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Vol. 16, No. 16 Week of April 17, 2011
Providing coverage of Alaska and northern Canada's oil and gas industry

Prevention the best cure

Canada’s industry urges review of Arctic drilling to favor new blowout technology

Gary Park

For Petroleum News

The Canadian Association of Petroleum Producers and leading E&P companies are stepping up their defense of exploratory drilling in the Arctic offshore, making a case for preventive measures rather than relying solely on same-season relief wells to prevent or deal with blowouts.

Among the submissions to the National Energy Board’s ongoing review, CAPP described the current regulatory regime as “robust and effective.”

The industry’s leading lobby organization, CAPP said that view was endorsed last year by the Canadian Senate Committee on Energy, the Environment and Natural Resources which concluded the offshore regime is “modern, up-to-date and among the most efficient and stringent in the world” compared with any other countries with active offshore industries.

CAPP said 2009 legislation created a goal-oriented regulatory environment that allows the NEB to oversee and regulate offshore activities.

It noted that 132 wells have been drilled in Canada’s offshore, 89 of them in the Canadian Beaufort Sea, utilizing several drilling systems and operating in a wide range of ice conditions.

“This suggests that the issue before the NEB is not whether Arctic offshore drilling can be done safely while protecting the environment, but how we can maintain best efforts to reduce the risks involved and prevent incidents,” CAPP said.

Open, collaborative approach

But CAPP, while noting that individual operators were best positioned to address options for well control and spill response, welcomed the “open and collaborative” approach to reviewing lessons learned from other jurisdictions.

It expressed confidence that the NEB will decide that “appropriate measures are in place to provide for safe and environmentally responsible Arctic offshore drilling and will provide additional clarity for operators on the NEB’s filing requirements for applications.”

Other than fallout from BP’s Macondo well blowout in the Gulf of Mexico, the issue in Canada has gained added traction during the current federal election campaign.

If elected to form a government, the opposition Liberal Party has pledged to halt all leasing and exploration activities in Arctic waters until an independent examination of the issues is conducted.

Work commitments made

Although there is no current drilling in the region, companies such as Imperial Oil, ExxonMobil, BP, Chevron and ConocoPhillips have made work commitments in the hundreds of millions of dollars to explore for oil and gas in the Beaufort.

None has scheduled any drilling before 2014, but all are urging the NEB to drop its requirement for same-season relief wells in the event of a blowout or spill — a provision that environmentalists insist is the last certain safeguard against spills that could last for years.

Chevron Canada Vice President David MacInnis told The Globe and Mail the information generated from the drilling of Arctic wells to date “provides Canada with a competitive opportunity among Arctic nations, all of whom are seeking to develop their northern oil and gas resources.”

He said the current same-season relief wells requirement “will likely not be feasible as exploration drilling moves into deeper water areas with more complex wells and with more challenging ice conditions than were experienced in the initial phase of Canadian Beaufort exploration.”

MacInnis noted that Chevron is developing an “advanced well kill system,” which it believes would dramatically increase the capacity of traditional blowout preventers to cut through drill pipe and seal the well in the event of an accident.”

Separate blowout control

ConocoPhillips is recommending that companies deploy a separate blowout control unit on the sea floor that could be activated if the main blowout preventer failed.

The two companies said a same-season relief well would take months to complete in even the best of conditions.

Chevron said in its submission that “reliance on a relief well as the only mitigation option could, in many ways, result in the situation we are expressly trying to avoid, which is the potential for a large spill.”

William Amos, an attorney for Ecojustice and WWF-Canada, said in a filing that companies should be required to adopt new technology that would choke off a blowout before a relief well could be completed. But he said that type of technology had yet to be proven as fail-safe.

However, Amos said the organizations he was representing were not urging a total ban on Arctic offshore drilling, given the support among the local Inuvialuit for commercial development.

“It is up to industry to make the safety case for offshore drilling … and if they can’t make it, the drilling should not be allowed,” he said.

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