Chevron drill ship, the Stena Carron, used to drill the Orphan Basin exploration well.
Newfoundland and Labrador is proceeding with the high-risk game of oil exploration in ultra-deep water, as regulators in the province express confidence in industry's safety practices despite the ecological catastrophe of BP PLC's Gulf of Mexico blowout.
Canada's East Coast is now the only region in North America where oil companies can continue to drill deep-water exploration wells after President Barack Obama last week ordered the industry to suspend such operations in the Gulf of Mexico, pending a review of the BP disaster.
Max Ruelokke, chair of the Canada-Newfoundland Labrador Offshore Petroleum Board, said Wednesday that it appears BP employed questionable drilling methods that would not be condoned in the Canadian offshore.
"We believe things were done in the Gulf that were not in compliance with regulations and probably not even good oil field practices," Mr. Ruelokke.
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The federal-provincial regulatory board has increased its supervision of Chevron Corp.'s operation in the Orphan Basin, some 430 kilometres off the coast.
The province already has four production areas in relatively shallow water, but Chevron is now leading an industry move into the deeper water off the continental shelf. The company drilled an inconclusive well three years ago at more than 2,000 metres.
Last month, it returned to the area and is now drilling in 2,600 metres of water, a record depth in Canadian waters, though some wells have been drilled in deeper water internationally.
"We think it is safe to go ahead with the well; we don't think there is any additional risk," Mr. Ruelokke said in a teleconferenced briefing from St. John's.
While the board added some precautionary procedures, "we didn't think it was necessary or appropriate to take that out to the extreme and say, 'You can't drill the well,'" he said.
BP was drilling in 1,500 metres of water in the Gulf of Mexico and the tremendous pressures at that depth have complicated its efforts to cap the blowout. The company had told U.S. regulators that it would be able to manage any potential accident. Those assurances have proven wildly optimistic, with fears now that the blowout will gush at up to 19,000 barrels a day (about three million litres) until relief wells can be completed in August.
In the aftermath of the Gulf disaster, Newfoundland Premier Danny Williams has faced calls from environmental groups for a moratorium on deep-sea drilling and from opposition critics to dramatically increase safety measures and the supervision of the entire industry.
The Newfoundland board - which is made up of federal and provincial appointees - said its first priority is prevention of a blowout and that it will closely monitor each step of the process to ensure Chevron follows appropriate procedures.
After drilling through the rock under the seabed, Chevron must pause its drilling operation before tapping into the targeted oil-and-gas zones so that board officials can assess its procedures. It must also have regulators on board the drill ship when crews are ready to terminate the well.
Oil companies typically drill exploration wells, then plug them with cement while they assess whether there are commercial quantities of oil. It was at that "termination" stage that BP apparently encountered a surge of pressure and escaping natural gas. The blowout preventer - a massive valve that sits atop the well - inexplicably failed.
Mr. Ruelokke said BP appears to have prematurely switched from pumping heavy drilling fluid into the well, which acts as a cap, to using seawater, which is lighter and less effective as a barrier. He insisted that would not happen in the Newfoundland offshore.
The regulator, a veteran of the Newfoundland's offshore oil industry, said the sector has an outstanding safety record, with only 1,100 barrels of oil spilled over the course of 13 years of production, during which 1.1 billion barrels of crude have been produced.
Chevron vice-president David MacInnis said the company is acutely aware of the risks highlighted by the BP blowout. The company has tested its blowout preventer several times before installing it on the sea floor beneath the Stena Carron drill ship, he said.
But critics worry that both the company and the regulator are underestimating the dangers inherent in drilling at such depths, and the potential impacts of a uncontrollable blowout. It would take at least 10 days for Chevron to get another drill ship in the area and as long as three months to drill a relief well that might be needed to stop a blowout.
Gail Fisher, a York University biologist who studies offshore oil regulations, said she worries an accident like the one that has confounded BP would gush into the North Atlantic for months, killing sea birds, fish and marine mammals.
She argued that Chevron should be required to begin drilling a relief well as even as it proceeds with the primary exploration well - though the industry argues such an approach would be both risky and prohibitively expensive.
"You can damage a lot of populations in a couple of months," she said. "Is there going to be anything left alive in the Gulf of Mexico?"
In its briefing Wednesday, the board said that in the event of a blowout, the crude would spread no more than 100 kilometres from the drill site. It added the oil would never come near the North American coastline.
But Brad deYoung, head of the oceanography department at Memorial University, dismissed that forecast.
"After 10 days or something, a patch could be many hundreds of kilometres and after a month, a thousand kilometres is not a stretch," he said. "The oil would not likely end up on the northern part of the island of Newfoundland but the south coast is quite possible, as is the possibility that oil would move into the Gulf of St. Lawrence."