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Agency, Shell prevail in appeal EPA responds to Appeal Board ruling by proposing a new air quality permit for Beaufort Sea drilling vessel, the Kulluk Alan Bailey Petroleum News
The U.S. Environmental Protection Agency Region 10 has published for public comment a proposed air quality permit for Shell’s Kulluk floating drilling platform for operations in the Beaufort Sea. The authorized air emissions would have no adverse impacts on nearby communities, the agency said.
“The local communities have expressed a wide range of important social and public health concerns related to this permit,” said Rick Albright, director of EPA’s Air, Waste and Toxics office in Seattle. “We examined questions related to air quality impacts associated with the exploratory drilling operation. From an air quality standpoint, this proposed permit will meet all health-based ambient air quality standards.”
The proposed permit in part represents Region 10’s response to the “are they, aren’t they” tussle over whether two drilling vessels in the same drilling program constitute two separate industrial facilities versus a single facility.
Key question And the answer to this apparently esoteric question matters.
When in 2007 Shell applied for separate EPA air quality permits for the floating drilling platform Kulluk and the drillship Frontier Discover, the air emissions from each vessel fell within the limits of minor permits. And EPA Region 10 approved minor permits for both vessels, saying that each vessel could be viewed as a separate “stationary source” of air emissions during drilling operations provided that the vessels operated at least 500 meters apart.
Were EPA to have required a single permit for the two vessels as a single facility, the combined emissions would have triggered the need for a major air quality permit, a significantly more complex permitting requirement than the issuing of minor permits.
But a coalition of organizations, including the North Slope Borough, Resisting Environmental Destruction on Indigenous Lands or REDOIL and the Northern Alaska Environmental Center, appealed the EPA approval to the Environmental Appeals Board.
The petitioners said that the Shell drilling units should be considered as a single pollution source any time that the units are operating concurrently anywhere within Shell’s Beaufort Sea leases. That view stemmed from the definition in the federal regulations of a stationary source of emissions as “all of the pollutant-emitting activities which belong to the same industrial grouping, are located on one or more contiguous or adjacent properties, and are under the control of the same person.”
The Appeals Board rejected the petitioners’ interpretation of the regulations, saying that oil and gas leases were too broad a view of what constituted “property” and that EPA has previously stated that activities should not be aggregated as a stationary source if “they would not fit within the ordinary meaning of ‘building,’ ‘structure,’ ‘facility,’ or ‘installation.’”
Appeal Board challenge But the Appeals Board did question the basis for the 500-yard rule, saying that EPA must provide evidence “on the record” for that rule.
So for the new permit for the Kulluk EPA Region 10 has offered new reasoning for considering two drilling vessels in operation to be different stationary sources.
“Given that a) Shell’s emission generating activity occurs upon the hull (sic) of its vessels, and b) Shell’s ability to preclude public access is limited to the vessel hull, EPA Region 10 believes that the hull of the vessel, when that vessel is attached to the sea floor, is the appropriate unit of property from which to determine whether emissions generating activity is contiguous of adjacent,” EPA Region 10 said.
The agency also said that a company like Shell, especially in the short, weather-dependent Beaufort Sea drilling season, plans each exploration well individually before the start of the season. Each well targets different aspects of the subsurface geology, even within the context of a single exploration prospect. Thus, regardless of their physical distance apart, drilling different exploration wells cannot be considered as contiguous activities.
The new proposed permit also includes some other changes from the 2007 Kulluk permit: EPA has changed the specified emissions inventory and the emissions standard, and has added terms under which the permit could be revised, terminated or reissued.
However, the question regarding the emissions from more than one drilling vessel may be a mute point for the time being, since for 2008 Shell only plans to conduct a single-rig drilling program in the Beaufort Sea, using the Kulluk. (See story in last week’s Petroleum News, the issue of Feb. 24, 2008, at www.petroleumnews.com. Access restricted to subscribers.)
The proposed permit can be viewed at http://yosemite.epa.gov/R10/AIRPAGE.NSF/Permits/OCS. Comments are due by April 1.
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