Canada urged to halt Beaufort Sea O&G sale by green group

The Canadian portion of the Beaufort Sea has become the latest target for environmentalists, with the World Wildlife Fund-Canada trying to shut down a bidding process involving five parcels and 2.84 million acres in the Beaufort-Mackenzie Delta area.

The offering is seen as a critical test of interest in the region, following last year’s startling work commitment of C$585 million by Imperial Oil and ExxonMobil Canada to secure rights to 508,000 acres.

WWF-Canada said May 27 it wants the Canadian government to postpone the 2008 auction until it is able to develop a sound management plan to protect sensitive Arctic habitats needed for the survival of polar bears, beluga and bowhead whales.

In addition, Peter Ewins, director of species-conservation at WWF-Canada, said “there is no proven technique for recovering oil spills in such dangerous iced waters.”

The offering of exploration rights was announced in February, with a June 2 deadline for companies to submit bids.

Would erode oil company confidence in area

Natural Resources Minister Gary Lunn rejected accusations that Canada does not have proper environmental measures in place to protect the Arctic. He said any future development will face rigorous reviews, with full participation from northern residents, before it can proceed.

Nellie Cournoyea, a former premier of the Northwest Territories and currently chair of the Inuvialuit Regional Corporation, told the Calgary Herald the WWF-Canada is viewed by the Inuvialuit as a group of people “sitting in their Ottawa or Vancouver condos, telling the government of Canada what is good for the Inuvialuit and their environment.”

The government announced in May that it will soon list polar bears as a species of special concern, but will not categorize the bears as an endangered species. Canada’s is home to an estimated two-thirds of the world’s 25,000 bears, whose livelihood is being threatened by shrinking Arctic sea ice.

The U.S. government has listed polar bears as a threatened species under the Endangered Species Act, but has no plans to halt oil and gas activity in the Beaufort and Chukchi seas, where leases have recently been issued. The listing was, however, one of the reasons prospective onshore acreage was pulled from an upcoming federal lease sale in the National Petroleum Reserve-Alaska.

There was no immediate reaction from Canada’s departments of Indian Affairs and Northern Development and Fisheries and Oceans, which share responsibility for management of the Beaufort.

Interest in the Beaufort has been reactivated after a prolonged lull following the posting of about two dozen Significant Discovery Licenses, or SDLs, during the 1960-1980 period.

In addition to the Imperial-ExxonMobil bidding, in 2007 Devon Canada reported the first find in the Beaufort in 25 years, an estimated 240 million barrels of recoverable crude, which the National Energy Board declared an SDL covering 37,000 acres.

Although there is no infrastructure in place to ship oil from the Canadian Beaufort, some industry officials have suggested a link with the underutilized trans-Alaska oil pipeline might be possible.

Legal action possible

He said that without a federal management plan for the Beaufort any leases are invalid under Canada's Oceans Act.

The spokesman also believes Imperial and ExxonMobil will face problems developing their lease because the block encroaches into the Beaufort Shelf, viewed as an environmentally sensitive area.

He said WWF-Canada is not opposed to oil and gas development in the North, but it does object to a “flawed” approval process.

Editor’s note: ExxonMobil holds almost a 70 percent interest in Imperial Oil.