HBW Greenfield #Offshore #Energy Report


HBW Resources: Greenfield Offshore Energy Report

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. 

New Deepwater Gulf of Mexico Capping Stack Now Available For Deployment
The Marine Well Containment Company (MWCC) last Wednesday announced the availability of a 9 feet x 9 feet  ~50 ton capping stack for use in the deepwater Gulf of Mexico that can handle up to 10k pounds of pressure per square inch (psi).  MWCC’s system now includes two capping stacks, with the initial capping stack having been introduced in 2011. 
MWCC Chief Executive Officer Marty Massey says that the addition of the new and smaller capping stack–the design and construction of which was led by Shell–addresses input from member companies that operate facilities containing wells that are in closer proximity to one another and not as easily accessible for MWCC’s larger 15k psi capping stack. 
MWCC notes that the new dual ram capping stack is “easier to maneuver in areas where wellheads and riser systems are closely spaced,” and that it can cap a well at depths of up to 10,000 feet.
MWCC is a Houston-based independent organization open to all Gulf of Mexico oil and gas operators that provides well containment equipment and technology in the deepwater U.S. Gulf of Mexico.  Its mission is to be ready to respond to a deepwater well control incident in the Gulf of Mexico.  MWCC’s current membership is comprised of Anadarko, Apache, BHP Billiton, BP, Chevron, ConocoPhillips, ExxonMobil, Hess, Shell, and Statoil.
Offshore Oil & Gas Legislation Introduced In U.S. House Of Representatives
U.S. Rep. Kevin Brady (R-TX) last Wednesday introduced H.R. 2265, a bill that directs the U.S. Interior Secretary to issue a new 5-Year Outer Continental Shelf Oil and Gas Leasing Program within 2 years of enactment.  Once issued, the new 5-Year plan would replace the existing 2012-2017 Leasing Program.  The bill is co-sponsored by Rep.’s John Shimkus (R-IL) and Robert Wittman (R-VA).
Under the proposed legislation, the Interior Secretary would be required to (1) allow coastal state Governors to nominate sites for leasing that are located in adjacent OCS areas; (2) include any such nominated areas in the draft leasing program and consider the leasing of such areas as an alternative Federal action; and (3) include available resource estimates in the development of the new leasing program and develop resource estimates for areas lacking such data, including state-nominated sites.
The Interior Secretary would be required to include any state-nominated sites in the final program unless the Secretary determines that the impacts of oil and gas development in a particular area cannot be effectively mitigated and the development is not in the national economic interest. 
For any state-nominated sites that are omitted from the final plan, the Secretary would be required to transmit a report to the relevant Governor and U.S. House Natural Resources Committee explaining in detail why oil and gas development is not in the national economic interest or why the impact in such area cannot be effectively mitigated, and what steps were taken by the Secretary to try and mitigate such impacts.  Affected Governors would have 60 days to offer a response on why the findings are inconsistent with the national economic interests and how oil and gas development in the applicable area can be effectively mitigated.
The bill notes that the 2012-2017 Leasing Program excludes the entire Atlantic and Pacific Coasts and nearly all of the Eastern Gulf of Mexico, adding that “[m]any state governments have expressed a desire to proceed with oil and gas exploration and development off their coasts, but have not had the support of the Federal Government.”
DOI Authorizes Take Of Pacific Walruses & Polar Bears During Chukchi O&G Exploration Activities
The U.S. Interior Department’s Fish and Wildlife Service (USFWS) on Wednesday announced the issuance of final regulations that authorize the nonlethal, incidental, and unintentional take of small numbers of Pacific walruses and polar bears during oil and gas exploration activities conducted in the Chukchi Sea and adjacent western coast of Alaska between June 12, 2013 and June 12, 2018 (offshore exploration activities limited to July 1-November 30 absent a USFWS variance).  Activities covered include exploratory drilling, seismic surveys, geotechnical surveys, and shallow hazards surveys. 
