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Stakeholders consider future for Arctic offshore drilling
Arctic review informs new filing regulations with the National Energy Board

Lyndsay Herman
Northern News Services
Published Saturday, May 12, 2012

There are 1,600 trillion cubic feet of recoverable natural gas and 44 billion barrels of recoverable natural gas liquids in the Arctic Circle and, with the completion of the National Energy Board (NEB)'s Arctic Offshore Drilling Review in December, some interest groups are keen to start exploiting those resources under the waters of Beaufort Sea.

NNSL photo/graphic

The National Energy Board of Canada held a roundtable discussion on offshore drilling in the Arctic from Sept. 12 to 16 in Inuvik. The discussion was part of a larger Arctic review which has informed the National Energy Board's regulations for offshore drilling in Arctic regions. - NNSL file photo

David Ramsay, minister for the Department of Industry, Tourism and Investment, attended the Offshore Technology Conference in Houston, Texas, earlier this month and said it was an important opportunity to build relationships with industry to the south.

"It's important that we were there and the future development of our territory is going to be one that will involve offshore drilling in the Beaufort," he said.

"It's exciting. That's going to be a big plus for us as we develop the economy in the Northwest Territories in the years to come."

The NEB released filing requirements for Arctic offshore drilling last December.

Currently, according to Ramsay, there are currently no applications for offshore drilling before the NEB, although exploration permits have been granted to oil and gas companies.

Ramsay said the devolution agreement in negotiation between the territorial government and federal government does have a provision for an offshore resource royalty, similar to that of Nova Scotia and Newfoundland. The provision would contribute a considerable amount to programs and services in the territory, he said.

Ramsay said partnerships with experienced regional neighbours, such as Alaska, are already in development. Last fall, Ramsay became vice-president of Pacific Northwest Economic Region and sits on the organization's Arctic caucus. The importance of these partnerships, Ramsay said, is fostering communication and knowledge-sharing among other regions.

At a municipal level, Inuvik is looking forward to moving ahead with resource development in the Beaufort region.

"We're the hub of this region ... We are the gateway to the Beaufort," said Inuvik Mayor Denny Rodgers.

"There's several companies, local companies, that have partnerships with other members in the industry that are geared up for oil and gas resource development in the area. Certainly that's a big plus for them whenever we get some activity in the Beaufort region."

Rodgers also mentioned the services industry as a likely benefactor for the increased economic activity.

"It's exciting," he said. "We think resource development is long overdue in the Beaufort Sea and the Beaufort in general and we need that to provide economic stability."

Rodgers said he is glad the NEB not only sought a wide range of voices on the matter, but also integrated them effectively in its final filing requirements. He said the board's decision to allow spill response measures equal to or better than a same-season relief well is a solution that allowed flexibility for industry while still addressing the environmental impact concerns voiced by other interest groups.

Ramsay said the Arctic review laid out some important regulations, setting the stage for safe resource development in the area.

"The review is out there and I think it sets some very stringent requirements when it comes to drilling offshore and, of course, in a pristine environment like the Arctic, its important that those requirements are there," he said. "Companies that want to drill in the Beaufort would have to satisfy the requirements of the NEB."

Dan Slavik, adviser for marine spatial planning at the Inuvik World Wildlife Fund office, said the World Wildlife Fund is also happy with regulations such as same-season relief wells, but feel there is some more ground to cover before anyone is fully prepared to deal with the risks of offshore drilling in the Arctic.

"In terms of some of the recommendations we made, the NEB was great at listening to both our concerns and the communities' concerns and they responded positively in some regards," he said.

"We still feel that within the challenging Arctic environment, that industry hasn't demonstrated the full ability to retrieve spilled oil in frozen, broken, and re-freezing ice conditions. We're also concerned about the lack of information available in terms of what would happen if there was an oil spill."

Two areas which Slavik said require more research are on spilled oil trajectories and how countermeasures, such as in-situation burning or dispersant application, would affect the environment.

For now, the World Wildlife Fund will continue to add to research on the area but major decisions are in the hands of the communities.

"We would like to see the risks minimized as much as possible but at the end of the day, it's up to the communities to determine if the potential risk of this development and the potential costs of developing the area is worth the reward," said Slavik. "At the time being, we feel that the risk is too high and the ability to respond to incidents is not close to what's necessary to be able to safely respond, prevent and clean up oil spills that could happen in the region."

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