One more step for Shell
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EPA issues Shell’s air permit for the Kulluk to drill in Beaufort Sea in 2012
Alan Bailey Petroleum News
The U.S. Environmental Protection Agency has issued a final air permit for Shell’s planned use of its Kulluk floating drilling platform for exploration drilling in the Beaufort Sea starting in July 2012. The permit comes about a month after the issue of similar permits for the use of the drillship Noble Discoverer in both the Chukchi and Beaufort Seas.
“EPA’s final permit significantly reduces the potential air pollution from Shell’s drilling operations and protects the National Ambient Air Quality Standards,” EPA said on Oct. 21 when announcing its issuance of the permit for the Kulluk. “Strict pollution controls in the permit include selective catalytic reduction units and catalytic oxidation reduction units on some engines, use of low-sulfur diesel fuel fleet-wide, and limits on operational hours.”
Public appeals for review of the permit must be received by the Environmental Appeals Board by Nov. 28, EPA said. The agency published a draft version of the permit in July and after a public review period made a number of technical changes before issuing the final version.
“Shell has been in pursuit of a usable air permit for nearly five years,” said Shell spokesman Curtis Smith in response to the issue of the permit. “We appreciate that EPA Region 10 has thoroughly evaluated our program and issued a final permit for the Kulluk that is technically and scientifically sound. Shell has gone to great lengths to meet the goal of having no measurable impact on coastal villages, including a retro-fit of the Discoverer’s catalytic exhaust system and ongoing, multi-million dollar modifications to the Kulluk.”
Drilling decision? With the issue of the air permit for the Kulluk Shell now has all of the air permits that it needs to carry out its planned drilling in the Beaufort and Chukchi seas — the company wants to drill up to four wells in the Beaufort Sea and up to six wells in the Chukchi Sea, starting in 2012. However, on Oct. 24 some Native groups and environmental organizations appealed the Noble Discoverer permits issued a month ago and Shell has yet to announce any final decision on its planned 2012 drilling. Shell has said that it needs to make a decision in late October on whether to start activating its drilling operations and that the company’s decision will depend on the status of all of the various permits that the company needs.
“Going forward, we will continue to advance our drilling plans and evaluate investment decisions that would allow us to commence with a 2012 drilling season,” Smith told Petroleum News Oct. 21.
The terms of the new Kulluk air quality permit appear to be very similar to those of the Noble Discoverer. The permit considers the Kulluk to be a stationary emissions source requiring an air permit when it is moored at a drill site by at least one anchor. And the emissions from any vessel in the Kulluk’s support fleet are also regulated under the terms of the permit when that vessel is within 25 miles of the Kulluk during a drilling operation. The support fleet includes icebreakers, anchor handlers and vessels that are part of Shell’s oil spill response assets.
Shell has to notify EPA by April 1 each year of any drill sites where the company plans to drill during that year. The Kulluk cannot operate as a stationary source for more than 120 days in any drilling season, with drilling operations limited to a maximum of 1,632 hours in a season.
Other challenges Although Shell now has its air permits, the company still faces several challenges to its drilling plans, in addition to appeals against the air permits themselves.
In August the Bureau of Ocean Energy Management, Regulation and Enforcement announced conditional approval of Shell’s Beaufort Sea exploration plan. However, on Sept. 29 the Native Village of Point Hope and 12 environmental organizations appealed the BOEMRE decision in the U.S. Court of Appeals for the 9th Circuit. The court has set a deadline of Dec. 19 for submission of the petitioners’ opening brief, with respondents answering briefs due by Jan. 17, 2012.
Shell submitted its plan for its Chukchi Sea drilling to BOEMRE in May. However, the agency placed its review of the plan on hold because of an unresolved appeal in the U.S. District Court in Alaska challenging the validity of the 2008 Chukchi Sea lease sale in which Shell purchased its leases. On Oct. 3 BOEMRE’s successor agency, the Bureau of Ocean Energy Management, published a new supplementary environmental impact statement and record of decision for the lease sale. That new record of decision affirmed the sale, thus paving the way for the review of Shell’s plan to proceed.
On Oct. 18 Michael Bromwich, director of the Bureau of Safety and Environmental Enforcement, told a U.S. Senate committee that the Department of the Interior is doing everything it can to complete a review of Shell’s Chukchi Sea plan. And on Oct. 26 the District Court confirmed that BOEM can proceed with the exploration plan review.
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