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EPA releases draft Shell air permits Agency says it has addressed questions raised by Appeals Board in appeal over permits for planned Beaufort and Chukchi Sea drilling Alan Bailey Petroleum News
The multiyear saga of Shell’s efforts to obtain air quality permits for its planned exploration drilling in Alaska’s Beaufort and Chukchi Seas took its latest twist on July 1 when the Environmental Protection Agency released yet another version of the permits for public review. The air quality permits form a particularly critical component of the permitting requirements for Shell’s OCS plans, with appeals over permit issuance being a major factor in past deferrals of company’s Arctic OCS drilling program.
Needed for 2012 Shell wants to drill in Alaska’s Beaufort and Chukchi Seas during the 2012 Arctic open water season and needs the permits before it can proceed with its plans. Comments on the draft permits are required by Aug. 5.
“We appreciate the work done by EPA Region 10 to issue Shell draft air permits for our upcoming drilling program,” Shell spokesman Curtis Smith wrote in an email dated July 1. “The issuance of these permits is a critical milestone and keeps in motion a series of events that will ultimately determine our ability to drill in 2012.”
The permits in question relate to the operation of the drillship Noble Discoverer – Shell plans to use both the Discoverer and the floating drilling platform the Kulluk in 2012 and will need to separately apply for an air quality permit for the Kulluk. The company announced recently that it is moving the Kulluk to Seattle for power plant and generator upgrades to reduce air emissions.
Shell has said the efforts to secure air quality permits for its Alaska drilling have so far cost the company about $60 million over a period of four and a half years.
EAB mandate Following unresolved litigation over minor air quality permits that Shell had originally tried to obtain for drilling in Alaska’s Beaufort Sea, in 2008 the company elected to apply for major Prevention of Significant Deterioration permits for planned drilling in both the Beaufort and Chukchi Seas. However, with no previous permits of this type having been issued for drilling in the Arctic offshore, EPA was forging new ground when it published the new permits in April 2010.
The permits were promptly appealed to the Environmental Appeals Board, a panel of judges within EPA, by the Native Village of Point Hope and eight environmental organizations. In December 2010 the EAB issued a ruling on the appeal, sending the permits back to EPA for revision and saying that EPA needed to change the specification for when a drillship becomes a stationary emissions source, as distinct from a regular vessel plying the oceans. The EAB also ordered EPA to take into account a new nitrogen oxides emissions rule that had come into force while EPA had been preparing the permits.
After a request for clarity over some issues raised in the appeal but not initially addressed by the EAB, the EAB in February 2011 also ruled that EPA needs to provide an explanation of why it decided that the modeling of certain types of particulate emissions from the drillship is not necessary.
Modifications made In the new draft permits EPA has modified the original permits to address the requirements of the EAB orders. The permits now state that Shell’s drillship will be considered to be a stationary OCS emissions source when attached to the seafloor by at least one anchor at a drill site. The original permits had considered the drillship to be a stationary source when Shell’s on-site representative declares that the vessel is secure, stable and able to conduct exploratory activity. The new permits incorporate the requirements of new nitrogen oxides emissions regulations, as well as revisions to certain particulate emissions limits, based on Shell’s air quality monitoring.
And recognizing that EAB’s December ruling had required EPA to “apply all applicable standards in effect at the time of issuance of the new permits on remand,” the permits now mandate a limit on greenhouse gas emissions by Shell’s drillship and its attendant fleet, to ensure that these emissions remain below levels that would trigger greenhouse gas permitting. EPA has recently implemented the regulation of greenhouse gases for major emissions sources.
Additional changes EPA has made a number of other changes to the permits “in response to additional information and requests from Shell,” EPA says. Those changes include a specification that the drilling season will end by Nov. 30 rather than Dec. 31; a reduction in the total number of operational days allowed under each permit; an increase from 10 days to six months in the advance notification required for operations at a new drill site; the reduction of some emissions from one of Shell’s icebreakers; the removal of restrictions on the relative positions of vessels in the drilling support fleet; and the removal of some limits on visible emissions from that support fleet.
“While air permits must be issued as ‘final’ to become usable, the movement from EPA on the draft permits for the Discoverer is meaningful progress,” Smith said. “Many years of work have gone into achieving these permits and the support from Alaska to Washington D.C. has been tremendous. We believe the work we have done to further modify and reduce our air emissions to meet new standards meets the goal of having no measurable impact on the environment or coastal villages.”
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