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N.W.T. gas could gain from U.S. spill: minister

The major blowout of an oil rig in the Gulf of Mexico could be a boon to the Northwest Territories' natural gas industry, according to the territory's industry minister.

Offshore drilling a concern in western and eastern Arctic

The major blowout of an oil drill rig in the Gulf of Mexico could be a boon to the Northwest Territories' natural gas industry, according to the territory's industry minister.

Bob McLeod said if the blowout — which has led to a massive oil spill off the coast of Louisiana — leads to tighter U.S. environmental restrictions on oil production, there could be more demand for natural gas from places like the N.W.T.'s Mackenzie Delta, where a gas pipeline has long been proposed.

"Canada is the largest supplier to the United States, and one of our main messages is we have Arctic natural gas," McLeod said Wednesday from Houston, where he is promoting the Mackenzie pipeline at the Offshore Technology Energy Conference.

"Arctic natural gas is a very good transitional fuel that has a lot of benefits to reduce greenhouse gas emissions, and we think that that would be a very important consideration for the United States."

The National Energy Board is currently deciding whether to approve the 1,200-kilometre Mackenzie pipeline, which would run from three onshore natural gas fields in the Mackenzie Delta, south through the Mackenzie Valley to northern Alberta, where it would connect with existing gas networks.

McLeod said the events unfolding in the Gulf of Mexico since the April 20 rig explosion has made the Mackenzie pipeline project an easier sell.

However, McLeod added that the oil spill could have a very different effect on the N.W.T.'s offshore reserves of oil and natural gas in the Beaufort Sea.

The territorial government is taking a closer look at how best to manage environmental risks for offshore exploration in the sea, he said.

Worries over Davis Strait drilling

In another part of the Arctic, Scottish oil company Cairn Energy plans to drill in Davis Strait, off the coast of Greenland, this summer.

The upcoming drilling work is a worry to Canadian Inuit elders like Rita Nashook of Iqaluit, who said a similar oil spill off the coast of Greenland would seriously harm walrus, seals and other wildlife in neighbouring Baffin Island.

"If oil leaked into the water, there would be nothing to do about it, and the wildlife there would be hurt very badly," Nashook told CBC News in Inuktitut.

David Nisbet, Cairn Energy's head of group corporate affairs, said his company will take every precaution in the event it strikes oil in Davis Strait.

"We are very conscious operating offshore [from] Greenland [of] how we have to behave, and that we have the best of systems in place," Nisbet said.

"We will have a support fleet of vessels, about a dozen vessels, working alongside the two rigs. We have a relief well capability."

Nisbet added that exploration in Davis Strait is in its early stages, so there's a chance oil may not even be found.

"There's good potential to be able to find oil and gas off the shores of Greenland, but to date only six wells have ever been drilled," he said.

"It is really very early days, and we are saying that there's a one in 10 chance."

The federal NDP has called for emergency hearings to discuss what can be done to protect the Arctic environment before any drilling goes ahead.

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