OCS Governors Seek Expanded Offshore Development While Obama Pursues Ocean Zoning Initiative

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.  With numerous legislative bodies now in session, HBW Resources is monitoring these activities to ensure that responsible policies based on sound science are advanced.

Eight Governors Call On Congressional Delegations To Support Offshore Energy Development

In letters transmitted to the 16 U.S. Senators and 85 U.S. Representatives that represent their states, the eight coastal state governors that comprise the Outer Continental Shelf Governors Coalition are urging their federal representatives to “act in concert to champion OCS energy and, by effect, the vitality of our coastal and state economies” as they consider offshore energy-related items.

Governors from Alaska, Alabama, Louisiana, Mississippi, North Carolina, South Carolina, Texas, and Virginia specifically note their support for the following:

·         Advancing revenue-sharing for all coastal states;
·         Expanding offshore oil and gas access to frontier areas;
·         Ensuring an efficient and consistent regulatory regime for offshore energy development;
·         Improved understanding of potential offshore energy resources, including completion of the Atlantic seismic Programmatic Environmental Impact Statement; and
·         Improved management and stewardship of coastal resources related to coastal and ocean activities

U.S. House Members Address BOP Regulations In Letter To BSEE Director 

In a recent letter sent to Bureau of Safety and Environmental Enforcement Director James Watson, the following 11 Members of Congress sought answers to questions regarding pending regulations governing blowout preventers: U.S. Rep.’s Marsha Blackburn (TN)Michael Burgess (TX)Kevin Cramer (ND)Jeff Duncan (SC)Morgan Griffith (VA)Ralph Hall (TX)Gregg Harper (MS)Bob Latta (OH)Billy Long (MO)Pete Olson (TX), and Steve Scalise (LA).

The Members noted in part that they are “somewhat concerned that regulators are failing to provide clarity for rig operators, inching towards substantial rules affecting that very same safety equipment that industry is voluntarily upgrading,” and request answers that address the following:

·         Timing of new blowout preventer regulations, and timeframe for implementation;
·         Expected scope of new rule and the degree of change that will be associated with the new rule;
·         Whether the new rule might require the retirement of existing blowout preventers;
·         The extensiveness of the rulemaking process to be utilized;
·          Interaction of rule with ongoing voluntary safety upgrades, and related discussions with industry; and
·         Incorporation of cost and continuity of operations into the rulemaking

North Carolina Governor Urges Prompt Completion Of Atlantic Seismic Study

In a letter sent to U.S. Interior Secretary Sally JewellNorth Carolina Governor Pat McCroryrecently discussed the potential of energy resources located offshore North Carolina and urged the Interior Department to “expeditiously finalize” a Programmatic Environmental Impact Statement(PEIS),  initially scheduled for completion by April 2012, that will guide seismic permitting in the Atlantic Outer Continental Shelf.

Gov. McCrory pointed out that several federal regulatory hurdles exist that prevent North Carolina from moving ahead to begin offshore energy development, specifically citing the ongoing PEIS related to Atlantic seismic permitting.

In discussing the need for seismic activity, Gov. McCrory referred to the following rationale:

·         Seismic surveys are critical for science-based decisions on future activity
·         Seismic surveys will help inform sound decisions on oil, gas, and wind leasing and coastal preparation and response for hurricanes, earthquakes, and other natural disasters
·         Compared to 30-year old surveys, today’s advanced survey technologies will produce much more accurate energy resource assessments
·         Mitigation and technology advances allow seismic activity to take place with little or no impact to marine mammals

BSEE Seeks Participants and Input For OCS Technology Forum 

In an email sent to potential participants at the Bureau of Safety and Environmental Enforcement’s October 2013 public forum on the use of Best Available and Safest Technology (BAST) in the Outer Continental Shelf, BSEE announced that it is seeking interest to establish a panel of experts for the event.

BSEE states that the purpose of the event, tentatively scheduled for October 16 in theHerndon/Reston, VA area, is to “share and gather information from experts and stakeholders to inform and assist BSEE in developing a comprehensive BAST Program in to the OCS that will contribute to increased safety and environmental protection in the OCS.”

In addition to requesting participation on one of the 5 panels, BSEE seeks input on the following 5 areas:

·         Equipment test procedures and protocols;
·         Identification of appropriate test laboratories;
·         How BSEE should decide which equipment to test for a BAST determination;
·         Possible BAST economic models; and
·         BAST for use in extreme conditions

U.S. House Committee Seeks National Ocean Policy Materials From 5 Federal Entities

The U.S. House Natural Resources Committee recently announced the transmittal of four letters to the U.S. Interior DepartmentU.S. Agriculture DepartmentEnvironmental Protection Agency, and National Oceanic & Atmospheric Administration requesting information on the development, legal authority, activities, staffing, and funding of the National Ocean Policy and Coastal and Marine Spatial Planning.  In addition, one letter was sent to the National Ocean Councilrequesting a response “without further delay” with information and documents that were previously requested.

In a statement included in the announcement, U.S. House Natural Resources Committee Chairman Doc Hastings said that “[t]here are still significant questions about how this initiative is being funded and implemented and it’s time for answers.”

Hastings referred to the National Ocean Policy Executive Order as “a unilateral, back-door maneuver by an army of bureaucrats to zone the Nation’s ocean and coastal regions,” adding that it “requires all federal agencies to meet new policy directives that have no basis in law – while costing untold millions in taxpayer dollars.”

Marine Planning Handbook Released By National Ocean Council

In a blog post on Friday, National Ocean Council Director Deerin Babb-Brott announced the release of
Marine Planning Handbook to “support the efforts of regions that choose to engage marine industries, stakeholders, the public, and government to advance their economic development and conservation priorities.”

