Don't ban offshore drilling: Senate

A report by a federal Senate committee looking into offshore oil drilling in Canada says the facts do not justify the banning of current offshore drilling in Canada.

"We are satisfied that the oversights are such that there is not any imminent danger," said Senator David Angus, chair of the committee.

The committee said there is no risk of a spill in western Canada or the north.

"There is nothing happening in the Arctic," said Angus. "So, there is no danger of a blowout because there is no drilling going on there at the present time."

He said the committee is satisfied that deepwater drilling off Newfoundland and Labrador is safe.

"There’s one … well being drilled at the present time," said Angus. "It's a major project by Chevron Canada. They are the lead operator. It's taking place about 400 kilometres northeast of St. John's and it's being done under very careful supervision and so forth."

"We found no need, or justification, or evidence to lead us to recommend that that operation be stopped. To interrupt an operation just because of possible fears isn't necessarily a wise course of action. We were satisfied that the regulatory regime, federal and provincial, is a good one."

The committee on energy looked at the regulations governing offshore drilling and the country's preparedness to deal with a spill after the disastrous release of 4.9 million barrels of oil in the Gulf of Mexico from a blown-out BP well.

The committee heard from 26 witnesses, including the head of Newfoundland and Labrador's oil regulator, who testified that liability limits for oil spills may need to be raised.

Max Ruelokke, CEO of the Canada-Newfoundland and Labrador Offshore Petroleum Board, said the regulator requires oil companies operating in its jurisdiction to have $100 million available for spill containment and cleanup.

Current laws cap a company's cleanup costs for a spill off Eastern Canada at $30 million.

Meanwhile, the deadline for an assessment of Newfoundland and Labrador's offshore oil spill prevention and response preparedness has been extended to late 2010.

Capt. Mark Turner, an expert in marine safety and environmental management, was originally expected to finish his work within 90 days, but asked for an extension and has been given it.

Turner was appointed by the province May 12.

The province now expects to receive Turner's final report by November.