RFF speakers relay challenges faced by Alaskan offshore oil developers

Significant problems ranging from the lack of deepwater ports and spill-response systems to potential impacts on wildlife and indigenous populations need to be solved before US Arctic offshore oil exploration and production moves ahead, speakers agreed at a Resources for the Future (RFF) event.

“Despite ice melt elsewhere, Alaska’s North Coast remains icebound for most of the year,” said David J. Hayes, a former deputy US Interior secretary who now teaches at Stanford University’s Law School. “Intrusion and scour can become problems. If there is a spill, it has to be addressed before the ice comes in.”

There’s little supporting infrastructure in comparison to the Gulf of Mexico, and on-site well control and containment capabilities don’t exist, he said. Operators would have to bring up the necessary spill infrastructure to work safely offshore in the US Arctic, he said.

Hayes’s remarks came days after the National Petroleum Council issued a report saying technology exists to explore for and produce crude offshore in the US Arctic, but governments, the oil and gas industry, and other stakeholders will need to work together to build the necessary public confidence that it can be done (OGJ Online, Mar. 27, 2015).

RFF Senior Policy Advisor Jan Mares, who worked on the NPC study, said that significant spill-prevention and response work has been done since the 2010 Macondo deepwater well blowout and spill. “There are multiple prevention barriers,” he said. “If there is a spill, there are things that can be used from a subsea shutoff valve below the blowout preventer that operates as an independent auxiliary BOP to a capping stack.

“Weather, ice, and related factors affect operating decisions in Alaska,” Mares said. “There’s a lot we know, but we need to know more.”

Understand broader context

US President Barack Obama’s executive order directing “a gaggle of federal agencies” in Alaska to work together has improved permitting processes, Hayes said. “But in the Arctic, it’s not smart to go project-by-project…with a limited pinpoint decision without understanding the broader context.”

William Brown, the US Bureau of Ocean Energy Management’s chief environmental officer, said a new Arctic Standards Rule codifies 2012 requirements, including having an integrated operating plan using several agencies and improving contractor management.

“Vessel traffic has become another issue,” he said. “In 2012, when Shell worked up there, 90% of it was unrelated to energy. It was even more in 2014.” International Arctic research cooperation is growing through organizations such as the International Petroleum Regulators Forum, Brown said.

Willie Goodwin, a former mayor of Kotzebue, Alas., said local residents need to be more directly involved in decisions affecting their lives that now are made thousands of miles away. More consultation needs to take place, he said. “The environment itself needs to be better understood. We know what’s going on out there,” Goodwin said.

“There still are enormous challenges,” said Hayes. “We’re really not investing in the Arctic right now to deal with conditions up there where the oil industry has been in the lead, but commercial shipping is quickly catching up. The big question is whether the US government can effectively implement a cross-agency, integrated management approach in Alaska.”

Contact Nick Snow at nicks@pennwell.com.

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