Thursday, June 17, 2010

Breaking the bank(s)

Once upon a time Newfoundland was known for its Grand Banks.


These days NL is known for how it “banks on global oil addiction.”


Or so reads a headline today on CBC’s website.


The story angle is about how NL isn’t heeding American President Barack Obama’s call for the world to end its addiction to oil.


In fact, NL’s offshore is “wide open” for business, Natural Resources Minister Kathy Dunderdale informed the Oil and Gas Industries Association meeting in St. John’s this week.


An estimated 34.5 cents ($2.1 billion) of every dollar the provincial government takes in this fiscal year will come from offshore oil royalties.


And the U.S. won’t shake its oil “addiction” for at least 25 years.


Does that make us a dealer?

•••

BBC News is carrying a story this week (Newfoundland fears fail to halt deepwater drilling) about how NL’s offshore is the only region in North America where deepwater exploration continues after a moratorium on offshore drilling was introduced off the U.S. coast.


Resulting from the so far unstoppable leak (up to 60,000 barrels a day) from British Petroleum’s rig in the Gulf of Mexico.


The gist of the story is that NL’s environment/economy are fragile, but worth risking because of the oil payoff.


Chevron is drilling on the Orphan Basin about 430 kilometres northeast of St. John’s in 2,600 metres of water — 1,100 metres deeper than the leaking Gulf well.


The BBC quotes Premier Danny Williams, who told the House of Assembly recently that a moratorium on deep-water drilling could cost us in terms of health, education and social services.


So we either keep drilling or risk losing … everything.


The message seems to be that NL has to do more to break its addiction to oil revenues.


Let’s see, no movement on the Lower Churchill front.


And as far as I can tell the fisheries will always take a backseat to oil, for as long as it lasts.

•••

Finally, the Vancouver Sun carried a story Wednesday (June 16th) about how one of the three ships tapped to drill a relief well in the Orphan Basin is already in use by BP in the Gulf.


A relief well would be necessary in the event of a blowout, i.e. Gulf of Mexico scenario.


Relief wells are able to plug a leak by pumping heavy fluid into the original well.


Chevron hired three ships to drill a relief well in the Orphan Basin, but one of those vessels is currently working for BP in the Gulf, raising questions about how quickly it could be deployed off Newfoundland if a spill occurs.


Canadian regulators say a ship could be mobilized to the Orphan Basin within 11 days.


A representative of World Wildlife Fund Canada said it would more likely take a month for a drill ship to deploy to the Orphan Basin, and between two and three months at least to drill a relief well.


Does finger crossing count as a plan for the future?


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