shelburne basin venture exploration drilling project ... · revision history : revision status ......

Shelburne Basin Venture Exploration Drilling Project

Environment Report for Cheshire L-97A

Project Shelburne Basin Venture Exploration Drilling Project

Document Title Environmental Report for Cheshire L-97A

Document Number EP201611201173

Document Revision 04A

Document Status Issued for Authority Approval (IFAA)

Owner / Author L. Smandych/L. Dalton

Issue Date January 6, 2017

Expiry Date None

Security Classification Restricted

Disclosure CNSOPB

Revision History

REVISION STATUS APPROVAL Rev. Date Description Originator Reviewer Approver

01R 2016-12-05 Draft for Review Lara

Smandych/ Lexy Dalton

Scott Jardine/Tara Barnett/Greg

Krauss/Lindsay Grice

N/A

02R 2016-12-19

Draft for Review Lexy Dalton Tara Barnett/Greg

Krauss

N/A

03A 2016-12-20 Final Lexy Dalton Ben Martell Greg Krauss 04A 2017-01-06 Revised Appendix B Lexy Dalton N/A Greg Krauss • All signed originals will be retained by the P&T Document Control Center and an electronic copy will be stored in Livelink

Signatures for this revision Date Role Name Signature or electronic reference (email) January 6, 2017

Originator

Lexy Dalton

December 20, 2016

Reviewer

Ben Martell

January 6, 2017

Approver

Greg Krauss

TABLE OF CONTENTS ACRONYMS ............................................................................................................. 4

1. SCOPE AND PURPOSE ...................................................................................... 6

2. PROJECT OVERVIEW ........................................................................................ 6

3. GENERAL ENVIRONMENT CONDITIONS .......................................................... 8

4. ENVIRONMENTAL PROTECTION AND PERFORMANCE ...................................... 8 4.1. Spills and Discharges ............................................................................... 10

4.1.1. Summary of Spills ....................................................................... 10 4.1.2. Summary of Authorized Discharges .............................................. 10 4.1.3. Summary of Unauthorized Discharges .......................................... 17

4.2. Waste Material ....................................................................................... 21 4.2.1. Summary of Waste Material Produced .......................................... 21 4.2.2. Waste Reduction Measures .......................................................... 22

5. ENVIRONMENTAL CONTINGENCY PLAN EXERCISES ...................................... 24

6. REFERENCES .................................................................................................. 26

APPENDIX A SUMMARY OF OPERATIONAL DISCHARGES ............................... 27

APPENDIX B SUMMARY OF MONTHLY COMPLIANCE MONITORING REPORTS .................................................................................... 29

APPENDIX C SUMMARY OF WASTE DISPOSED DURING THE CHESHIRE WELL ......................................................................................... 30

LIST OF FIGURES Figure 2-1: Cheshire L-97A Location ........................................................................... 7

Figure 4-1: Rig Discharges Quick Reference Card ...................................................... 21

ACRONYMS

AFFF .................................................................................... Aqueous Film Forming Foam BOP .................................................................................................... blowout preventer CCG ............................................................................................. Canadian Coast Guard CNSOPB .................................................. Canada-Nova Scotia Offshore Petroleum Board CO ...................................................................................................... Carbon Monoxide CO2 ........................................................................................................Carbon Dioxide CO2e ....................................................................................... Carbon Dioxide Equivalent E&CCC ............................................................. Environment and Climate Change Canada ECRC ..................................................................... Eastern Canada Response Corporation EL ...................................................................................................... Exploration Licenses EPP ..................................................................................... Environmental Protection Plan GHG ..................................................................................................... Greenhouse Gas HSSE & SP CF ........................ Health, Safety, Security, Environment and Social Performance Control Framework JSA .................................................................................................... Job Safety Analysis MARPOL ........................ International Convention for the Prevention of Pollution from Ships NOx ...................................................................................................... Nitrogen Oxides OA-D .......................................................................... Operations Authorisation – Drilling OCSG .................................................................. Offshore Chemical Selection Guidelines for Drilling and Production Activities on Frontier Lands OEM .............................................................................. original equipment manufacturer OSPAR ................................................................................. Oslo and Paris Commissions OSR ..................................................................................................... Oil Spill Response OSRP ............................................................................................ Oil Spill Response Plan OSV ............................................................................................ Offshore Support Vessel OWS .................................................................................................. oil water separator OWTG ................................................................... Offshore Waste Treatment Guidelines PLONOR............................................................ Poses Little Or No Risk to the environment PM ................................................................................................. Planned Maintenance PMR ...................................................................... Performance Monitoring and Reporting ROP .................................................................................................... rate of penetration

Document # EP201611201173 - 4 - December 20, 2016

Revision 03A Restricted

ROV ........................................................................................ remotely operated vehicle SBM ................................................................................................ synthetic based mud SCCP .............................................................................. Source Control Contingency Plan SOC ................................................................................................. synthetic-on-cuttings SOx ......................................................................................................... Sulphur Oxides TMS ....................................................................................... Tether Management System WMP ........................................................................................ Waste Management Plan



1. SCOPE AND PURPOSE

Shell Canada Limited (Shell) has developed this Environmental Report for the Cheshire L-97A exploration well (the Cheshire well) in accordance with the requirements of Section 87(2) of the Nova Scotia Offshore Drilling and Production Regulations (SOR /2009-317). This report describes the environmental protection measures implemented and environmental performance observed during the drilling of the Cheshire well.

