Energy Ink

NEB releases Arctic offshore drilling report

And the regulator (sort of) re-affirms its same season relief well policy

December 15, 2011

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Well, it’s out. The long-awaited (at least by me) report from the National Energy Board’s on its review of Arctic offshore drilling was released this morning. (You can read the entire report here.)

The review was initiated after BP’s Macondo disaster in the Gulf of Mexico raised new concerns about the oil and gas industry’s ability to control a blowout in deep water – particularly in the remote and unforgiving Canadian Arctic. There was some speculation that an Arctic drilling moratorium might even be the end result of this review.

That didn’t happen, but the NEB did not do away with its requirement that companies looking to drill in the Canadian Arctic must show the capability to drill a relief well to kill an out-of-control well during the same drilling season. This technology is often called SSRW for short.

I wrote about this in our December issue of Alberta Oil. But for those who haven’t followed this issue from the outset, operators with skin in the game were looking for the SSRW requirement to be scrapped. The prevailing industry view was summed up by Chevron Canada Resource’s Rod Maier, who told the NEB that:

What we’ve seen from recent experience at Macondo and confirmed by efforts from industry, that certainly a relief well is not the only option in terms of killing a blowout and, in fact, it’s our …belief that there are other, more superior methods available to industry in terms of killing a blowout.

Chevron Canada and other companies active in the Canadian Arctic , such as Imperial Oil Ltd. and BP, didn’t get their wish. But the NEB appears to have left some wiggle room for them when it comes to the SSRW policy. While stating in the report that it will continue to require companies applying to drill in the Arctic offshore that they must provide details on how they will meet this policy, the NEB – on page 40 of the report – also includes this wording:

An applicant wishing to depart from our policy would have to demonstrate how they would meet or exceed the intended outcome of our policy. It would be up to us to determine, on a case-by-case basis, which tools are appropriate for meeting or exceeding the intended outcome of the Same Season Relief Well Policy.

Look for more coverage on the NEB’s report in the next 24 to 48 hours here at Energy Ink.

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