HBW Resources: Greenfield Offshore Report


HBW Resources: Greenfield Offshore Report

Below is a summary of publicly available activities currently underway at the federal, state and international levels that could impact the development of offshore oil and gas resources.  With numerous legislative bodies now in session, HBW Resources is monitoring these activities to ensure that responsible policies based on sound science are advanced. 


Murkowski and Landrieu Introduce Energy Revenue-Sharing Legislation


U.S. Senators Lisa Murkowski (R-AK) and Mary Landrieu (D-LA) announced their introduction of legislation that would provide 27.5% of revenue from offshore traditional and renewable energy development to coastal states, and an additional 10% if the state creates a clean energy or conservation fund.


In addition, the “Fixing America’s Inequities with Revenues Act,” also co-sponsored by U.S. Senators Mark Begich (D-AK) and Heidi Heitkamp (D-ND), would do the following

  • Accelerate from 2017 to 2013 the date by which Gulf Coast producing states will begin to receive their 37.5% share of revenues from Western and Central Gulf of Mexico Planning Area leases offered since 2007;
  • Gradually lift the statutory $500 million annual cap on revenues kept by Gulf Coast states, which is set to begin in 2015; and
  • Allows state to keep 50% of revenues generated from renewable energy production on federal lands within their borders.


In announcing the legislation, Sen. Murkowski called revenue sharing “critical for the coastal communities that will shoulder the increased demands on their roads, docks and other infrastructure from offshore development.


Sen. Landrieu added that the legislation is “about justice for the coast and jobs for America,” adding that federal policy has allowed onshore energy-producing states to receive 50% of revenues while offshore energy-producing states have received “virtually nothing.”


The proposed legislation has been referred to the Senate Energy & Natural Resources Committee.


Interior Department Holds Central Gulf of Mexico Lease Sale


The U.S. Interior Department announced the conclusion of Central Gulf of Mexico Lease Sale 227 in New Orleans, LA, which garnered over $1.2 billion in high bids from 52 companies for 320 tracts covering roughly 1.7 million acres of federal waters offshore Alabama, Louisiana, and Mississippi.


Following the lease sale, Interior Secretary Ken Salazar said in part that “[d]eveloping public energy resources in the Gulf of Mexico is good for the Gulf’s economy, and reflects President Obama’s commitment to expand oil and natural gas production safely and responsibly…”


BOEM Director and Acting Assistant Secretary for Land and Minerals Management Tommy Beaudreau called the Central Gulf of Mexico “one of the cornerstones of the United States’ domestic energy portfolio” and “central to meeting the Nation’s energy needs and fueling the economy.”


Jewell Nomination Clears Senate Committee, Heads To Full Senate For Consideration


The U.S. Senate Energy & Natural Resources Committee  voted 19-3 to favorably report Sally Jewell’s nomination to be U.S. Interior Secretary. 


During roughly 30 minutes of comments by Committee members before the vote took place, Sen. Mary Landrieu (D-LA) mentioned that she and Sen. Lisa Murkowski (R-AK) recently introduced revenue-sharing legislation.  Committee Chairman Ron Wyden (D-OR) committed that he would work closely with Sen.’s Landrieu and Murkowski on revenue-sharing.


Regarding Jewell’s nomination advancing to the full Senate for consideration, Chairman Wyden said that he has “full confidence in…Jewell’s ability to take on this important assignment,” and that she will “give each member of this committee her ear and her expertise that comes from having managed to pack of host of professional careers…into just one lifetime.”  


USFWS Proposes Critical Habitat Designation For 739 Miles Of GOM/Atlantic Coastline


The U.S. Fish and Wildlife Service (USFWS)  announced that it is seeking comments on its proposal to designate 739 miles of U.S. coastal beach shoreline in Alabama (26 miles), Florida (451 miles), Georgia (69 miles), Mississippi (18 miles), North Carolina (96 miles), and South Carolina (79 miles) as critical habitat for the Northwest Atlantic Ocean Distinct Population Segment (DPS) of the loggerhead sea turtle.  USFWS states that the proposed critical habitat area covers 84% of the documented number of nests within these 6 states.


In September 2011, USFWS and the National Marine Fisheries Service revised the loggerhead sea turtle’s listing from a single worldwide threatened species to nine DPS’s (7 endangered and 2 threatened), and listed the Northwest Atlantic Ocean DPS as endangered.


USFWS notes that oil and natural gas activities occur offshore Alabama, Mississippi, and Florida, stating that “potential direct and indirect [e]ffects to proposed critical habitat could result from associated oil and gas activities” such as pipeline installation and maintenance, coastal based facilities, boat vessel traffic, and spills.