2. PROJECT OVERVIEW

Shell is conducting an exploration drilling project within the area of its offshore Exploration Licences (EL) 2423, 2424, 2425, 22426, 2429 and 2430 in the Nova Scotia Offshore Area, under the jurisdiction of the Canada-Nova Scotia Offshore Petroleum Board (CNSOPB). The Shelburne Basin Venture Exploration Drilling Project (the Project) is divided into two separate drilling campaigns; Campaign one consists of drilling two wells and Campaign two, up to five additional wells. As part of the Project, Shell has completed the drilling of the first exploration well of the first campaign, the Cheshire well. The well is located 250 km offshore Nova Scotia in a water depth of approximately 2,143m (Figure 2-1). Drilling activity was completed by Shell’s contractor, Stena Drilling (Stena), using the Stena IceMAX drill ship (IceMAX). Drilling commenced on October 23, 2015 and the well was abandoned in accordance with applicable regulations on September 21, 2016.



Figure 2-1: Cheshire L-97A Location



3. GENERAL ENVIRONMENT CONDITIONS

In accordance with Section 87.1 of the CNSOPB Drilling and Production Guidelines (D&P Guidelines), the Physical Environmental Report required under Section 7 of the Offshore Physical Environmental Guidelines complies with the reporting requirements for describing the General Environment Conditions as outlined in section 87(2)(a) of the Nova Scotia Offshore Drilling and Production Regulations (D&P Regulations). As part of the Cheshire end of well reporting requirements, Shell commissioned Amec Foster Wheeler (AMEC) to develop a Physical Environment Report. The report contains meteorological data; weather forecasts; oceanographic data, including current and wave data; and descriptions of the instrumentation installed, including calibration reports on each sensor. Please reference the Physical Environmental Report submitted for the Cheshire well for the General Environment Conditions required in accordance with Section 87.1 of the D&P Guidelines.

4. ENVIRONMENTAL PROTECTION AND PERFORMANCE

Shell developed an Environmental Protection Plan (EPP) at the onset of the Project as part of the CNSOPB Operations Authorisation – Drilling (OA-D) approval process, in accordance with Section 9 of the D&P Regulations and the Environmental Protection Plan Guidelines. The EPP is managed as an evergreen document throughout Project operations and continuously updated to improve environmental compliance and accountability for operational activities. The EPP describes the expected operational discharges and outlines the environmental management and protection procedures to be executed to comply with relevant environmental management commitments and requirements for Project operations. These procedures are developed from the Offshore Waste Treatment Guidelines (OWTG) as well as Shell’s Commitment and Policy on Health, Security, Safety, the Environment and Social Performance and Health, Safety, Security, Environment and Social Performance Control Framework (HSSE & SP CF). Shell’s HSSE & SP CF includes 11 individual manuals written to guide Shell employees and contractors in appropriate health and safety management. These manuals cover key areas of HSSE & SP risk including environment (with subsections on biodiversity, emissions and waste among others), social performance and chemical management. The control framework also includes guidance for overall implementation of these manuals including a chapter on Performance Monitoring and Reporting (PMR) of HSSE & SP data. The purpose of this chapter is to report HSSE & SP performance data that are relevant, consistent, transparent,



accurate and complete. Shell measures, monitors and reports performance of the following Project environmental parameters under PMR:

• Energy Use • Greenhouse Gas (GHG) Emissions • Venting • Water Use • Oil Discharged to Surface Water • Waste • Volume of synthetic-on-cuttings (SOC) disposed at sea • Mass of water based mud and cuttings disposed • Mass of synthetic based mud and cuttings disposed • Biodiversity

Data is collected quarterly from each Operating Company within Shell (the Project is considered an Operating Company) and compared between Assets, Business Units etc. across all of Shell. The data collected is used to quantify Shell’s HSSE & SP performance with the goal of continuous improvement, each year’s data improving on the year before. The following sections summarize the environmental protection matters during the drilling of the Cheshire well and the measures implemented to reduce environmental impact. As part of Shell’s commitment to continuous improvement, Shell initiated an EPP Audit Program to confirm compliance with the Project EPP. The objectives of the audits are to assess the adequacy of the Project environmental protection controls and whether they are effectively implemented towards achieving site, business and regulatory environmental objectives. Where weaknesses or deficiencies are identified, recommendation and guidance on what is expected and needed to demonstrate adherence to the EPP is provided and documented. Each section of the EPP is audited independently; the following sections were audited during the drilling of the Cheshire well:

Section 12 – Environmental Protection and Compliance Monitoring of Waste Streams Section 14 – Chemical Selection and Management Section 15 – Waste Management For Section 12 all discharges outlined in the EPP were reviewed onboard the IceMAX to ensure they are managed as described and there have not been any changes to the waste management systems onboard. For Section 14 a selection of proposed chemicals were reviewed to confirm if they are still in use or not and to ensure the Material Safety Data



Sheets are up to date onboard the IceMAX. The Section 15 audit is discussed in more detail in Section 4.2.2. For all three audits there were no significant findings.

4.1. Spills and Discharges

4.1.1. Summary of Spills

During the drilling of the Cheshire well there were no reportable spills (as defined in the CNSOPB Incident Reporting and Investigation Guidelines) from the IceMAX or the Project’s offshore support vessels.

