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Court rejects Kulluk permit appeal 9th Circuit judges say that EPA correctly issued air quality permit for Shell’s Arctic floating drilling rig in the Beaufort Sea By Alan Bailey Petroleum News
Apanel of three judges in the U.S. Court of Appeals for the 9th Circuit has dismissed an appeal by a group of environmental organizations against the air quality permit for Shell’s use of its Kulluk floating drilling platform for exploration drilling in the Alaska Beaufort Sea. The environmental organizations had originally appealed to the Environmental Appeals Board over the Environmental Protection Agency’s issue of the permit. But following the Appeals Board’s rejection of that challenge the organizations elevated the appeal to the 9th Circuit.
In December 2012 the 9th Circuit Court rejected a similar appeal against the air permit for the Noble Discoverer, the drill ship that Shell is using for exploration drilling in the Chukchi Sea.
With the Kulluk’s air permit having passed muster with the Environmental Appeals Board, Shell proceeded with using the Kulluk to drill the top-hole section of a Beaufort Sea exploration well in October 2012. And presumably the air permit will still apply if Shell continues to use the vessel in the Beaufort Sea in the future. The Kulluk is currently being repaired in Singapore following the grounding of the vessel in the Gulf of Alaska on Dec. 31 — Shell has deferred continuation of its Alaska drilling program and has not yet said when or how that program will continue.
Two issues The appeal against the air permit for the Kulluk revolved around two main issues: whether certain mandated limits to air pollutant levels in the region of the drilling should apply to the Kulluk’s operations, and whether a 500-meter zone around the Kulluk should be exempted from air quality standards.
The first of these issues relates to the fact that, although the permit recognizes the Kulluk as a major source of emissions while drilling wells, the permit does not consider the vessel to be “a major emitting facility,” as defined under U.S. statutes. While recognizing that, under these circumstances, there is some legal ambiguity over the applicability of mandated pollutant level limits for the region around the Kulluk’s operations, the 9th Circuit judges said that previous case law supports EPA’s position in issuing the permit without imposing the limits.
The 500-meter zone exemption was EPA’s method of adapting to an offshore drilling operation air emission laws designed to be applied to fixed onshore industrial facilities. For an onshore facility, air emission regulation applies outside the fence that normally surrounds a facility and prevents public access to that facility. With the U.S. Coast Guard having imposed a 500-meter public exclusion zone around Shell’s drilling operation, EPA decided to view the perimeter of that exclusion zone as equivalent to the fence around an onshore facility, with the stipulations of the permit applying to air emissions that cross the exclusion zone boundary.
The 9th Circuit judges upheld EPA’s use of the 500-meter exclusion zone, saying that in its decision in the appeal against the Noble Discoverer’s air permit the court had already set a precedent of accepting this means of defining the boundary for the drilling vessel as an emissions source.
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