US issues proposal on Arctic drilling regulations

February 20, 2015

The US Bureau of Safety and Environmental Enforcement (BSEE) and the Bureau of Ocean Energy Management (BOEM) released proposed regulations for exploratory drilling activities on the US Arctic Outer Continental Shelf (OCS) concerning  exploratory drilling conducted by floating drilling vessels and jackup rigs (mobile offshore drilling units or MODUs).

The regulations focus solely on offshore exploration drilling operations within the Beaufort Sea and Chukchi Sea planning areas. Using a combination of performance-based and prescriptive standards, the proposed regulations codify and further develop current Arctic-specific operational standards, the agencies said.

According to BSEE, the proposed rule seeks to address issues relating to design, development of an integrated operations plan, the ability to deploy source control and containment equipment, and procurement of – and the ability to deploy – a separate relief rig in the event of loss of well control situaiton, the ability to monitor and respond to ice conditions and other adverse weather events, the ability to effectively manage contractors, and the development and implementation of an oil spill response plan.

“This proposed rule is designed to ensure safe energy exploration in unforgiving Arctic conditions,” said BSEE Director Brian Salerno. “It builds upon our existing Arctic-specific standards and experience with previous operations offshore Alaska, encourages further development of technology, and includes rigorous safeguards to protect the fragile environment.”

BSEE said that the proposed regulations would require comprehensive planning of operations, especially for emergency response and safety systems. The rule also seeks to institutionalize a proactive approach to offshore safety, and also seeks to identify possible vulnerabilities early in the planning process so that corrections could be made in order to decrease the possibility of an incident occurring.

The Department of the Interior said the proposed regulations were developed with public input from the State of Alaska, North Slope communities, industry and non-governmental organizations. 

NOIA President Randall Luthi urged the Obama administration not to stifle American opportunity with the proposed rules.

"This long anticipated rule provides at least some certainty, consistency and reliability for offshore oil and gas production in the resource-rich Arctic region," Luthi said. "Energy exploration is a highly regulated process with a 10-20 year lead time, but even the administration’s own EIA recognizes that the majority of our energy in that time will still come from traditional sources like oil and natural gas. Opponents of oil and gas may point to the low price of fuel as a reason to stop any and all production in Alaska, but that would be short-sighted, and naïve at best, while icing the dream of an America not reliant on foreign oil."

In January 2013, former Secretary of the Interior Ken Salazar directed a review of Shell’s 2012 offshore drilling program in the Beaufort and Chukchi Seas – including the company’s preparations for the 2012 drilling season and its maritime and emergency response operations – to identify challenges and lessons learned. The company's exploration efforts in 2012 suffered mishaps involving the Kulluk drilling rig and spill containment system. Operations were put to a halt to repair equipment.  Severe weather caused The Kulluk, which was being towed to Seattle at the time, to run aground on the southeast shoreline of Sitkalidak Island, Alaska.

In March 2013, the Department of the Interior released the findings of the assessment, which also included recommendations to guide future exploratory activities. The proposed regulations released today incorporate some of the lessons learned from Shell’s 2012 operations and recommendations from the Department’s review.

In January 2015, Shell announced it would return to the Arctic, committing US$1 billion to operatons there. That same month, the US detailed its proposed 2017-2022 five-year plan, which will include lease sales off Alaska in the Chukchi Sea, Beaufort Sea, and Cook Inlet areas. However, President Obama designated portions of the Beaufort and Chukchi Seas off limits from consideration in future oil and gas leasing sales using the OCS Lands Act.

More about the proposed rule can be found at BSEE's website, here.

Image: CGG

Read more

Shell returning to the Arctic

US details new leasing program

BOEM weighs Cook Inlet lease sale

BOEM increases prediction on Chukchi Sea oil & gas lease sale

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