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Vol. 11, No. 18 Week of April 30, 2006
Providing coverage of Alaska and northern Canada's oil and gas industry

Setting the stage for Arctic offshore oil, gas exploration

Alan Bailey

Petroleum News

With oil prices at record levels and companies champing at the bit to find more oil reserves, plans to shoot seismic offshore Alaska’s Arctic are picking up speed. Shell, ConocoPhillips and Houston-based GX Technology Corp. all plan to shoot seismic this summer in the Chukchi Sea, ahead of a Chukchi lease sale planned for 2007 by the U.S. Minerals Management Service. And Shell also plans to shoot seismic on leases it purchased in MMS’ 2005 Beaufort Sea lease sale.

But this mushrooming activity has North Slope Native communities worrying about potential impacts on subsistence hunting and traditional Native life. The communities depend on hunting bowhead whales and other marine mammals, both as a source of food and as part of a cultural tradition. Noise from industrial activities could disturb the wildlife and disrupt hunting, Native leaders say.

The various issues surrounding offshore oil and gas development came to the forefront at the National Marine Fisheries Service’s annual Arctic Open Water Peer Review Meeting, held from April 18 to 21 in Anchorage, Alaska. Companies wanting to shoot seismic in U.S. waters have to obtain what is known as an incidental harassment authorization (or IHA) from NMFS — the open water meeting provided the public with an opportunity to comment on the IHA applications before the applications are finalized.

And comments came aplenty.

Conflict avoidance agreement signed

People need to consider the cultural and human impacts of offshore development, Edward Itta, mayor of the North Slope Borough, told the meeting attendees. Itta said that the North Slope Borough is adamantly opposed to offshore oil and gas developments in the Arctic. He expressed particular concern about the potential impact of an offshore oil spill and said that no one has demonstrated technologies for cleaning up an oil spill in Arctic waters.

“We need you to understand that you cannot separate the ocean from us. … we are tied in intricately,” Itta said.

Itta is also concerned about rushing into offshore development without adequate information about the potential impacts, especially in the Chukchi Sea.

“Too much, too soon, too fast,” Itta said.

But Itta also recognized the realities of what is happening.

“We are also realistic enough to know that we can’t ever go back and we want to work with you, and we want some definitive project that is going to answer the concerns,” he said.

A core issue that emerged during the discussions in the Anchorage meeting was the need for a conflict avoidance agreement for the summer industrial program, signed off both by industry and the North Slope whaling captains’ associations. Negotiations prior to the meeting had already resulted in a draft agreement, but some issues remained to be resolved.

Ken Hollingshead, the meeting facilitator from NMFS, pointed out that the lack of a conflict avoidance agreement would require NMFS to start a further investigation before it could issue any IHAs for the seismic work.

“We strongly urge a conflict avoidance agreement to be signed,” Hollingshead said.

On April 24 Hollingshead got his wish. The whaling captains’ associations of the North Slope communities of Kaktovik, Nuiqsut, Barrow, Wainwright and Point Hope signed a conflict avoidance agreement for the 2006 open water program.

Mark Kosiara, Shell’s health, safety and environment lead for Alaska, stressed his company’s commitment to conducting safe and environmentally responsible operations.

“We have a strong safety culture in Shell and we are committed to executing our operations in a way that is as safe to humans as feasibly possible,” Kosiara told the meeting attendees. “… We have a … strong culture on protecting the environment. We want to make sure our operations are cognizant of that here, in this very sensitive region.”

Kosiara commented on the company’s engagement with stakeholders on the North Slope.

“We want to make sure that we do everything we can to minimize our impacts on the subsistence whale hunts,” he said.

Kosiara said that Shell plans to mobilize on July 1 from Dutch Harbor in the Aleutian Islands, to carry out 3-D seismic surveys in the Chukchi Sea. The company has contracted WesternGeco to do the surveys using the M.V. Gilavar, with the M.V. Kilabuk as chase vessel. (According to Shell’s MMS permit application both the Gilavar and the Kilabuk are owned by an Azerbaijan company.)

Shell plans to move the vessels into the Beaufort Sea when sea ice conditions permit and in accordance with a timetable specified in a conflict avoidance agreement with subsistence whale hunters.

The company expects to eventually spend two to three seasons acquiring 3-D seismic data from all of its Beaufort Sea leases; exactly which areas it surveys in any particular season will depend on ice conditions.

“Sometime in mid-August through early October we would hope to collect 3-D seismic data in the Beaufort Sea,” Kosiara said. “… As … the ice starts to move in we’ll be moving back out to the Chukchi, where we hope to acquire some additional 3-D seismic data until the end of the season.”

