HBW Resources: Greenfield Offshore Energy Report
Offshore Energy Development Is Critical to US Economic Growth and Energy Security
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.
Deputy Interior Secretary To Step Down In June
The Interior Department on Tuesday announced that Deputy Interior Secretary David Hayes will step down at the end of June to become a Senior Fellow at the Hewlett Foundation and teach at Stanford Law School. Hayes, who has been serving as Deputy Secretary since 2009, said in part that “[i]t was a difficult decision to leave the Department, but I’m looking forward to heading out West…where I will continue to develop progressive solutions to our nation’s environmental and natural resources challenges.” In his capacity as Deputy Secretary, among other roles, Hayes also served as Chair of the Interagency Working Group on Coordination of Domestic Energy Development and Permitting in Alaska and Co-Chair of the Interior Secretary’s Energy and Climate Change Task Force. Interior Secretary Sally Jewell called Hayes “a key architect for nearly every significant initiative undertaken at Interior over the last four years,” adding that he “has left an incredible mark.”
Proposed Western Gulf of Mexico Lease Sale Scheduled For August 2013
The U.S. Interior Department last Thursday announced the availability of its Proposed Notice of Sale for Proposed Western Gulf of Mexico Lease Sale 233, scheduled to take place in New Orleans, LA on August 28, 2013. In a press release, DOI called the announcement to offer nearly 4,000 unleased blocks spanning about 21.1 million acres in the Western Gulf of Mexico Planning Area “part of President Obama’s all-of-the-above energy strategy to continue to expand domestic energy production.”
In making the announcement, DOI Secretary Sally Jewell stated that Gulf of Mexico “is a cornerstone of the United States’ energy portfolio,” and that the proposed lease sale “reflects President Obama’s continued commitment to safely and responsibly develop our domestic energy resources to help create jobs, foster economic opportunities and reduce America’s dependence on foreign oil.” Acting Assistant Interior Secretary for Land and Minerals Management and Bureau of Ocean Energy Management DirectorTommy P. Beaudreau called the proposed sale “another important step to promote responsible domestic energy production,” adding that DOI is “advancing the Administration’s goal of continuing to safely increase vital oil and gas production, while encouraging diligent development and a fair return to taxpayers for these valuable public resources that belong to all Americans.” BOEM says that the proposed lease sale could yield production levels of 116-120 million barrels of oil and 538-938 billion cubic feet of natural gas.
BSEE Directs Unannounced Deepwater Oil & Gas Containment Exercise
The Bureau of Safety and Environmental Enforcement (BSEE) on Tuesday announced that BSEE Director Jim Watson had launched an unannounced drill to deploy well control equipment to the Gulf of Mexico’s ultra-deep seabed. According to the announcement, the exercise involves Helix Well Containment Group’s capping stack system, of which Noble Energy serves as the designated operator, and is also designed to test Noble’s ability to obtain and schedule deployment of the systems necessary for successful containment.
Director Watson said in part that “[w]e fully expect operators to have the plans, equipment and capabilities in place to respond to a subsea blowout in deepwater at a moment’s notice,” adding that drills like these “give us an opportunity to see how the equipment is deployed in real-world conditions and to learn lessons that can be shared across the industry to protect the environment and improve the safety of offshore operations.” The Helix capping stack will be deployed by wire to a seafloor depth exceeding 5,000 feet and then latched to a test wellhead and pressurized. BSEE inspectors, engineers, and spill response experts will be on the scene throughout and oversee the system’s mobilization, deployment, and tests. A similar test was successfully completed by the Marine Well Containment Company last year.
Congressman Introduces Virginia Offshore Lease Sale/Revenue-Sharing Legislation
U.S. Rep. Scott Rigell (R-VA) on Friday introduced the Virginia Jobs and Energy Act (H.R. 1782), a bill that would, among other things, require the Interior Secretary to hold offshore Lease Sale 220 no later than 1 year from the date of the legislation’s enactment. The bill would also require the Interior Secretary to hold at lease one lease sale in the Virginia lease sale planning area in each future 5-year oil and gas leasing program. In conjunction with the new leasing activity offshore Virginia, the legislation requires that 37.5% of the new leasing revenues be allocated to Delaware, North Carolina, Maryland, and Virginia to the extent that they are each affected by the leases. The legislation also contains provisions related to the permitting of certain offshore meteorological site testing and monitoring projects.The Virginia Jobs and Energy Act, which has been referred to the House Natural Resources Committee, is cosponsored by U.S. Rep.’sMorgan Griffith (R-VA), Robert Hurt (R-VA), and Robert Wittman (R-VA).
