001b).

The potential for Canadian and Newfoundland involvement in project construction and operations activity could potentially be constrained by industrial and labour capability and capacity, and will be directly reflective of the competitiveness of the local environment. The business and employment effects of the project will depend not only on the existing business capabilities and labour force and how they might be increased or enhanced, but also on other cumulative demands on them. However, given the current project schedule, it is anticipated that there will be only limited conflicts between industrial and labour requirements of White Rose and those of other major projects.

There will be similar demands on infrastructure and labour required for operations. However, this is not viewed as problematic, given that such demand provides long-term opportunities, justifying investments in infrastructure and training. There is a high level of awareness, within the federal and provincial government, industry and training institutions of the need to plan and prepare for future labour requirements.

In addition to these potential direct effects, there will also be important secondary or multiplier effects that can be wide-ranging and long-term. The oil industry as a whole is having a transformative effect on companies and workers as they develop new skills and capabilities that make them highly competitive in Newfoundland's oil industry and elsewhere. Similarly, oil industry-related industrial infrastructure, research and education are increasing the likelihood of and potential for Newfoundland benefits from further offshore petroleum projects. Overall, the project will further contribute to this growing industry and, hence, to the further development and diversification of the Newfoundland economy.

During the development phase of the project, the St. John's area will see administrative, engineering, training, regulatory, and supply and service activity. In addition, during the operational life of the field, the St. John's area will be the administrative, engineering, training, regulatory and supply and service centre for the project. This activity, and associated indirect and induced business and employment effects, will have an important beneficial effect on the St. John's area economy.

The Bull Arm site in Trinity Bay was originally developed as the construction and fabrication facility for the Hibernia project, and has been used for the Terra Nova Development. Depending on final decisions resulting from the competitive bid process, the site could also be used for similar White Rose FPSO activity. The main local business and employment effects of any project activity at Bull Arm would fall within the daily commuting range of the site. The White Rose schedule would see development activity following after construction, fabrication and hook-up/commissioning activity associated with the Terra Nova project. This is potentially advantageous to the proponents if current schedules are maintained since it means that equipment and skills could potentially be available at Bull Arm. This will also be beneficial to the Isthmus area, in that it could result in some continuity in direct and spin-off employment and business activity related to the Bull Arm facility. There may also be local business and employment benefits as a result of project operations. It appears unlikely that there would be any significant adverse cumulative effects at Bull Arm resulting from concurrent construction/fabrication of White Rose and other project components.

The Marystown area could also be positively affected by this project through involvement in project-related work, if success is achieved through the competitive bidding process. Any such work will both provide direct and spin-off benefits to the local economy and reinforce the shipyard's position as an important oil industry facility. Any cumulative effects will depend on other work that may be ongoing at the same time, although from the perspective of the yard's owner and operator, any likely cumulative effects would be beneficial rather than adverse.

The predicted effects (including project-specific and cumulative effects) of the project on business and employment are summarized in Table 5.1. For each project phase, the potential effects on business and employment are seen as positive, and no adverse effects are anticipated or mitigative measures suggested.

Table 5.1: Effects Assessment Summary - Business and Employment

Project Activity Positive (P) or Adverse (A) Environmental Effect Mitigation Environmental Criteria for Assessing Environmental Effects
Magnitude Geographic Extent Duration / Frequency Reversibility Socio-Economic Context
Construction
Fabrication of offshore components Increased business and employment (P) Implementation of C-N Benefits Plan 1 2-3 1/1 R 2
Installation of offshore components Increased business and employment (P) Implementation of C-N Benefits Plan 1 2-3 1/1 R 2
Operations
Offshore production / support / service Increased business and employment (P) Implementation of C-N Benefits Plan 1 2 3/ 3 R 2
Decommissioning
Offshore decommissioning / support NA NA NA NA NA NA NA
Malfunctions / Accidents
Emergency response / support Increased business and employment (P) Implementation of C-N Benefits Plan 1 2-3 3/2 R 2
Past / Present / Future Projects
Construction Increased business and employment (P) Implementation of C-N Benefits Plan 1 2-3 1/ 2 R 2
Operations Increased business and employment (P) Implementation of C-N Benefits Plan 1 2-3 3/ 2 R 2
Key for Table 5.1
Magnitude 1 = Low: within current capacity, standard or threshold
2 = Medium: approaches currentcapacity, standard or threshold
3 = High: exceeds current capacity, standard or threshold
Geographic Extent 1 = Individual Community
2 = Regional Study Area
3 = Province
Duration 1 = Construction only
2 = Operations only
3 = Life of Project
4 = Decommissioning only
Frequency 1 = single occurrence
2 = occasional occurrence
3 = continuous
Reversibility R = Reversible
I = Irreversible
Socio-economic Context 1 = Area has no previous experience with offshore development
2 = Area has previous experience with offshore development
NA = Not Applicable

The project is expected to add further business and employment benefits to all regions and the province as a whole. No significant adverse residual effects are anticipated. Monitoring and reporting of Canada-Newfoundland benefits commitments will be undertaken as required by the C-NOPB.

5.2 Community Social Infrastructure and Services

Local residents value community infrastructure and services insofar as the quantity and quality of those services in a community contribute to the overall standard and quality of life. These include education, health, security (policing and fire protection) and recreation infrastructure and services.

5.2.1 Existing Conditions

Education

In recent years, the province has seen a decline in the number of schools, students, teachers and the student-teacher ratio. During the 1999-2000 school year there were 343 schools in Newfoundland and Labrador, with 93,957 full-time students. The student-teacher ratio as of 1998-1999 was 1:15 (Newfoundland and Labrador 1999). Post-secondary education in the province is provided through Memorial University of Newfoundland, the College of the North Atlantic and 54 registered private training institutions.

