Some Relief! Imperial Oil will not seek exemption from safety requirements to drill in the Beaufort Sea
On June 26, Imperial Oil, on behalf of its partners BP and ExxonMobil, informed the National Energy Board it would not apply as planned for an exemption from the board’s same season relief well (SSRW) capacity requirement. Chevron abandoned its plans in December. These decisions mean that two anticipated challenges to the board’s precautionary requirement have vanished ‒ at least for now.
It’s good news!
WWF has worked for several years with Ecojustice to defend the SSRW requirement and until their announcement, we were preparing to defend it again. We don’t know what the companies might have proposed had they chosen to proceed with their applications, but we do know that we have yet to see anything to convince us that it would be responsible to drill in the Arctic offshore without the safety net of SSRW capability. A timely relief well is the only means we know of to ensure that a blowout can be stopped before the end of the Arctic operating season if same-well interventions (e.g. capping stacks) were to fail. The SSRW requirement minimizes the intolerable risk of a multi-year blowout and the catastrophic long-term environmental, economic and social consequences it would cause. For more information about how an oil spill may travel see arcticspills.wwf.ca.
These decisions mean that plans for exploratory drilling in the Beaufort are delayed indefinitely. What has changed their minds? We can only speculate. But I believe the answer may have two parts. A little history is needed to understand the first. A glimpse into the future is necessary to understand the second.
Five years ago, the oil majors were set to argue before the NEB that the SSRW capacity requirement should be abolished. The bottom line for the petroleum industry: this precautionary safety measure would make deep offshore drilling extremely, maybe prohibitively expensive. Before the NEB SSRW hearing could get underway, the BP Deepwater Horizon drilling rig in the Gulf of Mexico exploded. In the wake of that event, the NEB cancelled the hearing and instead convened a broader review of Arctic safety. At that proceeding, WWF argued that the board should retain the SSRW requirement, and it did. It also left the door open for industry to propose an alternative, if they could demonstrate that it would meet or exceed the intended outcome of the board’s policy. That brings us back to the present and the decisions by the companies to abandon the opportunity to present alternatives. Could it be that the oil majors have finally recognized that no collection of subsea intervention devices, blowout preventers, and capping stacks can do what a timely relief well can?
And then there is the uncertain future: Arctic oil is expensive compared to other sources for a host of reasons. No one can predict if the price of oil will one day rise high enough to make Arctic oil profitable. No one can predict how quickly international demand for oil will decline as humanity embraces measures needed to avoid the worst effects of climate change. These uncertainties, coupled with the environmental challenges and high cost of oil from the Arctic, make the business case for development unclear.
In light of these uncertainties, now is the time to turn our focus to ways that nature and economic growth can exist in balance in Canada’s North, and away from the ever-receding mirage of Arctic oil riches. Realistic and sustainable plans to create employment and build prosperity in northern communities are needed. The real bottom line: northerners should never have to place their heritage and environment on the line to earn a living.