4.1.2. Summary of Authorized Discharges

Shell’s environmental protection measures are based on best management practices to reduce and prevent the generation and/or discharge of waste into the marine environment. All offshore discharges associated with the Project are managed as described in the Project EPP and Waste Management Plan (WMP), in compliance with the Fisheries Act, the Migratory Birds Convention Act, the International Convention for the Prevention of Pollution from Ships (MARPOL) and the OWTG as applicable, prior to discharge. Within the EPP, Shell has identified normal operational discharges from the IceMAX and the associated compliance measurements, monitoring and/or reporting requirements in as outlined in the OWTG. These discharges are listed in Appendix A. In accordance with the OWTG and the EPP, Shell reports the discharges of bilge water, deck drainage, 48-hr mass average SOC, blowout preventer (BOP) control fluid and Monoethylene Glycol to the CNSOPB in a monthly EPP Compliance Monitoring Report (EPP Monthly Report). This report was submitted to the CNSOPB on the 15th day of each month from September 15, 2015 through to October 15, 2016. A summarized list of reported discharges and volumes from the drilling of the Cheshire well is provided in Appendix B except for SOC discharges. These are described in more detail in Section 4.1.2.3 and summarized in Table 1.

4.1.2.1. Bilge Water

The IceMAX employs a MARPOL compliant oil-water separator (OWS) to treat bilge water from machinery spaces prior to discharge. The oil concentration limit for the separated water



is set to 15 mg/L (15 ppm) and the unit is equipped with a high oil-in-water alarm that will sound if this limit is exceeded in the separated bilge water. There were no exceedances of the bilge water oil concentration limit during the drilling of the Cheshire well.

4.1.2.2. Deck Drainage

Drainage from exposed decks of the Stena IceMAX is collected in a drain line that flows through a monitoring system overboard. The oil-in-water detectors installed on the port and starboard side of the exposed decks use remotely operated valves to control the flow of deck drainage on the rig.

• If the detected oil concentration in the drains exceeds 15mg/L the deck drainage is directed into a drain tank for collection and processing through an OWS prior to discharge.

• If the oil concentration is below 15 mg/L, then the deck drainage is routed overboard.

Drainage from the drill floor is collected in drain/holding tanks. From these tanks the collected drain water is transferred through a dedicated MARPOL compliant OWS which removes the oil from the drain water. Clean drainage water (oil concentration <15 mg/L) is discharged overboard and oily drainage (oil concentration >15 mg/L) drain water is returned to the recovered oil tank. There were no exceedances of the deck drainage oil concentration limit during the drilling of the Cheshire well.

4.1.2.3. Synthetic Retained on Cuttings

The riser system installed after top hole drilling creates a conduit to capture the associated drilling fluids and cuttings from the well, and transport them back to the IceMAX for further processing. During this phase of drilling, Shell utilized a synthetic-based mud (SBM). Drill cuttings are separated from the drilling fluid utilizing the IceMAX’s solid control system. The separated cuttings are processed through the cuttings dryer prior to being discharged approximately 2 m below the sea surface. Only synthetic-based fluid adhering to cuttings



(SOC) at a concentration of ≤6.9% (6.9g/100g) after processing is discharged at sea in accordance with the OWTG. As per the OWTG, the concentration of SBM retained on discharged drill cuttings is measured every 12 hours in accordance with the Procedure for Field Testing Oil Based Drilling Muds (API 1991). A mass-weighted rolling 48-hour average is calculated in grams of synthetic fluid per 100 grams wet solids. The average 48-hr mass-averaged SOC concentration for the well as a whole was 3.53g/100g. As described in the EPP Monthly Reports, Shell experienced a number of reportable SOC exceedances during the drilling of the Cheshire well. In these instances, the 48-hour mass average of retained SOC discharged to sea that was calculated in accordance with the guidelines exceeded 6.9g oil/100g cuttings discharged. These exceedances were initially due to misinterpretation of the OWTG, this was corrected following consultation with the CNSOPB. Later exceedances were caused by the method of calculating the %SOC, which gives a distorted result when centrifuge waste is discharged when not drilling ahead. These occurrences were reported to the CNSOPB within 24 hours of occurrence as well as in the EPP Monthly Reports and were investigated and corrected on the rig. Procedures were updated so that when not drilling ahead and the calculated SOC concentration is likely to exceed the discharge limit, processed cuttings are contained and shipped onshore for disposal. A summary of the exceedances is provided in Table 1 below.



Table 1: Cheshire SOC Exceedances and Corrective Actions

Date 48 hr Mass Averaged SOC wet (g/100g)

Reason for Exceedance Corrective Action Taken

22-Nov-15 10.84 Centrifuges were run without other discharges such as drilled cuttings from the dryer (which have a lower SOC concentration and typically bring down the overall concentration discharged)

The rig was instructed to not centrifuge unless the cuttings dryer is in use.

23-Nov-15 10.98

24-Nov-15 11.29

25-Nov-15 9.93

26-Nov-15 10.08

27-Nov-15 11.14

9-Dec-15 9.73

10-Dec-15 11.14

15-Dec-15 8.29 The centrifuge was being run while the cuttings dryer was in use, but as there was no drilling in the time period therefore there was no ‘drilled’ volume to enable recording the % SOC from the dryer which would have reduced the reported % SOC. Due to the way the % SOC is calculated, the exceedance carried over into December 16.

Going forward cuttings are only discharged during drilling.

16-Dec-15 12.89

22-Dec-15 11.81 The rig was reaming to bottom and using the dryer and centrifuge; however, reamed cuttings are not measured as drilled cuttings and therefore were not included in the discharge calculations resulting in a higher discharge concentration.

Going forward cuttings are only discharged during drilling.

Additional discussion and clarification was provided regarding cuttings management during reaming versus drilling ahead.



Date 48 hr Mass Averaged SOC wet (g/100g)

Reason for Exceedance Corrective Action Taken

25-Dec-15 11.57 When cleaning the mud traps, the solids from the effluent tank were centrifuged. The crew on the rig treated mud conditioning the same as drilling and discharged the cuttings. As there were no drilled cuttings to reduce the overall discharge concentration, this caused another exceedance which carried over into December 26.