The decision follows a January 2012 request by the Alaska Oil and Gas Association (on behalf of its members) and ConocoPhillips, Alaska, Inc. (as a participating party) for the issuance of regulations providing such authorization.
According to USFWS, the total expected takings “will impact small numbers of animals, will have a negligible impact on these species, and will not have an unmitigable adverse impact on the availability of these species for subsistence use by Alaska Natives.” 
Upon request, Letters of Authorization (LOA) will be issued for activities proposed to be conducted in accordance with the new regulations.  LOAs will not be issued for marine activities occurring within a 40-mile radius of Barrow, Wainwright, Point Hope, or Point Lay, AK unless expressly authorized by these communities through consultations or through a Plan of Cooperation.
USFWS notes that LOA requests will be evaluated individually and that it may condition LOA’s based on the specific activity and location concerned.
In addition, all LOA applicants will have to submit the following:
·         Operations Plan;
·         Marine Mammal Interaction Plan;
·         Plan of Cooperation describing the availability of Pacific walruses and polar bears for subsistence use by Alaska Native communities and how that availability might be affected by the operations to be conducted; and
·         Site-specific Marine Mammal Monitoring and Mitigation Plan to monitor any effects of authorized activities on Pacific walruses and polar bears
Within 90 days of completion of the activity, USFWS will also require the submittal of a report on the exploration and marine mammal monitoring activities that were conducted.
Findings of note included in the USFWS announcement include the following:
·         Additional mitigation measures (seasonal restrictions, reduced vessel traffic, or rerouting vessels) may be required for activities occurring within the Hanna Shoal Walrus Use Area
·         “…it is possible that LOAs may not be issued for seismic and drilling activities” in the Hanna Shoal Walrus Use Area
·         “…it is unlikely that LOAs issued…would authorize take” from seismic surveys and exploration drilling in the Hanna Shoal Walrus Use Area during time of high walrus use
·         The likelihood of large spills from oil and gas exploration activities are “extremely remote,” with impacts from such spills thus “highly unlikely”
·         Bureau of Ocean Energy Management/Bureau of Safety and Environmental Enforcement operating stipulations “reduce both the risk and scale of potential spills”
·         “With lower drilling depths and well pressures, well sites in the Chukchi Sea will be more accessible in the event of a spill” compared to other areas like the site of the Deepwater Horizon incident
·         “…should a large spill occur, effective strategies for oil spill cleanup in the broken ice and open-water conditions that characterize walrus and polar bear habitat in the Chukchi Sea are limited”
·         USFWS estimates that up to 3 operators will drill a total of 3-8 wells per year in the Chukchi Sea between June 2013 and June 2018
·         Between June 2013 and June 2018, USFWS estimates that 1 seismic survey program will operate in the Chukchi Sea during the open-water season, that each seismic survey vessel will be accompanied or serviced by 1-3 support vessels, and that helicopters may be used for vessel support and crew changes
·         Between June 2013 and June 2018, USFWS estimates that up to 2 operators will annually conduct 4-7 shallow hazards surveys in the Chukchi Sea
·         Between June 2013 and June 2018, USFWS estimates that up to 2 operators will conduct up to 2 geophysical surveys in the Chukchi Sea in any given year
·         Between June 2013 and June 2018, USFWS estimates that up to 2 environmental studies may be conducted in any given year
Comments Sought On Proposed IHA Permit To Conduct Chukchi Sea Seismic Survey
NOAA’s National Marine Fisheries Service (NMFS) on Wednesday announced that it is seeking comment on its proposal to issue an Incidental Harassment Authorization (IHA) to TGS-NOPEC Geophysical Company ASA (TGS) to take 12 species of marine mammals by Level B harassment while conducting ~9,600 km of marine 2-dimensional seismic surveys along pre-determined lines in U.S. and international waters of the Chukchi Sea during the 2013 open water season.  The NMFS proposal responds to a revised IHA application and marine mammal monitoring and mitigation plan filed by TGS in April 2013. 
