Canada must be ready before Arctic drilling: report

Fri Sep 9, 2011 10:00am EDT

* Canada must prepare for Arctic drilling, report says

* Regulators should keep relief well rules

* Need to ensure region can cope with spills

CALGARY, Alberta, Sept 9 (Reuters) - Canada should strengthen its capability to handle Arctic oil spills before it allows deepwater drilling in its Arctic waters and it should continue to insist on stringent relief-well requirements, a study released on Friday said.

In the study, the Pew Environment Group asks that environmental rules for the sensitive region be strengthened before new drilling is approved and that greater consultation with the region's indigenous Inuit people take place.

The study by the conservation arm of The Pew Charitable Trusts comes after Canada's National Energy Board embarked on a review of Arctic drilling regulations last year spurred by BP Plc's (BP.L) massive spill in the Gulf of Mexico.

With rising temperatures, Arctic waters are ice-free for longer periods in the summer, making oil exploration and drilling easier. But there is little ability to cope with an oil spill should one occur and the report urges regulators to put stringent standards in place before drillers rush north.

"We want to ensure that the system is ready for the economic benefits as well as the environmental and Inuit concerns that will be on the other side of those benefits," said Louie Porta, an Arctic science and policy analyst at Oceans North Canada and one of the report's authors. "We should take the opportunity to get it right from the beginning."

So far, only one well is in the works for the Canadian Arctic. Exxon Mobil Corp (XOM.N), Imperial Oil Ltd (IMO.TO) and BP are looking to drill a deepwater well in the Beaufort Sea.

BP and Exxon had asked the National Energy Board to waive a regulation requiring that the companies be able and prepared to drill a relief well in the same season as they drill their exploratory well, a regulation put in place to ensure that a blowout wouldn't continue under the ice during the hostile winter months when drill ships cannot operate.

The energy board had scheduled a hearing into the request, but last year decided instead to launch a full review of its rules for drilling in the region before approving any exploration. The review is expected to be complete in December.

The study recommends the board keep its relief-well policy in place unless the oil companies can come up with an alternative method that also ensures any blowout can be dealt with in one season.

It also wants the National Energy Board to improve its spill-response planning by staging an annual exercise and ensuring the region has the capacity and equipment in place to deal with a "worst-case scenario" spill. (Reporting by Scott Haggett; editing by Peter Galloway)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.