Primary and secondary education in the St. John's area is administered by the Avalon East School Board. In 1998-1999 there were 74 schools in the St. John's study area (Newfoundland and Labrador 1999). The number of schools in the area has decreased in recent years, due to changing demographics and consolidation. In 1998-99 there were 31,745 primary and elementary students in the area (Newfoundland and Labrador 1999), with recent years seeing steadily decreasing enrollments in area schools. Statistics on school capacity are not available, although in general, supply continues to exceed demand. The Isthmus of Avalon and Marystown areas have also seen a decrease in primary and secondary schools and in student enrollment. There were 12 primary and secondary schools in the Isthmus of Avalon area, with 2,719 students in 1998-99. During the same year, there were six primary and secondary schools in the Marystown area, with a total student enrolment of 2,423 (Newfoundland and Labrador 1999). The College of the North Atlantic has a campus in Burin.

Health and Community Services and Infrastructure

Health and community services in Newfoundland and Labrador are administered by the provincial Department of Health and Community Services. There are currently 36 hospitals and 19 nursing homes in the province (Department of Health and Community Services 2000). The level of service, as defined by the number of nurses and doctors per capita, is comparable to other Canadian provinces. In 1998, the overall physician-to-population ratio was 1.7 physicians per 1,000 persons and the registered nurse-to-population ratio was 9.8 per 1,000 persons (Department of Finance 2000b). The St. John's area has a number of acute and long-term health care facilities and one health care centre. The Dr. G.B. Cross Memorial Hospital in Clarenville serves the Isthmus area. The Marystown area has one acute-care facility, the Burin Peninsula Health Care Centre.

Social Assistance and Employment Services

The Department of Human Resources and Employment is the provincial agency responsible for income support through social assistance and employment-related services. In the St. John's area, there is a St. John's Region office, three district offices within the City and others on Bell Island and in Conception Bay South. The District Office for the Isthmus of Avalon area is located in Clarenville, while the office for the Marystown area is located in Marystown. The demand for social assistance in the St. John's, Marystown and Isthmus of Avalon areas has fluctuated over the past decade (Department of Health and Community Services 2000b).

Security and Safety: Policing and Fire Protection

Policing in the St. John's area is provided by the Royal Newfoundland Constabulary (RNC), while the Isthmus of Avalon and the Marystown areas fall under the jurisdiction of the Royal Canadian Mounted Police (RCMP). In the St. John's area, fire protection services are provided by the St. John's Regional Fire Department and volunteer fire departments in various communities. The Isthmus is served by fire departments in five local communities, while fire protection in the Marystown area is provided by volunteer departments in five local communities and a composite fire department in Marystown.

Recreation Services and Facilities

The St. John's area contains numerous recreation and leisure facilities capable of accommodating a wide range of activities. Some of the existing facilities are used to full capacity, and there is a demand for some new types of facilities. The Isthmus of Avalon area also has a range of recreational facilities, many of which are found in the Clarenville-Shoal Harbour area. Likewise, there are a number of recreational facilities in the Marystown area, with Marystown and Burin having the widest range of facilities and serving a number of the smaller communities. The facilities and programs appear to satisfy the needs of local residents.

5.2.2 Effects Assessment

Education

Direct project effects on education at the provincial level will be limited to post-secondary training. There is already a substantial supply of trained and experienced labour; however, ongoing training of new entrants to the industry and upgrading of those already in it will continue. It is expected that local institutions will be able to provide much of the required training. At this time, no problems are anticipated to arise from the project itself, or from cumulative activity, to which provincial post-secondary institutions could not respond.

The Hibernia and Terra Nova projects have not resulted in significant effects on schools in the St. John's area. When all three projects are in operation, there will be a large workforce located in the St. John's area, but any increased cumulative demand on the education system is unlikely to be problematic as the changing demographics of the area continue to lead to a reduced or, at best, stable (in most cases, at lower levels than the past), demands for services. In addition, White Rose is not expected to generate any substantial demands on education in the Isthmus of Avalon or Marystown areas that the existing systems cannot accommodate.

The predicted effects (including project-specific and cumulative effects) of the project on education are summarized in Table 5.2. Through a Canada-Newfoundland Benefits Plan, the proponents will actively promote the employment and training of Newfoundland residents. Insofar as such training will affect the post-secondary components of the provincial system, the outcomes should be beneficial or positive for those trained and for those individuals and institutions providing the training. No significant adverse effects on the primary and secondary elements of the education system are expected either from the White Rose project itself or cumulatively with other offshore projects or other activity. No formal monitoring or follow-up is anticipated, beyond the normal processes that post-secondary institutions follow in tracking and anticipating demand for existing and potential courses and programs.

Health and Community Services and Infrastructure

The White Rose oilfield development will result in some in-migration of onshore and offshore personnel and their families, which will have a small incremental effect on the overall demand for medical services over the life of the project. There is no evidence that the Hibernia or Terra Nova projects resulted in substantial new demands for health care services. Incoming workers and their families generally tend to be relatively young and healthy, and therefore place relatively low demands on medical services. These workers are very likely net contributors to the system in terms of taxes paid relative to services used. Any increased demands for medical services are therefore expected to be minimal given the typical age of the workforce and the fact that operators have medical programs in place (Table 5.2). The residual effects of the project on medical services and infrastructure are predicted to be adverse, but not significant. There will be some cumulative effects during the operations phase in particular, but demands from the off-shore related workforce overall are expected to be small and within the capabilities of the current system. Monitoring demand at the institutional level is a provincial responsibility. The proponents will monitor workforce health issues on a periodic basis.

