HBW Resources: Greenfield Offshore Energy Report

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 that could impact the development of offshore oil and gas resources.  With numerous legislative and regulatory bodies actively engaged in offshore energy development, HBW Resources is monitoring a broad array of these activities to ensure that responsible policies based on sound science are advanced. 
Programmatic Environmental Review Proposed For Gulf Of Mexico Seismic Activities

The Bureau of Ocean Energy Management last Thursday announced that BOEM and NOAA’sNational Marine Fisheries Service are proposing to prepare a Programmatic Environmental Impact Statement (PEIS) analyzing the potential impacts of multiple oil and gas, renewable energy, and marine mineral-related geological and geophysical (G&G) activities that could take place over a period of ten years on federal and state waters in the Gulf of Mexico’s Western, Central, and Eastern Planning Areas.
Under the proposed action, BOEM proposes to issue permits to conduct G&G activities under the Outer Continental Shelf Lands Act (OCSLA) and NMFS proposes to promulgate regulations under the Marine Mammal Protection Act that establish a framework for issuing letters of authorization for the unintentional take of marine mammals incidental to G&G activities in the Gulf of Mexico. 
Noting that the MMPA prohibits the taking of marine mammals without an NMFS permit or exemption, the notice states BOEM has asked NMFS to complete an MMPA rulemaking for the incidental take by harassment of marine mammal species as a result of Gulf of Mexico oil and gas-related G&G surveys.  The notice adds that the PEIS will help provide the necessary National Environmental Policy Act documentation to support the NMFS MMPA rulemaking as well as future decisions regarding future OCSLA permitting and MMPA authorization actions.
Official notice of the PEIS begins a 45-day scoping period during which comment is being sought on (1) the determination of significant issues and alternatives for analysis in the PEIS and (2) developing the scope of the PEIS. 
In conjunction with the public comment period, seven public meetings will take place in Tampa, FL (June 10), Fort Walton Beach, FL (June 11), Mobile, AL (June 12), Gulfport, MS (June 13), Galveston, TX (June 17), New Orleans, LA (June 19), and Silver Spring, MD (June 20).
Under a tentative project schedule, the draft PEIS would be published in mid-2014, with a final PEIS published in early/mid-2015 and a Record of Decision issued in mid/late-2015.
Comments on the proposed PEIS are due by Monday, June 24, 2013.
National Arctic Strategy Released By White House, AK Roundtable Discussions Set For June
The White House last Friday announced the release of the “National Strategy for the Arctic Region” and the convening of administration-hosted roundtable discussions in Alaska in mid-June. 
The purpose of the meetings, which initially will include “high-level” officials from the White House and other key agencies, will be to talk about “how best to move forward” with implementation.   According to the announcement, successful implementation of the strategy will require “active engagement” with and “meaningful, up-front input” by Alaska Natives, the State of Alaska, and other key stakeholders. 
With regard to energy, the strategy states that the Arctic’s energy resources “factor into a core component of our national security strategy: energy security.”  Noting that the region is home to “sizable” oil and natural gas resources that are “likely to continue to provide valuable supplies” to meet U.S. energy demand, the document says that “[c]ontinuing to responsibly develop Arctic oil and gas resources aligns with the United States ‘all of the above’ approach to developing new domestic energy sources…”
The report goes on to state that “we are committed to working with stakeholders, industry, and other Arctic states to explore the energy resource base, develop and implement best practices, and share experiences to enable the environmentally responsible production of oil and natural gas as well as renewable energy.”
The strategy is underpinned by the following three “lines of effort” and accompanying objectives:

  • Advance U.S. security interests
  • Evolve Arctic infrastructure and strategic capabilities
  • Enhance Arctic domain awareness
  • Preserve Arctic region freedom of the seas
  • Provide for future U.S. energy security
  • Pursue responsible Arctic region stewardship (line of effort)
  • Protect the Arctic environment and conserve Arctic natural resources
  • Use integrated Arctic management to balance economic development, environmental protection, and cultural values
  • Increase understanding of the Arctic through scientific research and traditional knowledge
  • Chart the Arctic region
  • Strengthen international cooperation
  • Pursue agreements that promote shared Arctic state prosperity, protect the Arctic environment, and enhance security
  • Work through the Arctic Council to advance U.S. interests in the Arctic region
  • Accede to the Law of the Sea Convention
  • Cooperate with other interested parties
In addition, the following will serve as “guiding principles” to serve as “the foundation for U.S. Arctic engagement and activities:
  • Safeguard peace and stability
  • Make decisions using the best available information
  • Pursue innovative arrangements
  • Consult and coordinate with Alaska Natives
Final Safety Culture Policy Statement Released By BSEE
The Bureau of Safety and Environmental Enforcement (BSEE) last Friday announced the issuance of the Final Statement of Policy in order to announce the agency’s “expectation that individuals and organizations performing or overseeing activities regulated by BSEE establish and maintain a positive safety culture commensurate with the significance of their activities and the nature and complexity of their organizations and functions.”