Additional clarification was provided to the rig that only when drilled cuttings are included can cuttings be discharged. Outside of this, all centrifuge waste is to be skipped and transported to shore for disposal.

26-Dec-15 11.72

11-Sep-16 7.28 The rig was drilling ahead and, as is the usual practice, the effluent mud recovered from the dryer was being centrifuged to reduce the finer solids. Due to the lower rate of penetration (ROP) combined with finer screens on the shakers, the % SOC was higher for this period than the limit. The lower ROP generates a smaller amount of cuttings and means that the %S OC of the dryer solids is a higher proportion of the overall % SOC value.

This was an unusual event magnified by the low ROP and the method used to calculate the % SOC.

Typically all solids recovered from centrifuging when not drilling ahead are being collected in skips and shipped ashore. This exceedance was caused by the low ROP during drilling, this will be closely monitored in the future to prevent future exceedances.

4.1.2.4. Blowout Preventer Fluids

In accordance with the OWTG, the Project EPP includes a description of the BOP fluid discharges associated with the Project. The original EPP described BOP control fluid discharges to sea related to low volume function testing of the choke and kill lines. The IceMAX is equipped with a unique return line system, whereby high volume function testing of the Ram/Annular preventers does not discharge BOP control fluid to the sea. The current accepted version of the EPP describes all potential BOP control fluid discharges, including non-routine and emergency events. The inclusion of all BOP control fluid discharges, as well as estimates of the volumes to be discharged and the frequency of reporting, ensures full compliance with the OWTG. This additional detail regarding BOP control fluid discharges in



the Project EPP is considered a positive improvement to environmental oversight of potential discharges to the marine environment offshore Nova Scotia. Further, the full inclusion ensures that these BOP control fluid discharges would be considered authorized discharges in accordance with the CNSOPB Incident and Investigation Reporting Guidelines. A summary of BOP fluid discharged is included in Appendix B. The total volume of BOP fluid discharged over the course of the Cheshire well includes one unauthorized discharge which is described in Section 4.1.3.

4.1.2.5. Monoethylene Glycol

Hydrate build up around the wellhead connector has the potential to prevent the BOP from being disconnected from the wellhead. To prevent the buildup of hydrates, approximately 20-40 L of monoethylene glycol was pumped into this seal by the remotely operated vehicle (ROV) every 1-2 days. At times excessive hydrate buildup was observed by the ROV and the volume and frequency of glycol discharged was increased.as reported in the EPP Monthly Reports. The glycol is typically discharged to sea through the connector, removing any hydrates that may be present; hydrates from around the BOP are also jetted directly using either sea water or glycol. Glycol has been assessed under the Offshore Chemical Selection Guidelines for Drilling and Production Activities on Frontier Lands (OCSG) and is accepted for use and discharge offshore as it is appears on the OSPAR PLONOR List as a substance that ‘Poses Little or No Risk to the Environment’ and is readily biodegradable. The total volume of glycol injected by ROV during the drilling of the Cheshire well is included in Appendix B.

4.1.2.6. Fire Suppression Chemicals

The IceMAX uses Aqueous Film Forming Foam (AFFF) in her fire suppression system. The fire monitors are tested monthly with seawater and the foam is sampled annually. During the drilling of the Cheshire well no foam was discharged to the marine environment.

4.1.2.7. Air Emissions

There are two sources of air emissions onboard the IceMAX, the ship engines and the onboard oil incinerator.



There are six 7.4MW main diesel engines onboard the IceMAX. Through combustion of diesel the engines produce primarily CO2, NOX and CO along with other combustion products. The incinerator is used to burn waste oil from the rig, including oil that has been separated from the bilge water and deck drainage streams prior to discharge overboard. Combustion of waste oil produces primarily CO2, SOX and CO along with other combustion products. In accordance with the OWTG, GHG are reportable to Environment and Climate Change Canada (E&CCC) rather than the CNSOPB. GHG reporting to E&CCC occurs annually and is only mandatory for facilities (including offshore installations) that produce more than 50 000 tonnes of GHG in a calendar year. The Project did not exceed this 50 000 tonne threshold in 2015 and therefore did not report GHG emissions for 2015. The Project will exceed the 50 000 tonnes for 2016, primarily from drilling of the Cheshire well (January – September) with some additional emissions associated with the drilling of the second well in the campaign, Monterey Jack E-43. A summary of CO2 equivalent emissions produced during the drilling of the Cheshire well is included in Table 2 below.



Table 2: Summary of CO2e Emissions Produced

2015 Engines (tonnes CO2e) Incinerator (tonnes CO2e)

Oct 1236.49 23.97

Nov 4166.31 26.39

Dec 5025.28 25.78

TOTAL 10 428.08 76.14

2016 Engines (tonnes CO2e) Incinerator (tonnes CO2e)

Jan 5348.08 10.63

Feb 5514.96 13.35

Mar 5323.44 31.51

Apr 4324.96 19.94

May 5685.27 25.80

Jun 3704.00 12.22

Jul 4475.41 3.72

Aug 4289.39 26.34

Sep 4349.57 21.01

TOTAL 43 015.08 164.52

4.1.3. Summary of Unauthorized Discharges

As per the Project EPP, Shell lists and describes all known discharges expected as part of the drilling of the Cheshire well. Any product, event or volume exceedance not included within the EPP is considered unauthorized and was reported to the CNSOPB and the Canadian Coast Guard (CCG). Table 3 includes the unauthorized discharges reported during the drilling of Cheshire and the corrective actions taken by Shell and its contractors.