Social Assistance and Employment Services

Potential effects to these types of community services are expected to be of both a direct and indirect nature, primarily experienced in the operations phase and as a result of cumulative effects, and particularly in the St. John's area. The effects may be both positive and negative. The project will generate employment, thereby reducing the need for financial support. However, there may also be negative effects as the benefits of economic growth will not be shared by all and any associated inflationary effects will particularly affect those with low incomes. This would potentially increase demands for income support services. Overall, however, the effects of the project on social assistance and employment services is expected to be small, but primarily positive (Table 5.2). No adverse significant residual effects are anticipated, and no formal project monitoring is recommended. The provincial department responsible for social assistance and employment support programs have in place mechanisms to assess and address program needs.

Policing and Fire Protection

As with any other industrial or business activity, there is a potential for project-related activities to require policing or fire protection services. There has been no suggestion or evidence that Hibernia or Terra Nova have affected the nature or level of crime, or the demands for policing services or fire protection, in the St. John's, Isthmus of Avalon or Marystown areas. White Rose, even when the cumulative effects of multiple project operations are considered, is not expected to change this should any project related activity occur there (Table 5.2). The residual effects of the project on this VEC are predicted to be not significant. Data on events and needs are collected on a regular basis by the relevant policing and fire-protection authorities as part of their normal mandate and planning activities. No additional monitoring or follow-up is anticipated or proposed.

Recreation Services and Facilities

Effects on recreation systems may be both adverse and positive. While additional demand may reduce access and enjoyment, newcomers may make activities more viable. The potential effects of the project on recreation services and facilities are summarized in Table 5.2. The project will result in some in-migration and increased demand for access to recreation facilities and programs, primarily during the operations phase. These effects will mainly be experienced in the St. John's area. However, the magnitude of these effects will be low and existing facilities and programs are expected to be able to cope with any increases. Even with the cumulative effects of population growth associated with direct and indirect employment for the three major oil developments, the effects on recreation are not expected to be significant. No formal project monitoring is recommended. The authorities responsible for recreation facilities and programs have in place mechanisms to assess and project demand, and can be expected to respond accordingly.

Table 5.2: Effects Assessment Summary - Community Social Infrastructure and Services

Project Activity Positive (P) or Adverse (A) Environmental Effect Mitigation Environmental Criteria for Assessing Environmental Effects
Magnitude Geographic Extent Duration / Frequency Reversibility Socio-Economic Context
Education
Construction
Fabrication of offshore components Training of provincial workforce (P) Post-secondary institutions plan to meet industry needs 1 2-3 1/1 R 2
Installation of offshore components Training of provincial workforce (P) Post-secondary institutions plan to meet industry needs 1 2-3 1/1 R 2
Operations
Offshore production / support / service Training of provincial workforce (P) Post-secondary institutions plan to meet industry needs 1 2-3 3/3 R 2
Decommissioning
Offshore decommissioning / support NA NA NA NA NA NA NA
Malfunctions / Accidents / Unplanned Events
Emergency response / support Training of provincial workforce (P) Post-secondary institutions plan to meet industry needs 1 2-3 3/3 R 2
Past/Present/Future Projects
Construction NA NA NA NA NA NA NA
Operations Training of provincial workforce (P) Post-secondary institutions plan to meet industry needs 1 2-3 3/2 R 2
Medical Services and Infrastructure
Construction
Fabrication of offshore components Increased demand for medical services (A) Institutions respond as appropriate / feasible 1 2 1/ 3 R 2
Installation of offshore components Increased demand for medical services (A) Institutions respond as appropriate / feasible 1 2 1/ 3 R 2
Operations
Offshore production / support / service Increased demand for medical services (A) Institutions respond as appropriate / feasible Proponent monitors and responds to work and family life issues 1  1 2  3 3/ 3  3/ 3 R  R 2  2
Decommissioning
Offshore decommission / support NA NA NA NA NA NA NA
Malfunctions / Accidents / Unplanned Events
Emergency response / support Increased demand for medical services (A) Institutions respond as appropriate / feasible Proponent medical and EAP programs 1 2 3/ 3 R 2
Past / Present / Future Projects
Construction NA NA NA NA NA NA NA
Operations Increased demand for medical services (A) Institutions respond as appropriate / feasible 1 2 3/ 3 R 2
Social Assistance and Employment Services
Construction
Fabrication of offshore components Decreased demands for services (P) Monitoring / action by responsible authorities 1 2 1/3 R 2
Installation of offshore components     NA NA NA NA NA
Operations
Offshore production / support / service Increased demands for services (A) Decreased demands for services (P) Monitoring / action by responsible authorities 1 2 3/ 3 R 2
Decommissioning
Offshore decommissioning / support NA NA NA NA NA NA NA
Malfunctions / Accidents / Unplanned Events
Emergency response / support     NA NA NA NA NA
Past / Present / Future Projects
Construction NA NA NA NA NA NA NA
Operations Increased demands for services (A) Decreased Demands for services (P) Monitoring / action by responsible authorities 1 2 3/ 3 R 2
Policing and Fire Protection
Construction
Fabrication of offshore components Increased demands for services (A) Monitoring / action by responsible authorities 1 2 1/ 3 R 2
Installation of offshore components Increased demands for services (A) Monitoring / action by responsible authorities 1 2 1/ 3 R 2
Operations
Offshore production / support / service Increased demands for services (A) Monitoring / action by responsible authorities 1 2 3/ 3 R 2
Decommissioning
Offshore decommissioning / support NA NA NA NA NA NA NA
Malfunctions / Accidents / Unplanned Events
Emergency response / support Increased demands for services (A) Monitoring / action by responsible authorities 1 2 3/ 3 R 2
Past / Present / Future Projects
Construction NA NA NA NA NA NA NA
Operations Increased demands for services (A) Monitoring / action by responsible authorities 1 2 3/ 3 R 2
Recreation Services and Facilities
Construction
Fabrication of offshore components Increased use of facilities / demand for services (P/A) Monitoring / action by service providers 1 2 1/3 R 2
Installation of offshore components NA NA NA NA NA NA NA
Operations
Offshore production / support / service Increased use of facilities / demand for services (P/A) Monitoring / action by service providers 1 2 3/ 3 R 2
Decommissioning
Offshore decommissioning / support NA NA NA NA NA NA NA
Malfunctions / Accidents / Unplanned Events
Emergency response / support NA NA NA NA NA NA NA
Past/Present / Future Projects
Construction              
Operations Increased use of facilities / demand for services (P/A) Monitoring / action by service providers 1 2 3/ 3 R 2
Key for Table 5.2
Magnitude 1 = Low: within current capacity, standard or threshold
2 = Medium: approaches current capacity, standard or threshold
3 = High: exceeds current capacity, standard or threshold
Geographic Extent 1 = Individual Community
2 = Regional Study Area
3 = Province
Duration 1 = Construction only
2 = Operations only
3 = Life of Project
4 = Decommissioning only
Frequency 1 = single occurrence
2 = occasional occurrence
3 = continuous
Reversibility R = Reversible
I = Irreversible
Socio-economic Context 1 = Area has no previous experience with offshore development
2 = Area has previous experience with offshore development
NA = Not Applicable

