The Globe and Mail reports that, “Energy companies are facing new hurdles in their quest to drill for oil in Canada’s Arctic waters after a U.S. presidential panel investigating BP PLC’s catastrophic Gulf of Mexico spill found glaring shortcomings in the industry’s ability to operate safely in the Far North’s offshore.”
FINDINGS: “The blue-ribbon group urged that before permitting companies to operate, Washington must address serious safety gaps – challenges that also exist in the Canadian Arctic, including a lack of oil-spill response capability. The panel stopped short of recommending a moratorium on drilling in the Arctic offshore. The panel, appointed by President Barack Obama after the BP blowout, recommended that the U.S. play a leading role among Arctic nations, including Canada, to create international standards for Arctic oil exploration and a multilateral response capability for potential spills in the Far North. …(The report) concluded that neither the government nor the industry has prepared properly to undertake exploration and development activities in the Arctic offshore, where conditions are far more daunting than those of the Gulf of Mexico.”
NEB HEARINGS: “The U.S. warning comes as Canada’s National Energy Board has undertaken a review of its safety and environmental regulations for offshore drilling in the Beaufort Sea, where companies such as Exxon Mobil Corp., Chevron Corp. and BP itself are eager to begin drilling for oil by as early as 2014. Board chairman Gaeton Caron has said the regulator would take the work of the U.S. panel into account in its review. That NEB process won’t conclude for at least six months, but the U.S. report on the BP blowout sheds light on the huge challenges the oil industry faces in persuading the regulator that it can operate safely in the remote, ice-plagued environment.”
RELIEF-WELL RULE: “As a result of the BP accident, the board will likely force the industry to spend huge sums to assemble spill-containing and well-capping equipment in the Arctic. Companies will also find it difficult to persuade the National Energy Board to ease it requirement that any company drilling in deep water have the capacity to drill a relief well in the same season, in the event of a blowout. The relief-well rule is meant to ensure the a rogue well can be capped before the seas are covered with ice, which would prevent further capping operations. Given the short drilling season in the Beaufort, oil companies have complained that the regulation represents a serious impediment to offshore exploration.”
The Globe and Mail article is at http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/us-panel-warns-on-arctic-drilling/article1865544/. The Council of Canadians ‘Arctic Moratorium Now’ web-page is at http://canadians.org/arctic. Our ‘Leave it in the ground’ factsheet is at http://canadians.org/energy/documents/arctic/factsheet-1010.pdf. The 398-page National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling report is at http://beta.images.theglobeandmail.com/archive/01120/Deepwater_Commissi_1120264a.pdf.