Shell expects the seismic data acquisition in the Chukchi to continue until the end of October, Kosiara said.

Site clearing, well cellars

In parallel with the seismic operations, Shell is mobilizing another vessel, the Henry Christofferson, from the Canadian Beaufort to perform site clearing operations, identifying shallow water hazards in the Alaska Beaufort Sea, as part of Shell’s program to explore the company’s offshore leases. That operation should start in late July and might last until early October, depending on ice conditions, Kosiara said.

Also in parallel with the other operations, Shell is commissioning two Russian icebreakers to cross to Canada’s Beaufort to tow the Kulluk floating drilling barge to the Alaska Beaufort (see “Shell on fast forward” in the March 5 edition of Petroleum News). After all whaling activities have ceased, the Kulluk will prepare some mud-line “cellars” in preparation for the placement of wellhead equipment in 2007 at future well sites in Shell’s Beaufort leases, Kosiara said.

At the end of the open water season the Russian icebreakers will tow the Kulluk back to Canada. Shell has been unable to locate a safe mooring for the Kulluk in Alaska, Kosiara said.

ConocoPhillips shooting Chukchi only

In 2006 ConocoPhillips will only shoot offshore seismic in the Chukchi Sea but will not shoot in the Beaufort Sea, Bruce St. Pierre Jr., senior environmental coordinator for ConocoPhillips Alaska Inc., told the meeting attendees. St. Pierre also said that ConocoPhillips has been working with the Alaska Eskimo Whaling Commission and visiting North Slope villages, describing the company’s plans and seeking input.

“That’s an important component of how we work,” St. Pierre said.

ConocoPhillips has contracted with WesternGeco to use the M.V. Western Patriot for its Chukchi seismic. The seismic crew will mobilize from Dutch Harbor in early July. Surveying should start around July 15 and may continue into November, depending on the sea ice conditions.

“Our operations will be pretty much focused on the areas around the prospects drilled in the previous (Chukchi) wells,” St. Pierre said, adding that the company would also survey some other areas.

GX Technology shooting its own 2-D

GX Technology, a subsidiary of seismic company I/O and a newcomer to Alaska, also plans to shoot seismic in the Chukchi, Todd Jones, the company’s integrated seismic services program development manager, told the meeting attendees. GX Technology started out as a seismic data processing company but began doing seismic data acquisition about five years ago, Jones said.

Working on a scale of hundreds of miles across complete oil and gas margins the company gathers 2-D data from depths of 20,000 feet or more and then processes and licenses the data.

“We’re looking for basins. We’re looking for how the container was developed where all these sediments came in and were deposited onto,” Jones said.

And that’s the type of regional program that GX Technology proposes for the Chukchi Sea. According to the company’s MMS permit application the company also plans to collect magnetic data across the region.

“We’ve laid out a program from a geologically driven standpoint but then we impart what’s doable from an operational standpoint … we will not operate where there is ice,” Jones said. “… Our focused area is still in the central portion of those lease block areas — they are a primary target that we’re trying to collect data on for this year.”

The company will be using a large 2-D survey vessel, towing four single-gun arrays and a 4,500-meter streamer, Jones said. According to GX Technology’s MMS permit application the vessel is named the M.V. Discover and is owned by Shanghai Offshore Petroleum Geophysical.

Jones said that the seismic crew will mobilize at the beginning of July at Dutch Harbor and move out to open water to begin operations as early as possible in the season. Data acquisition in the Chukchi will continue until ice in the Beaufort Sea opens sufficiently for the vessel to cross to Canada’s Beaufort, to do a survey there. Later in the season the crew will return to the Chukchi to complete as much as possible of the Chukchi data acquisition.

Academics to do surveys, too

In addition to the industry seismic surveys, a team from the University of Texas and the U.S. Geological Survey plans to acquire seismic data in the northern Chukchi Sea and Arctic Ocean, using the U.S. Coast Guard icebreaker Healy during the summer season. This seismic program forms part of a scientific study of the composition of submarine plateaus and the structure of the Earth’s crust in the Arctic Ocean.

Other open water activities in 2006 will include barging operations by FEX and Pioneer Natural Resources, in support of their exploration and development activities.

Federal permits needed

All of the organizations planning to do seismic surveys in the open water season require permits from MMS and from NMFS.

MMS permitting requirements fit within that agency’s role in administering the operation of the National Environmental Policy Act (known as NEPA) on the U.S. outer continental shelf.