5.3 Community Physical Infrastructure

5.3.1 Existing Conditions

Housing

The number of dwellings in the province has grown considerably over the past 20 years. However, the number of annual housing starts has declined. In 1996, there were 185,500 occupied private dwellings in Newfoundland with most being owner-occupied, single-detached homes. During that same year there were 60,295 occupied private dwellings in the St. John's area, of which 61 percent were located within the City of St. John's itself (Statistics Canada 1996). Much of the growth in the region continues to occur in Conception Bay South and Mount Pearl. Annual housing starts in the area have fluctuated over the last decade, with the general trend being one of decline (CMHC 2000). In recent years, the housing market, as reflected in number and value of sales, has generally improved, and vacancy rates have fluctuated widely. Social housing in the St. John's area is provided by the City of St. John's and the Newfoundland and Labrador Housing Corporation.

The total housing stock in the Isthmus Area increased by 26 percent between 1991 and 1996 (Statistics Canada 1991; 1996), with most growth occurring in the Clarenville-Shoal Harbour area. In 1996, there were 3,895 occupied private dwellings in the Marystown area (Statistics Canada 1996), where the housing market is affected by the seasonal and annual fluctuations in employment by the main employers in the area.

Port and Airport

St. John's Harbour is administered by the St. John's Port Corporation, a federal agency. There is approximately 5 km of available dockface. Currently, the port serves as a container and roll-on/roll-off (RoRo) terminal for vessels carrying freight between Halifax and Montreal. The A.H. Harvey wharf is used by Hibernia and Terra Nova for shore-based marine services. Overall, the port has been considerably underused in recent years with traffic tonnage declining in the early 1990s. Cargo tonnage handled has increased in recent years, with over one million tonnes of cargo being handled in 1999 (St. John's Port Authority 2000).

The St. John's International Airport is the busiest commercial airport in the province. The main terminal serves scheduled national and international passenger air traffic, most charter flights and air cargo traffic. Helicopter, military and private aircraft also use the airport. Over 800,000 commercial passengers used the airport in 1999 (St. John's International Airport 2000). In response to increased passenger demand and anticipated further increases, the St. John's Airport Authority is currently undertaking a $48 million redevelopment program, including runway improvements and terminal building upgrading.

Industrial and Commercial Land, Warehousing and Office Space

The dockyard in St. John's covers approximately 7.5 ha (18.5 acres) at the western end of the Port of St. John's. The dockyard is capable of providing a range of marine and offshore services. Its facilities include a graving dock, marine elevator, transfer and repair berths, mobile cranes, fabrication shops, warehousing and laydown areas (St. John's Dockyard Limited 2000). There are currently eight industrial parks in the St. John's area, with a total area of 464 ha (1,150 acres). Highway access from these industrial lands to other key infrastructure elements such as the Port of St. John's and the St. John's Airport is generally good. St. John's and Mount Pearl are the only communities in the study area with substantial amounts of commercial warehouse space. Office space for administrative and development and operations-phase activities is found mainly in St. John's.

The Bull Arm site represents the most significant industrial lands in the Isthmus area relevant to the offshore industry. While the construction/administration area is closed, the fabrication and assembly yard are currently in operation for the Terra Nova project. There are other industrial and commercial lands in the area with most concentrated in Clarenville and Arnold's Cove. In Marystown, Friede Goldman Newfoundland Limited owns and operates the Marystown Shipyard, which handles boat construction and repair, refitting, conversion and maintenance for fishing fleet and offshore-related vessels, as well as rig component construction and outfitting. The Cow Head facility, completed in the early 1990s, handles a variety of offshore construction contracts.

5.3.2 Effects Assessment

Housing

There is the potential for increased demands for housing during construction activities and during the operations phase. Direct effects during construction activity could occur in any of the study areas, while effects from operations are expected only in the St. John's area. Some cumulative effects may also occur in the St. John's area as a result of multiple field development, growth of the offshore service sector and general economic growth. Any project-specific direct effects on housing in the St. John's area are likely to be small and of short-term duration. Cumulatively, the three offshore projects, a growing offshore supply and service sector, and growth related to other economic activities, will increase the demand for housing. For the most part, however, these effects will be beneficial, especially from the perspective of home-builders and suppliers, home sellers, and municipal tax authorities. However, it could place a burden on those with low or fixed incomes who find higher prices for accommodations problematic.