The Statement of Policy defines “safety culture” and addresses the following 9 characteristics that BSEE says typify a robust safety culture and are “foundational to…[a] safety culture that recognizes the need to protect people and the environment first and foremost”: (1) Leadership Safety Values and Actions; (2) Hazard Identification and Risk Management; (3) Personal Accountability; (4) Work Processes; (5) Continuous Improvement; (6) Environment for Raising Concerns; (7) Effective Safety and Environmental Communication; (8) Respectful Work Environment; and (9) Inquiring Attitude.
In announcing release of the final policy statement, BSEE Director James Watson called the human factor “the critical element in offshore safety.”  Watson said that while [p]rescriptive regulations can reduce risks to worker safety and the environment…they alone are not enough,” adding that “[e]veryone working in the offshore industry must adhere to a set of core values that places safety above all else.”
BSEE received 32 comments in response to the Draft Statement of Policy that was released for review in December 2012.  In addressing comments encouraging the agency to study the experiences of other organizations that have already undergone safety culture “transformations,” BSEE noted that it is working to put together information sessions and workshops with entities such as the Federal Aviation Administration, Nuclear Regulatory Commission, and Petroleum Safety Authority Norway.
Memorandum Of Agreement On Offshore Oversight Signed By Coast Guard, BSEE 
The Bureau of Safety and Environmental Enforcement (BSEE) last Thursday announced that the agency and the Coast Guard have signed a Memorandum of Agreement that addresses the two agencies’ Outer Continental Shelf safety management and environmental protection efforts.
According to the terms of the MOA, the two agencies will establish a process to identify offshore safety and environmental management requirements within the jurisdiction of both entities, jointly develop policy and guidance, conduct joint evaluations/boardings/inspections, and ensure consistent requirements on industry.
In announcing the MOA, BSEE Director James Watson said that the agreement “will bring together resources and expertise from both agencies as we work to ensure both orderly resource development and protection of the human, marine and coastal environments.”
Coast Guard Rear Adm. Joseph Servidio added that the MOA “solidifies the commitment of each regulatory agency to work across agency boundaries in order to develop a coordinated regulatory approach that promotes safety through the use of safety management systems.” 
Coast Guard Proposes Revised Offshore Crane Regulations
The U.S. Coast Guard on Monday announced that it is seeking comments on its proposal to revise regulations related to the design, certification, inspection, and testing of certain cranes installed on Mobile Offshore Drilling Units (MODUs), Offshore Supply Vessels (OSVs), and floating Outer Continental (OCS) Shelf facilities.
The proposed rule would do the following:
  • Update API Spec. 2C (Specification for Offshore Pedestal Mounted Cranes) and RP 2D (Recommended Practices for Operation and Maintenance of Offshore Cranes) industry standards that are incorporated by reference in Coast Guard regulations to reflect the most recent editions;
  • Synchronize Coast Guard regulations for cranes used on offshore fixed platforms with requirements imposed by the Interior Department’s Bureau of Safety and Environmental Enforcement; and
  • Allow owners and operators of vessels the option to use organizations and entities beyond the Coast Guard, American Bureau of Shipping, and International Cargo Gear Bureau to allow all classification societies recognized under 46 CFR part 8 to inspect, test, and certify cranes;
  • Allow crane manufacturers who have a license from API to affix API monograms to their cranes to be recognized as crane-certifying authorities and in compliance with API Spec. 2C; since the cranes would not be considered satisfactory for use on inspected vessels without continued program or tests and inspections witnessed or conducted annually by a crane-certifying authority, Coast Guard would have the option to conduct an audit of the crane certification and inspection process at any time
The Coast Guard calls the proposed rule “necessary to enhance the safety of offshore cranes by ensuring that industry uses the best available and safest technologies for the operation, maintenance, design, and construction of cranes used on…MODUs…,…OSVs…, and floating OCS facilities.”