USFWS says primary threats that may impact the proposed critical habitat and require special management or protection include, among other things, coastal development, human-caused disasters and response to human-caused and natural disasters (citing oil spills/spill response and post-natural disaster debris cleanup), in-water and shoreline alterations (including inlet/nearshore dredging and dredging/deepening channels), artificial lighting, climate change, and beach sand placement activities.  Elsewhere, USFWS says that bridge and highway construction on lands adjacent to the proposed critical habitat areas may be affected.


While USFWS notes that it does not expect the proposed designation to “significantly affect” energy supplies, distribution, or use, it also notes that the agency “will further evaluate this issue as we conduct our economic analysis, and review and revise this assessment as warranted.”


In response to the proposed designation, the Center for Biological Diversity (CBD)–which previously petitioned the government for an endangered listing and subsequently engaged in litigation on the matter–responded by stating that under the proposal, “[a]ny new beachside hotels, homes or commercial construction built on protected beaches that require federal permits would need to be reviewed.”


Referencing the National Marine Fisheries Service’s current review of specific areas in the marine environment as potential critical habitat for this DPS, CBD adds that “[a]ny wave-energy, offshore-drilling, or aquaculture projects in or likely to affect the designated ocean critical habitat would also require analysis and assessment to ensure that these activities would not compromise their [turtles’] ability to find food, breed, and migrate safely in their ocean home.”


USFWS seeks comments on, among other things, the prudence of the proposed designation, which areas should be included in the designation, special management considerations or protection that may be needed, land use designations and current or planned activities in the subject areas and their potential impacts, and the economic, national security, or other relevant impacts of the proposed designation.


USFWS notes that it may exclude additional areas from the final rule based on information received during the public comment period, and seeks comments from “independent specialists” to ensure that the proposed designation is grounded in scientifically sound data and analyses.   Additional public review and comment will be sought when USFWS makes available an economic analysis of the proposed designation (analysis is currently being prepared).


Comments on the proposed designation are due by Friday, May 24, 2013, and requests for public hearings on the proposal are due by Thursday, May 9, 2013.


NOAA Seeks Comments On Supplemental EIS For Arctic Oil and Gas Activities


NOAA’s National Marine Fisheries Service  announced that it is seeking comments on a supplemental draft environmental impact statement (SEIS) for oil and gas exploratory drilling and geological & geophysical activities in Alaska’s Chukchi and Beaufort Seas.


Whereas the initial EIS analyzed the effects of up to two drilling programs per year in the Chukchi Sea and up to two drilling programs per year in the Beaufort Sea, the draft SEIS analyzes the effects of up to four drilling programs per year in each area.  The draft SEIS also includes an expanded discussion of the mitigation measures intended to address impacts on marine mammals and marine subsistence users.


According to Deputy Assistant NOAA Administrator Sam Rauch, “NOAA scientists are working hard to learn as much as we can about how oil and gas activities impact marine mammals” and the agency “will continue to work with our partners to develop and put into place strong mitigation measures that will help lessen the impacts of these and other activities in our oceans.”


The announcement notes that the draft SEIS considers various mitigation measures including area closures during whale migration/feeding seasons and traditional whale and seal hunts, in order to “minimize potential harmful effects from sound, accidental discharge of pollutants including oil, and the presence of vessels that will be part of these oil and gas operations.” 


Responding to the draft SEIS announcement, U.S. Sen. Lisa Murkowski (R-AK) said that she “continue[s] to believe it’s unnecessary for the agency to conduct this review,” adding that NOAA “is clearly acting beyond its jurisdiction by analyzing impacts on polar bears and walruses, which are clearly the responsibility of the U.S. Fish and Wildlife Service.” 


Sen. Murkowski stated that she “remain[s] concerned about the scope of the EIS and the potential for area closures and additional mitigation and technological requirements to result in a de facto moratorium on the development of oil and gas in the Arctic.”


U.S. Sen. Mark Begich (D-AK) called the draft SEIS “real progress,” citing the expanded exploration activity that the review examines, and said that “[w]e need to make sure to balance responsible offshore oil and gas development with protection for the subsistence resources that have sustained North Slope residents for centuries.” 


However, he added that “it’s a big document, and we still have a lot of work ahead of us to ensure all agencies and stakeholders are working together.”  Sen. Begich also voiced his concerns about how NOAA is “working with Interior Department agencies to coordinate timing and spatial restrictions on development.”  He said that he will “be watching to make sure this isn’t a bait and switch,” noting that the amount of oil and subsistence resource values at stake “demand our best efforts.”