The White Rose project is also not expected to have any substantive effects on housing in the Isthmus of Avalon area, should it be the site of the project-related activity. The proponents will work with the local community to plan the management of any workforce effects, including decisions regarding the accommodation of workers. In the Marystown area, there is presently a large excess of infrastructure capacity, including housing, and it is therefore not expected that there would be any significant adverse effects on housing should fabrication and construction contracts for White Rose be awarded to the shipyard. Cumulative effects on housing are not anticipated in either of these areas. The potential effects of the White Rose oilfield development on housing are summarized in Table 5.3. Overall, project residual effects are considered to be primarily positive, with any adverse effects being not significant.

Port and Airport

The port would be used if topsides or subsea components are to be fabricated at the St. John's Dockyard. An existing marine supply base will be used to support offshore production. The harbour and airport would also be used as necessary in the event of accidents or other unplanned events. The effects of the project on both the Port of St. John's and St. John's International Airport are expected to be positive (Table 5.3). Their greater use would generate increased revenues for both administrative authorities, but should have no negative effects on other users. No mitigative measures are considered necessary, and the overall predicted residual effects of the project on this VEC are predicted to be positive. The port and airport authorities monitor activities on an ongoing basis and can be expected to respond to any customer needs as they emerge.

Industrial and Commercial Land, Warehousing and Office Space

During the construction/installation phase, depending on where contracts are awarded, there will be a demand for industrial and commercial land, warehousing and office space. During operations there will primarily be a demand for industrial lay-down space, light industry space, and office and warehouse space, particularly in the St. John's area. The potential effects of the project on industrial and commercial lands, warehousing and office space will likely to be positive.

Offshore operators, industry suppliers and contractors have and will continue to use industrial land and warehouse and office space in the St. John's area. These properties contribute to the local economy through their direct and indirect employment and business effects. Terra Nova and White Rose personnel presently occupy office space in downtown St. John's and may require additional industrial and warehouse space when their projects are operational. These will benefit the area and should not exceed the capacity or capability of the area to meet demand. In the Isthmus area, the use of the Bull Arm site by the oil industry has been beneficial to the local and provincial economies. Any use made of it for the White Rose project would continue these benefits. No additional demands are expected to be placed on lands in Clarenville, Arnold's Cove or other Isthmus area communities. Similarly, the Marystown Shipyard and the Cow Head facility are capable of accommodating demands which might be placed upon them by the White Rose project. Additional work on the project would be welcomed and generate positive benefits for the area.

The potential effects of the project on this VEC are summarized in Table 5.3. Municipal authorities and other public and private land developers track industrial and commercial occupancy characteristics and respond accordingly. No specific mitigative measures are considered necessary at this time and no monitoring beyond what is currently undertaken is considered necessary. The residual effects with respect to these infrastructure components are predicted to be positive, with no significant adverse effects.

Table 5.3: Effects Assessment Summary - Community Physical Infrastructure

Project Activity Positive (P) or Adverse (A) Environmental Effect Mitigation Environmental Criteria for Assessing Environmental Effects
Magnitude Geographic Extent Duration / Frequency Reversibility Socio-Economic Context
Housing
Construction
Fabrication of offshore components Increased demands for housing (P/A) Monitoring / action by responsible authorities 1 2 1/ 3 R 2
Installation of offshore components Increased demands for housing (P/A) Monitoring / action by responsible authorities 1 2 1/3 R 2
Operations
Offshore production / support / service Increased demands for housing (P/A) Monitoring / action by responsible authorities 1 2 3/ 2 R 2
Decommissioning
Offshore decommissioning / support NA NA NA NA NA NA NA
Malfunctions / Accidents / Unplanned Events
Emergency response / support     NA NA NA NA NA
Past / Present / Future Projects
Construction NA NA NA NA NA NA NA
Operations Increased demands for housing (P/A) Monitoring / action by responsible authorities 1 2 3/ 3 R 2
Port and Airport
Construction
Fabrication of offshore components Increased use of Port and Airport (P) Monitoring / action by service providers 1 1 1/ 3 R 2
Installation of offshore components Increased use of Port and Airport (P) Monitoring / action by service providers 1 1 1/ 3 R 2
Operations
Offshore production / support / service Increased use of Port and Airport (P) Monitoring / action by service providers 1 1 3/3 R 2
Decommissioning
Offshore decommissioning / support NA NA NA NA NA 3 NA NA
Malfunctions / Accidents / Unplanned Events
Emergency response / support Increased use of Port and Airport (P) Monitoring / action by service providers 1 1 3/ 3 R 2
Past / Present / Future Projects
Construction NA NA NA NA NA NA NA
Operations Increased use of Port and Airport (P) Monitoring / action by service providers 1 1 3/ 3 R 2
Industrial and Commercial Land, Warehousing and Office Space
Construction
Fabrication of offshore components Increased demands for land, office space, etc. (P/A) Monitoring / action by responsible authorities / private sector 1 1 1/3 R 2
Installation of offshore components NA NA NA NA NA NA NA
Operations
Offshore production / support / service Increased demands for land, office space, etc. (P/A) Monitoring / action by responsible authorities / private sector 1 1 3/3 R 2
Decommissioning
Offshore decommissioning / support NA NA NA NA NA NA NA
Malfunctions / Accidents / Unplanned Events
Emergency response / support NA NA NA NA NA NA NA
Past / Present / Future Projects
Construction NA NA NA NA NA NA NA
Operations Increased demands for land, office space, etc. (P/A) Monitoring / action by responsible authorities / private sector 1 1 3/2 I 2
Key for Table 5.3
Magnitude 1 = Low: within current capacity, standard or threshold
2 = Medium: approaches current capacity, standard or threshold
3 = High: exceeds current capacity, standard or threshold
Geographic Extent 1 = Individual Community
2 = Regional Study Area
3 = Province
Duration 1 = Construction only
2 = Operations only
3 = Life of Project
4 = Decommissioning only
Frequency 1 = single occurrence
2 = occasional occurrence
3 = continuous
Reversibility R = Reversible
I = Irreversible
Socio-economic Context 1 = Area has no previous experience with offshore development
2 = Area has previous experience with offshore development
NA = Not Applicable