Oil Spill Liability Cap/Trust Fund Legislation Jointly Introduced In U.S. House and Senate
U.S. Sen. Robert Menendez (D-NJ) and U.S. Rep. Rush Holt (D-NJ) on Thursday jointly introduced the “Big Oil Bailout Prevention Legislation Package” in the Senate and House of Representatives. Among other things, the legislation would remove the existing $75 million oil spill liability cap on economic damages, eliminate the $1 billion per incident cap on payouts from the Oil Spill Liability Trust Fund, and remove the $500 million cap on Trust Fund monies utilized for natural resources damages. If claims for damages were to exceed the Trust Fund balance, the bill allows the Treasury Department to temporarily refill the fund and be repaid with interest after it is replenished. H.R. 1753 is co-sponsored by U.S. Rep.’s Lois Capps (D-CA), Kathy Castor (D-FL), Raul Grijalva (D-AZ), Ed Markey (D-MA), Jared Polis (D-CO), and Louise Slaughter (D-NY). S. 828 is co-sponsored by U.S. Sen.’s Richard Durbin (D-IL), Bill Nelson (D-FL), Jack Reed (D-RI), and Sheldon Whitehouse (D-RI).
OCS Scientific Committee To Hold Public Meeting In New Orleans In May
The Interior Department’s Bureau of Ocean Energy Management on Monday announced that the Outer Continental Shelf Scientific Committeewill hold public meetings in New Orleans, LA on May 14-16, 2013. A 30-minute public comment period followed by a 1-hour discussion of Committee business will take place on May 16. The Committee will meet in plenary session on May 14 to hear BOEM Acting Chief Environmental Officer Bob LaBelle discuss BOME issues, challenges, and recent accomplishments, and will also receive an update from each region’s Environmental Studies Chief on OCS activities and current issues. The Committee will again meet in plenary session on May 16 for reports of individual discipline breakout sessions.
Discipline breakout groups will meet on May 14 to review the research plans for BOEM’s regional offices for FY 2014 and 2015. The groups will re-convene on May 15 to continue their review, and hold final sessions on May 16. The Committee provides advice on the feasibility, appropriateness, and scientific value of the OCS Environmental Studies Program and reviews the research and data produced to meet BOEM’s scientific information needs for decision-making, with opportunities to recommend changes in scope, direction, and emphasis.
BOEM Seeks Comments On Oil Spill Financial Responsibility Information Collection Request
The Bureau of Ocean Energy Management on Wednesday announcedthat it is seeking comments on an information collection request that it will submit to the Office of Management and Budget for review and approval concerning oil spill financial responsibility for offshore facilities. The collection covers the following:
- Form BOEM-1016 (designated applicant information certification);
- Form BOEM-1017 (designation of applicant);
- Request for determination of oil spill financial responsibility applicability (providing required and supporting information);
- Notification to BOEM of change in ability to comply;
- Providing claimant written explanation of denial;
- Form BOEM-1018 (self-insurance or indemnity information, including renewals);
- Form BOEM-1019 (insurance certificate);
- Form BOEM-1020 (surety bond);
- Proposal and supporting information for alternative method to evidence oil spill financial responsibility;
- Form BOEM-1021 (covered offshore facilities);
- Form BOEM-1022 (covered offshore facility changes); and
- Oil spill claimant requests for BOEM assistance to determine whether a guarantor may be liable for a claim
The currently approved annual reporting burden for this collection is 21,319 hours, and respondents include designated applicants of Outer Continental Shelf and state coastal water lease, permit, right of use, and easement holders, designated applicants’ insurance agents and brokers, bonding companies, and indemnitors, and claimants.
BOEM seeks comments on whether the collection is necessary or useful, the accuracy of the burden of the proposed information collection, enhancing the quality, usefulness, and clarity of the information to be collected, and minimizing the burden on respondents. BOEM also seeks comments on any non-hour cost burdens, including information related to any capital and startup up cost components or annual operation, maintenance, and purchase of service requirements that are necessary to comply with this information collection. Comments on the proposed information collection are due by Monday, July 1, 2013.
EPA Issues Final Rule Setting Deadline For GHG Best Available Monitoring Method Requests
The Environmental Protection Agency on Wednesday announced the issuance of a final rule requiring owners or operators of facilities subject to the petroleum and natural gas systems source category of the Greenhouse Gas (GHG) Reporting Rule–including owners and operators of offshore petroleum and natural gas facilities that emit 25,000 metric tons or more of greenhouse gases (GHGs) per year– to submit requests to use best available monitoring methods for future reporting years by June 30 of the year prior to the reporting year for which the request is being made (the current deadline is September 30 of the year prior to the reporting year for which the request is being made).
