Environmental groups seek intervention in oil industry effort to preserve Arctic leases

Drillship Kulluk, 2012 - photo courtesy Royal Dutch Shell
The drillship Kulluck in the Beaufort Sea, 2012. Photo courtesy Royal Dutch Shell PLC.

The environmental advocacy community aims to have a voice as the Department of Interior addresses oil industry arguments that rights to drill for oil in Arctic seas were unlawfully taken away.

In a motion filed Wednesday with the Interior Board of Land Appeals, nine organizations asked for permission to intervene in two Royal Dutch Shell PLC subsidiaries’ efforts to force the Obama administration to extend exploration leases for five years.

“The agency was right to reject Shell’s extension request, and we look forward to helping it defend that decision,” Erik Grafe, an attorney at Earthjustice who is representing the groups, said.

Royal Dutch Shell announced on Sept. 28 that it would cease all exploration activities in the Alaskan Arctic. However, the oil giant had asked the Obama administration in July 2014 to grant a Suspension of Operations for its leases in the Beaufort and Chukchi seas. In legal terms, an SOO is a pause in the duration of an exploration lease that allows it to be extended by a time equivalent to that lost when drilling is economically impractical.

The Department of Interior’s Bureau of Safety and Environmental Enforcement then said on Oct. 16 that it had denied the SOO request by the two subsidiaries.BSEE found that Shell had failed to provide a “reasonable schedule” of exploration resumption.

As a general rule, companies can retain marine exploration leases only if they are actively engaged in an effort to find and extract energy resources.

Shell Gulf of Mexico Inc. and Shell Offshore Inc. filed an appeal of the BSEE decision with IBLA, the department’s panel of administrative judges, on Dec. 15. The subsidiaries have not yet filed a statement of the reasons they argue justify a reversal of BSEE’s decision.

The Beaufort and Chukchi leases are due to expire in 2017 and 2020.

Conoco-Phillips Co., another giant in the energy industry, has also asked IBLA to force the administration to grant it an SOO for its Arctic leases.

NYT: Obama administration to allow drilling off Atlantic coast, ban it in Arctic seas

The New York Times, in an online article that appeared Monday evening, reports that the Obama administration will announce Tuesday a decision to allow oil exploration on the Atlantic coast while forbidding it in areas of the Beaufort and Chukchi Seas off Alaska.

Areas along the Eastern seaboard that would be affected by the Department of Interior’s Bureau of Ocean Energy Management decision would be between Virginia and Georgia.

No oil exploration has occurred off the country’s Atlantic coast since the early 1980s. However, political pressure to resume the practice has grown in recent years. In March 2010 President Barack Obama said that he favored drilling off the East coast states shorelines, but in the aftermath of that year’s Deepwater Horizon oil spill along the Gulf coast, the Department of Interior decided to hold off issuing any leases until at least 2017.

A Dec. 2014 study by BOEM concluded that the mean quantity of oil beneath the Atlantic waves and under the continental shelf could be as much as 4.72 billion barrels. The amount exploitable between Virginia and Georgia would likely be as much as about 3 billion barrels, according to the agency. BOEM also found that the area along the coast that encompasses Virginia, North Carolina, South Carolina, and Georgia may also hide about 25 trillion cubic feet of natural gas.

The decision on Arctic drilling would follow the announcement Sunday by President Barack Obama that he will ask Congress to designate more than 12 million additional acres of the Arctic National Wildlife Refuge as wilderness. That designation, if approved by Congress, would included the refuge’s coastal plain.

About 7 million acres of the 54-plus year old Arctic National Wildlife Refuge was preserved from most forms of natural resource exploitation in 1980.

Obama’s effort to nearly triple the wilderness acreage in the Mollie Beattie Wilderness would, if successful, create the largest single component of the National Wilderness Preservation System.

 

Obama administration to tighten controls on oil and gas industry’s methane emissions

Oil and gas exploration wells and associated infrastructure emit methane to the atmosphere. Methane is the second-most common greenhouse gas. Image courtesy Wikimedia.
Oil and gas exploration wells and associated infrastructure emit methane to the atmosphere. Methane is the second-most common greenhouse gas. Image courtesy Wikimedia.

The U.S. Environmental Protection Agency has decided to move forward with rules that could reduce methane emissions from oil and gas exploration wells and associated equipment by up to 45 percent by 2025.

The new regulations are expected to be proposed this summer and to be finalized in 2016.