API Spec. 2C and RP 2D do not establish limits on the size of cranes to which they apply.  However, the Coast Guard “believes that small cranes and other lifting appliances are satisfactory for operation, as long as they are maintained and operated in accordance with the manufacturer’s recommendations,” and proposes to exempt small cranes or other lifting appliances with a lifting capacity of 5 tons (10,000 pounds) that are used only for special purposes like lifting fuel transfer hoses or transferring supplies or provisions.
New language included in the latest edition of API Spec. 2C and RP 2D address the following:
·         Rigger qualifications and personnel operating practices, signaling, load testing, and pull tests (API RP 2D);
·         Expansion and sorting of inspection, testing, and maintenance requirements into categories based on crane usage (API RP 2D);
·         New inspection categories that detail inspection requirements to be conducted at periodic intervals (e.g. initial, pre-use, monthly, quarterly, annually) (API RP 2D);
·         Rerating of cranes, crane operations, wire rope testing, pendant lines, and slings;
·         Definition of scope of cranes covered and not covered (API Spec. 2C);
·         List of components considered to be critical, including components of rigging gear (API Spec. 2C);
·         New recordkeeping requirements imposed on manufacturers requiring the retention of test and inspection records for 20 years and provision of certain documentation to the purchaser (API Spec. 2C);
·         Expansion of method for establishing crane rated loads;
·         Establishment of methods for determining the rated loads for cranes handling personnel (API Spec. 2C);
·         New requirements for calculating in-service loads based on specific crane usage (API Spec. 2C);
·         New calculations to determine dynamic forces and forces in horizontal and vertical directions (API Spec. 2C);
·         New requirements addressing environmental loads (e.g. wind, ice, snow) and seismic design (API Spec. 2C);
·         New requirements for strength factors associated with wire rope for standing, guy ropes, and personnel hoist systems (API Spec. 2C); and
·         U-bolts, grip clips, eye splices, wedge sockets, and wire rope end terminations (API Spec. 2C)
Comments on the proposed rule are due by Monday, August 12, 2013.
“Dangerous Drillers” Report Released By House Natural Resources Cmte. Ranking Member
U.S. House Natural Resources Committee Ranking Member Ed Markey (D-MA) last Friday released a report titled “Dangerous Drillers: Offshore Safety Lapses Continue Three Years After BP Spill.”
In a statement accompanying the release, Markey said in part that “[o]il and gas companies with the worst safety records in the Gulf before the BP disaster continue to spill oil, lose control of their wells and rack up safety violations,” adding that “[w]e need to make sure those companies change their ways and pay a price for their risky practices.”
Among other things, the report states that “instilling a new safety culture in the oil industry remains a challenge,” but adds that data show improvements including a 50% reduction in the number of injuries from offshore accidents over the last two years “as DOI has been more aggressive in handing out violations, and companies have had fewer well-control problems since DOI adopted stronger regulations in 2010.”
The report noted that “the data show…facilities of top violators are still no more likely to be inspected than other facilities; that civil penalties are being imposed at about the same rate as before the BP spill; and that when such penalties are imposed, they are typically miniscule compared to company profits.”
The report concludes that the following recommendations by the BP Spill Commission and DOI OCS Safety Oversight Board “could provide a path forward to addressing remaining safety issues”: (1) focus inspection on the riskiest companies; (2) assess more penalties for violations; and (3) authorize higher penalties for offshore safety violations.
NMFS Seeks Comments On Proposed IHA Permit To Conduct Chukchi Sea Marine Surveys
NOAA’s National Marine Fisheries Service on Tuesday announced that it is seeking comments on its proposal to grant Shell Exploration and Production’s application for an Incidental Harassment Authorization to take 13 species of marine mammals by Level B harassment incidental to its plans to complete a marine surveys program and conduct its equipment recovery and maintenance activity during the 2013 open water season in the Chukchi Sea (beluga whale, harbor porpoise, killer whale, narwhal, bowhead whale, gray whale, minke whale, fin whale, humpback whale, ringed seal, spotted seal, bearded seal, and ribbon seal).
