DoI issues final Arctic OCS drilling rule

Three US Department of the Interior bureaus jointly released the final regulations governing drilling activities on the US Arctic outer continental shelf.


Offshore staff

WASHINGTON D.C. – Three US Department of the Interior (DoI) bureaus jointly released the final regulations governing drilling activities on the US Arctic outer continental shelf (OCS).

DoI Assistant Secretary for Land and Minerals Management Janice Schneider, Bureau of Ocean Energy Management (BOEM) Director Abigail Hopper, and Bureau of Safety and Environmental Enforcement Director Brian Salerno took part in the announcement.

The Arctic-specific regulations focus solely on OCS exploratory drilling operations from floating vessels within the US Beaufort and Chukchi Seas. These rules require oil companies to ensure proper internal controls and planning for oil spill prevention, containment, and responses – all issues identified by previous DoI reports regarding Shell’s 2012 exploration activities in the Arctic, the department said.

The regulations codify and further develop current Arctic-specific operational standards to ensure that operators take the necessary steps to plan through all phases of OCS exploration in the Arctic, including mobilization, maritime transport and emergency response, and the conduct of safe drilling operations while in theater.

Specifically, the final rule requires operators to develop an Integrated Operations Plan addressing all phases of a proposed Arctic OCS exploration program and submit it to BOEM in advance of filing an Exploration Plan. The regulations require companies to have access to – and the ability to promptly deploy – source control and containment equipment, such as capping stacks and containment domes, while drilling below or working below the surface casing.

Operators also must have access to a separate relief rig able to drill a timely relief well under the conditions expected at the site in the event of a loss of well control; have the capability to predict, track, report, and respond to ice conditions and adverse weather events; effectively manage and oversee contractors; and develop and implement anOil Spill Response Plan designed and executed in a manner that accounts for the unique Arctic OCS operating environment, and is supported with the necessary equipment, training, and personnel for oil spill response on the Arctic OCS.

“With the United States as Chair of the Arctic Council, we are committed to demonstrating our leadership in governance and activities in the Arctic Region,” said Schneider. “The regulations we are issuing today support the administration’s thoughtful and balanced approach to any oil and gas exploration in the Arctic region. The rules help ensure that any exploratory drilling operations in this highly challenging environment will be conducted in a safe and environmentally responsible manner, while protecting the marine, coastal, and human environments, and Alaska Natives’ cultural traditions and access to subsistence resources.”

Hopper said: “The unique Arctic environment raises substantial operational challenges. These new regulations are carefully tailored to ensure that any future exploration activities will be conducted in a way that respects and protects this incredible ecosystem and the Alaska Native subsistence activities that depend on its preservation.”

Salerno added: “Conducting safe and environmentally responsible Arctic exploratory drilling operations presents a variety of technical, logistical and operational challenges. This rulemaking seeks to ensure that operators prepare for and conduct these operations in a manner that drives down risks and protects both offshore personnel and the pristine Arctic environment.”

These regulations complement the previously announcedFinal Well Control Rule, released in April. While the Well Control Rule applies across the entirety of the OCS, including the Arctic OCS, many of the provisions of the final Arctic regulations announced today go beyond the scope of the Well Control Rule and address the unique challenges posed by the Arctic operating environment, especially provisions that put in place systems and processes to further reduce risk and provide rigorous safeguards for Alaska’s North Slope coastal communities and the sensitive Arctic environment.

The agencies developed the regulations with significant public input from the State of Alaska, North Slope communities, Alaska Native tribes and organizations, industry, and non-governmental organizations, DoI said. An environmental assessment, pursuant to the National Environmental Policy Act, was also prepared in conjunction with this rule and more than 100,000 individual comments were received on the Notice of Proposed Rulemaking.

Although there have been Arctic lease relinquishments, operators continue to hold a number of leases in the Beaufort Sea Planning Area and one in the Chukchi Sea Planning Area that have not expired. Finalizing these regulations will ensure that, should operators decide to act upon their leases or any future leases in these planning areas, they will operate with robust safety and environmental protections in place.

NOIA response

National Ocean Industries Association President Randall Luthi issued a statement on the Final Arctic Rule after testifying in Washington yesterday at a hearing on theOCS planning sale

“Given current market conditions and the president’s apparent sway to environmental groups opposed to any exploration in the Arctic, the release of the Arctic rule provides a thread of hope for Alaska residents and US consumers that an Arctic oil and gas program will move forward as the Department of the Interior finalizes the 2017-2022 Five Year Leasing Plan.

“However, beyond that hope, the rule may not provide much optimism to the offshore industry other than finally knowing the regulatory requirements.

“Despite taking years to write, the rule does not accurately reflect current industry capabilities and includes unnecessary requirements, such as same season relief wells, which may not be needed due to the availability of new response and containment equipment. Prescriptive requirements in the rule could thwart industry innovation and development of new technology, and may not actually increase operational safety.

“Arctic oil and natural gas development is integral to national energy security and a vital source of jobs for the people of Alaska, and should remain so. Former military leaders have urged the administration to keep the Arctic in the 2017-2022offshore leasingprogram, citing important national security implications. With an estimated 23.6 Bbbl of oil and 104.4 tcf of natural gas in the Beaufort and Chukchi seas, a strong Arctic offshore program can ensure that both Alaska and the lower 48 benefit from jobs, revenue, and energy security.

“The offshore industry has shown that oil and natural gas development can be done safely in Arctic conditions. Even as we review the provisions of this rule, other countries, includingCanada, Greenland, Russia and Norway, are already taking steps to explore and develop Arctic OCS resources.

“We look forward to working with the Bureau of Safety and Environmental Enforcement to see that this rule is implemented in a manner that will enhance Arctic safety and foster a robust Arctic energy leasing program.”


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