Canada rethinks deep sea oil drilling

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The oil spill in the Gulf of Mexico has prompted Canada to re-examine its own deep sea oil drilling regulations and how it could prevent and respond to similar spills. Derek Stoffel reports from Toronto.

DEREK STOFFEL: As the situation along the Gulf Coast began to unfold, in Canada questions began to emerge. Could a disaster of the same magnitude happen here? Canada's Prime Minister, Stephen Harper rose in the House of Commons recently to offer reassurance.

STEPHEN HARPER: There is no drilling unless the environment is protected, unless workers are protected. That is the bottom line and this government will not tolerate the kind of situation we see in the Gulf of Mexico.

STOFFEL: Canada's offshore oil industry is relatively undeveloped compared to that in the Gulf of Mexico. There are only three drilling platforms up and running off the coast of Newfoundland. There was a relatively minor oil spill at one of those platforms six years ago. At 45,000 gallons, it was just a puddle compared to what's happening off the coast of Louisiana. But now some politicians in Newfoundland are questioning whether the industry is prepared to deal with a major spill. Cathy Dunderdale, Newfoundland's natural resources minister, told the province's legislative assembly there are no guarantees.

CATHY DUNDERDALE: Mr. Speaker, there's no assurance that we can give to the member opposite or anyone else that there won't be something happened in our off shore that is going to have some kind of an environmental impact. Does she want us to shut down all three producing projects, Mr. Speaker? Because there's risk there.

STOFFEL: By that she means jobs and financial penalties that would have to be paid to the oil companies. Now, there's a new worry for critics of the off shore oil industry here. Chevron began exploratory drilling for a new well this month off the Newfoundland coast. The well is more than 3,000 feet deeper than BP's ill fated Deepwater Horizon. Chevron Canada launched a public relations offensive recently to reassure Canadians that the project is safe. Chevron's Bill Scott says the company is prepared to deal with a spill, though he was vague on details.

BILL SCOTT: There are technological solutions out there that can be brought to bear to make drilling safe enough.

STOFFEL: While Canada's existing off shore drilling activity remains small, the potential for expansion is huge. Experts say that perhaps a quarter of the world's oil reserves lie untouched underneath the ice of Canada's arctic region. Several companies, including BP, have paid billions for the rights to explore in the Beaufort Sea, north of the Arctic Circle. Oil company executives were in Ottawa last week urging the Canadian government to ease regulations on drilling in the north. Specifically, they want looser rules around relief wells, used to contain a leak by taking pressure off the primary well. The oil companies say that because there are only a few months of summer up north, it's much harder to drill relief wells in the arctic. That worries Lawrence Amos, an aboriginal leader from northern Canada.

LAWRENCE AMOS: In the Gulf of Mexico, the capacity to respond to a spill is far greater than anything available in the arctic both in terms of equipment and manpower. In light of this, it really hit home that there is no way that a similar response would be possible in the Beaufort Sea, or anywhere in the Canadian Arctic should a major oil spill ever happen.

STOFFEL: The Canadian government says the disaster in the Gulf highlights the need to maintain strict environment safeguards for off shore drilling. But with the potential of thousands of jobs and economic benefits from further exploration in the arctic, the government isn't ready to close the door just yet on drilling in Canada's far north. For The World, I'm Derek Stoffel in Toronto.