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A cold, hard look at Arctic drilling as feds prepare to unveil rules

Jennifer A. Dlouhy

WASHINGTON -- Hunting for offshore oil in remote and unforgiving Arctic waters requires vessels capable of withstanding crushing blows from icebergs, a nearby stash of emergency equipment and other specialized resources, according to a new report from Pew Charitable Trusts.

In the 142-page document released Monday, Pew details the Alaska-sized challenges confronting oil companies that do business in the region and calls on federal regulators to impose baseline standards that would govern offshore oil and gas activity at the top of the world.

Interior Department officials are drafting a formal proposal of minimum standards for oil and gas activity in U.S. Arctic waters, partly with an eye on codifying some of the voluntary steps that Shell took during its 2012 drilling in the Chukchi and Beaufort seas north of Alaska.

During a visit to the state earlier this month, Interior Secretary Sally Jewell said regulators would unveil the minimum standards by the end of the year, giving companies with oil and gas leases in federal Arctic waters a chance to decide whether they want to pursue drilling next year.

Shell Oil, which took a pause this summer while its Arctic drilling rigs are repaired in Asian shipyards, has said it aims to return to the region in 2014.

The Interior Department's work is a recognition that the Arctic presents unique challenges, including thick sea ice much of the year, dense fog in summer and remote terrain more than 1,000 miles from the nearest major port.

But most offshore oil and gas equipment - from drilling rigs to skimmers for collecting floating oil - has been designed for temperate conditions. And federal regulations generally make no distinction between oil development in the Arctic and the Gulf of Mexico.

"There should be consistent standards in regulation that every company operating in the Arctic needs to meet. It shouldn't be discretionary, and it shouldn't be what is recommended by the industry," said Marilyn Heiman, a former Interior Department official who now serves as director of Pew's U.S. Arctic Program.

"It should be very clear up front what is required so it is clear to the public and to the industry what they need to do to drill in the Arctic."

FOCUS ON PREVENTION

One major recommendation: Energy companies should have immediate access to emergency equipment for capping and containing blown-out wells and allowing captured oil to flow to surface processing vessels. Pew also wants the oil spill equipment tested in Arctic conditions.

Shell's voluntary Arctic containment system was not ready in time for its 2012 drilling because it was damaged during a deployment drill in Seattle. Interior Department officials have said they expect other companies to prove oil spill containment capability but have not offered specifics.

Many of Pew's roughly 80 recommendations focus on preventing problems. For instance, the group wants the government to limit oil and gas drilling to the 100 days or so a year when ice melts enough that rigs and oil spill response equipment can operate in open water.

Additional performance standards and assessments should define thresholds for when Arctic operations are safe, said Pew, a nonprofit organization that researches public policy issues.

SPECIAL CEMENTING

It said companies should be required to use purpose-built Polar Class drilling rigs that are designed to prevent ice accumulation and survive encounters with thick ice floes while remaining anchored over a well, even when water starts freezing over.

The government also should impose special requirements for cementing wells to secure drill pipe and prevent oil from escaping, since the unique geology and soils of the Arctic can weaken the barrier, Pew said.

Pew also urged that the government require:

--Redundant emergency equipment for controlling blowouts and closing off well holes in emergencies, mirroring Shell's decision to have a second blowout preventer on each of its drilling rigs in the Arctic last year.

--A drilling rig capable of starting to bore a relief well during an emergency within 48 hours, a standard that could in some conditions preclude a company from relying on a second vessel working in a neighboring Arctic sea.

--Well-control specialists with Arctic expertise on rigs during all drilling.

--An armada of Polar Class vessels capable of supporting an oil spill response and working in icy conditions.

Pew's report tacitly acknowledges the likelihood of future drilling in U.S. Arctic waters, which many environmental groups oppose. Its analysis, developed with technical experts, was subjected to external review.

Tommy Beaudreau, the Interior Department's acting assistant secretary for land and minerals management, said he welcomed the "thoughtful review and ideas on standards for prevention, response and safety."


By Jennifer A. Dlouhy
Houston Chronicle