The proposed activities would be comprised of the following:
  • Ice gouge surveys along roughly 1,000 km of tracklines in the Chukchi, in order to determine the rate or frequency of new ice gouges and map seafloor topography and characterize the upper 34 feet of the seafloor using acoustic methods;
  • Site clearance and shallow hazards surveys along roughly 3200 km of tracklines in the Chukchi, in order to gather data on bathymetry, seabed topography and other seabed characteristics such as ice gouges, potential shallow geohazards, and the presence of any possible archaeological features; and
  • Equipment recovery and maintenance at the Burger A well site in the Chukchi
The proposed activities would involve three vessels—one for marine surveys, one for equipment recovery and maintenance, and one for logistical support.
Explosive O&G Rig Removals To Be Discussed At GOM Fishery Mgmt. Council Cmte. Meeting
Last Friday, NOAA’s National Marine Fisheries Service announced that the Gulf of Mexico Fishery Management Council’s Standing and Special Reef Fish Scientific and Statistical Committees will hold a public meeting in Tampa, FL on May 29-31, 2013.
According to the latest agenda, the morning session on May 31 will include a discussion on the impact of explosive oil and gas rig removals on the red snapper stock.
The Council is responsible for managing fisheries in federal waters offshore Texas, Louisiana, Mississippi, Alabama, and Florida. 
Remote live access to the meeting will be available to those who register here.
Offshore Oil & Gas Discussed In EIS For Stellar Sea Lion Protection Measures 
NOAA’s National Marine Fisheries Service on Tuesday announced its release for public review and comment of a Draft Environmental Impact Statement/Regulatory Impact Review/Initial Regulatory Flexibility Analysis that evaluates environmental, social, and economic effects of alternatives to the Stellar sea lion protection measures for the Bering Sea and Aleutian Islands Management Area groundfish fisheries.
The proposed action would implement measures to protect principal prey of the Stellar sea lion (whose western distinct population segment is listed as endangered under the Endangered Species Act), namely the Atka mackerel, Pacific cod, and Pollock fisheries in the Aleutian Islands.
NOAA Fisheries Alaska Regional Administrator Jim Balsiger said in part that the agency is required by the Endangered Species Act to “ensure that the groundfish fishery…is not likely to jeopardize the continued existence of the [distinct population] segment of the [Stellar sea lion] population,” adding that NOAA “must also ensure the groundfish fishery will not adversely modify or destroy the segment’s designated critical habitat…”
The draft EIS makes observations about offshore oil and gas activity in the region that include the following:
  • Production in the Chukchi and Beaufort Seas cannot be considered reasonably foreseeable at this time;
  • Exploratory or production activities in the Aleutian Islands or in the Bering Sea are not reasonably foreseeable;
  • Interior Department’s updated OCS Oil & Gas Strategy indicates that most of the Bering Sea/Aleutian Islands has low oil and gas resource potential and/or there is little support for potential leasing there;
  • Potential impacts of Alaska oil and gas development on the Aleutian Islands/Bering Sea Management Area would come from transportation through the Aleutian Islands or from the use of Aleutian communities to provide logistical support for development elsewhere;
  • Exploratory and development activity in the Chukchi and Beaufort Seas may be associated with increased north-south shipping through the Aleutian Islands;
  • Adak may become logistical support center for Chukchi and Beaufort Sea developments, as Offshore Systems last year signed an agreement to operate a logistics support terminal for the oil  and gas industry operating in federal waters offshore Alaska;
  • Potential environmental risks from offshore drilling include impacts from increased vessel traffic, offshore oil spills, drilling discharges, offshore construction activities, and seismic surveys;
  • BOEM’s Final PEIS for the 2012-2017 5-Year OCS Oil & Gas Program found that cumulative impacts of oil and gas activities are unlikely to significantly impact fisheries and essential fish habitat;
  • Cumulative impacts of past, present, and future oil spills on fisheries would be minor to moderate, and incremental impacts of expected additional spills would be negligible to medium;
  • Exploratory drilling or production that may lead to a large spill would be likely to have effects beyond moderate, which may adversely impact those species that occur in the action area and migrate into the location affected by such a spill; and
  • Oil and gas leasing, development, and production on state lands in areas near Stellar sea lion habitat and in Alaska state waters is likely to occur in the future
Under the terms of a federal court order, the EIS must be finalized by March 2014.  Comments on the draft EIS are due by Tuesday, July 16, 2013.