“Achieving the Administration’s goal would save up to 180 billion cubic feet of natural gas in 2025, enough to heat more than 2 million homes for a year and continue to support businesses that manufacture and sell cost-effective technologies to identify, quantify, and reduce methane emissions,” a statement by the White House said.

The Wednesday announcement from the White House also said that the new regulations would limit volatile organic compound emissions from oil and gas infrastructure.

The new regulation, which is expected to be proposed during the coming summer, would apply only to new or altered oil and gas exploration or extraction systems, at least initially.

The White House said that it would encourage the oil and gas industry to voluntarily reduce emissions from existing oil and gas wells and associated pumps, booster and compressor stations, and well site delivery systems.

“If the reported target is correct, and if there’s a solid program offered to achieve it, then this is indeed a landmark moment,” Fred Krupp, president of Environmental Defense Fund, said in a statement released Tuesday after the New York Times reported the administration’s planned announcement. “Methane pollution is both an environmental problem and a needless waste of energy, and we need responsible oversight of an issue that industry has failed to address.”

Methane is the country’s second-most common contributor to atmospheric warming. It accounts for nine percent of U.S. greenhouse gas emissions but is a far more effective trapper of heat than carbon dioxide.

According to the most recent U.S. inventory of greenhouse gas emissions, during 2011 the country’s oil and gas producers leaked, flared, or vented enough methane to match the emissions of about 200 coal-fired power plants.

Administration efforts to limit methane emissions from oil and gas infrastructure on private lands are not the only planned federal programs aimed at cutting methane accumulation in the atmosphere. President Barack Obama called for inter-agency efforts to limit methane emissions in his March 2014 Climate Action Plan.

The U.S. Department of Interior’s Bureau of Land Management will likely propose one of the more impactful of those efforts this spring, a regulation that would limit methane emissions by oil and gas producers operating on U.S. public lands under its control.

Methane emissions from oil and gas facilities have declined by about 11 percent since 1990, according to the U.S. government’s 2014 greenhouse gas emissions inventory, but emissions of the compound have trended upward in recent years. Moreover, a paper published last year in Science suggested that such emissions may be under-estimated by as much as 50 percent.

Shell again asks Interior to allow Arctic oil drilling

Bowhead whales inhabit the shallow Chukchi Sea. An endangered species, Balaena mysticetus can grow to 40 feet in length and weigh up to 100 tons. Walruses, ringed seals, a variety of whale species, and polar bears also inhabit the Chukchi Sea, as do millions of sea birds of many species. Photo courtesy National Oceanic & Atmospheric Administration, photo by Dave Rugh.
Bowhead whales inhabit the shallow Chukchi Sea. An endangered species, Balaena mysticetus can grow to 40 feet in length and weigh up to 100 tons. Walruses, ringed seals, a variety of whale species, and polar bears also inhabit the Chukchi Sea, as do millions of sea birds of many species. Photo courtesy National Oceanic & Atmospheric Administration, photo by Dave Rugh.

Oil giant Royal Dutch Shell PLC has decided to again seek U.S. government permission to drill for oil in the Arctic.

The company filed an exploration plan with the Department of Interior’s Bureau of Ocean Energy Management on Thursday, according to a report in Financial Times.

An earlier effort to obtain approval for drilling in the fragile Chukchi Sea was blocked by the federal appeals court in San Francisco, which ruled that BOEM’s environmental impact statement on $2 billion worth of leases sold to Shell did not comply with federal law. The decision in Native Village of Point Hope v. Jewell pushed Shell’s nearly decade long effort to extract hydrocarbons from some of the most environmentally sensitive marine areas on Earth back to the drawing boards.

Shell has also experienced a series of machinery disasters in the Arctic, including the grounding of a vessel off the coast of Sitkalidak Island, Alaska in 2012. A Coast Guard report on that incident released last April concluded that “inadequate assessment and management of risks” was a principal cause of it.

Within U.S. terrritorial waters, the federal government owns the sea and seabed beyond 5.6 kilometers past the shoreline. Two statutes that date back to the 1950s – the Submerged Lands Act and the Outer Continental Shelf Lands Act – together authorize the secretary of the interior to lease submerged oil and gas deposits. However, that authority is subject to a variety of constraints imposed by broadly applicable environmental laws, including the National Environmental Policy Act. NEPA requires federal agencies to study the environmental impact of “major federal actions” before moving forward with them.

The drilling rig Kulluk ran aground near Alaska on Dec. 31, 2012. This image shows the distressed vessel on Jan. 1, 2013. Image courtesy Wikimedia.
The drilling rig Kulluk ran aground near Alaska on Dec. 31, 2012. This image shows the distressed vessel on Jan. 1, 2013. Image courtesy Wikimedia.

