Canada unveils Arctic drilling rules

Canada's energy regulator rolled out new rules on Thursday allowing for alternative ways to deal quickly with blowouts in the Arctic other than drilling relief wells. However, oil companies will still have to prove that the new methods to prevent or deal with blowouts are as good or better than the current standard for regaining control of rogue wells before being permitted to drill in the pristine Arctic waters. The National Energy Board spelled out the conditions in a report after 18 months of consultations with the industry, environmental groups and residents of the far north. It reaffirmed its relief well policy, but offered a compromise to oil giants that have said the rule is blocking oil exploration in the deep waters and challenging icy conditions of the Arctic. "Any company wishing to depart from (the same-season relief well policy) in a future application for a well would have to demonstrate to us how they would meet or exceed the intended outcome of the policy, which is to kill an out-of-control well in the same season in order to minimize harmful impacts on the environment," the board said. There is currently no offshore drilling in the Arctic, nor any applications before the board to do so. But a number of companies hold exploration rights in the Beaufort Sea. Oil companies had asked the National Energy Board to remove its relief well policy, arguing that the short Arctic drilling season make it impossible to complete a relief well (which can take months to drill) if a blowout occurred late in the season. They also touted new technologies to make blowouts much less likely and to regain control of rogue wells without the need for a relief well. But none of the technology has proven to be fail-safe.