Salerno considers same-season relief wells basic Arctic offshore tool

US Bureau of Safety and Environmental Enforcement Director Brian Salerno disagreed with oil and gas industry comments that a requirement in proposed regulations for oil and gas operators working offshore Alaska’s north coast be capable of deploying a same-season relief well to control a blowout as unreasonable and impractical (OGJ Online, Feb. 20, 2015).

Many industry comments received by BSEE and the US Bureau of Ocean Energy Management in response to their proposed requirements cited the National Petroleum Council’s late March report outlining prime Arctic oil and gas issues (OGJ Online, Mar. 27, 2015), Salerno said in his written statement to a US House Energy and Natural Resources Committee subcommittee.

“They have specifically mentioned Canada’s policy, which also requires a same-season relief well,” he told the Energy and Mineral Resources Subcommittee on June 16. “The NPC report implies that Canada is considering changing its policy.”

He said, “At this time, that is not the case. In fact, following a review of all components of drilling in the Arctic, Canada recently affirmed the same season relief well requirement, although Canada remains open to proven alternative technologies to meet this standard of care.”

Salerno said the two agencies responsible for US Outer Continental Shelf oversight also received industry comments that an alternative well kill system has been developed that would be just as effective as a relief well.

“If this technology exists, we have not seen it,” he said. “This type of technology has never been deployed on the [US OCS]. If it has been developed, we would be very interested in examining it, and we would work with the Ocean Energy Safety Institute to review its effectiveness.”

Potentially wider application

Such technology, if effective, may be suitable for deployment across the OCS, not just in the Arctic, Salerno testified. “However, the Arctic is not the place where we want to rely on uncertain technology as a substitute for a relief well,” he said. “The absence of readily available back-up, coupled with the potential environmental damage, requires a very cautious approach. Technology used in the Arctic should be proven.”

Salerno spoke at a hearing where subcommittee Democrats generally argued that the proposed regulations were too lenient, and Republicans contended that the rules would be too strict. He said the requirements would require operators to develop an integrated operations plan which would detail all of an exploration program’s phases for advance planning and risk assessment purposes.

They also would require operators to submit region-specific oil spill response plans and have prompt access to source control and containment equipment in addition to having a separate rig to promptly drill a relief well if a blowout occurs, Salerno said. The proposal would allow for continued innovation as long as the operator demonstrates its safety and environmental performance satisfies the proposed requirements, he said.

Three other witnesses disagreed. Richard Glenn, executive vice-president, lands and natural resources at Arctic Slope Regional Corp. (ASRC), said the agencies’ proposed rule contains requirements already in place elsewhere that would increase operators’ costs and confuse regulatory jurisdiction.

“Ultimately, ASRC believes that the overly prescriptive nature of the Arctic Standards Rule is likely to hinder, rather than foster, development of oil and gas resources on the Arctic OCS,” Glenn said.

More cooperation needed

Drue Pierce, a senior policy advisor at Crowell & Moring LLP’s Washington office who worked on the NPC study, called for adoption of its approach which she considers more balanced that DOI’s proposed requirements.

 “The public will not be confident in the decisions being made by the regulators nor in the activities planned by industry until our regulators work together with industry to perform analysis, investigations, and any necessary demonstrations to validate new and advanced technologies,” Pierce said.

Christine A. Resler, GeoMarket manager for Schlumberger Ltd.’s Alaska division in Anchorage, said it’s essential that regulators and the industry focus on primary barriers (blowout preventers, casing and cementing, and effective well designs) to prevent the release of hydrocarbons into the environment.

“These technologies are evolving with advances in primary barriers technology and well control methodologies. Current and future regulation must be flexible enough to incorporate these evolving advances,” Resler said. “The absence of flexibility in the current regulations does not allow for technological advances and best practices to be incorporated to improve operational performance in a timely manner.”

The fifth witness, Michael LeVine, Pacific senior counsel for the Oceana environmental group in Juneau, said DOI’s proposed requirements do not go far enough to address significant concerns associated with Arctic oil and gas drilling. “[It] could‑and should‑mandate that drilling activities not be considered until prevention and response techniques have been demonstrated to be effective in Arctic conditions. The agency has not done so,” LeVine said.

Salerno noted that BSEE and BOEM were reviewing the more than 100,000 public comments it received on the proposed regulations. “Amongst the general public, the comments have been resoundingly either against this rule or supportive of the proposed rule to the extent that drilling in the Arctic is to be allowed,” he said.

“These comments are telling us that industry will be operating in an environment where there is very little tolerance for error,” BSEE’s director said. “Given the risks, industry must be expected to operate to the highest safety standards in the Arctic.”

Contact Nick Snow at nicks@pennwell.com.

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