A final EIS is expected in 2014, and NOAA will begin to accept comments on Friday, March 29, 2013.  Comments are due by Tuesday, May 28, 2013.


National Offshore Safety Advisory Committee To Hold Public Meeting


The Coast Guard announced that the National Offshore Safety Advisory Committee (NOSAC) will hold public meetings in New Orleans, LA on April 17-18 to discuss various issues related to safety of operations and other matters affecting the oil and gas industry.


NOSAC’s Subcommittee on Recommended Standards for Accommodation Service Vessels will meet for two hours on April 17 to discuss its ongoing work.


NOSAC itself will meet on April 18 to review and discuss progress reports and recommendations received from the Subcommittee meeting, using that information and public comments to formulate recommendations to the U.S. Department of Homeland Security.


In addition, the agenda includes other items including the following:


  • Introduction of new Task Statements on, among other things, life-saving and fire-fighting voluntary standards on the Outer Continental Shelf and electrical equipment in hazardous areas on foreign flag mobile offshore drilling units;
  • Update on recent Coast Guard regulations affecting the offshore industry;
  • Coast Guard Outer Continental Shelf (OCS) National Center of Expertise update on Coast Guard OCS training initiatives;
  • Update on International Maritime Organization activities of interest to OCS community;
  • Towing of mobile offshore drilling units;
  • Overview and history of manning mobile offshore drilling units; and
  • Public comment period


Comments on the issues to be considered by NOSAC must be submitted in writing by Tuesday, April 2.


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


Nominations Sought For Upcoming National Offshore Safety Advisory Committee Vacancies


The U.S. Coast Guard  announced that it is seeking applications to fill the following six positions that will become vacant on the National Offshore Safety Advisory Committee (NOSAC) on January 31, 2014:


  • Representative of companies, organizations, enterprises, or similar entities engaged in petroleum production;
  • Representative of companies, organizations, enterprises, or similar entities engaged in offshore drilling;
  • Representative of companies, organizations, enterprises, or similar entities engaged in offshore operations support (by offshore supply or other vessels);
  • Representative of companies, organizations, enterprises, or similar entities providing safety and training services to the offshore industry;
  • Representative of companies, organizations, enterprises, or similar entities providing environmental protection, compliance or response services to the offshore industry; and
  • Representative of companies, organizations, enterprises, or similar entities engaged in offshore oil exploration and production on Alaska’s Outer Continental Shelf


NOSAC members serve a term of up to 3 years (maximum of 3 consecutive terms) and serve at their own expense.  


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


Applications are due by Tuesday, May 28, 2013.


NPDES Permit Reissuance Proposed For O&G Exploration Facilities In Cook Inlet OCS


Last Friday, EPA announced its proposal to reissue the National Pollutant Discharge Elimination System (NDPES) permit for oil and gas exploration facilities in federal waters located in Alaska’s Cook Inlet.  The proposed permit would authorize certain discharges of pollutants into Cook Inlet federal waters from oil and gas exploration facilities subject to limits and requirements designed to minimize pollution and protect water quality. 


EPA also announced that it will hold 3 public hearings on the proposal in Kenai, AK (April 29), Homer, AK (April 30), and Anchorage, AK (May 2).


The existing NPDES permit, which covers oil and gas exploration, development, and production facilities in both state and federal waters in the Cook Inlet, expired on July 2, 2012. 


Under the terms of a Memorandum of Agreement, the Alaska Department of Environmental Conservation is taking over the reissuance of permits addressing discharges to Cook Inlet state waters.  Under the new proposal, EPA would reissue exploration permits in federal waters in Cook Inlet.


Proposed changes from the 2007 NPDES permit include the following:


  • Authorizes discharges from exploration activities, including geotechnical activities, in federal waters;
  • Includes previously deferred areas under BOEM lease sales;
  • Requires submission of a Drilling Fluids Plan with the Notice of Intent;
  • Requires reporting of Chemical Additives Inventory;
  • Require Notice of Intent submission 45 days prior to discharge rather than 30 days;
  • Deletes requirement to submit Notice of Termination within 30 days of cessation of discharging, allowing time to submit End-of-Well Report, due 90 days after drilling ends;
  • Updates analytical method for diesel oil analysis;
  • Adds static sheen testing requirements for discharges of bilge water;
  • Adds requirements to comply with CWA § 316(b) Cooling Water Intake Structures;
  • Requires submission of the Best Management Practices Plan with Notice of Intent; and
  • Allows opportunity for permittees to submit Discharge Monitoring Reports in netDMR


Comments on the proposed permit reissuance are due by Tuesday, May 21, 2013.