 

Colorado adopts new air quality rules for oil and gas industry; first to cover methane

Colorado has adopted new air pollution rules that, for the first time, limit methane emissions from oil and gas facilities.

The regulations came over the opposition of the state’s primary oil and gas trade associations, though they were supported by the three companies who are the biggest players in Colorado’s energy industry.

“The new rules approved by Colorado’s Air Quality Control Commission, after taking input from varied and often conflicting interests, will ensure Colorado has the cleanest and safest oil and gas industry in the country and help preserve jobs,” the state’s Democratic governor, John Hickenlooper, said in a statement.

Hickenlooper secured the agreement of powerhouse operators Anadarko Petroleum Corp., Encana Corp., and Noble Energy, Inc. to the new rules before asking AQCC to adopt them.

The new rules will require oil and gas companies to find and fix methane leaks. They also include a mandate that will force those companies to deploy technology capable of capturing 95 percent of methane leaks.

Methane is a powerful greenhouse gas, with as much as 30 times the heat-trapping capability as carbon dioxide.

Methane is not the only focus of Colorado’s new oil and gas industry air pollution rules. They also target volatile organic compounds that lead to ozone accumulation in the atmosphere. Colorado’s Front Range has fallen out of compliance with the air quality standard for ozone required by the federal Clean Air Act as oil and gas production in the region has accelerated in recent years.

The AQCC held four days of hearings on the rules before adopting them Sunday on an 8-1 vote.

Proposed new air quality regulations in Colorado draw acclaim

Colorado has proposed revisions to the state’s air quality regulations that aim to crack down on pollution by oil and gas operations, including first-in-the-nation provisions that would limit methane emissions from the industry’s infrastructure.

Gov. John Hickenlooper announced the changes Monday.

“The rules will help Colorado prepare for anticipated growth in energy development, while protecting public health and the environment,” Hickenlooper said. “They represent a significant step forward in addressing a wider range of emissions that before now have not been directly regulated.”

Methane is among the most potent of greenhouse gases. The second-most prevalent warming air pollutant in the U.S., after carbon dioxide, it has 20 times the impact of CO2 over a century.

It constitutes as much as 90 percent of natural gas and is emitted during all stages of the process to extract the booming energy source from subterranean chambers and caverns.

A January 2013 study published in the journal Nature concluded that as much as nine percent of the methane extracted from the ground during hydraulic fracturing operations in Colorado and Utah escapes to the atmosphere. 

Unlike federal air quality rules, the Colorado proposal would impose specific limits on discharges of the gas to the atmosphere.

The proposal would also require oil and gas producers, who in Colorado are primarily engaged in hydraulic fracturing, to detect leaks from storage tanks, pipelines, and other facilities, repair any such leaks on a specified timeline, and to conduct regular inspections of potential air pollutant sources.

The rules would cover volatile organic compound (VOC) emissions in addition to being the first in the nation to specifically limit methane discharges to the air.

A prominent spokesperson for the environmental community lauded the Colorado proposal, as did representatives of the energy industry in the state.

“If this package is adopted, Coloradans will breathe easier, knowing they have the best rules in the country for controlling air pollution from oil and gas activities,” Fred Krupp, the president of Environmental Defense Fund, said.

A joint statement by energy companies Anadarko, Encana, and Noble promised support for the regulations.

“This collaboration is a good model for developing effective regulations and activities to monitor, control and reduce methane leaks and VOCs,” the statement said. “The process and increased accountability established by the proposal will provide transparency and build public trust.”

The new rules will not be finalized until after the Colorado Air Quality Control Commission conducts hearings.

The Hickenlooper administration’s proposal for increased regulation of the air pollution caused by the state’s burgeoning oil and gas industry follows indications that the state’s residents are becoming restive over the presence of extraction activities.

Four communities along the northern Front Range voted earlier this month to ban, either permanently or for several years, fracking operations within their municipal boundaries. 

AP: Nearly 300 oil spills in ND in two years, none reported to public

The Associated Press reports that, in North Dakota, nearly 300 oil spills occurred during the last two years and the public was not notified of any of them.

North Dakota is the second-largest producer of oil in the United States.

Attention to the ubiquity of oil spills in the northern Great Plains state was drawn by a significant leak in its northwestern region earlier this month. That spill, which exceeded 20,000 barrels, was not announced to the public for 11 days after it commenced.