Table 3: Summary of Cheshire Unauthorized Discharges

Date Fluid Discharged

Volume Source Root Cause Corrective Actions

November 3, 2015

Hydraulic Fluid Leak

300ml IceMAX: Starboard ROV Atlas Hybrid Manipulator Arm

1. Damage to Atlas Hybrid manipulator arm due to contact with ROV crash frame

1. Adjust the Atlas hybrid manipulator restrictors and relief valves per original equipment manufacturer (OEM) guidance.

2. Communicate to the ROV Supervisors and Technicians: ROV pilot to position the ROV in such a manner to provide the best execution of work utilizing the manipulator, field of camera view, and away from close proximity of obstacles such as the ROV top bumper frame.

November 13, 2015


7.5L IceMAX: Port ROV Hydraulic Hose

1. Procedures need improving - hose failure due to inadequate installation

2. Inspection needs improvement – hoses located in cramped area

3. Planned maintenance program did not include specific direction to inspect this skid

1. Inspect all other multipurpose skid hoses immediately, replace and report any damaged hoses found

2. Review routing of the multipurpose skid hoses and options to improve access for inspection

3. Remove excessive hose length

4. Review Preventative Maintenance (PM) program for MIL126 and incorporate PM task for the

Document # EP201611201173 - 18 - November 5, 2016

Revision 01R Unrestricted



multipurpose skid hose

March 5, 2016

BOP Fluid Release

1,742 L Erifon

4,354 L Glycol

IceMAX: Marine riser hydraulic fluid lines

1. Hydraulic lines were drained when riser dropped from the drill ship to the seafloor.

Unavoidable release as lines fully charged at the time of incident however incident is unprecedented in industry with low risk of repetition.

1. Incident prompted review of the EPP and revision to include additional BOP fluid discharges possible during an emergency or accidental event.

May 26, 2016


1.9 L IceMAX: Starboard ROV Plug (during recovery)

1. Inadequate preventative maintenance inspection frequency of the Tether Management System (TMS) o-rings

1. Increase frequency of inspection of TMS o-rings by adding this to the monthly preventative maintenance inspection

June 22, 2016

Synthetic Based Mud (SBM)

5 L IceMAX: Slip joint packer leaked into moonpool

1. The upper packer air pressure was insufficient to provide an adequate seal to compensate for any possible wear of the packer element

1. The air pressure and sealing of the telescopic joint is monitored and documented daily as per standard procedures. The pressure will be maintained at the higher end of the recommended range

2. As per normal routine between wells, the packer elements will be





inspected and assessed for any wear and tear upon recovery of the telescopic joint

The majority of unauthorized discharges that occurred during the drilling of the Cheshire well involved the release of ROV hydraulic fluid. Shell utilises an environmentally-friendly, readily biodegradable biobased hydraulic fluid in lieu of a standard petroleum based fluid. All substances released in the above unauthorized discharges have been assessed under the OCSG and accepted for use and discharge as they are deemed to have relatively low toxicity. To improve compliance and reporting performance of unauthorized discharges, Shell created Quick Reference Cards highlighting the approved rig discharges, including BOP fluid (Figure 4-1). These cards were made available to all personnel onboard the IceMAX.



Figure 4-1: Rig Discharges Quick Reference Card

4.2. Waste Material

4.2.1. Summary of Waste Material Produced

Wastes destined for onshore treatment, recycling and/or disposal are managed in accordance with the Nova Scotia Solid Waste-Resource Management Regulations and comply with applicable federal and provincial waste requirements as well as municipal bylaws. Terrapure is the third-party waste management contractor for the Project. They manage all hazardous and non-hazardous wastes transported onshore from the IceMAX and ensure the waste is treated/disposed at Shell audited and approved facilities. As per the Shelburne WMP, all waste materials are properly classified, labeled and segregated to ensure all personnel in the waste management chain can follow appropriate safety, handling and disposal practices. Terrapure provides monthly summaries to Shell detailing the type and weight of waste received and the associated disposal/treatment method used. A full listing of all wastes sent onshore during the drilling of the Cheshire well is provided in Appendix C. A summary of hazardous and non-hazardous waste masses that were recycled and disposed over the course of the Cheshire well is provided in Table 4 below.

Table 4: Summary of Wastes Disposed and Recycled

Waste Category Disposed (kg) Recycled (kg) Total (kg)

Hazardous 7,537,109 436,434 7,973,543

Non-hazardous 70,130 145,265 215,395

Totals 7,607,239 581,699 8,188,938

The largest waste stream disposed was interface fluids from riser displacements, which makes up 52.5% of all hazardous waste generated. This waste stream originates when displacing the riser from SBM to seawater in preparation for a well disconnect. The second largest waste stream produced was cuttings/drill muds (9.9% of all hazardous waste) which are sent to shore for disposal when the SOC concentration exceeds the allowable offshore discharge limit, as per OWTG. The third highest waste stream (9.8% of all hazardous waste generated) was a mix of SBM and water, this waste stream represents slops produced during tank cleaning. The largest waste stream that was recycled is oily water/wash water (31% of all recycled waste) which is generated from the drain tanks onboard the rig. The second largest recycled stream (26.9% of recycled waste) is a mix of lube oil/water/glycol, waste lube oil is generated from the IceMAX engine oil changes and is recycled with waste water and waste glycol from the rig (glycol is used in MUX lines, radiators etc.). The third largest recycled waste stream is scrap metal (8.9% of recycled waste) which originates from various maintenance, repair and fabrication activities that occur daily on the rig.