TGS proposes to conduct about 35 days of seismic operations covering ~6,088 km of pre-plot lines in U.S. waters in the Chukchi Sea over a period of 45-60 days beginning sometime between July 15 and August 5.  In addition, TGS might conduct up to 33 days of seismic operations in international waters covering ~3,691 km of pre-plot lines.
TGS would gather geophysical data using a 3,280 in³ seismic source array and an 8,100-m long hydrophone solid streamer towed by the seismic vessel.  TGS would also use a smaller vessel to search for marine mammals as well as ice and other navigation hazards ahead of the seismic vessel.   Survey results would be used to identify and map potential hydrocarbon-bearing formations and the geologic structures that surround them.
Comments and information on the NMFS proposal to issue an IHA are due by Friday, July 12, 2013.  Prior to issuing a final decision on the IHA application, NMFS will complete an Environmental Assessment currently being prepared to determine whether the proposed activity will have a significant effect on the human environment.
Comment Period On Potential Iliamna Lake, AK Harbor Seal Listing Extended Through August
NOAA’s National Marine Fisheries Service (NMFS) last Friday announced its decision to extend until Friday, August 16, 2013 the comment period on the agency’s finding that substantial scientific or commercial information indicate that it may be warranted to (1) find that harbor seals in Iliamna Lake, AK are a distinct population segment (DPS) of Pacific harbor seals and list them as a threatened or endangered species; and (2) designate critical habitat.  The proposal responds to a November 2012 petition filed by the Center for Biological Diversity (CBD).
According to NMFS, the agency received a request from the Bristol Bay Native Association/Bristol Bay Marine Mammal Council to extend the comment period for at least 30 days.  NMFS says that the extension will allow the Bristol Bay and Iliamna Lake communities with additional time to comment since the current comment period timeline “overlaps with their summer subsistence and commercial fishing seasons.”
Among other things, CBD asserts that harbor seals in Iliamna Lake, AK constitute a DPS that faces threats including the following:
·         Habitat modification and disturbance associated with the Pebble Project and climate change;
·         Disease and natural predation;
·         Other natural and anthropogenic factors including risks of rarity, entanglement in fishing gear, illegal hunting, oil and gas exploration and development, contaminants, and commercial fisheries; and
·         Inadequacy of existing regulatory mechanisms for addressing greenhouse gas emissions, climate change, ocean acidification, and the Pebble Project
With regard to oil and gas exploration and development, the petition also states that “marine stages of salmon populations that utilize the Kvichak watershed for spawning will impact Iliamna Lake seals.”  The petition then notes that oil and gas development “has been proposed in Bristol Bay in the past, and if it was allowed to go forward could have devastating impacts on salmon in the event of an oil spill or other catastrophic failure.”  The petition further states that “increased shipping due to decreased sea ice and offshore drilling in the Beaufort and Chukchi seas is likely to increase shipping in the North Pacific and Bristol Bay, which would result in an increased risk of oil spills from these vessels.”
National Offshore Safety Advisory Committee To Hold Open Teleconference
The Coast Guard last Thursday announced that the National Offshore Safety Advisory Committee (NOSAC) will hold a public meeting via teleconference call on Tuesday, June 25 to receive a Final Report from the Subcommittee on the Implementation of Standards from the International  Labor Organization Maritime Labour Convention of 2006, a task statement presented at NOSAC’s April 2013 meeting.  The Final Report will be presented to the U.S.  Coast Guard for acceptance upon NOSAC’s approval.
NOSAC will also reconvene the Subcommittee on commercial diving safety to consider recommendations for commercial diving operational standards.
NOSAC provides advice and recommendations to the Homeland Security Department on matters and actions concerning activities directly involved with or in support of the exploration of offshore mineral and energy resources as they relate to matters within Coast Guard jurisdiction.