NEPA requires an environmental assessment of any activity that involves federal action or approval. If the environmental assessment determines that the activity is likely to have a significant environmental impact, an environmental impact statement, or EIS, is required.

The procedure for developing an EIS can take several years to complete. MMS has a set of science-based criteria for determining a significant environmental impact.

In general, MMS grants an offshore seismic survey what is known as a categorical exclusion from an environmental assessment. However, given the level of interest and planned activity in the Arctic offshore, the agency is preparing what it terms a “programmatic environmental assessment” (or PEA) for the complete 2006 program of seismic surveying in the Beaufort and Chukchi Seas. The agency has published the PEA in draft form for public review — the review period ends on May 8. The draft PEA and contact information for comments are available at www.mms.gov/alaska/ref/pea_be.htm.

“Anticipating an increase in seismic survey permitting activities in the Arctic Ocean in 2006, the Minerals Management Service decided to prepare the subject document (the PEA),” Wayne Crayton, MMS biologist and NEPA team coordinator, told the open water meeting attendees. “… The comments that we receive from it will be used by the Minerals Management Service to environmentally evaluate possible impacts associated with ramping geological and geophysical seismic surveys.”

MMS has also published on its web site permit applications from the companies wishing to do the seismic surveys. The public can comment on those applications, although there is no mandated comment period for seismic permits, Crayton said.

Crayton explained that a determination of a significant environmental impact in the PEA would trigger the need for an EIS for the complete seismic program. However, even were the whole program to require an EIS, an individual seismic survey might not in itself require an EIS. But, in any case, each seismic survey will require an individual environmental assessment, although that assessment will be very straightforward if the survey falls within the scope of the PEA.

Incidental harassment authorization

NMFS also has responsibilities under the terms of NEPA and is a cooperating agency in the development of the MMS PEA. NMFS will use the PEA to assist in its evaluation of the environmental impacts of the seismic program, Crayton said.

But the main focus for NMFS is the protection of marine wildlife under the terms of the Endangered Species Act and the Marine Mammals Protection Act. And it is the Marine Mammals Protection Act that spells out the need for an organization doing an offshore seismic survey to apply to NMFS for an incidental harassment authorization.

In issuing an incidental harassment authorization NMFS specifies criteria that will prevent what NMFS considers to be harassment to sea mammals.

As part of its criteria NMFS prohibits the shooting of seismic if there are whales within a zone where seismic noise levels exceed 180 decibels. The equivalent noise level for pinnipeds such as seals is 190 decibels (the MMS PEA quotes research indicating that the ambient noise level in the Arctic marine environment is in the range 63 to 133 decibels).

Monitoring and mitigation

To ensure compliance with MMS and NMFS permit stipulations and to avoid harassment of marine mammals each offshore seismic crew has to establish an exclusion zone around its seismic vessel. Within that zone the sound levels from the seismic air guns exceed the marine mammal harassment levels.

As the vessel moves through the water, the exclusion zone may approach marine mammals. In that case, the crew will power down the seismic operation. If an animal comes within the exclusion zone the seismic operation will shut down.

Two marine mammal observers on each vessel (including support vessels) must continuously monitor the ocean for animals, to initiate a power down or shut down, as necessary.

The observers also have to communicate with whaling crews and an industry-whaling communications center, to minimize impacts on subsistence hunting. Observers will include people from the North Slope communities, who can bring local knowledge and experience to the observation program.

Initially, the crews will use exclusion zone dimensions derived from computer models that use parameters such as the water depth to estimate sound levels propagated from the seismic air guns.

Given the uncertainties regarding the accuracy of the models, crews will add safety factors to the estimated exclusion zone dimensions. However, as a first step in surveying in a particular region each seismic crew must verify the zone dimensions by measuring the actual sound levels at various distances around the seismic vessel.

After completion of the sound level verification the crew will use the measured size of the exclusion zone, rather than the modeled size.

The marine mammal observers have to record their observations as part of the reporting process associated with the government permits. The observations also build on the accumulated data about the wildlife of the region and help in planning future offshore work programs.

Shell plans additional wildlife monitoring

Shell described some additional wildlife monitoring that it plans. The company will monitor marine mammal movements by the use of daily aerial surveys in the Beaufort Sea and by vessel-based surveys in the Chukchi Sea, Shell biology advisor Michael Macrander explained.

Shell also plans acoustic monitoring of animal sounds in the Beaufort Sea, he said.

