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Vol. 15, No. 8 Week of February 21, 2010
Providing coverage of Alaska and northern Canada's oil and gas industry

Beaufort air permit

EPA issues proposed air quality permit for Shell’s Beaufort Sea drilling

On Feb. 17 the U.S. Environmental Protection Agency issued a proposed air quality permit for Shell’s planned drilling program in the Beaufort Sea. Shell plans to use the drillship Frontier Discoverer to drill one well in its Beaufort Sea Torpedo prospect and another well in its Sivulliq prospect during the 2010 open water drilling season — both prospects are on the outer continental shelf, on the west side of Camden Bay, east of Prudhoe Bay.

The EPA permit, allowing exhaust emissions up to prescribed annual limits for the drilling program, is a critical piece of the required permitting for Shell’s exploration plan.

“We are pleased this permit is now out for public comment,” Shell spokesman Curtis Smith told Petroleum News Feb. 17. “This permit is the result of a year-plus effort on behalf of Shell and the EPA to ensure the minimization of air emissions from our program in the Beaufort Sea.”

EPA is inviting public comments on the proposed permit until March 22 and the agency has scheduled public hearings in the Beaufort Sea coastal communities of Barrow, Nuiqsut and Kaktovik. Following the public comment period the agency will decide whether to issue the permit.

Feb. 17 was also the closing day of the public comment period for a similar EPA air quality permit for Shell’s planned drilling operations in the Chukchi Sea — the company proposes drilling up to three wells in its Chukchi Sea leases in 2010.

Following a multiyear, unresolved courtroom tussle over previously approved minor air quality permits for its planned drilling in the Beaufort Sea, Shell elected to apply for major prevention of significant deterioration air quality permits, rather than minor permits, for its latest Beaufort Sea and Chukchi Sea exploration plans. The company is also making a $25 million modification to the Frontier Discoverer, to install catalytic reducers to scrub the engine exhaust and thus reduce the emission of pollutants by more than 90 percent. And the company has committed to the use of low-sulfur fuel in the diesel engines of the Frontier Discoverer and other vessels in its drilling fleet.

In both the Beaufort Sea and the Chukchi Sea permits, EPA is inviting public comment on a couple of options for the definition of an “OCS source,” for the purposes of determining the periods during which Shell’s drilling fleet comes under the terms of the air emissions permit. The question of what constitutes an OCS emissions source, a critical factor in determining the total emissions from an offshore drilling program, became a major bone of contention in the court battles over Shell’s earlier Beaufort Sea minor air quality permit.

Essentially, determining when a drillship becomes an OCS emissions source, as distinct from a regular ship plying the ocean, becomes a question of defining each period during which the drilling vessel is in a fixed position, working at a drill site.

The Frontier Discoverer has a drilling turret that is anchored at a fixed position over a well location during a drilling operation, with the turret moored by set of eight anchors and the ship’s hull able to rotate around the turret to face the wind or sea ice.

In one proposed definition the vessel would become an OCS source during the entire period that the vessel is attached to the seafloor by at least one anchor at a drill site. According to the other proposed definition the vessel would be an OCS source only during the period when the vessel is deemed sufficiently secure and stable for drilling operations, a situation that would presumably require multiple anchors to be deployed but which EPA says does not necessarily require all of the vessel’s eight anchors to be in place.

In addition, the supply vessel used for resupply of the drillship would become part of the OCS source during periods when the supply vessel is attached to the drillship, EPA says. And, when calculating the total emissions anticipated from a drilling operation, EPA is taking into account the estimated emissions from any vessels supporting the operation, when those vessels are within 25 miles of the drill site when the drillship is in place as an OCS source.

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