List Of GOM Site-Specific Environmental Assessments/FONSIs For 1st Quarter 2013 Released
The Interior Department’s Bureau of Ocean Energy Management on Friday published a list of 140 Site-Specific Environmental Assessments and Findings of No Significant Impact that were prepared between January 1, 2013 and March 31, 2013 for oil, gas, and mineral-related activities that were proposed in the Gulf of Mexico.
Publication of the list constitutes public notice of the availability of environmental documents required under the National Environmental Policy Act’s implementing regulations. 
Restricted Joint Bidders Announced For May-Oct 2013 Federal Oil & Gas Lease Sales
The Bureau of Ocean Energy Management on Friday issued its list of Restricted Joint Bidders for Outer Continental Shelf oil and gas lease sales to be held between May 1, 2013 and October 31, 2013. 
The bidders are divided into eight groups, and no entity in one group may bid with any entity in any of the other seven groups at OCS oil and gas lease sales held between May 1 and October 31.
Proposed MSP/EBM-Related Study Released For Public Comment
NOAA last Thursday announced that it is seeking comment on a new proposed study involving 1,000 respondents located in marine- and coast-related West Coast communities in order to inform the California Current Integrated Ecosystem Assessment “Resilient and Economically Viable Coastal Communities” section.
According to the announcement, NOAA scientists must collect a broad range of currently unavailable social, cultural, and economic information in order to address National Ocean Policy Executive Order “requirements to promote human wellbeing through implementation of ecosystem-based management (EBM).” 
NOAA states that such research “is designed to improve social science data related to the human dimensions of ecosystem-based management and marine spatial planning related to marine and coastal management needs by: (1) Investigating how marine and coastal conditions and management affect human wellbeing; (2) developing and testing theories and methods for defining and measuring human wellbeing within an EBM model; and (3) identifying indicators of wellbeing for use in such a model.”
One-hour interviews and two-hour focus groups are to “assist managers with evaluating how different management strategies may affect the wellbeing of marine-dependent and coastal communities…such as in terms of health, cultural values, and social cohesion,” and will “assist with identifying salient stakeholder groups and locally meaningful indicators in the study area.”  Then, 30-minute surveys will “test the validity of the resulting selected suite of indicators with broader samples of each stakeholder group.”
Comments on the proposed study are due by Monday, July 8, 2013.

Federal Government Completes 15-Day Gas Hydrate Research Expedition in GOM
The Bureau of Ocean Energy Management (BOEM) on Tuesday announced the completion of a 15- day gas hydrate research expedition in two locations in the northern Gulf of Mexico.  According to the announcement, scientists returned with “the best high-resolution seismic data and imagery ever obtained of sediments with high gas hydrate saturations.”  BOEM calls gas hydrates “an important potential future energy resource.”
Executed by the U.S. Geological Survey and planned jointly with BOEM and the U.S. Department of Energy (DOE), the expedition involved USGS scientists using low-energy seismic sources to collect information about the nature of gas hydrate reservoirs and geologic features of the sediment between the reservoirs and the seafloor.
USGS Energy Resources Program Coordinator Brenda Pierce called the expedition “a significant milestone,” adding that the resulting data and information “provide insight into the entire petroleum system at each location.”
DOE Acting Assistant Secretary for Fossil Energy Christopher Smith stated that “[u]nderstanding the nature and setting of deepwater gas hydrates is central” to the DOE-led National Methane Hydrates R&D Program, and cited an “unprecedented” level of cooperation among government, industry, and academia as critical to the success of recent gas hydrate research activities.
BOEM Strategic Resources Office Chief Renee Orr added that the new data will “uniquely inform” the agency’s efforts to assess the resource potential of gas hydrates in federal waters.
Based on the findings from a 2009 drilling project in the same area, BOEM estimates that the northern Gulf of Mexico is home to sand-rich reservoirs containing gas hydrates that house 6,700 trillion cubic feet of gas.  By using new data from the 2013 expedition to update estimates on the nature, distribution, and concentration of gas hydrates in this region, BOEM says it will be better able to assess the usefulness of specialized seismic data in estimating hydrate saturations in deepwater sediments.
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, updates and Member profiles can be reviewed at: http://www.mzehrhbw.wordpress.com.   Hope you have a great week!
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



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