Canada approves exploratory oil lease near Georges Bank

ELLSWORTH — The company that lost out on its bid to build an experimental floating wind energy farm off the coast of Maine has won approval to explore for oil off the coast of Nova Scotia at the edge of Georges Bank.

Last month, the Canada-Nova Scotia Offshore Petroleum Board announced that it had approved a bid by Statoil Canada Ltd., owned by the Norwegian energy giant Statoil ASA, for an exploration license on two subsea parcels located on the outer part of the Western Scotian Shelf and Slope that Canadian authorities consider “underexplored.”

Statoil Canada has committed to spend at least $82 million (Canadian) — $61.7 million — on exploration of the two parcels during the first six years of the nine-year license period. The company will be required to post a 25 percent deposit before exploration activities begin.

Provided neither Canada’s federal minister of natural resources nor Nova Scotia’s provincial minister of energy object, the board will issue the licenses to Statoil on Jan. 16, 2016.

The two offshore licenses cover an area slightly larger than 2,500 square miles and lie about 225 miles southeast of Bar Harbor. Depths on the two parcels vary widely but range from about 1,000 to 3,000 meters (approximately 3,300 to 9,900 feet).

Georges Bank is one of the most productive fishing grounds on Earth and the proximity of the two license areas could be worrying for fishermen.

The northern sections of the Statoil parcels are located at the entrance to the Northeast Channel, the 22-mile-wide deep-water passage that is the primary entrance and exit for the ocean water that circulates through the Gulf of Maine.

The first offshore well was drilled in Nova Scotian waters in 1968. Since then, more than 200 wells have been drilled, with two well blowouts, according to an April environmental assessment report on the area prepared for the Canadian-Nova Scotia board.

In 1984, the surface blowout of a Shell exploratory gas well near Sable Island released 70 million cubic feet of gas. In 1985, a blowout at a Mobil well was contained underground.

Before it can drill any well, Statoil will have to apply for specific permission. That, in theory, will trigger a detailed environmental review process. In its announcement, the Canadian board said that it reserved the right to refuse approval for any specific exploratory well.

“It’s very much a possibility that the offshore petroleum board could review the (environmental assessment) and come to the determination that the proposed project could not be done without significant environmental effects,” a spokesman for the board said.

So far, though, the board has “concluded that the effects of exploration on fisheries are not expected to result in unacceptable effects provided the implementation of recommended mitigation and ongoing communication with fishery stakeholders.”

Stephen Rappaport

Stephen Rappaport

Waterfront Editor at The Ellsworth American
Stephen Rappaport has lived in Maine for nearly 30 years. A lifelong sailor, he spends as much time as possible messing about in boats. [email protected]

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