The oil slick in the Gulf of Mexico has spread to Canada’s Arctic, with the National Energy Board taking an even closer look at its well-blowout regulations for the Beaufort Sea, where four global majors are drafting plans for possible drilling programs.
A similar concern relates to prospects of liquefied natural gas and oil sands bitumen shipments through waters offshore British Columbia.
The NEB has flagged the petroleum industry that it is “aware of the recent fire and sinking of Transocean’s Deepwater Horizon rig in the Gulf of Mexico” and intends to raise questions about that disaster when it holds hearings into industry applications to abandon the same-season relief well policy for the Beaufort.
It told the companies registered to participate in the hearing — Imperial Oil, Chevron Canada, BP, Shell Canada, ConocoPhillips Canada and junior explorer MGM Energy — to advise it how the continuing response to the Gulf incident and the ongoing investigation should affect the scope and timing of its planned hearing.
Same-season relief requiredThe current regulation requires any company drilling an offshore well in Canada to drill a relief well in the same season to pierce any out-of-control well and stop its flow.
The challenge in the Arctic is how to drill a relief well once the winter freeze stops all drilling.
The major companies have argued that the impending move into deepwater exploration areas in the Beaufort, where wells will take two or three years to complete, make same-season wells impossible.
They also claim that new technology has made drilling so safe that relief wells are no longer needed, even though some experts, such as well-control company SafetyBOSS, said a relief well is the only sure way to contain a blowout.
Imperial Chief Executive Officer Bruce March said the drilling conditions and timeframe available for a relief well are “quite different” in the Beaufort from the Gulf.
“We’re not looking at year-round activity in the Beaufort. We’re looking at two to three months. There have been discussions about same-season relief well capability ever since Beaufort exploration started in the 1970s and ’80s. There is no written policy on that today,” he said.
Advance ruling requestedThe issue resurfaced last October when Imperial asked the NEB for an advance ruling on the company’s approach to a same-season well.
The federal regulator decided to formally review its policy in a written hearing.
A spokesman for the regulator said hearing participants are often asked for their views on how a hearing should proceed.
March said April 29 that the issue has been discussed by the industry and NEB since 2008 and suggested Imperial and others could benefit from the investigation into the Gulf of Mexico incident.
Documents have also been filed with the NEB by the Inuvialuit Game Council, the Inuvialuit Land Administration, and the Tuktoyaktuk Hunters and Trappers Committee, while the Alaska region of the United States Minerals Management Service has asked to participate, although the U.S. and Canada differ over where the boundary lies in the Beaufort.
Imperial said it plans to spend C$20 billion in Canada over the next five years, but did not say how much is tagged for the Mackenzie Gas project or the Beaufort.