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Offshore drilling requirements released
National Energy Board's Arctic review praised for its comprehensive approach

Nathalie Heiberg-Harrison
Northern News Services
Published Monday, December 19, 2011

The National Energy Board's recently-released offshore drilling requirements address Northern concerns and issues in a positive and comprehensive way, according to some Northern stakeholders.

NNSL photo/graphic

Mike Peters, with the Canadian Association of Petroleum Producers, pushes for a public education campaign on the offshore oil industry during a panel discussion at the Inuvik Petroleum Show June 23, 2010. - NNSL file photo

"We're quite pleased in lots of ways with the report," said Rob Powell, director of the Mackenzie River basin for the World Wildlife Federation.

"We think that the NEB review has been an important step because they have listened to people in the North and opened up a conversation about the risk and benefits that may be involved in offshore oil and gas."

Oil companies that plan on drilling in the Beaufort Sea must hold extensive consultations in the North before filing their offshore drilling applications, make their safety and contingency plans public and be able to counter a blow-out with a same-season relief well, according to the National Energy Board Filing Requirements for Offshore Drilling in the Canadian Arctic released on Dec. 15.

"Filing requirements set out the technical information we will need to see in future applications for offshore drilling in the Canadian Arctic," said Gaetan Caron, board chair and CEO, in a press release.

"These new requirements provide clarity to future applicants and to those who will provide input into the board's decision to approve or deny an application for a well in the Arctic."

The Inuvialuit Regional Corporation, which manages the Inuvialuit Settlement Region and a portion of the Beaufort Sea, is commending the board's Arctic offshore drilling review and subsequent filing requirements.

"The report recognizes the important role of the Inuvialuit as stewards of the Inuvialuit Settlement Region and is consistent with the principles of the Inuvialuit Final Agreement," stated Peggy Jay, IRC communications adviser, in a news release.

Nellie Cournoyea, chair and CEO of the corporation, said the National Energy Board responded well to issues presented by the Inuvialuit.

"Now the big job is to ensure that implementation moves forward in a timely manner by all parties.

"There is more to be done on the issues of risk and liability, and the Inuvialuit look forward to working with governments and industry to ensure adequate resources are put in place so that offshore Arctic drilling is done in a safe manner," she stated in a news release.

Powell said the major gaps of the Arctic review are with the issues of liability and blame.

"The NEB has a limited mandate to deal with this, but we would like to see an amendment to the liability cap," he said.

Currently, under the Canada Oil and Gas Operations Act, companies can be fined a maximum of $40 million.

"It's very low compared to some of the recent costs for disasters that have happened," Powell said, pointing out that federal prosecutors in Brazil recently filed a lawsuit against Chevron and Transocean Ltd. for $10.6 billion.

"It's really a thousand-fold less than the cost of one (disaster)," he said.

The National Energy Board's filing requirements come after a 19-month Arctic drilling review that was prompted by the Gulf of Mexico disaster in 2010.

The board's roundtable in Inuvik this past September attracted more than 175 delegates from across the circumpolar region.

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