June 9, 2010 / 10:21 PM / in 7 years

Two Canadian premiers back offshore drilling

CALGARY, Alberta (Reuters) - Two Canadian premiers still back offshore drilling despite the catastrophic oil spill in the Gulf of Mexico, arguing that tighter rules can prevent a repeat of the disaster.

Danny Williams, the premier of Newfoundland and Labrador -- the only Canadian province that has offshore oil projects -- said on Wednesday that he has no plans to impose a moratorium on offshore drilling

Indeed, provincial regulators allowed Chevron Corp to begin drilling a deepwater well in the North Atlantic after the Gulf of Mexico spill, though it imposed tough conditions and demanded more frequent inspections.

“I think we’re doing everything we can in the province of Newfoundland and Labrador to prevent similar occurrences,” Williams told reporters in Ottawa following a speech.

“There’s no intent by the government of Newfoundland and Labrador to impose any moratorium on any drilling at this point in time.”

Oil has been gushing into the waters of the Gulf of Mexico since April 20, when a a deepwater drilling rig licensed to BP Plc had a blowout and fire, killing 11 workers.

The failure of the well’s blowout preventer left as much as 19,000 barrels per day spewing into the waters of the gulf, causing environmental devastation.

Prior to the blowout, BP and Exxon Mobil Corp were in the early stages of planning to drill in the Canadian waters of the Beaufort Sea, north of the Arctic Circle. Federal regulators were mulling requests to ease rules for drilling in the environmentally sensitive region but have since called a halt, waiting for a clearer picture of what happened in the Gulf of Mexico.

Floyd Roland, the premier of the Northwest Territories, said on Wednesday he wants to see drilling eventually take place in the Beaufort, but wants to be certain that a similar disaster doesn’t occur in the remote Arctic waters, where there are no resources to clean up a spill.

“We need to understand what happened in the gulf and we need to see what that then does for future development of our offshore,” Roland said in an interview. “We need to be shown -- it needs to be proven -- that the technology could work in Arctic conditions”

Still, Roland wants to see the economic boost that would come from oil and gas production in the Northwest Territories, whose resource-based economy suffered during the recession.

Most petroleum exploration is on hold there while regulators ponder whether to approve a multibillion-dollar natural gas pipeline, backed by Imperial Oil Ltd, that would from the Mackenzie Delta in the Arctic to southern markets.

“In the Northwest Territories we’re trying to build an economy. We’re trying to employ people, we’re trying to develop the North in a sustainable manner,” Roland said. “We’re supportive of the pipeline in a way that is environmentally conscious.”

Reporting by David Ljunggren, Jeffrey Jones and Scott Haggett; editing by Rob Wilson

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