EPA says that the amended deadline “ will provide additional certainty to reporters” and result in a “more appropriate time frame for comprehensively reviewing and processing submitted requests and allowing the EPA to notify all owners and operators of final determinations in a timely manner.” Under EPA’s GHG reporting program, owners or operators of certain facilities must collect GHG data, calculate GHG emissions, and follow specified procedures for quality assurance, missing data, recordkeeping, and reporting. As part of the reporting rule, EPA allows owners or operators to use best available monitoring methods (i.e. monitoring methods currently used by the facility, supplier data, engineering calculations, or other company records) for specified parameters where more time is needed to comply with the monitoring and quality assurance/quality control requirements. The final rule is effective on Friday, May 31, 2013.
NMFS: Great Hammerhead Shark ESA Listing Might Be Warranted
NOAA’s National Marine Fisheries Service (NMFS) last Friday announcedits 90-day finding that substantial scientific or commercial information indicate that it may be warranted to institute petitioned actions to (1) list the great hammerhead shark as threatened or endangered throughout its range, or in the alternative, to list the Northwest Atlantic distinct population segment (DPS) or any other identified DPSs as threatened or endangered; and (2) to designate critical habitat.
The finding responds to petitions filed by WildEarth Guardians (Dec. 2012) and the Natural Resources Defense Council (March 2013) that respectively sought to (1) list the great hammerhead shark as threatened or endangered throughout its range, or in the alternative, to list any identified DPSs as threatened or endangered, and to designate critical habitat; and (2) list the Northwest Atlantic DPS of great hammerhead shark as threatened, or in the alternative, to list the great hammerhead shark as threatened throughout its range, and to designate critical habitat. In the U.S., great hammerhead sharks can be found in the western Atlantic, where the range extends from Massachusetts to Uruguay, including the Gulf of Mexico and Caribbean Sea.
NMFS finds that information included in the petitions and in its files indicates that the following three factors may be causing or contributing to increased risk of extinction for the great hammerhead shark: (1) overutilization for commercial, recreational, scientific, or educational purposes (fisheries); (2) inadequate existing regulatory mechanisms; and (3) other natural factors. NMFS will now commence a comprehensive status review of the species to determine whether a listing is warranted, and specifically seeks information and supporting documentation on the following with regard to a potential listing:
- Historical and current distribution and abundance of this species throughout its range;
- Historical and current population trends;
- Life history in marine environments, including identified nursery grounds;
- Historical and current data on great hammerhead shark bycatch and retention in industrial, commercial, artisanal, and recreational fisheries worldwide;
- Historical and current data on great hammerhead shark discards in global fisheries;
- Data on the trade of great hammerhead shark products, including fins, jaws, meat, and teeth;
- Any current or planned activities that may adversely impact the species;
- Ongoing or planned efforts to protect and restore the species and their habitats;
- Population structure information, such as genetics data; and
- Management, regulatory, and enforcement information
Scientific and commercial information must be received by Tuesday, June 25, 2013.
5-Year ESA Status Review Of Southwest Alaska Northern Sea Otter DPS Now Underway
The U.S. Fish and Wildlife Service (USFWS) last Friday announced the commencement of a 5-year status review of the southwest Alaska distinct population segment (DPS) of the northern sea otter. This DPS of the northern sea otter has been listed as threatened under the Endangered Species Act (ESA) since 2005, and the ESA requires a status review at least once every 5 years. USFWS seeks new scientific and commercial data such as the following:
- Species biology (including population trends, distribution, abundance, demographics, and genetics);
- Habitat conditions, including amount, distribution, and suitability;
- Conservation measures that have been implemented that benefit the species; and
- Threat status and trends; and
- Other new information, data, or corrections, including changes in taxonomy or nomenclature, identification of erroneous information contained in the List of Endangered and Threatened Wildlife and Plants, and improved analytical methods
In 2009, USFWS designated roughly 5,900 square miles of nearshore marine waters as critical habitat for this DPS of northern sea otters. Information is due by Tuesday, June 25, 2013.
IHA Permit Request For Chukchi Drilling Activity Is Withdrawn
NOAA’s National Marine Fisheries Service (NMFS) last Friday announcedthat ConocoPhillips Company has withdrawn its December 2012 applicationfor an Incidental Harassment Authorization (IHA) that if granted would have allowed ConocoPhillips to take 12 species of marine mammals by Level B harassment during offshore drilling-related activity that it had expected to conduct between June and November 2014. ConocoPhillips has deferred its plans to drill an exploratory well at the Devils Paw prospect in the Chukchi Sea during the 2014 open-water season.
