Arctic offshore drilling review underway

The National Energy Board has kicked off its Arctic offshore drilling review by meeting with territorial and federal leaders in the North.

The National Energy Board has kicked off its Arctic offshore drilling review by meeting with territorial and federal leaders in the North.

Oil and gas companies are anxious to start offshore oil and gas exploration in the Arctic. The photo shows a Canadian Coast Guard icebreaker working off Nunavut in the middle of the summer. ((Jonathan Hayward/Canadian Press))
Gaetan Caron, chair of the federal regulator, met privately with Northwest Territories Premier Floyd Roland and Energy Minister Bob McLeod in Yellowknife on Nov. 24  to discuss infrastructure, devolution and the oil companies that are eager to start drilling.

McLeod told the board the North lacks ports and frontline emergency assistance, which are integral to the kind of drilling under consideration.

"For us, it was a concern the type of drilling being proposed has never been done here," the minister said. "We didn't want the Arctic to be used as the testing ground."

He fears the risks might be too high and the benefits too few for residents.

"We're concerned that because [the drilling is] in the deep part [of the sea], the technology, employment and people would be outsourced," McLeod said.

While in the North last week, Caron also met with the Inuvaliut Regional Corporation Board of Directors and the Gwich'in Tribal Council, as well as Inuvik Mayor Denny Rodgers and Deputy Mayor Chris Laroque.

The review is expected to last several months, but three major oil companies are waiting anxiously to move on millions of dollars in exploration leases.

Imperial Oil Ltd., ExxonMobil Corp. and BP have formed a joint venture to explore offshore areas for which they secured leases in 2007 and 2008.

The joint venture aims to avoid duplication of personnel and equipment in the remote Arctic sea. The leases are located in the sea's deepest areas, where ice often moves, breaks and turns.

"We think there's some urgency," McLeod said. "There are two drilling licences that are out there. In our view, we don't support drilling at any cost."

Imperial Oil seeks extension

Imperial Oil officials say no exploration work will be planned until after the energy board has finished its review — and the clock is ticking.

Imperial Oil has committed to spending $585 million drilling in the Beaufort Sea. Under the terms of the nine-year exploration licence, the company must drill at least one well by October 2013 or face a penalty of more than $100 million.

Imperial Oil spokesperson Pius Rolheiser said the company needs more time.

"We have advised Indian and Northern Affairs Canada of our intention to make an extension request due to regulatory uncertainty," he said.

Caron is scheduled to return to the North next week and will spend Dec. 6-9 meeting with the Inuvaliut Game Council, the Inuvik Town Council and the Wildlife Management Advisory Council.

Public meetings on Arctic offshore drilling will be held in the spring.