The 24-page Handbook includes sections on the following:

  • Regional Planning Bodies (addressing purpose, establishment, membership, co-leadership, decision-making, working groups, meetings, transparency, stakeholder participation, charter, resources, and relationship to National Ocean Council);
  • Regional participation (addressing tribes and indigenous groups, fishery management councils, stakeholder participation, methods of participation, sources of expertise, and Federal Advisory Committee Act considerations); and
  • Marine planning (addressing a planning framework, regional capacity and existing efforts, regional vision, regional and national goals and objectives, work plan, analysis of data, uses, services, and impacts, planning options, draft marine plan, and concurrence)

The National Ocean Policy Final Implementation Plan Appendix includes an action item requiring the development of marine plans by 2017, and the Final Implementation Plan  base document notes that in regions where all states decide not to participate in a Regional Planning Body, while such a body will not be formed, “Federal agencies will identify and address priority science, information, and ocean management issues associated with marine planning as described in the Executive Order.”

Comments Sought On Atlantic/GOM Loggerhead Sea Turtle Critical Habitat Designation 

NOAA’s National Marine Fisheries Service (NMFS) has announced that it is seeking comments on its proposal to designate 36 marine areas in the Atlantic Ocean and Gulf of Mexico that are within the Northwest Atlantic Ocean loggerhead sea turtle Distinct Population Segment (DPS).  A Draft Economic Analysis and Biological Report have also been released.  The Northwest Atlantic Ocean DPS has been listed as threatened since September 2011.

The 36 proposed areas for the DPS are located offshore Alabama (1), Florida (20), Georgia (4), Mississippi (2), North Carolina (5), and  South Carolina (4).  If Sargassum habitat is included in the final rule, then additional habitat would be included.

The announcement states the following with respect to oil and gas-related activities:

·         Impacts on nearshore reproductive habitat could result from (among other things) offshore structures including but not limited to artificial reefs, lights on land or in the water, oil spills and response,
·         Impacts on breeding habitat could result from oil spills and response
·         Impacts on migratory habitat are less likely but could be impacted by oil and gas activities such as construction and removal of platforms, lighting, and noise, and noise pollution from construction, channel blasting, shipping, and/or military activities
·         Impacts on Sargassum habitat could be impacted by oil and gas exploration, development, and transportation that affects the Sargassum habitat itself and the loggerhead prey items found within this habitat-this could occur both in the process of normal operations and during blowouts and oil spills, which release toxic hydrocarbons and also require other toxic chemicals for cleanup
·         Activities that may affect the proposed critical habitat and be subject to the Section 7 consultation process include oil and gas exploration and development, such as decommissioning of old oil and gas platforms, construction of nearshore oil and gas platforms, and oil and gas activity transport in the nearshore environment
·         Oil and gas exploration and alternative energy projects may affect the essential features of critical habitat for the loggerhead sea turtle

The notice concludes that “[d]ue to the extensive requirements of oil and gas development and renewable energy projects to consider environmental impacts…even absent critical habitat designation for the loggerhead sea turtle, we anticipate it is unlikely that critical habitat designation will change conservation efforts recommended during Section 7 consultation for these projects.”

USFWS adds that “it is unlikely the identified activities and projects will be affected by the designation beyond the quantified administrative impacts,” and therefore the proposed designation “is not expected to impact the level of energy production.”

Comments on the proposed designation are due by Monday, September 16, 2013, and requests for public hearings are due by Tuesday, September 3, 2013.

USFWS Reopens Comment Period On Critical Terrestrial Habitat For Loggerhead Sea Turtle DPS

The U.S. Fish and Wildlife Service (USFWS) recently announced that it is reopening the comment period on its previous request for 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 theNorthwest Atlantic Ocean Distinct Population Segment of the loggerhead sea turtle.  The Northwest Atlantic Ocean DPS has been listed as threatened since September 2011.

In conjunction with the re-opening of the comment period, USFWS will hold three public informational sessions and hearings in Charleston, SC (Tuesday, Aug. 6), Wilmington, NC(Wednesday, Aug. 7), and Morehead City, NC (Thursday, Aug. 8)

The announcement states that the comment period is being reopened to provide the public with an opportunity to simultaneously comment on the proposed rule, newly-released Draft Economic Analysis, and an amended required determinations section.

With respect to impacts of the proposed critical habitat designation on oil and gas activities, the Draft Economic Analysis concludes that over the next 10 years (2014-2023), total potential incremental economic impacts related to Section 7 consultations in areas proposed for designation would be $6,600.  For areas being considered for exclusion from critical habitat, USFWS estimates a $140 impact on oil and gas activities over this time period.  The calculations are based on present-value terms and apply a 7% discount rate.

Comments are due by Monday, September 16, 2013.

USCG Seeks Comments  On Safety Zone Around Olympus Tension Leg Platform

The U.S. Coast Guard (USCG) has announced that it is seeking comments on its proposal to establish a safety zone around the Olympus Tension Leg Platform located in the deepwater Gulf of Mexico in Mississippi Canyon Block 807B.

The announcement notes that establishment of a safety zone has been requested by Shell Exploration and Production Company (Shell) “due to safety concerns for vessels operating in the area and the environment,” adding that Shell “indicated that it is highly likely that any allusion with the facility would result in a catastrophic event.”

USCG concludes that the safety zone “will significantly reduce the threat of allusions, oil spills, and releases of natural gas, and thereby protect the safety of life, property, and the environment in the Gulf of Mexico.”

Comments are due by Monday, August 19, 2013.

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.


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