BOEM Seeks Comments On Proposed Northern Alaska Native Community Surveys
The Bureau of Ocean Energy Management (BOEM) on Wednesdayannounced that it is seeking comments on an information collection request that it will submit to the Office of Management
and Budget for review and approval concerning two Northern Alaska Native community voluntary in-person surveys. BOEM seeks to renew an existing information collection, updating
the target communities for the original survey and requesting approval to conduct a second survey. Each respondent would be paid an honorarium for taking part in the survey. According to BOEM, the two surveys “will facilitate the meeting of DOI/BOEM information needs on subsistence food harvest and sharing activities in various coastal Alaska areas, with specific focus on the coastal Alaska communities in the North Slope area.”
The first survey (Study of Sharing to Assess Community Resiliency) will assess the “vulnerabilities” of North Slope coastal communities to the potential impacts of offshore oil and gas activity on subsistence food harvest and sharing activities. The survey will be given to each head of household as well as sharing networks in Barrow, Nuiqsut, Point Lay, and Point Hope, the four communities BOEM says are closest to proposed exploration areas. BOEM estimates that completion of each survey will take 1.25 hours and involve 782 respondents.
The second survey (Social Indicators in Coastal Alaska: Arctic Communities) will assess the well-being and living conditions of residents in the following North Slope communities: Barrow, Point Hope, Wainwright, Nuiqsut, Kaktovik, and Point Lay. The survey will be given to randomly-selected adults in selected households. BOEM estimates that completion of each survey will take 1 hour and involve 1,001 respondents.
BOEM states that without the information to be obtained from the surveys, the agency “will not have sufficient information to make informed oil and gas leasing and development decisions for these areas,” and that the survey information will help BOEM “identify and mitigate impacts of offshore oil and gas exploration and development on Native communities.”
BOEM seeks comments on whether the collection is necessary or useful, the accuracy of the burden of the proposed information collection, enhancing the quality, usefulness, and clarity of the information to be collected, and minimizing the burden on respondents. Comments on the proposed information collection are due by Monday, July 1, 2013.
Coast Guard Establishes Regulated Navigation Area In Gulf of Mexico
The Coast Guard on Monday announced the issuance of an interim rule to establish a 300-foot diameter Regulated Navigation Area (RNA) in the Mississippi Canyon Block 20 south of New Orleans, LA in the Gulf of Mexico. Although vessels may transit through this area, they may not anchor, moor, or loiter without express permission by the Captain of the Port of New Orleans. According to the Coast Guard, the RNA is needed to protect the subsurface monitoring and collection dome system above a leaking wellhead from the potential hazards of vessels anchoring, mooring, or loitering on or near the oil and gas discharge area.
The Coast Guard states that anchoring, mooring, or loitering in the area “could potentially cause structural damage and failure to the containment dome, associated hoses and systems, wellheads, well piping system and closure valves, causing the discharge of crude oil and gas into the Gulf of Mexico.” The containment dome system is in place as a result of a September 16, 2004 mudslide triggered by Hurricane Ivan that toppled the Mississippi Canyon 20 Platform A, covering the platform’s wells with over 100 feet of mud and sediment. The Coast Guard reports that ensuing structural damage has resulted in crude oil and gas plume discharges. Comments and related material are due by Monday, July 29, 2013. Before issuing a final rule, the Coast Guard will consider revising the RNA to reflect any comments deemed pertinent and necessary.
MARAD Clarifies Policy For Designating Adjacent Coastal States For Deepwater Port Licenses
The Transportation Department’s Maritime Administration on Tuesdayannounced the clarification of its policy on the unit of distance measurement to apply when designating Adjacent Coastal States under the Deepwater Ports licensing program. Under the Deepwater Port Act, any coastal state that would be directly connected by pipeline to a proposed deepwater port or would be located within 15 miles of a proposed deepwater port must be designated as an Adjacent Coastal State. Since the Deepwater Port Act does not specify whether the 15-mile distance would be measured in statute miles (1 statute mi. = 5,280 feet) or nautical miles (1 nautical mile = 6,076 feet), the Coast Guard has interpreted the Deepwater Port Act, its legislative history, and implementing regulations to determine that the distance will be measured in nautical miles.
Interior Seeks Applicants For U.S. Extractive EITI Advisory Committee
The U.S. Interior Department last Friday announced that it is seeking nominations for individuals to be considered as members and/or alternates of the U.S. Extractive Industries Transparency Initiative Multi-Stakeholder Group Advisory Committee. Nominations are requested to fill an industry seat that is now vacant due to a recent resignation. In addition, nominations for government, civil society, and industry are also requested in order to build a pool of eligible, qualified applicants to be considered for any future potential vacancies. Nominations are due by Friday, May 24, 2013.
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. The U.S. EITI Advisory Committee will be the initial Multi-Stakeholder Group for U.S. implementation.
For additional information, contact Brent Greenfield with HBW Resources. His contact information is below.
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