5.4 Fisheries

5.4.1 Existing Environment

Newfoundland and Labrador's fishing industry has undergone significant structural changes in the last decade following the closure of traditional groundfish fisheries, and is again highly viable. Among the Goods Industries in Newfoundland and Labrador, fisheries accounted for 35 percent of employment in 1998 and ranked second in terms of contribution to GDP (Government of Newfoundland and Labrador 2000). The number of people employed in fish harvesting in Newfoundland has remained relatively stable since 1995. The annual average for 1999 was 8,700 employed, with peak employment at 10,300. There are over 100 (core and non-core) processing plants in Newfoundland, employing an average of 8,400 people, with peak employment at 16,700 (Department of Fisheries and Aquaculture 1999).

The Grand Banks fisheries have undergone substantial change since the collapse of groundfish stocks. Groundfish (mostly northern cod) accounted for 63 percent of the catch by weight on the Grand Banks in 1987 (Petro-Canada 1995). In 1998, catches of snow crab, capelin, yellowtail flounder and redfish made up the bulk of the catch (81 percent). Overall, the Grand Banks fishery was more lucrative in 1998 ($74 million landed value) than it was 11 years earlier (approximately $62 million). Grand Banks fisheries differ across NAFO Divisions (Figure 5.1) in terms of species harvested and their relative importance, landings, value and industry structure (CHART 2000).

Figure 5.1: NAFO Zones

Figure 5.1: NAFO Zones

The proposed White Rose project, along with the Terra Nova and Hibernia developments, is located in NAFO Division 3L, in NAFO unit area 3Lt (Figure 5.1). The fishery in 3L is predominantly a fixed gear (crab pot) fishery and is mostly conducted by Newfoundland vessels under 35 ft (10.6 m). The bulk of the 3L fishery is undertaken close to shore. The most intensive fishing activity typically occurs between June and September.

In 3Lt, the groundfish fishery (northern cod and American plaice) made up 99 percent of the catch by weight in 1987. In 1998, the fishery in this area was dominated by snow crab (98 percent of landed value). Other important fisheries (existing and anticipated) near White Rose are shrimp, Greenland halibut, and perhaps American plaice and northern cod during the later part of the operations and decommissioning phases of the project. Shrimp and Greenland halibut concentrations are not found in the immediate vicinity of White Rose, but rather, further offshore. Catch data from research surveys do not indicate that the fishable area around White Rose will generate new fisheries in the near future. Fishing activity has generally not been predominant in the project area, with catches being lower than elsewhere in 3L. Overall, catches in 3Lt made up only one percent of the total catches (by value) in 3L from 1992 to 1998 (CHART 2000).

The focus of the assessment is on Canadian (commercial) catches. An analysis of foreign catches based on NAFO statistics confirmed the assumption that the distribution of foreign fisheries parallels that of Canadian catches (see the Supplemental Report). At present there are no Aboriginal, recreational or subsistence fisheries in 3Lt.

Further information regarding fishing activity in the area is provided in Part Two of the Comprehensive Study (Section 7.1) and in the Supplemental Report.

5.4.2 Effects Assessment

Given the renewed strength of the fishing industry, issues have been raised regarding potential losses in catch and income as a result of the proposed White Rose project. It was assumed that any effects on Canadian fisheries are representative of effects on international fisheries. The primary issues are those related to loss of access to fishing grounds, damage to fishing gear or vessels, biophysical effects to fish and possible oil spills. Effects on fisheries are predicted to be consistent across the development, production and decommissioning phases of the project.

A no-fishing zone will be in place around the glory holes and will cover an area of approximately 15.4 km². This no-fishing zone comprises only a small proportion of the total fishing area available in 3L (152,000 km²), and a much smaller proportion of the total fishing area on the Grand Banks as a whole. Given the geographic distribution of fisheries in the area, it is very unlikely that catch levels will decline. The no-fishing zone would allow a growth refuge for a proportion of the harvested fish and shellfish populations and/or food species, which may indirectly benefit the fishery.

Two to three supply boats are expected to travel between White Rose and St. John's weekly. Four tanker trips per month are expected to travel between the project area and the nearest shipping lanes. Increased vessel traffic on the Grand Banks as a result of White Rose is not expected to interfere with fisheries. The fishing industry currently operates in proximity to, or encounters, many other vessels during their operations, including increased numbers of vessels engaged in crab fishing on the Grand Banks.

Damage to fishing gear or vessels may result from physical contact with White Rose vessels or installations, and small oil spills and materials lost from vessels, drill rigs or production facilities could damage or foul gear. In addition to fishing vessel damage or loss of gear, further economic loss might result from reduced catch. Overall, however, these types of damages are expected to occur infrequently. To date, there have been no reported damages as a result of the Hibernia and Terra Nova developments.

Potential effects to fish and fish habitat as a result of construction, operation and decommissioning at White Rose are predicted to be not significant (Section 4.1). In addition, any effects to fish will not be directly transferred to fisheries, because additional variability will be introduced by changing fishing practices and management regimes. Therefore, any resulting effects on fisheries are anticipated to be of low magnitude.

Increased and ongoing environmental data collection and monitoring programs for the White Rose project will enhance understanding of the Grand Banks ecosystem, and may lead to the identification of new commercial species. Also, the White Rose production facility and supply vessels will be able to provide emergency services to existing fishing activity on a large portion of the Grand Banks.