4.2.2. Waste Reduction Measures

4.2.2.1. Project Waste Management onboard the Stena IceMAX

Shell’s waste management philosophy, as outlined in the HSSE & SP CF, aims to prevent or reduce waste generation and requires project teams to incorporate controls into the design, procedures and working practices of all new activities in order to achieve this. Other Shell waste management strategies include reusing waste for the same or alternative applications, including in other industries, returning unused materials to suppliers and identifying recycling and recovery opportunities for waste. Shell has reviewed the waste management policies of Stena and has confirmed that they align with Shell’s philosophy. Stena is committed to reducing, reusing and recycling of waste generated by its activities (e.g. drilling). In order to achieve this, a number of initiatives are being implemented including:

• Utilisation of environmentally friendly substances and products wherever possible

• Preventing stock passing expiry dates and having to be discarded • Reduce organic domestic waste

All crew on the IceMAX are responsible for minimising generation of waste. Both Stena and Shell recognise that improper disposal of waste (and the associated transport) is potentially harmful to the environment. The potential impacts of unnecessary transportation and improper disposal of waste can be reduced by minimising the quantity of waste generated and ensuring that all waste is correctly categorised, stored and disposed. As outlined in Stena’s waste management procedure, waste products on the rig are separated at the source to encourage recycling. Shell has developed a WMP for the project to detail the management processes and procedures for waste that is generated in association with the Project. The WMP is based on Shell’s waste management philosophy of reduce, reuse and recycle wherever possible. In addition to the principles outlined in the HSSE & SP CF, the following working practices were also implemented to reduce the amount of waste generated:

• Complete use of materials and contents of containers • Adequate storage to avoid spoilage • Use of oldest supplies to avoid disposal due to expiry • Reduction of paper waste through use of electronic media • Reuse of waste material and products where possible in additional operational

activities • Using non-hazardous alternatives, where possible • Return of unused materials to suppliers, where possible

4.2.2.2. Waste Management Assurance

As outlined in Section 4, EPP Section 15 – Waste Management was audited during the drilling of the Cheshire well. The purpose of the EPP Section 15 audit was to review waste management practices and confirm that wastes are being managed in accordance with the Project EPP and WMP. There were no major findings from the audit. To further demonstrate Shell’s commitment to implementing above average environmental performance in waste handling and treatment, all facilities used to treat, store, dispose or recycle Project waste streams are reviewed and approved through the Shell Offsite Residuals Management audit process. Approved waste management facilities are reviewed every 5 years to ensure continued compliance.

Only those waste management facilities on the approved list are used in support of Project waste management, the following Shell approved facilities are currently in use:

• Terrapure – Sussex • Terrapure – Chatueaugay • Stericycle • BD Rae Environmental • Aces Recycling • Miller Waste • John Ross & Sons • Halifax C&D Recycling • Otter Lake Waste Processing and Disposal Facility • Terrapure – Beechill • Clean Earth Technologies • Lafarge Canada • Conrads/SRT Soil Remediation Technologies

5. ENVIRONMENTAL CONTINGENCY PLAN EXERCISES

Shell takes all reasonable measures to prevent accidents and malfunctions that may result in adverse environmental effects and will implement emergency response procedures and contingency plans developed in relation to the Project. Examples of these Project contingency plans include the Oil Spill Response Plan (OSRP) and associated Wildlife Response Plan and Dispersant Preparedness and Operations Plan; as well as the Source Control Contingency Plan (SCCP) and associated Subsea Dispersant Plan and Contingency Plan for Cap and Contain. Project response procedures and contingency plans were implemented prior to the commencement of operations, and assurance activities are undertaken to verify that plans are up-to-date, correct and appropriately implemented. Stena performs weekly safety drills onboard the IceMAX including environmental drills (local spill response). Prior to the commencement of drilling operations, Shell conducted emergency response exercises to assure that the response capabilities outlined in the procedures and contingency plans were understood and could be mobilized and deployed, as required. These include an April 23, 2015 Shell Americas Response Team Tier III Oil Spill Response Exercise and an October 2015 table top emergency response communications exercises. Shell has a comprehensive oil spill response (OSR) training program to assure that the necessary competency and response capabilities outlined in Shell’s response procedures and contingency plans are ready to be implemented, as required. From September 2015 to September 2016, all crews on all four OSVs completed multiple live on water Offshore Oil

Spill Preparedness training sessions delivered by Eastern Canada Response Corporation (ECRC). The goal of each oil spill response training session is to safely develop OSV crew competency and expertise to understand and operate Tier I or Tier II Response Equipment, as per their vessel emergency response role and technical capability. The principal objective is to have each vessel crew able to safely and independently: set-up, deploy, operate and recover each piece of equipment assigned to their vessel in realistic offshore conditions, and to validate and operationalize the OSRP. Operational and procedural challenges and recommendations were also captured and incorporated into training materials, after action reviews, training summaries and Job Safety Analyses (JSAs) for wider distribution and sharing of best practices/lessons learned. In 2016, Aerial Observation of Marine Oil Spills training for flight crews was also added to the training program. This course included discussion on oil properties, fate and effects of oil, and oil spill assessment.

6. REFERENCES

Stantec Consulting Limited. 2014. Shelburne Basin Venture Exploration Drilling Project Environmental Impact Statement. Volume 1: EIS Document. Prepared for Shell Canada Limited. Stena Drilling Limited. 2015. Stena IceMAX HSE Case Part 3 – Vessel Description. Stena Drilling Limited. 2015. Stena IceMAX HSE Case Part 5 – Emergency Response. Stena Drilling Limited. 2014. Management of Waste Offshore.

