Energy Ink

Industry giants broach relief well issue in the Arctic offshore

Chevron and ConocoPhillips tell the NEB the technology shouldn't be a requirement

April 11, 2011

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How do you spell relief in Canada’s Arctic offshore? If you are Chevron and ConocoPhillips, apparently it doesn’t include the letters “S” “R” or “W”.

Put those letters together in that order (and add an “S”) and you get “SSRW”, which is industry shorthand for a single season relief well. It’s long been a requirement for companies drilling in the Canada’s Arctic waters. But the Globe and Mail’s Shawn McCarthy reports that Chevron and ConocoPhillips – in filings to the National Energy Board (NEB) in preparation for the regulator’s upcoming Arctic offshore drilling review – have asked the NEB to drop a requirement for companies to be able to drill a relief well in the same season that they undertake exploration drilling. Same season relief wells are considered a critical tool in ensuring that a blowout doesn’t spew oil into the pristine Arctic waters for weeks or months on end.

As McCarthy’s story points out, Chevron and ConocoPhillips are asking the NEB to instead set a performance standard that would do what they say an SSRW cannot – stop crude flowing from a blowout well in the same drilling season.

I wouldn’t mind being a fly on the wall in the offices of the Inuvialuit Regional Corporation these days as its management debates this news. The corporation is the business arm of the Inuvialuit people of the Northwest Territories. It is led by Nellie Cournoyea, a former NWT premier and now a vocal proponent of the Mackenzie Gas Project. It’s in the Inuvialuit’s backyard – the Beaufort Sea – where the vast majority of offshore drilling in Canada’s Arctic would occur.

The Inuvialuit are generally pro-business and pro-oil and gas folk. You would be too if you lived in communities where unemployment rates of 30 per cent are the norm. But these people living in the northern-most region of the NWT also treasure the Beaufort system ecosystem. They are not for development at any cost.

The Macondo disaster in the Gulf of Mexico gave them a glimpse of what the potential cost could be if a similar blowout were to occur in the Beaufort. This press release the Inuvialuit issued in May of 2010 sums up their concerns regarding offshore drilling and what assurances they will be looking for if it is to occur in their region in the future.

It seems to me that if the Inuvialuit are going to be okay with oil and gas drilling in the Beaufort Sea (and it’s hard to envision the authorities allowing it to occur without their approval), they would be looking for the Chevrons of the world to develop these performance standards and to also be required to drill an SSRW if necessary. When it comes to the Beaufort, the Inuvialuit want as much oversight in place as possible to prevent blowouts. Chevron and ConocoPhillips have a lot of convincing to do here, I think, to gain acceptance for what they are proposing.

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