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Providing coverage of Alaska and northern Canada's oil and gas industry
November 2010

Vol. 15, No. 47 Week of November 21, 2010

Air permits a big issue

Air permits are “surprisingly difficult to get in the Chukchi Sea and the Beaufort Sea offshore,” Geoff Haddad, ConocoPhillips’ vice president for Alaska exploration and land, told the Alaska Support Industry Alliance Nov. 11.

That was “a bit of a shock to me, coming from the Gulf of Mexico.,” Haddad said.

Air permits are what have held Shell up in its Arctic offshore drilling projects, he said, “basically going back to when they first wanted to drill in the Beaufort.”

Air permits for offshore Alaska are managed by the Environmental Protection Agency Region 10, Haddad said, “and EPA Region 10 is taking a very extreme view of the Clean Air Act.”

He said EPA Region 10 is regulating air permits for temporary activities from drilling rigs and supporting vessels 80 miles offshore as though those emissions were coming from a factory next to a village or town.

It’s different in the Gulf of Mexico, he said, because the central and western Gulf were carved out of the Clean Air Act and offshore air permits there are handled by BOEM. That agency regulates air emissions by calculating the emissions for a project and then modeling how those emissions will impact the shore.

Haddad said BOEM collects data on emissions from all projects and does a cumulative impact for the shoreline, and emissions from 80 miles offshore are pretty diluted by the time they reach shore.

The biggest problem ConocoPhillips sees coming, he said, is that nearby Chukchi operators could use up any emissions allowance. And that’s inconsistent, he said, with the small size of the leases and the fact that BOEM uses sealed competitive bidding, so a prospective leaseholder has no way of knowing in advance how many operators would have leases in a given area.

Haddad said what EPA is doing now is “first come, first served.”

“So if you’re in there first with your air permit … you’ll get it; and if you’re next, if your lease is next to the other operator (and) you came in second, you probably won’t because the emissions increment is already taken up by the first operator.”

He said ConocoPhillips has “pushed back on that” and thinks it will probably be able to get a permit for its first operation, but is “very concerned about development permits down the road.”

—Kristen Nelson






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