OTC: Gulf oil spill could have implications for Canadian drilling

Canadians are questioning the safety of offshore drilling in the Beaufort Sea and on the Canadian Outer Shelf following the Gulf of Mexico drilling rig explosion and subsequent crude oil spill, Northwest Territories and Nova Scotia officials said May 4 at the Offshore Technology Conference in Houston.

Paula Dittrick
OGJ Senior Staff Writer

HOUSTON, May 4 -- Canadians are questioning the safety of offshore drilling in the Beaufort Sea and on the Canadian Outer Shelf following the Gulf of Mexico drilling rig explosion and subsequent crude oil spill, Northwest Territories and Nova Scotia officials said May 4 at the Offshore Technology Conference in Houston.

Northwest Territories Minister of Industry, Tourism, and Investment Robert McLeod said the gulf accident raises questions about how fast the oil industry could drill a relief well, if needed, in the Beaufort Sea.

“If in the Beaufort Sea, if you had a blowout, where would you go to find another drillship to deal with it,” McLeod asked, noting that some 4,000 wells are drilled every year in the gulf so equipment was readily available to quickly move into place and begin drilling a relief well.

The gulf accident is going to have “some real implications for the Beaufort Sea,” McLeod said, adding that Canada’s National Energy Board already was contemplating the need for relief wells in Arctic drilling operations before the gulf accident happened.

Future of Georges Bank
Nova Scotia Premier Darrell Dexter said Nova Scotia faces a decision regarding offshore drilling on Georges Bank, which lies on the Outer Shelf of the Canadian and US east coasts. Canada and the US share jurisdiction of Georges Bank, an elevated area on the seabed between Cape Cod, Mass., and Cape Sable Island, NS.

“In the 1980s, Canada and Nova Scotia banned petroleum exploration and development on our side of the bank…and that moratorium expires Dec. 31, 2012,” Dexter said. Some 20 years ago, Georges Bank was estimated to contain 1 billion bbl of oil and more than 5 tcf of natural gas.

Ottawa and the provincial government call Georges Bank one of the world’s most productive fishing areas. The original moratorium was established in 1988. Previously, the US and Canadian governments previously extended the moratorium’s expiration date from Jan. 1, 2000, to Dec. 31, 2012.

“Government needs to make a decision on whether to extend the ban or end it,” Dexter said. “There is not a lot of time left before the government must decide on a public review of the moratorium.” If a public review is to be undertaken, Dexter said Nova Scotia officials must decide this by June to allow time for the review process, given that the existing moratorium is scheduled to expire in 2012.

The gulf oil spill has created “a heightened sensitivity” about the possibility of drilling in Georges Bank, Dexter said. “I think there are, of course, questions raised.”

Contact Paula Dittrick at paulad@ogjonline.com.

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