APPENDIX A SUMMARY OF OPERATIONAL DISCHARGES

Discharge Stream

OWTG Limit Management (per OWTG) Regulatory Requirement

Air Emissions (sources: engines and onboard oil incinerator)

N/A Greenhouse gas (GHG) emissions are reported to Environment and Climate Change Canada (E&CCC) as required. Air emissions are reported annually. In 2015 the Project did not reach the threshold for GHG reporting. 2016 emissions will be submitted June 2017 per E&CCC requirements.

OWTG

Bilge Water 15 mg/L oil in water

The IceMAX employs a MARPOL compliant oil-water separator to treat bilge water from machinery spaces. This equipment is set to 15 mg/L and is equipped with a high oil-in-water alarm that will sound if this limit is exceeded.

MARPOL

OWTG

Ballast Water N/A The IceMAX ballast water is contained in segregated tanks and therefore not contaminated with oil or chemicals. The IceMAX conducts all ballast water exchanges or saltwater tank flushing >200nm from shore.

OWTG

Deck Drainage 15 mg/L oil in water

Drainage from exposed decks:

- If the oil concentration of the deck drainage exceeds 15 mg/L, the drainage flows into a deck drain tank through remotely operated valves.

- If the oil concentration of the deck drainage is below 15 mg/L, then the deck drainage is discharged overboard.

Drainage from the drill floor:

- Collected drainage is transferred through a dedicated MARPOL compliant oil water separator (OWS) which removes the oil from the drain water.

- Clean drainage(oil concentration< 15 mg/L) is discharged overboard and oily drainage (>15 mg/L) is returned to the recovered oil tank.

MARPOL

OWTG

Sewage and Grey Water

Macerated to a particle size of <6mm

All sewage and food wastes are reduced through maceration to an average particle size of 4 mm prior to discharge at sea.

The majority of the sewage and grey water produced on the IceMAX is passed through a non-chlorinated system. Sewage that is chlorinated is injected with a 15% solution on demand when the

MARPOL

OWTG

Discharge Stream

OWTG Limit Management (per OWTG) Regulatory Requirement

discharge pump is activated. The chlorine is substantially consumed during the disinfection process.

Cooling Water N/A There is no biocide added to the cooling water on board the IceMAX therefore it is considered an authorized discharge and not subject to discharge limit.

OWTG

Drilling Discharges (includes: Drilling Muds and Drilling Cuttings)

6.9g/100g synthetic-on-cuttings (SOC)

All substances that make up the drilling muds (water based mud, WBM, and synthetic based mud, SBM) are screened through Shell’s Chemical Selection and Review Process developed in consideration of the OCSG, for more information on this process (see Condition 3.2).

No whole SBM was discharged during the drilling of the Cheshire well.

Drill cuttings are treated on board the IceMAX in order produce a 48 hour mass weighted average of retained synthetic-on-cutting (SOC) not exceeding 6.9g/100g (see Condition 3.12.). The 48-hr mass average SOC discharge SOC is reported monthly to the CNSOPB

OCSG

OWTG

Blowout Preventer (BOP) Fluids (including hydrate seal glycol)

N/A The BOP fluids used on the IceMAX are assessed under the OCSG as having low aquatic toxicity and are accepted for use and discharge in accordance with those guidelines.

All operational and batch discharges of BOP fluid and hydrate seal glycol are described in the EPP and are accepted for use and discharge as per the OCSG. The volumes of BOP fluid and glycol discharged are reported monthly to the CNSOPB.

OCSG

OWTG

Fire Suppression Chemicals

N/A Fire monitors are tested monthly with seawater which is discharged without treatment.

The active fire extinguishing agent, Aqueous Film Forming Foam (AFFF) is sampled annually and contained on board. If AFFF is anticipated to be released to the marine environment during testing or sampling, prior notification will be provided to CNSOPB.

OWTG

APPENDIX B SUMMARY OF REPORTED DISCHARGES

Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16Volume of bilge water discharged 12.3.5 m3 0 46 31 18 25 18 0 0 14 55 52.6 43Volume of deck drainage discharged 12.4.5 m3 0 704 0 951 304 724 0 253 0 395 3 0Monoethylene Glycol 12.8.5 L 0 171 247 200 300 38 0 0 130.2 228 435.4 306BOP control fluid 12.8.5 L 0 1949 1218 1739 1815 43621.9 0 0 2542.6 2023 41488.6 46046

*values are the total volumes for each month

March-June 2016 Marine Riser Incident - few discharges as drilling was suspended

October 2015Well spudded towards the end of the month (23rd) therefore no discharges this month

Parameter UnitDate

EPP Section

Summary of Discharges for Cheshire L-97AOctober 23, 2015 - Sept 20, 2016

July 2016BOP fluid discharges:- Increased use of the fail safe valves - Additional BOP acoustic testing (as per CNSOPB condition)

September 2016- After a weather disconnect, the BOP was landed again which requires the conduit lines to be flushed.- BOP pressure and function tests were performed with the acoustic system due to auto-shear trigger damage.- The BOP was retrieved as part of planned abandonment operations, as described in the EPP the full volume of the conduit lines is drained during retrieval.

August 2016 BOP fluid discharges: - Increased use of the fail safe valves - Additional non-routine closure of the failsafe valves - Increased acoustic testing (as per CSNOPB condition) - Rig disconnected from the well and moved off well center while pulling the LMRP up to surface, the conduit lines were drained.