Navigation Safety Advisory Council To Hold Public Meeting


The U.S. Coast Guard announced that the Navigation Safety Advisory Council (NAVSAC) will hold a public meeting on April 10-11, 2013 in Arlington, VA to discuss matters related to maritime collisions, rammings, and groundings, inland and international rules of the road, navigation regulations and equipment, routing measures, marine information, diving safety, and aids to navigation systems.


Specifically, among other things, NAVSAC will review, discuss, and formulate recommendations regarding unmanned underwater vehicles, rules/standards of operation for unmanned surface vessels, lights on law enforcement vessels engaged in law enforcement activities, and special distinctive lights for small passenger vessels. 


In addition, NAVSAC will receive an update on the Atlantic Coast Port Access Route Study that has been undertaken to accommodate offshore wind energy development, receive a briefing on Coast Guard formal risk assessments currently being conducted for several U.S. ports/waterways, and receive an update on how the use of the Automatic Information System and the Physical Oceanographic Real Time System support the E-Navigation Strategy that is being developed to establish a framework for data exchange between and among ships and shore facilities.


A public comment period will take place on Wednesday, April 10 from 3:00-4:00 p.m. and on Thursday, April 11 from 11:00 a.m. until the close of the meeting.  Speakers are asked to limit presentations and comments to 10 minutes, and must pre-register and submit written comments by Monday, April 1, 2013.  In addition, public comments or questions may be taken during the discussion and recommendations and new business portions of the meeting.


Comments on the issues to be considered by NAVSAC at its upcoming meeting are also due by Monday, April 1, 2013.


BSEE Issues Two Notices To Gulf of Mexico OCS Lessees and Operators


The U.S. Bureau of Safety and Environmental Enforcement (BSEE) issued two Notices to Lessees and Operators (NTLs) of federal oil and gas leases in the Gulf of Mexico Outer Continental Shelf. 


NTL 2013-G01, which supersedes NTL 2009-G16, pertains to Global Positioning Systems (GPS) for Jack-Up and Moored Semi-submersible rigs.  The NTL notes that BSEE has a “major concern” about mobile offshore drilling units moving off location during a storm, and says that GPS real-time data “provides a valuable tool to prevent future incidents.”


The NTL requires that each Jack-Up and Moored Semi-submersible rig be quipped with a GPS system, with multiple GPS transponders placed in different locations and each transponder capable of relaying data for at least 7 days following passage of a storm.   


BSEE must also be informed of how the agency is being provided with real-time access to the GPS data, and the agency must be notified in the event of any revision or update as to how BSEE is to receive such data.  In the event that a Jack-Up or Semi-submersible rig moves off location, BSEE must be contacted immediately and provided with certain information.


NTL 2013-G02, which supersedes NTL 2010-G03, pertains to wells (holes-in-the-ground) without assigned BSEE API numbers that were drilled prior to 2000.  According to BSEE, there are roughly 500 unidentified completed and/or abandoned wellbores.  The NTL states that collecting data that identifies the location of all boreholes in the Gulf of Mexico will “help BSEE promote safety, protect the environment, and conserve resources.”


Under this NTL, following an extensive BSEE review of internal records, operators of wells where BSEE records indicate additional wellbores may exist will be contacted for assistance in resolving the data gap.  When BSEE requests for information are made, operators are asked to review company databases and records to confirm the information that BSEE has and to provide the requested information (where available).


Transportation Worker ID Credential Requirements Proposed, Public Meeting Announced


The U.S. Coast Guard issued a Notice of Proposed Rulemaking (NPRM) proposing to require owners and operators of certain vessels and facilities to use electronic readers designed to work with the Transportation Worker Identification Credential (TWIC).  The NPRM also proposes other electronic TWIC reader requirements related to recordkeeping and security plan amendments. 


The Coast Guard on Wednesday announced that it will hold a public meeting in Arlington, VA on Thursday, April 18 to receive public comments on the proposal.


 According to the Coast Guard, the proposed rule would build upon existing regulations intended to ensure that unescorted access to secure areas on certain vessels and facilities is limited to only those individuals who have a TWIC card.


Under the proposed rule, electronic TWIC reader requirements would not apply to entities including mobile offshore drilling units, offshore supply vessels, tank vessels carrying high flash point petroleum (i.e. crude oil), or fixed or floating facilities operating on the Outer Continental Shelf that are engaged in the exploration, development, or production of oil, natural gas, or mineral resources. 


