Greenfield Report: Regulators & Industry Continue Efforts to Enhance Safety of Offshore OCS Oil & Gas Energy Dvlpmnt

HBW Resources: Greenfield Offshore Energy Report

Below is a summary of publicly available activities currently underway that could affect the development of offshore oil and gas resources prepared by Brent Greenfield, HBW Resources’ Director of Ocean Policy and Regulatory Affairs.

Interior Official Discusses Possibility of Proposing Atlantic Lease Sales in Next 5-Year Plan

The Houston Chronicle recently reported on statements by a senior Interior Department official that Atlantic Outer Continental Shelf oil and gas lease sales could be proposed in the 2017-2022 offshore leasing program even if new seismic data has not yet been obtained.

The paper reported that “Interior Department officials insisted they will take an expansive view when they begin piecing together the 2017-2022 leasing plan sometime next year.  Atlantic acreage won’t be ruled out just because seismic data isn’t in hand, stressed Tommy Beaudreau, Interior’s acting assistant secretary for land and minerals management.”

In referencing new seismic data and military activities in the region, Beaudreau stated that “[w]e don’t have to have the full set of data from the seismic work and we don’t have to completely work through the issues around deconfliction in order to make a decision around scoping a new five-year plan.”

The Chronicle reported that Beaudreau “said the ocean energy bureau was open to tentatively scheduling lease sales in the Atlantic – as it has done for waters around Alaska – with the idea that they could be canceled if necessary information isn’t ready in time.  An Atlantic lease sale could be penciled in for 2012, for instance, to allow time for harvesting geological and environmental data.”

“Ultimately,” the paper said, “any final decision on the issue will rest with Interior Secretary Sally Jewell.”

BSEE Director Addresses Offshore Safety Conference in Australia

Bureau of Safety and Environmental Enforcement Director Brian Salerno recently addressed attendees at the International Regulators Forum 2013 Offshore Safety Conference in Perth, Australia.  Salerno was joined at the conference by BSEE’s Chief of Offshore Regulatory Programs Doug Morris and Gulf of Mexico Regional Director Lars Herbst.

Salerno noted that “the inherent risks associated with all offshore activities persists,” citing three well control incidents and an explosion resulting in loss of life that occurred during the past year in shallow water.

In addressing how to manage risk, Salerno discussed the need to identify risk (operational, financial, technical, geologic, and human-related), quantify risk, define acceptable risk levels, mitigate risk, and adopt a safety culture within industry.  He also noted that BSEE is “near completion” of a proposed blowout preventer rule.

While drilling activities in Alaska in 2012 “were accomplished safely,” Salerno says that a “series of mishaps and near-mishaps made it clear that companies need to address risks across all phases of their operations, including those that are primarily conducted by contractors.”

Salerno called regulations “the basic ground rules,” adding that “[w]e want to see companies exceed those standards and fully embrace the elements or characteristics of a safety culture” that is detailed in the agency’s recent policy statement.  He called safety something “easier to measure when it is absent.”

Salerno said that the public “expect[s] a regulatory program that is fair, consistent, firm, and most importantly enables the nation [to] meet its energy demands while protecting workers and the environment.”

He also discussed U.S. collaboration with Mexico, and engagement with the Arctic Council in advance of the 2012 drilling season in Alaska, adding that engagement with the Arctic Council is continuing as BSEE addresses the Arctic-specific rulemaking and that “we encourage our partners to share their experiences as companies seek to develop resources in this frontier environment.”

BOEM Releases Final EIS for Proposed Eastern Gulf Lease Sales

The Bureau of Ocean Energy Management has issued a Notice of Availability of the Final Environmental Impact Statement (see volumes I and II) for proposed Lease Sales 225 (2014) and 226 (2016) in the Eastern Gulf of Mexico Planning Area.

The Final EIS features a preferred alternative that would offer for lease all unleased blocks within the proposed Eastern Planning Area lease sale area for oil and gas operations.  The proposed lease sale area covers roughly 657,905 acres and includes blocks previously included in the Eastern Planning Area Lease Sale 224 Area and a triangular-shaped area south of this area bordered by the Central Planning Area boundary on the west and the Military Mission Line on the east.

