The Department of Interior announced new safety and environmental regulations for exploratory drilling off Alaska’s coast Thursday that are expected to cost more than $2 billion over the next 10 years.
The new rules build off the regulations already required for drilling for oil and natural gas on the outer continental shelf by making them specific to the unique conditions of the Arctic Ocean, said Brian Salerno, the director of Interior’s Bureau of Safety and Environmental Enforcement.
Among the new requirements are coming up with an “integrated operations plan” for a drilling site at least 90 days before sending in a exploration plan to the Department of Interior, having access to a separate drilling rig to drill a relief well in case of an oil spill and having the ability to cap wells quickly in the event of a spill.
The regulations are among the strictest edicts for offshore drilling in the United States, but have to be that way to take into account the special features of the Arctic off Alaska’s coast, Salerno said.
“What’s different about this rule is it takes into account some of the unique features the exist in the Arctic and not elsewhere,” he said in a call with reporters.
While there are 43 oil and gas leaseholders off the shore of Alaska, there are no active drilling rigs in the water. Oil companies have been stopping their drilling operations in the region over the last year, despite the potentially lucrative amounts of oil and gas in the earth, due to high costs and regulatory challenges.
Roughly 24 billion barrels of recoverable oil and 104 trillion cubic feet of natural gas are estimated to be in the ground below the Arctic Ocean in the Beaufort and Chukchi seas.
The rules require energy companies working in the Arctic to be able to predict, track, report and respond to changing ice conditions and other adverse weather events, which are common in the Arctic. The new rules also have provisions for better oversight of contractors, the required development of an oil spill response plan for the Arctic and having the proper equipment to deal with an oil spill there.
The oil industry immediately reacted with chagrin at the new rules, criticizing the regulations while they were still being announced by the Obama administration.
The American Petroleum Institute’s Upstream and Industry Operations Director Erik Milito said the new rules were going to “stifle” oil and gas production.
“Certain proposed requirements may not improve safety and in fact may inhibit innovation and technological advancements,” Milito said. “Any regulations that are published should achieve the objectives of protecting workers and the environment and promoting energy development.”
Abigail Ross Hopper, director of Interior’s Bureau of Ocean Energy Management, said the government worked closely with the industry in developing the regulations. She said the government wanted to understand advances in technology made by the industry to best formulate the rules.
Arctic Energy Center spokesman Lucas Frances said the rules were going to hurt oil and gas production in the Arctic but were at least a signal from the Obama administration that drilling can be done safely there.
“Today’s regulations do signify its recognition that America’s largest energy opportunity — the offshore Arctic — can be explored safely and responsibly,” Frances said. “It is critical that it now acknowledges the importance of Arctic offshore resources and includes the region in the forthcoming offshore leasing program.”
While Frances and his group hope the rules are a first step toward the administration allowing more drilling in the Arctic, environmentalists say they must be the first step toward ending drilling off Alaska.
Kristen Miller, conservation director of the Alaska Wilderness League, said the group was pleased to see the rules but wants drilling to be discontinued completely.
“Instead of allowing drilling in the Arctic, the administration should focus on protecting our most special places from development,” Miller said. “Alaska is feeling the effects of climate change at twice the rate of anywhere else in our nation and, in June 2016, Arctic sea ice cover has crashed to a new low.
“President Obama has made a commitment to address climate change, and protecting the Arctic must be part of that equation.”