Major oil spills are unlikely events (see Section 4.1.2.4), but have the potential to cause serious damage to the fishing industry. The most serious potential effects from major spills are loss of market or market value, loss of access to fishing grounds, damage to fishing gear, and fish tainting (real or perceived). Oil spill trajectory model results for spills greater than 10,000 barrels (Comprehensive Study (Part One) Section 5.8) indicate that an oil spill occurring in the project area would most often disperse offshore and to the south of the Flemish Cap. Given these dispersion patterns, fisheries that would be most disrupted include the Greenland halibut, tuna and swordfish fisheries around the Flemish Pass and the shrimp fishery on the Flemish Cap. Fisheries in the eastern portion of NAFO division 3L and 3N could be affected, but to a much lesser degree. The most serious effect should be loss of market or market value, a disruption of fishing activity, and potential damage to gear rather than any serious effect on fish.

Cumulative effects on fisheries might occur as a result of the Hibernia, Terra Nova and White Rose oilfields, general marine transportation, seismic testing and exploration drilling. Cumulative effects due to loss of access to fishing grounds and/or increased vessel traffic on the Grand Banks will be of low magnitude. The total no-fishing zone for Hibernia (5 km²), Terra Nova (13.8 km²) and White Rose (15.4 km²) is approximately 34.2 km², comprising a very small fraction of the total fishing area available in 3L. Further, the bulk of current fish catches are made either well on the landward side of oil development sites or on the shelf margin rather than in 3Lt itself. As discussed above, the presence of no-fishing zones could also indirectly benefit fisheries. With respect to vessel traffic, the total number of trips per week by supply vessels supporting offshore oil operations will remain a very small fraction of total traffic on the Grand Banks.

Although to date there have been no damages reported, damage to fishing gear might nevertheless occur in the future as a result of Hibernia, Terra Nova and White Rose vessels and installations. Although each operator has or will have mitigation measures in place to deal with damage to fishing equipment, there could be delays in compensation for lost or damaged gear and lost revenue if there is disagreement about which project is responsible. In such a case, the industry non-attributable damage compensation policy, currently in development, will provide guidance. Cumulative effects on fish catches as a result of biophysical effects of oil operations on fish are anticipated to be of low magnitude. A positive cumulative effect is expected with respect to information, communication and emergency response as a result of oil development on the Grand Banks.

A more detailed assessment of the potential effects of the proposed project on this VEC is provided in Part Two of the Comprehensive Study (Chapter 7). The potential effects (including cumulative effects) of the various phases and components/activities associated with the proposed project on fisheries are summarized in Table 5.4.

Table 5.4: Effects Assessment Summary - Fisheries

Project Activity Positive (P) or Adverse (A) Environmental Effect Mitigation Evaluation Criteria for Assessing Environmental Effects
Magnitude Geographic Extent Duration / Frequency Reversibility Socio-Economic Context
Construction, Operations, Decommissioning
Loss of Access to Fishing Grounds A Discussion with Fishing Industry; Common Traffic Routes 1 3 5/6 R 2
Damage to Fishing Vessels or Gear A No-fishing Zone; Notification to Mariners; Reduction or Elimination of Debris; Compensation 1 5 5/1 R 1
Biophysical Impacts on Fisheries A See Chapter 4 1 3 5/6 R 1
Information, Communication and Emergency Response P NA 1 6 5/6 R 1
Malfunctions / Accidents / Unplanned Events
Major Oil Spillsa A Prevention; Containment; Monitoring; Recovery; Compensation 2-3 4-6 2-5/1 R 1
Past / Present / Future Projects (seismic testing, exploration drilling, marine transportation, Hibernia, Terra Nova, White Rose)
Loss of Access to Fishing Grounds A Discussion with Fishing Industry; Common Traffic Routes; 1 3 5/6 R 2
Damage to Fishing Vessels or Gear A No-fishing Zone; Notification to Mariners; Reduction or Elimination of Debris; Compensation 1 5 5/1 R 1
Biophysical Impacts on Fisheries A See Chapter 4 1 3 5/6 R 1
Information, Communication and Emergency Response P NA 1 6 5/6 R 1
Key for Table 5.4
Magnitude 1 = Low
2 = Medium
3 = High
 Geographic Extent 1 = <1 km²
2 = 1-10 km²
3 = 11-100 km²
4 = 101-1000 km²
5 = 1001-10,000 km²
6 = > 10,000 km²
Duration 1 = < 1 month
2 = 1-12 months
3 = 13-36 months
4 = 37-72 months
5 = > 72 months
Frequency 1 = < 11 events/year
2 = 11-50 events/year
3 = 51-100 events/year
4 = 101-200 events/year
5 = > 200 events/year
6 = continuous
Reversibility R = Reversible
I = Irreversible
Ecological/Socio-cultural and Economic Context 1 =Relatively pristine area or area not adversely affected by human activity
2 = Evidence of adverse effects
NA = Not Applicable

a Note: Effects of major oil spills on fishing gear and on loss of access to fishing grounds can be remedied relatively quickly (often within 2 years of a spill). However, loss of market and market value for fisheries species depends on media coverage and public perception of fish taint. Because of this, impacts of major spills can extend over a larger area than the immediate geographic area affected by the spill and can extend long after oil has been removed and/or has dissipated.

For the most part, potential effects on fisheries are small, and can be further decreased by the implementation of various mitigation measures, the majority of which include discussion and collaboration with the fishing industry. Measures to mitigate potential effects on commercial fisheries are summarized below:

  • establishing a no-fishing zone at the White Rose development site;
  • compensation for damage resulting from project and industry activities either through the proponents program or the overall industry unattributable damage programs (under development);
  • all reasonable efforts will be made to accommodate fishing activity over portions of the field not under development;
  • a sequential approach to reservoir development will allow for sequential fishing over portions of the White Rose oilfield during pre-drilling, before production or as wells are abandoned;
  • using common routes by Hibernia, Terra Nova and White Rose vessels, or collaborating (where appropriate) to minimize the number of trips, to reduce overall interference with the fishing industry;
  • beyond the no-fishing zone, the proponents will keep the fishing industry fully informed of the timing and sequence of field development and of the exact location of potential hazards (e.g., through participation in the industry fisheries liaison group); and
  • oil spill prevention and response procedures.

