NEWS BULLETIN

September 06, 2013 --- Vol. 19, No. 54September 2013

EPA fines Shell for air permit violations

The U.S. Environmental Protection Agency announced yesterday that Shell has agreed to pay a total of $1.1 million in penalties for violations of air quality permit emissions limits by the company’s drilling vessels during the 2012 open water season in Alaska’s Chukchi and Beaufort seas. Shell will pay a $710,000 penalty for violations by the drillship Noble Discover and a $390,000 penalty for violations by the floating drilling platform the Kulluk. The Noble Discoverer, owned and operated by Noble Drilling, was drilling in the Chukchi Sea when the violations occurred, while the Noble Drilling was operating the Shell-owned Kulluk in the Beaufort Sea. Noble Drilling was working under contract to Shell on Shell-operated oil and gas leases.

Shell had applied for and was issued air permits for the operation of the two vessels in its Alaska Arctic drilling program.

According to notices of violation issued by EPA in January, Shell had self-reported excess emission of nitrogen oxides from the drilling vessels and EPA had determined that there had been multiple permit violations by each vessel.

“For its 2012 operations offshore Alaska, Shell accepted stringent emission limits that were based on assumptions and modeling. Following a season of operations, Shell better understands how emissions control equipment actually functions in Arctic conditions,” Shell spokeswoman Megan Baldino told Petroleum News by email in response to EPA’s announcement of the penalties. “Despite reported overages in 2012, the EPA did not allege any negative impact from Shell’s emissions to local populations, nor did Shell exceed its overall allowable annual emissions for the operating season.”

—ALAN BAILEY

See story in Sept. 15 issue, available online at 11 a.m., Friday, Sept. 13 at www.PetroleumNews.com

Cook Inlet production up, ANS down

August data for Alaska’s North Slope show production down by 11.7 percent from July, while July data for Cook Inlet (only available on a month-delay basis) show a 6.8 percent increase over June.

August ANS production was impacted by the end of Alyeska Pipeline Service Co.’s scheduled summer maintenance program, including an 18-hour shutdown of the line and two shorter interruptions. ANS production averaged 439,153 barrels per day in August, down from 497,342 bpd in July.

July Cook Inlet production topped the 15,000 bpd mark, averaging 15,099 bpd, up from a June average of 14,135 bpd and up considerably from a July 2012 average of 10,530 bpd and a July 2011 average of 10,017 bpd.

Changes in Cook Inlet production are being driven by work Hilcorp Alaska is doing at fields it acquired from Chevron, and by work Cook Inlet Energy is doing on fields it acquired following the bankruptcy of a previous owner.

—KRISTEN NELSON

See story in Sept. 8 issue, available online today at www.PetroleumNews.com


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