“In the course of developing the monitoring plan there were several goals that we should look to achieve,” Macrander said. “… The first one is to meet the reporting requirements. … We also have to develop a monitoring program allows us to be protective of the (marine mammal) resources and the resource use. … The third goal is to contribute to advancing science.”

And Kosiara explained that Shell has also committed $1 million to a research program for deploying new seafloor acoustic recorders and developing new computer software for interpreting the data from the recorders.

Impact on subsistence hunting

But will all of these monitoring and mitigation measures satisfy the needs of the subsistence hunters from the North Slope communities?

The crucial issue for hunters is the potential for the industrial disturbance to deflect the summer whale migration route and, thus, force the hunt dangerously far offshore or even render the hunt impractical.

There was some debate at the meeting as to whether a 120-decibel sound level limit would be needed to prevent whale deflection. However, the conflict avoidance agreements between industry and the whalers are designed to ensure separation between the seismic activities and the whale hunts.

One of the major concerns that emerged from the discussions at the meeting was the need for much more scientific data about the Arctic offshore. People were especially concerned about the Chukchi Sea, where relatively little is known about the ocean biology. People also voiced concerns that data should be gathered as soon as possible — a lack of solid information leads to uncertainty and worry about the impacts of industrial activities. And comprehensive data would enable a better understanding of industry impacts for future planning.

Mayor Itta expressed his support for efforts by industry to work with North Slope communities to gather more data.

“These kinds of efforts allay my concerns,” Itta said. “I would truly support as much to get done this season as possible.”

“We’re going to do this,” responded Rick Fox, Shell’s asset manager for Alaska, “… It’s that simple.”

What if whales can’t be hunted?

There was also general agreement in the meeting that, although scientific data are very important, the traditional knowledge of the Native peoples is also critical to any assessment of the situation.

Gordon Brower of the North Slope Borough planning department said that in the past seismic activities have deflected whales and disrupted hunting.

“The whales are nowhere in sight and lo behold there is seismic activity being conducted,” he said.

And Harry Brower, chairman of the Alaska Eskimo Whaling Commission, expressed major concern at the high level of activity planned for the 2006 open water season — the whaling captains are saying that there may not be whales this fall, he said.

“That’s a concern that I need to share with you all,” Brower said. “… This is something that we have not seen before, having this much noise being propagated into the water.”

Would it be possible to reduce noise levels by consolidating the seismic activities into a single operation, some of the North Slope representatives at the meeting asked.

Maggie Ahmaogak, executive director of the Alaska Eskimo Whaling Commission, pointed out that a poor subsistence harvest would lead to food shortages in the North Slope communities.

“What is industry prepared to do if … all the animal resources … are not available to them to harvest?” she asked.

Agreements on monitoring and mitigation

The upshot of discussions around the concerns of people from the North Slope was a commitment by all of the companies engaged in offshore seismic data acquisition to implement a comprehensive monitoring program to gather data about the marine wildlife and the impact of the seismic work. An industry team will develop a monitoring plan that potentially includes sound monitoring from vessels and an array of passive sound monitors offshore the Chukchi and Beaufort Sea coasts.

Chandler Wilhelm, Shell’s manager for Alaska exploration, said that Shell will commit to a baseline environmental monitoring program.

“If we do not do this now we will not be able to answer the fundamental questions … when we are faced with other decisions later on,” Wilhelm said.

Wilhelm also said that Shell commits to explore appropriate ways in which to mitigate any adverse impacts of the seismic work on North Slope communities.

Wilhelm said that reducing the level of seismic activity presents greater difficulties than meeting the monitoring and mitigation concerns. However, he said that Shell would commit to a “small surgical program” in the Chukchi by limiting the total area of the survey to 2 percent of the lease sale area. Shell is also working with the other companies doing seismic work to find ways to limit the amount of vessel traffic for logistical support of the offshore operations.

ConocoPhillips and GX Technology made the same commitments as Shell on monitoring and mitigation. ConocoPhillips said that it also would limit its seismic activities to about 2 percent of the Chukchi lease sale area. GX Technology said that it will consult with its stakeholders on how to reduce its program. The company will also investigate how to reduce the impact of its seismic operations by coordinating its program with other operators, Jones said.

The Alaska Eskimo Whaling Commission emphasized the need for a protocol for reducing the noise or stopping operations, if the subsistence hunters observe an impact from the seismic work on their hunt.

“There’s some work to do there but that should be no problem,” Fox said.

So what comes next?

MMS will likely complete its programmatic environmental assessment in May, prior to completing consideration of the individual seismic permits. NMFS will probably issue the incidental harassment authorizations in June.



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