APPENDIX C SUMMARY OF WASTE DISPOSED DURING THE CHESHIRE WELL

2015 2016Well #1 Well #1 Well #1 Well #1 Well #1 Well #1 Rig Repairs Rig Repairs Rig Repairs/ Well #1 Well #1 Well #1 Well #1

October November December January Febuary March April May June July August September Total

Hazardous Disposal Barite/ Drill Mud KG 189,450 189,450Hazardous Disposal WDF (well displacement fluid) KG 113,400 1,604,000 1,094,790 861,330 513,620 4,187,140Hazardous Disposal WDF/ wash water KG 31,900 200,980 279,820 512,700Hazardous Disposal SBM KG 121,330 193,490 179,140 22,690 516,650Hazardous Disposal SBM/ Water KG 277,380 169,290 186,900 147,130 780,700Hazardous Disposal Cuttings/ Drill mud KG 1,200 106,550 33,710 44,000 54,600 42,000 509,000 791,060Hazardous Disposal Water base cutting KG 12,000 12,000Hazardous Disposal Cement powder KG 3,660 6,840 200 2,400 600 10,260 23,960Hazardous Disposal Barite KG 800 1,984 2,784Hazardous Disposal Barite/ Cement powder KG 600 400 600 1,600Hazardous Disposal Barite/ Mud KG 403,960 403,960Hazardous Disposal Empty pails KG 400 200 500 300 200 400 500 200 200 2,900Hazardous Disposal Lime bags KG 1,200 5,700 3,800 1,900 800 450 1,250 1,800 1,600 18,500Hazardous Disposal Oily Rags KG 6,355 2,000 8,800 15,000 3,200 9,200 9,400 6,400 5,800 4,800 70,955Hazardous Disposal Hydraulic Hoses KG 600 400 1,000 200 2,200Hazardous Recycled Hydraulic oil (Houghto Safe 273) KG 205 7,400 20,950 13,700 42,255Hazardous Disposal Dye Containmented Garbage KG 800 800Hazardous Disposal Creysilic Acid KG 410 410Hazardous Recycled Empty Totes KG 2,900 300 900 100 2,400 3,000 3,500 13,100Hazardous Disposal Shaker Screens KG 700 800 400 400 1,000 400 3,700Hazardous Recycled Oily filters KG 400 200 400 200 600 1,800Hazardous Disposal Oily Debris KG 200 200 400 800 1,000 200 2,800Hazardous Disposal Dieseal KG 205 300 505Hazardous Disposal mineral spirits KG 205 205Hazardous Disposal Benzoic Acid KG 260 260Hazardous Disposal cooking oil KG 205 1,000 1,205Hazardous Disposal Grease pails KG 400 205 400 1,005Hazardous Recycled Lube Oil/ Water/ Glycol KG 5,600 5,600 11,060 14,000 15,800 27,850 30,450 16,180 7,770 18,100 4,300 156,710Hazardous Recycled Waste Oil KG 8,525 410 205 9,140Hazardous Recycled Oily Water/ wash water KG 10,450 87,300 5,100 36,500 11,500 13,980 5,310 5,340 5,300 180,780Hazardous Recycled Glycol KG 4,000 4,000Hazardous Recycled Empty Drums KG 160 320 510 320 20 160 500 360 2,350Hazardous Recycled Cal/ Aerosol Cans KG 800 200 200 600 100 400 2,300Hazardous Disposal Floor Resin KG 200 200Hazardous Recycled Aviation Fuel KG 5,420 900 995 1,000 3,550 1,630 1,500 14,995Hazardous Disposal Van-sol KG 820 475 1,295Hazardous Recycled Batteries KG 90 200 200 490Hazardous Disposal Paint Cans KG 1,400 1,025 1,600 900 400 200 1,200 6,725Hazardous Recycled Diesel/ Water KG 6,800 6,800Hazardous Disposal Medical Waste KG 10 200 210Hazardous Disposal Paint KG 205 820 205 1,230Hazardous Recycled Electronic Waste KG 400 400Hazardous Recycled Flourscent Tubes KG 200 164 400 200 380 1,344

Non Hazardous Disposal Domestic / Garbage KG 620 9,000 5,585 6,690 8,555 5,205 5,255 3,725 4,675 4,335 4,295 3,790 61,730Non Hazardous Recycled Wood (construction debris) KG 1,271 2,260 1,330 1,490 5,280 9,220 11,060 3,530 2,820 3,880 2,290 44,431Non Hazardous Recycled Cardboard/ Paper KG 750 1,750 1,500 1,250 1,250 1,500 750 1,000 1,000 500 500 11,750Non Hazardous Recycled Recyclables/ Plastic KG 500 1,500 500 1,800 1,000 750 800 500 800 1,000 500 600 10,250Non Hazardous Recycled Glass KG 200 400 200 800Non Hazardous Recycled Scrap Metal KG 1,860 4,420 680 13,574 12,620 4,590 3,990 6,340 5,090 2,450 3,620 59,234Non Hazardous Recycled Pipe End Caps KG 6,000 11,200 1,600 18,800Non Hazardous Disposal Food Waste KG 200 200 200 800 1,000 1,200 1,600 5,200Non Hazardous Disposal Grinding Disc KG 200 3,000 3,200

TOTALS (KGS) 23,050 123,256 264,705 1,740,850 1,238,838 1,529,025 85,800 493,865 609,970 469,729 259,840 1,350,040 8,188,968

Waste Description Recycle or DisposalHarzardous/ Non Hazardous

Shelburne: October 2015/ September 2016 ONSHORE WASTE DISPOSAL QUANTITIES FOR CHESHIRE L97-A (well #1)

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