The residual environmental effects of the project on fisheries during the development, production and decommissioning phases will be adverse but not significant. Although unlikely, the residual effect of a major oil spill on fisheries is predicted to be adverse and significant.

5.5 Residual Socio-Economic Effects Summary

The predicted residual socio-economic effects of the proposed White Rose oilfield development are summarized in Table 5.5.

The residual effects of the various project phases, and of the project overall, on business and employment are assessed as positive. The project's decommissioning phase is not expected to have an effect on this VEC (Table 5.5).

The residual effects of project construction and operations on the various aspects of community social infrastructure and services are assessed as positive and/or adverse but not significant. The project's decommissioning phase is not expected to have an effect on this VEC. Malfunctions, accidents or unplanned events are not predicted to result in significant adverse effects. Overall, the proposed project is expected to have positive effects on education, and social assistance and employment services, adverse but not significant effects on medical services and infrastructure and policing and fire protection, and both positive and not significant adverse effects on recreation services and facilities (Table 5.5).

The residual effects of project construction and operations on the various components of community physical infrastructure are predicted to be either positive, or a combination of positive and not significant adverse effects. The project's decommissioning phase is not expected to have an effect on community physical infrastructure, and adverse effects are not expected as a result of any malfunctions, accidents or unplanned events. The overall residual effects of the project on housing and industrial and commercial land, warehousing and office space are assessed as a combination of positive and not significant adverse effects, while the overall residual effect of the project on the port and airport is predicted to be positive (Table 5.5).

The construction, operations and decommissioning phases of the project are predicted to have adverse, but not significant, effects on fisheries. The effect of a major oil spill on fisheries is, although unlikely, assessed to be adverse and significant. The overall residual effect of the project on fisheries is predicted to be not significant (Table 5.5).

In summary, after mitigation measures have been implemented, the overall predicted socio-economic effects of the project are, depending on the specific component, assessed to be either positive, or adverse but not significant. The only exception is the potential effects of a major offshore oil spill on fishing activity. As discussed previously, however, the potential for such an event is very low, and preventive measures and contingency plans proposed by the proponents will further reduce the likelihood of, and minimize the effects of, any spills.

Table 5.5: Residual Effects Summary - Socio-Economic

Phase Residual Environmental Effects Rating, including Cumulative Socio-economic Effects¹ Level of Confidence Likelihood
Probability of Occurrence Scientific Certainty
Business and Employment
Construction P 3 3 3
Operations P 3 3 3
Decommissioning NA NA NA NA
Malfunctions, Accidents, Unplanned Events P 3 3 3
Project Overall P 3 3 3
Communituy Social Infrastructure and Services
Education
Construction P 3 2 3
Operations P 3 3 3
Decommissioning NA NA NA NA
Malfunctions, Accidents, Unplanned Events P 3 3 3
Project Overall P 3 3 3
Medical Services and Infrastructure
Construction NS 3 3 3
Operations NS 3 3 3
Decommissioning NA NA NA NA
Malfunctions, Accidents, Unplanned Events NS 3 3 3
Project Overall NS 3 3 3
Social Assistance and Employment Services
Construction P 3 3 3
Operations P 3 3 3
Decommissioning NA NA NA NA
Malfunctions, Accidents, Unplanned Events P 3 1 3
Project Overall P 3 3 3
Policing and Fire Protection
Construction NS 3 3 3
Operations NS 3 3 3
Decommissioning NA NA NA NA
Malfunctions, Accidents, Unplanned Events NS 3 3 3
Project Overall NS 3 3 3
Recreation
Construction NA NA NA NA
Operations P/NS 3 3 3
Decommissioning NA NA NA NA
Malfunctions, Accidents, Unplanned Events NA NA NA NA
Project Overall P/NS 3 3 3
Community Physical Infrastructure
Housing
Construction P/NS 3 3 3
Operations P/NS 3 3 3
Decommissioning NA NA NA NA
Malfunctions, Accidents, Unplanned Events NA NA NA NA
Project Overall P/NS 3 3 3
Port and Airport
Construction P 3 3 3
Operations P 3 3 3
Decommissioning NA NA NA NA
Malfunctions, Accidents, Unplanned Events P 3 3 3
Project Overall P 3 3 3
Industrial and Commercial Land, Warehousing and Office Space
Construction P/NS 3 3 3
Operations P/NS 3 3 3
Decommissioning NA NA NA NA
Malfunctions, Accidents, Unplanned Events NA NA NA NA
Project Overall P/NS 3 3 3
Fisheries
Seismic Testing / Construction NS 3 1 2
Operations NS 3 1 2
Decommissioning NS 3 1 2
Malfunctions, Accidents, Unplanned Events(Major Oil Spills) S 3 1 3
Project Overall NS 3 1 2
Key for Table 5.5
Residual Socio-economic Effects Rating S = Significant Adverse Effect
NS = Not-significant Adverse Effect
P = Positive Effect
Level of Confidence 1 = Low Level of Confidence
2 = Medium Level of Confidence
3 = High Level of Confidence
Probability of Occurrence
(based on professional judgement)
1 = Low Probability of Occurrence
2 = Medium Probability of Occurrence
3 = High Probability of Occurrence
Scientific Certainty
(based on scientific information, statistical analysis or professional judgement)
1 = Low Level of Confidence
2 = Medium Level of Confidence
3 = High Level of Confidence
NA = Not Applicable

¹ As determined in consideration of established residual socio-economic effects rating criteria