As of August 2013, roughly 465,200 acres of the proposed lease sale area are currently unleased.

BOEM Issues Draft SEIS for Western Gulf Lease Sales 

The Bureau of Ocean Energy Management (BOEM) has announced the availability for public comment of a Draft Supplemental Environmental Impact Statement (SEIS) for proposed Western Gulf of Mexico (GOM) Lease Sales 238 (2014), 246 (2015), and 248 (2016).  BOEM initiated the scoping period in July and held public meetings in Galveston, TX and New Orleans, LA.

The Draft SEIS features a preferred alternative that would offer for lease all unleased blocks within the proposed Western Planning Area lease sale area for oil and gas operations, with the exception of whole and partial blocks within the boundary of the Flower Garden Banks National Marine Sanctuary.  The proposed lease sale area covers roughly 28.58 million acres, of which ~20.8 million acres are currently unleased.

The Draft SEIS updates analyses in the 2012-2017 Multisale EIS and the Final SEIS for proposed Western GOM Planning Area Lease Sale 233 (2013) and Central GOM Planning Area Lease Sale 231.  According to the announcement, the Draft SEIS also analyzes “relevant new information regarding the Deepwater Horizon explosion, oil spill, and response.”

Comments on the Draft SEIS are due by Thursday, December 12, 2013.

BOEM Announces March 2014 Date for Central Gulf of Mexico Lease Sale 

The Bureau of Ocean Energy Management (BOEM) has announced that BOEM will hold Central Gulf of Mexico (GOM) Oil and Gas Lease Sale 231 in New Orleans, LA on Wednesday, March 19, 2014.  Affected states can comment on the size, timing, and location of the proposed lease sale within 60 days following their receipt of the Proposed Notice of Sale.

The sale will offer roughly 7,508 unleased blocks covering ~39.4 million acres of federal waters that are located between 3 and ~230 miles offshore Louisiana, Mississippi, and Alabama in water depths ranging from 9 to more than 11,115 feet.  BOEM estimates that the sale could generate the production of 1 billion barrels of oil and 4 trillion cubic feet of natural gas.

Comments Sought on New Tank Vessel Oil Transfer Regulations

The Coast Guard has announced that it is seeking public comments new measures that could be implemented to reduce the risk of oil spills in oil transfer operations from or to a tank vessel.  The announcement notes that the new regulations are required under the Coast Guard Authorization Act of 2010.

The Coast Guard says that it intends to focus on operations with “the highest risks of discharge,” including operations at night and in inclement weather.  In addition, the Coast Guard states that it is considering whether to establish new regulations or amend existing regulations for the use of equipment, such as putting booms in place for transfers, safety, and environmental impacts, as well as operational procedures like manning standards, communication protocols, and restrictions on operations in high-risk areas.

The Coast Guard adds that it is taking into account personnel safety and effectiveness of available procedures and equipment for preventing or mitigating transfer spills.

Comments are due by Friday, November 22, 2013.

National Offshore Safety Advisory Committee to Hold Public Meeting Next Week

The Coast Guard has announced that the National Offshore Safety Advisory Committee (NOSAC) and six of its subcommittees will hold public meetings at the offices of Det Nosrke Veritas in Katy, TX on November 13-14, 2013 to discuss various offshore oil and gas-related issues.  The meeting will include a public comment period on November 14.

NOSAC provides advice and recommendations to the Homeland Security Department on matters and actions concerning activities directly involved with or in support of the exploration of offshore mineral and energy resources as they relate to matters within Coast Guard jurisdiction.

National Spill Control School Receives Grant to Develop Oil Protection Plan for Texas Coast

Texas A&M University-Corpus Christi recently announced that researchers at the university’s National Spill Control School (NSCS) are establishing a new Texas Tidal Inlet Protection Strategies Program “to protect our state’s sensitive bays and estuaries from the potential harm of offshore oil spills.”

Using a $144,430 grant from the Texas General Land Office, the NSCS will develop an oil protection plan for the Texas coast that will encompass 22 tidal inlets spanning from the Rio Grande River to the Sabine River.  Specific plans that detail how to contain and potentially divert spilled oil will be developed for each inlet.

According to the announcement, action guidelines will ensure that oil is removed while it is still in the water rather than removing it from tidal inlet shorelines, flats, mangroves, inland bays, and estuaries.

