US regulator defends arctic drilling proposal

OREANDA-NEWS. June 19, 2015. The top US offshore safety regulator today defended a proposed rule that would require oil and gas producers exploring in the arctic to have equipment on hand to drill a relief well in case of a blowout.

Bureau of Safety and Environmental Enforcement (BSEE) director Brian Salerno, appearing before a US House of Representatives' panel, said regulators must ensure that producers operating in the Chukchi and Beaufort seas off the Alaskan coast can seal off a blown out well within the same drilling season.

As Shell prepares to resume drilling in the Chukchi in coming weeks after a three-year hiatus, US regulators are mulling more than 100,000 comments on a proposed rule that would require operators to leave enough time – up to 45 days – to drill a relief well during the same season.

Critics have complained about the costs involved in having drilling equipment available to drill a relief well are onerous. Salerno told the House Natural Resources Committee's Energy and Mineral Resources Subcommittee that producers drilling in the arctic would not have to have a rig sitting idle to comply with the regulation. Instead they could rely on a second rig working in the region, or even another company's rig operating in the vicinity, to comply with the regulation.

Industry trade groups the American Petroleum Institute and the National Ocean Industries Association, together with the US Chamber of Commerce, told BSEE in comments filed last month that "relief wells have historically not been used to regain well control." Instead, technological advances such as capping stacks and seabed isolation devices may represent better solutions for dealing with a blown out well.

To wrest control of the blown-out Macondo well in 2010, BP first installed a capping stack to stop the flow of oil into the US Gulf of Mexico. The company then pumped heavy drilling mud into the well, in a process known as a "static kill." And, eventually, BP sealed off Macondo by completing a relief well.

BP had begun drilling the relief well in early May, just days after the 20 April blowout. But the relief well was not completed until 19 September, 152 days after the blowout.

Salerno told that panel that if an alternative well kill system has been developed that is as effective as a relief well "we have not seen it." But if the technology exists "the arctic is not the place where we want to rely on uncertain technology as a substitute for a relief well."

While subsea shut-in devices have been widely used in the US Gulf, Salerno said he is not aware of data that would indicate they could perform for nine months in ice-covered waters.

Representative Don Young (R-Alaska) challenged the necessity of having equipment to drill a relief well, since well pressures in the Chukchi are known to be low. A "blowout will not occur," he declared.

Salerno conceded the risks of a blowout are low. But he noted: "These things do happen, and they are actual risks."

The US Interior Department estimates the Chukchi and Beaufort planning areas contain about 21.5bn bl of technically recoverable oil and 93.5 Tcf of gas. The proposed rule would not apply to Shell's Chukchi drilling plans, but the regulation was modeled on the requirements imposed on Shell.

Shell still must obtain the necessary letters of authorization from the US Fish and Wildlife Service and drilling permits from BSEE before it can resume work begun in 2012.

The drilling rig Transocean Polar Pioneer, and a flotilla of associated support vessels, left Seattle yesterday and is en route to Alaska. A second drilling rig, the Noble Discoverer, will leave Puget Sound in coming days.

Shell's 2012 arctic drilling program was plagued by a series of mishaps. A containment dome on the Arctic Challenger was damaged during testing. The Noble Discoverer dragged its anchor and nearly ran aground on the Alaska coast later that month, raising concerns about its ability to operate in harsh arctic conditions. Shell opted to move its Kulluk drilling rig through the Gulf of Alaska in December, only to have it run aground on Sitkalidak island after breaking free from its towing vessel during stormy weather.