Ottawa rules out extensions for oil firms
OTTAWA • The federal government says it won’t grant extensions to exploration licences for Exxon Mobil Corp., BP PLC and other oil firms as it prepares for consultations over the impact of an Arctic drilling moratorium.
The companies hold leases that expire over the next six years, totalling $1.9 billion in bids. Prime Minister Justin Trudeau and U. S. President Barack Obama announced new restrictions on Arctic oil development Dec. 20, with Canada saying existing leases wouldn’t be affected without industry input.
In an online background document, however, Trudeau’s government specifically ruled out lease extensions sought by industry before the new restrictions were put in place. Companies had expected that to be a central part of talks.
“Our understanding is they’ ll have consultations and conversations with industry, in particular the licence holders, with respect to extensions,” said Paul Barnes, Atlantic Canada and Arctic manager for the Canadian Association of Petroleum Producers, the top industry lobby group. “We’re kind of anxious to have further discussions.”
Indigenous Affairs Minister Carolyn Bennett, who oversees Arctic oil regulation, has declined interview requests since the announcement. Bennett’s spokeswoman, Sabrina Williams, referred questions about extensions to the department.
When asked, the department didn’t directly address its online statement that extensions won’t be granted — saying companies are free to keep asking for them. “Should stakeholders raise licence extension issues during the consultations, the Government of Canada will take their feedback into account to inform next steps,” spokesman Shawn Jackson said.
There is no current off- shore oil production or drilling in Canada’s Arctic, though exploration there dates back to incentives brought in by former prime minister Pierre Trudeau. Five companies hold exploration licences expiring between 2019 and 2023, all in the section of the Beaufort Sea that lies along the shores of the Yukon and Northwest Territories.
The Canadian leaseholders are BP; Imperial Oil Resources Ventures Limited, controlled by Exxon; Conoco-Phillips Co.; Chevron Canada Ltd.; and Franklin Petroleum Canada Ltd. Two other exploration licences issued in the 1980s to Talisman Energy Inc., acquired by Repsol SA in 2015, and BP have no expiry dates. Trudeau’s government has said those companies are eligible to upgrade their licences in the event of a discovery, but initially referred to consultations when pressed on whether extensions will be allowed. Trudeau has pledged to review the moratorium in five years.
Of the outstanding exploration licences, Imperial’s were acquired at the highest cost — $ 1.8 billion in work bid commitments. Imperial said last month it had sought extensions for exploration licences “to ensure future oil and gas activities are conducted in an appropriately paced, safe and environmentally responsible manner.”
Alex Speers- Roesch, a Greenpeace campaigner, said developing Arctic oil is at odds with Canada’s emissions reduction pledges. “The government should ... pause all Arctic oil and gas projects until they have rigorous tests in place that assess whether these projects make sense in the lowcarbon world Canada championed in the Paris climate agreement.”
THE GOVERNMENT SHOULD GO FURTHER AND PAUSE ALL ARCTIC OIL AND GAS PROJECTS UNTIL THEY HAVE RIGOROUS TESTS IN PLACE THAT ASSESS WHETHER THESE PROJECTS MAKE SENSE IN THE LOW- CARBON WORLD CANADA CHAMPIONED IN THE PARIS CLIMATE AGREEMENT. — GREENPEACE