Center For Offshore Safety Accredits Three SEMS Auditors

The Center for Offshore Safety (COS) recently announced that it has fully accredited the following organizations to conduct COS Safety and Environmental Management System Audits: ABS Quality EvaluationsBureau Veritas Certification, and DNV Business Assurance.

The three companies will offer audits that evaluate the implementation as well as the effectiveness of SEMS programs, which can lead to certifications that meet COS standards.  Under a Bureau of Safety and Environmental Enforcement rule finalized earlier this year, third-party audits of offshore safety and environmental management systems are required by June 4, 2015.

COS Executive Director Charlie Williams called the approval “an important accomplishment for the COS and these companies as it demonstrates further commitment to protecting the environment and improving offshore safety,” adding that “[a]ccredited independent third party audit service providers and certified SEMS audits are a key part of COS’s mission.”

U.S.-Mexico Transboundary Hydrocarbon Agreement Passes Senate 

The U.S. Senate has passed legislation by unanimous consent that would approve the
Agreement between the United States of America and the United Mexican States Concerning Transboundary Hydrocarbon Reservoirs in the Gulf of Mexico (signed in Los Cabos on February 20, 2012), and authorize the Interior Secretary to take actions including the following:

  • Approve unitization agreements and related arrangements for the exploration, development, or production of oil and natural gas from transboundary reservoirs or geological structures;
  • Disclose (as necessary under the Agreement) information pertaining to such activities that may be considered confidential, privileged, or proprietary; and
  • Accept and take action not inconsistent with an expert determination under the Agreement

The legislation differs from the bill passed by the House in late June, and must therefore be adopted as is by the House or reconciled in conference and again passed by the House and Senate.
U.S. House of Representatives Passes Legislation Addressing National Ocean Policy

The U.S. House of Representatives last week voted 225-193 in favor of an amendment to H.R. 3080 (Water Resources Reform and Development Act of 2013) that precludes the use of any programs or actions authorized by the legislation from being used to further implementation of the coastal and marine spatial planning and ecosystem-based management components of the National Ocean Policy Executive Order.  The House later approved the overall bill in a 417-3 vote.

In addition to making certain findings, the amendment also requires the Secretary of the Army to submit a report to Congress that details all activities engaged in and resources expended in furtherance of the National Ocean Policy, as well as any FY 2014 budget requests in support of National Ocean Policy implementation.

It is expected that a conference committee will be appointed to reconcile differences with the U.S. Senate’s version of the bill (S. 601).  The Senate legislation includes authorization for the establishment of a National Endowment for the Oceans that would be available to support entities including Regional Planning Bodies created under the National Ocean Policy Executive Order and tasked with developing ecosystem-based coastal and marine spatial plans.

Northeast Regional Planning Meeting Postponed

Due to the recent federal government shutdown, the Northeast Regional Planning Body has announced that it is postponing it next meeting, which was originally scheduled to take place on November 12-13 in the Boston, MA area.

The RPB’s next meeting is expected to focus primarily on approving regional ocean planning goals and objectives and discussing an accompanying draft work plan.  It is anticipated that revised draft regional ocean planning goals and objectives and a draft work plan will be posted online in advance of the meeting, which is likely to take place in the January-February 2014 timeframe.

The Northeast Regional Planning Body is tasked under the National Ocean Policy Executive Order with developing a Coastal and Marine Spatial Plan for Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont.

Additional Information

For additional information, contact Brent Greenfield with HBW Resources. His contact information is below.

Brent Greenfield
HBW Resources
2211 Norfolk Street, #410
Houston, TX 77098
Tel: 713-337-8810
E-mail: bgreenfield@hbwresources.com
Web: http://www.hbwresources.com

If you have any general questions, please give me a call anytime. Previous reports and other updates can be found at the new HBW Resources Intelligence Tab at: https://hbwresources.com/intelligence/.   Hope you have a great day.

Thanks,

Michael Zehr
HBW Resources
1666 K Street, NW, Suite 500
Washington, DC 20006
Direct: 202-429-6081
Cell: 202-277-3927
E-mail: mzehr@hbwresources.com
Twitter: @mzehrhbw