Jean Chemnick and Jason Plautz, E&E reporters
Published: Monday, July 8, 2013
Arctic drilling among new Interior regs
I’ve edited down this article to the portion relevant to oil. DV
The White House agenda also notes several significant rule making efforts at the Interior Department, including new regulations for oil and gas drilling in the Arctic and for the flaring and venting of methane, a potent greenhouse gas, from oil and gas wells on public lands.
Making its first appearance on the regulatory agenda is a proposed rule from the Bureau of Ocean Energy Management that would codify regulations for drilling in the oil-rich Arctic Ocean, where at least three major energy firms are pursuing exploration.
Former Interior Deputy Secretary David Hayes in May said those regulations will mirror the voluntary steps Royal Dutch Shell PLC
agreed to take during its 2012 Arctic exploration season, which included an oil spill containment plan and the ability to drill a
relief well, among other steps.
Hayes at the time said he believed the agency would issue draft rules by the end of the year.
“There will be clarity going forward,” Hayes said, noting that industry would be given flexibility for how it complies with
performance-based standards. It appears Interior has pushed to 2014 the release of a separate set of rules aiming to strengthen the integrity of blowout preventers, the hulking devices used to stanch the flow of oil or gas from an out-of- control well. BP PLC’s blowout preventer failed to prevent the escape of oil and gas from the Macondo well in April 2010, leading to the worst oil spill in the nation’s history. The blowout preventer rule was listed on the White House’s long-term agenda, and the proposed rule is tentatively scheduled for October 2014. The administration deemed it “economically significant,” which means it could be costly to implement.
“The industry has developed new standards for BOP design and testing that contain significant improvements to existing documents,” the White House said in its description of the rule. “By incorporating these new requirements into regulations and other supplemental requirements, the regulatory oversight over this critical equipment will be increased.” The Bureau of Land Management is continuing to evaluate a proposed rule to establish standards to “limit the waste of vented and flared gas and to define the appropriate use of oil and gas for beneficial use.”
The rule appears to address a significant concern environmentalists have about the emissions of methane, a potent greenhouse gas, from oil and gas wells on public lands. Environmentalists claim current affordable technologies could keep more methane in pipelines to be burned for heat and power, but BLM has been hesitant to require that those technologies be used. BLM’s proposed “onshore order 9” is scheduled for release in May 2014, according to a description of the rule.
Environmental groups continue to pressure the agency for tougher regulations in federal court (Greenwire, June 17).
BLM also continues to pursue rules that would provide for the competitive leasing of wind and solar energy on public lands, for the regulation of hydraulic fracturing and to address the royalty rate for oil shale.
BOEM is also pursuing a rule that would set a preliminary term of one year for offshore wind companies that lease federal waters to submit a site assessment or general activities plan to encourage diligent development of renewable energy.
Reporters Phil Taylor and Annie Snider contributed.
Special thanks to Richard Charter