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Providing coverage of Alaska and northern Canada's oil and gas industry
June 2010

Vol. 15, No. 23 Week of June 06, 2010

Canadian Beaufort ban urged

Canadian regulators claim there could never be a duplication of the Gulf of Mexico events in Atlantic Canada waters, at the same time a former federal scientist warned that an oil spill in the Beaufort Sea could have a “catastrophic” impact on the Arctic ecosystem.

William Adams, a former scientist at Environment Canada, urged federal lawmakers to place a moratorium on drilling in the deeper waters of the Beaufort pending a comprehensive study.

“If you look at the leasing that has been done in the Beaufort, it extends out into the moving pack ice,” he said. “I believe drilling in that area would be extremely risky.”

He said the behavior of a big spill in the Arctic is difficult to predict without more field research, but cautioned that such a spill would inflict significant damage on mammals and seabirds.

Adams was one of the researchers involved in a joint government-industry study of the impact of an oil spill in the Canadian portion of the Beaufort.

That work, which simulated a spill of about 1,000 barrels per day in water about 10 meters deep, stretched over a decade from 1976 and remains the only “comprehensive” study of its kind, he told the House of Commons Natural Resources Committee.

The committee is studying whether Beaufort drilling by a partnership of Imperial Oil and ExxonMobil and possibly BP in several hundred meters of water should be permitted without a toughening of safeguards.

Imperial: drilling 4-5 years away

Separately, Imperial Chief Executive Officer Bruce March said it would be at least four or five years before his company would drill in the Beaufort.

He said Imperial plans to learn what it can from the Gulf incident and implement any measures that are adopted by regulators.

Imperial and ExxonMobil made work commitments of C$585 million for 507,000 acres of Beaufort leases, 70 miles north of the mainland and in water depths of up to 4,000 feet.

Max Ruelokke, chief executive officer of the Canada-Newfoundland and Labrador Offshore Petroleum Board, told the same committee of federal legislators May 25 that would not be possible for a blowout at the Chevron Canada-operated well currently being drilled in the deepwater Orphan Basin to match the size of the Deepwater Horizon spill in the Gulf.

“The understanding we have is that (what) occurred (in the Gulf) is not something that would ever have been allowed to happen in Canada,” he said.

Even if a major spill did occur, wind and sea patterns would make it unlikely that oil would reach the shores of Newfoundland, he said.

The Chevron well is drilling in water 2.6 kilometers deep — a record for Canada — while the BP well in the Gulf was drilled to a water depth of 1.5 kilometers.

Ruelokke said his board, in tightening offshore drilling scrutiny in the wake of the BP disaster, has mandated a dual barrier, requiring a well to be sealed off using both a concrete plug and a blowout preventer.

Based on his information, Ruelokke said drilling mud keeping the oil underground at the BP well had been flushed out before a concrete plug was properly installed.

Review of Orphan operations

He said Chevron has agreed to delay Orphan operations before drilling in areas where there is an increased chance of striking oil, giving both the company and the board time to review the operation.

“We’ll make sure the dual-barrier concept remains valid and both barriers will have to be in place,” he told legislators. “So before there’s any potential to take away the drilling mud we’ll make sure there’s a cement plug in place. We’ll also make sure the blowout preventer is fully tested.”

Ruelokke said detailed modeling of the potential fate of a spill in Atlantic Canada , using 40 years of weather data, “indicates that even if a large spill were to occur, it would be unlikely that oil would approach the Newfoundland and Labrador shoreline. “Thus scenes that we see off the Gulf … would not occur here.”

He said offshore Newfoundland has produced 1.1 billion barrels of oil since 1997 and spilled only 1,100 barrels of crude in that time — a record he described as “quite respectable.”

Canada is continuing to seek bids for exploration licenses in the Beaufort and Mackenzie River Delta, including a parcel about 120 miles offshore to the west of the existing rights held by Imperial and BP.

A spokeswoman for Indian and Northern Affairs Minister Chuck Strahl told the National Post that the government is continuing to “consider its options with respect to the calls for bids in the Beaufort. But no decision has been taken with respect to the current call.”

—Gary Park






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