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Newfoundland and Labrador ready to lead Arctic oil exploration, premier says

ST. JOHN'S, N.L. - Newfoundland and Labrador is uniquely equipped to lead Arctic oil exploration and development as a North American "staging ground," says Premier Tom Marshall.

The province already has a proven track record of safe offshore production in some of the harshest conditions on Earth, he told an oil and gas conference Wednesday in St. John's.

"The land of frigid Junes and the land of Iceberg Alley is well prepared to take on the challenges of development in the Arctic. Having cut our teeth here, we are prepared to lead there," Marshall said in a speech to the Newfoundland and Labrador Oil and Gas Industries Association conference.

"This would be an ideal North American staging ground for Arctic operations."

Outside the conference, Marshall said safety must always come first.

"There's always concerns of not only the environment but the safety of workers. Can the risk be mitigated? If it can be, then we do it. If they can't be, then obviously we shouldn't do it."

Marshall said the province will continue to invest in new technology and skills to grapple with Arctic hazards.

Environmental activists and aboriginal groups have raised alarms about the potential for a disaster in pristine Arctic waters. They say the deadly BP Gulf of Mexico explosion in 2010 exposed the technological limits of controlling blowouts — even in comparatively mild climates.

Eleven workers died when the Deepwater Horizon oil rig blew up. A resulting 87-day oil leak gushed about 4.9 million barrels of oil into the water before it was finally capped, according to U.S. government estimates.

Greenpeace Canada has said the risks and costs outweigh the value of tapping relatively small Arctic oil reserves. It has called for a moratorium that would put the region off limits for good.

Robert Cadigan, president and CEO of the Newfoundland and Labrador Oil and Gas Industries Association, said the province is like an "incubator" for exactly the kind of technology that could limit such risks.

"That's an area that we can focus our expertise and try to help find the solutions that ultimately will support drilling farther north," he said in an interview.

"I think we're probably an example of how it could be done safely."

Cadigan said the province has been an increasing offshore oil player since the Hibernia site about 300 kilometres east of St. John's first began producing in 1997.

Countries such as Russia and Norway also have Arctic ambitions although Cadigan said he doesn't expect large-scale drilling for several years.

"The Arctic's a big place and certainly there are some areas where there's relatively little ice cover (in) parts north of Russia," he said. "So we will see pockets of development, we believe.

"And I think as that experience kind of builds, then probably a migration on to some of the tougher challenges."

The association is Canada's largest offshore petroleum group with more than 600 members in Atlantic Canada and around the globe.

The Canadian Press

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