Saturday, May 28, 2011

Greenland offshore drilling is safe: Cairn Energy

Cairn Energy formally launched its summer oil drilling program off the west coast of Greenland Tuesday, as the environmental group Greenpeace stepped up protests of the Scottish oil company's Arctic activity.

Greenpeace had two ships near the 53,000-tonne Leiv Eiriksson oil rig. An activist aboard the Greenpeace ship Esperanza said an oil spill off Greenland would be "all but impossible" to clean up.

"We want this ship to get out of the Arctic," said Ben Ayliffe, a senior oil campaigner with Greenpeace, from the Esperanza, located around 50 kilometres southwest of Nuuk in the Davis Strait off Greenland's west coast.

Ayliffe said drilling in Arctic waters can't be done safely and that a spill would devastate marine mammal populations in the Davis Strait and Baffin Bay.

He said both the oil rig and the Greenland government have refused to release a spill response plan to Greenpeace.

Jorn Skov Nielsen, the director of Greenland's Bureau of Minerals and Petroleum, said Cairn's drilling licence was granted with extensive regulations based on Norway's strict rules for drilling in the North Sea.

Nielsen said a second drill ship is always near the rig to drill a relief well in the event of a blowout, and another dozen ships laden with oil spill response equipment are circling the Leiv Eiriksson at all times.

The environmental organization says Cairn Energy's exploration program in Greenland is a disaster in the making, citing hazards such as the steady stream of icebergs in Davis Strait, an area that is often dubbed "Iceberg Alley."

"This is the extreme end of extreme oil drilling," said Ben Ayliffe, a Greenpeace member aboard one of the organization's two ships.

"It is crazy to think that Cairn Energy [is] just rushing in here with all these risks."

Cairn Energy crews had to move icebergs out of the drilling area every day during the company's exploration program last year.

Thomson said there are risks and dangers to drilling in Baffin Bay, but he added that those risks are being exaggerated. As well, the company has assured the Greenland government that it can drill safely, he added.

Stringent requirements
"We have to satisfy stringent requirements, and the Greenland government [itself gets] effective third-party auditing," Thomson said.

"It's a very rigorous process we have to go through to ensure that they are comfortable before they approve our drilling program."

The outcome of Cairn Energy's exploration efforts will likely be watched by several other major companies that hold oil and gas exploration licences in the Arctic, including Shell, Chevron and ExxonMobil.

Government officials in Canada will also be monitoring the situation, given that Nunavut is on the other side of Davis Strait and Baffin Bay.

Concerns about Cairn Energy's exploratory drilling are already being raised by fisheries officials in Nunavut's Baffin Island region, which is home to a turbot fishery in Davis Strait.

Betting the house on a gold rush from oil at this stage is a very risky thing to do," he said.

But Nielsen said Greenland has every right to explore for oil within its own waters.

"It's a coastal state's sovereign right to . . . exploit their natural resources as long as they do it in accordance with international practice."

Greenpeace released documents it obtained through an access to information request containing correspondence between British government officials and the country's energy secretary, Chris Huhne, warning Arctic oil spills pose massive technical challenges and environmental risks.

Those concerns echo statements in Canada about the risks of Arctic oil exploration.

Larry Bagnell, the former Liberal MP for Yukon, called last year for a moratorium on drilling in Arctic waters.

Officials with the Government of Nunavut and Nunavut Tunngavik Inc. — the body that oversees promises made under the Nunavut Land Claims Agreement — worry Canada lacks the equipment and manpower to handle even minor oil spills in Nunavut waters.

Arctic sketch by Lawren Harris sells for $1.77 million at Joyner auction

Brilliantly coloured Lawren Harris oil sketch, created during his famed Arctic voyage of 1930, fetched a whopping $1.77 million in Toronto on Friday, helping end the Canadian art spring auction season on a high note.

The dramatic painting titled Island off Greenland, Arctic Sketch XIX was the highlight of Joyner's spring sale, with rapid bidding from a trio of interested parties quickly driving the price up from an opening bid of $400,000.

"It was just a steady climb. There wasn't any stalling at all," Joyner vice-president Rob Cowley, who served as auctioneer, told CBC News.

"We climbed an entire million in a very short period of time."

The stunning, rare work — which Harris had painted on-site during his trip and used as the preliminary sketch for his later, larger canvas South Shore, Bylot Island — was consigned by an Alberta family that had owned the piece for 40 years.

Ultimately, it was another Western Canada collector — participating by phone — who won Friday's bidding war.

Other highlights of the Canadian spring art sale included "Fall Woods, Algonquin Park," a 1914 oil sketch by Tom Thomson which sold for $472,000.
Toronto's Laing Galleries acquired the work from the artist's sister, Elizabeth Thomson Harkness.
Isabelle Dunbar, the aunt of Canadian scientist George Garland, bought it for her then-young nephew in the late 1930s or early '40s, and he kept it until his death in spring 2008.
Meanwhile, "Pickle Jar," a large still life by David Milne, sold for $153,400, and "The St. Anne Falls," an 1855 canvas by Cornelius Krieghoff, fetched $118,000.
On Thursday, another Harris work sold at the Sotheby's auction for $163,500, but a second Harris piece failed to find a buyer, as did a prized work by Jean-Paul Riopelle.
The biggest seller at the Sotheby's sale was Milne's "Trilliums and Trilliums." It went for $278,500, including the buyer's premium.
At the Heffel auction in Vancouver earlier this month, an E.J. Hughes piece fetched a little more than $1 million, while another Hughes painting earned a bid just shy of $800,000.

Minus the Harris and a handful of other high fliers, among them a 1914 Tom Thomson sketch bought for $472,000 by the same western Canadian collector, Joyner’s spring sale would have been cause for hand-wringing. A hefty 35 per cent of its offerings – 89 lots – went unsold on Friday, and those that did sell more often than not went for prices at or slightly above their reserve (the confidential price, established pre-auction, that auctioneer and consignor agree will be the minimum acceptable bid).

It was yet another reflection of the cool-down the once nova-hot resale market has undergone in the past 12 to 18 months as would-be buyers “increasingly look for fresh material,” in the words of Winnipeg-Toronto art dealer Shaun Mayberry, “work that hasn’t been cycled through one auction or another, that doesn’t have that sort of anchored, hammered-down valuation assessment on it.”

For Joyner vice-president Rob Cowley, “the bottom line is that quality Group of Seven work, quality historical and contemporary stuff [including a large 1953 abstract by Painters Eleven member Alexandra Luke that Joyner sold for $70,800, an artist record] continue to do well. What we did find today is that later work by the Group, post-Group work by Franz Johnston, the later paintings of A.J. Casson had trouble … There’s more of an abundance of those things in the market place, not that much rarity.”

Works by Harris, of course, have long been pace-setters in the resale world. Of the top 10 paintings by Canadians ever sold at auction, six are Harrises. Yet even the mighty Harris is not immune, it seems, to the demand for rarity and quality. Joyner had another Harris for sale Friday, a small autumn scene from 1915, but because it lacked what Mr. Cowley called “the absolute rarity of the Arctic painting,” bidding reached only $48,000 ($12,000 less than the low end of its pre-sale estimate) and the work was declared unsold.
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