However, owners or operators of such vessels and facilities would have to continue to ensure that all individuals seeking unescorted access to secure areas first present their TWICs for inspection.


Such inspections include a visual match of the TWIC photograph to the presenter of the TWIC, a visual check of the TWIC card for signs of tampering/forgery, and visual confirmation that the TWIC card is not expired.


While the Coast Guard notes its decision to propose TWIC reader requirements only for the highest-risk entities, it adds that the decision “should not be read to foreclose revised TWIC reader requirements in the future.”  The Coast Guard states that it “will continue to gather and analyze data to determine how the use of TWIC readers might be appropriate for each risk group.”  


Comments on the proposed rule are due by Tuesday, May 21, 2013.


NOAA Issues Draft Damage Assessment/Restoration Plan For GOM Spill


NOAA announced the availability for public comment a Draft Damage Assessment and Restoration Plan and Environmental Assessment proposing alternatives for restoring natural resource injuries resulting from the November 11, 2005 collision between an integrated tug-barge unit and submerged remains of a collapsed pipeline service platform roughly 50 miles southeast of Sabine Pass, TX in the Gulf of Mexico.


According to NOAA, an estimated 45,846 barrels of oil were discharged in federal waters in the Gulf of Mexico, most of which sank to the ocean floor.  An estimated 43,491 barrels of oil are said to have remained unrecovered at the time that oil spill cleanup operations were discontinued in January 2006.  NOAA’s injury assessment determined that the primary injury resulting from the incident was to offshore benthic habitat.


NOAA’s preferred restoration alternative involves an estuarine shoreline protection and salt marsh restoration project at the Texas Chenier Plan National Wildlife Refuge Complex in Galveston, TX.  Based on the U.S. Coast Guard determination that the responsible party exceeded its liability under the Oil Pollution Act, the restoration plan will be submitted to the Oil Spill Liability Trust Fund for implementation funding.


Comments on the Draft Damage Assessment and Restoration Plan and Environmental Assessment are due by Monday, April 15, 2013.


U.S. Extractive Industries Transparency Initiative Advisory Committee To Hold Public Meetings


The U.S. Interior Department (DOI) on Wednesday announced that the U.S. Extractive Industries Transparency Initiative Multi-Stakeholder Group Advisory Committee will hold a public teleconference on Thursday, April 11, 2013 and a public meeting in Washington, DC on May 1-2, 2013.  Instructions for remotely accessing both meetings are available here.


According to the announcement, agenda items for the April teleconference include the following:


  • Final review and approval of Terms of Reference;
  • Nomination and approval of co-chairs;
  • Approval of the Feb. 2013 meeting minutes;
  • Progress report from the Subcommittee; and
  • Public comments


Individuals planning to deliver public comments at the April teleconference must submit written statements by Friday, April 5.


Agenda items for the May meeting include an overview and discussion of components needed for the draft USEITI candidacy application and other committee business as needed. 


Individuals planning to deliver public comments at the May meeting must submit written statements by Thursday, April 25.


DOI has described the Extractive Industries Transparency Initiative (EITI) as a “voluntary, global effort designed to increase transparency, strengthen the accountability of natural resource revenues, and build public trust for the governance of these vital activities.” 


Participating EITI nations are required to disclose certain oil, gas, and mining development revenues to an independent reconciler, while companies are required to make disclosures of payments to the government that are then made public.


Each nation’s obligations are jointly developed by consensus through a Multi-Stakeholder Group made up of members of the public, government, and the private sector, and the U.S. EITI Advisory Committee will be the initial Multi-Stakeholder Group for U.S. implementation.


National Climate Assessment and Development Advisory Committee Renews Charter


NOAA’s Office of Oceanic and Atmospheric Research announced the 6-month renewal of the charter for the National Climate Assessment and Development Advisory Committee (NCADAC) through July 10, 2013.  The announcement refers to the renewal as “critical to the success of the national climate assessment.”


Formed in December 2010, NCADAC’s mission is to gather and summarize the science and information regarding existing and future impacts of climate change on the U.S., and its specific objective is to produce a National Climate Assessment scheduled to be completed in 2013.


The National Climate Assessment (NCA) will include chapters addressing Climate Change Science, Energy Supply and Use, Water/Energy/Land Use, Alaska and Arctic, and Oceans and Marine Resources.  The NCA is intended in part to serve as a status report on climate change science and impacts, and “aims to incorporate advances in the understanding of climate science into larger social, ecological, and policy systems, and with this provide integrated analyses of impacts and vulnerability.”  The most recent NCA was completed in 2009.


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