A game changer for Canada's oil industry

For some Canadians watching the Gulf of Mexico spill unfold, it's a foreign news story, but in Canada's oil industry there are those who are certain the disaster will change the rules here.

U.S. President Barack Obama has pledged to tighten oversight of the American industry, something that will affect some Canadian companies directly.

Nexen has deferred one exploration well because of the drilling moratorium in the Gulf of Mexico. (Nexen)

Calgary-based Nexen, for example, has been exploring in the Gulf since 1998 and produces about 25,000 barrels of oil and gas a day there. That's about 10 per cent of its output.

None of that has been affected by the federal moratorium on deep water drilling imposed since the blowout, but Nexen is deferring a planned exploratory well, despite a promising discovery in the same formation as the BP blowout, the Mississippi Canyon, earlier this year.

Other Canadian companies, such as EnCana and Talisman, with extensive onshore operations in the U.S., likely will come under stricter oversight, too.

Nexen vice-president Pierre Alvarez expects the rules to change, and not just for deepwater drilling in the Gulf.

"This is a global industry," Alvarez told CBC News. "When things change, they tend to change around the world."

"So if there are things that make us safer and better operators, I don't expect them to just stay in the Gulf. I expect them to spread around the world," Alvarez said.

"It's important to recognize you need to do the investigation, you need to understand what the errors were, you need to understand where the problems occurred and then you make some decisions. The [U.S.] government has been very clear about that," he said.

Mike Miller questions how prepared Canada is to deal with an offshore blowout in the Arctic or off the East Coast. (Safety Boss)

Lots of changes coming?

Mike Miller, whose company has put out a number of well fires, is convinced the Gulf spill is a game changer for the global oil industry, with new regulations coming that will change the procedures for drilling wells, for staffing rigs and for employing safe practices.

Miller is certain that the rules will change, too, for fighting blowouts. He's convinced that is where one colossal mistake happened with the Gulf spill.

He has run Calgary-based Safety Boss — which established an international reputation after successfully fighting the Kuwait well fires after the first Gulf War — for more than 30 years.

It has fought oil well fires, blowouts, pipeline ruptures and processing facility fires throughout North America, Southeast Asia and the Middle East.

The U.S. Coast Guard erred, Miller said, in how it dealt with the fire aboard the Deepwater Horizon after the explosion on April 20 and before the drilling rig sank two days later.

He remains convinced that two days of pouring water on the fire swamped the ship, causing it to sink and sever the connection from the ocean floor to the surface, where it would have been easier to deal with the fire and contain the flow.

Oil well firefighters would know not to do that, he said.

"If you're not successful in an hour you're not ever going to be successful," he told CBC News.

The U.S. Coast Guard made a 'colossal' mistake in how it fought the fire on the Deepwater Horizon, says Mike Miller. (Associated Press/U.S. Coast Guard)

"You have to hit these fires with overwhelming force. They're not like a forest fire where you fight them for days at a time. Why they went on with that was just beyond me."

The resulting aerial pollution would have been far less of a threat than oil in water, especially given that booms have limitations. In the Exxon Valdez tanker spill in 1989, booms only collected four per cent of the oil, and that was in an enclosed bay.

At the surface, fighting the blowout would be easier, Miller said.

"You have to recognize that had this blowout occurred on land, it would been at the most been a three-week event. You can drive up to the wellhead. You can see things. You can physically hook and unhook things. You're not trying to do everything with a pretty inarticulate robot," he said.

Another lesson not to be overlooked — and relevant to Canada — said Miller, is what requirements there should be for equipment within easy range for dealing with offshore blowouts.

"Houston is the centre of the world offshore industry," he said. "All the services you could imagine [for controlling blowouts] are there."

"If this happened in the Arctic or off the East Coast, where are you going to get that kind of equipment there? It's going to be weeks if not months in transit simply to get it there."

Miller said a review of how to conduct ultra deepwater exploration — drilling in more than 1,500 metres of water — would be timely, given it has only gone on for about a decade.

"The whole world's going to have to look at ultra-deep technology under a microscope," he said.