NOAA Proposes To Remove Expiration Date For Atlantic Vessel Speed Restrictions
NOAA’s National Marine Fisheries Service (NMFS) last Thursday announced that it is seeking comments on its proposal to eliminate the expiration date for regulations designed to protect the endangered North Atlantic right whale that require vessels 65 feet and greater in length to travel at speeds of 10 knots or less in certain areas off the U.S. East Coast during certain times of year.  Without action to remove the expiration date, the rules will expire on December 9, 2013.
In addition to removal of the expiration date, NMFS also seeks comments on metrics for assessing the long-term costs and benefits of the vessel speed restrictions for the endangered North Atlantic right whale population, as well as any modifications that would improve the rule’s effectiveness.  In doing so, it requests comments on whether the sunset provision should be extended to allow more time for a comprehensive review to examine the rule’s benefits and effectiveness, and the appropriate timeframe for such an extension. 
NMFS notes that the sunset provision was included in the 2008 final rule due to (1) uncertainties about the specific ways in which whales and vessels interact at the time of a strike and the mechanisms that drive the relationship of speed and other factors that lead to injuries and deaths; and (2) the burdens imposed on vessel operators. 
The agency states that it now proposes to eliminate the rule’s expiration date “[g]iven that the justification for establishing the initial rule remains applicable and is supported by subsequent studies regarding the diminished probability of lethal strikes and an absence of vessel-related right whale deaths since the rule went into effect…”
NMFS adds that retrospective analysis of the existing rule indicate that the economic impacts “are substantially lower than were initially projected in 2008.”  According to the agency, updated economic analysis now indicate that overall average delays for all vessels was 22 minutes, and ranged from 5 minutes for refrigerated cargo ships to 37 minutes for combination cargo carriers (e.g. oil-bulk-ore).
Comments on the proposed rule are due by Monday, August 5, 2013.
USCG Announces Deepwater Horizon Response Transition To National Response Center Reporting
The U.S. Coast Guard on Monday announced that the Gulf Coast Incident Management Team has begun the transition for the Mississippi, Alabama, and Florida coastlines back to National Response Center reporting.  The transition is expected to be completed by mid-June.
According to the Coast Guard’s Federal On-Scene Coordinator for the Deepwater Horizon Response Captain Duke Walker, “we’ve reached a point in some areas where the impact to the environmentally sensitive land outweighs the minimal amounts of oil being collected.”  Walker adds that the transition “will allow us to adjust to a smaller footprint for cleanup while being environmentally friendly.” 
The National Response Center is the sole national point of contact for reporting oil, chemical, radiological, and etiological discharges into the environment that occur in the U.S. and its territories.  Local Coast Guardsmen are tasked with investigating any reports and taking appropriate action.  
National Climate Assessment and Development Advisory Committee To Hold Meeting
NOAA’s Office of Oceanic and Atmospheric Research on Wednesday announced that the National Climate Assessment and Development Advisory Committee (NCADAC) will hold an open meeting in Washington, DC on July 9-10, 2013.  The meeting will include a 15-minute public comment period, and individuals interested in attending the meeting must RSVP to Cynthia.Decker@noaa.gov by Monday, July 1.
Formed in December 2010, NCADAC’s mission is to gather and summarize the science and information regarding existing and future impacts of climate change on the U.S., and its specific objective is to produce a National Climate Assessment scheduled to be completed in 2013.
The National Climate Assessment (NCA) will include chapters addressing Climate Change Science, Energy Supply and Use, Water/Energy/Land Use, Alaska and Arctic, and Oceans and Marine Resources.  The NCA is intended in part to serve as a status report on climate change science and impacts, and “aims to incorporate advances in the understanding of climate science into larger social, ecological, and policy systems, and with this provide integrated analyses of impacts and vulnerability.”

The most recent NCA was completed in 2009, and an initial draft of the new National Climate Assessment was released in January.
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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