On Sept. 19 the U.S. Environmental Protection Agency announced that it had issued final air quality permits for Shell to operate the Noble Discoverer drillship for exploratory drilling in Alaska’s Chukchi and Beaufort seas, starting in the Arctic open water season of 2012. The air quality permits represent a key piece of the required permitting for Shell’s planned Arctic outer continent shelf drilling.
EPA says that the new permits take account of issues raised during a successful appeal against earlier permits issued to Shell in 2010. Any petition for review of the new permits must be submitted by Oct. 24, the agency says. An appeal against the new permits would go to the EPA’s Environmental Appeals Board for adjudication. However, after several years of abortive efforts to obtain air quality permits for its planned Arctic drilling, Shell has said that it believes its new permits will prove robust in the face of any new appeal.
“The issuance of these permits comes on the heels of BOEMRE’s conditional approval of Shell’s Beaufort Sea plan of exploration and adds significantly to our confidence that we will be permitted to explore our leases in the Alaska offshore,” said Shell spokesman Curtis Smith in response to the EPA announcement. “Shell has been in pursuit of a usable air permit for nearly five years. We appreciate the effort EPA Region 10 has made to evaluate our program and issue final permits that are technically and scientifically sound.”
Chukchi Sea
Shell actually plans to use the Noble Discoverer for drilling in the Chukchi Sea, with the company deploying its floating drilling platform, the Kulluk, for drilling in the Beaufort Sea. The company has applied for a separate air quality permit for the operation of the Kulluk and its attendant fleet in the Beaufort — Shell has said that it anticipates the issue of that permit in mid-October.
In August the Bureau of Ocean Energy Management, Regulation and Enforcement announced conditional approval of Shell’s exploration plan for the Beaufort Sea, although the company will require BOEMRE drilling permits before drilling can commence. Meantime a BOEMRE review of Shell’s Chukchi Sea exploration plan is on hold pending resolution of litigation over the lease sale in which Shell purchased its Chukchi Sea leases. That litigation is about to head back to the federal District Court in Alaska for potential resolution, following completion by BOEMRE of a new Chukchi Sea lease sale supplementary environmental impact statement.
Shell plans to drill up to six wells in the Chukchi Sea and up to four wells in the Beaufort Sea, starting in 2012. The company has said that it needs to make a go/no-go decision by late October for drilling in 2012, given the cost and time taken to activate and deploy its drilling operations.
Support and opposition
“This is another positive step in Shell’s effort to explore the Alaska OCS. We appreciate the EPA completing work on these air permits,” said Alaska Gov. Sean Parnell in response to the EPA air quality permit announcement. “We remain hopeful that the Department of the Interior and the EPA can resolve other issues related to spill response plans, exploration plans, air quality and litigation issues, so Shell can explore in both the Chukchi and Beaufort seas in 2012 and 2013.”
“This announcement continues the momentum we need to develop Alaska’s true energy potential, create thousands of jobs and improve our nation’s energy security,” said Sen. Mark Begich, D-Alaska. “Over the past months I’ve hammered home the message that the Obama administration needs to approve key permits allowing increased oil and gas exploration in Alaska. This continues to prove there is a recognition Alaska is key to more domestic oil and gas production.”
However, environmental groups and some Alaska Native organizations remain adamantly opposed to Arctic offshore oil and gas development. In a Sept. 19 press release titled “EPA gives Shell the go-ahead to pollute America’s Arctic Ocean,” Rosemary Ahtuangarauk, tribal liaison for the Alaska Wilderness League, said that the Obama administration is signaling that those who live in the Arctic are “less important than Shell oil.”
“Today, the Obama administration issued final Clean Air Act permits for the Discoverer drill ship — pushing the Inupiat people of Alaska’s Arctic coast one step closer to being forced to hand over our Arctic Ocean to Shell Oil,” Ahtuangarauk said. “If Shell is allowed to proceed with its proposed drilling, the resulting pollution could have a devastating impact on my people, who have called the Arctic home for thousands of years.”
Untested territory
One reason for the problems surrounding Shell’s Arctic air quality permits has been the fact that EPA has been heading into new and untested territory when preparing major air permits for the outer continental shelf — the only analogous permitting situation occurs in the Gulf of Mexico where BOEMRE, not EPA, is responsible for air permits for offshore oil operations.
And one of the difficulties that EPA has wrestled with has been the question of defining the periods within which a drillship becomes a stationary emissions source, requiring an air permit, rather than a regular vessel plying the ocean. Following the ruling in the appeal against the earlier versions of Shell’s permits, the new permits for the Noble Discoverer consider the drilling vessel to be a stationary source when the vessel is moored at a drill site by at least one anchor. And also following that appeal, the new permits incorporate EPA’s most recent emissions standards, including limits on greenhouse gas emissions.
The permits limit the Noble Discoverer to operate as an emissions source during drilling operations to a maximum of 120 days per year, with the drilling season limited to the period between July 1 and Nov. 30, and with drilling limited to a total of 1,620 hours in a single season. Shell must give EPA six months advance notice of any drilling sites where it plans to drill. Stipulations for permitted emissions apply to both the drillship and to any support vessel within Shell’s drilling support fleet, when that vessel is within 25 miles of the drillship during a drilling operation. The support fleet includes icebreakers, oil spill response vessels and supply ships.
