Offshore Energy Today | 12 July 2016

US Government Issues Final Rule for Arctic Offshore Drilling

The US Department of the Interior, acting through the Bureau of Ocean Energy Management and the Bureau of Safety and Environmental Enforcement, on 7 July issued the final rule regarding offshore drilling in Alaska, requiring operators to have containment equipment and a relief well rig ready in case of a blowout.

The rule, focused on the offshore continental shelf within the Beaufort Sea and Chukchi Sea Planning Areas—Arctic OCS—aims to “help ensure the safe, effective, and responsible exploration of Arctic OCS oil and gas resources, while protecting the marine, coastal, and human environments and Alaska Natives’ cultural traditions and access to subsistence resources.”

The Arctic-specific regulations focus solely on OCS exploratory drilling operations from floating vessels within the US Beaufort and Chukchi Seas.

These rules require oil companies to ensure proper internal controls and planning for oil-spill prevention, containment, and responses—all issues identified by previous Interior reports regarding Shell’s 2012 exploration activities in the Arctic.

NPR | 22 June 2016

Federal Judge Strikes Down Obama Administration’s Hydraulic Fracturing Rules

A federal judge in Wyoming has struck down the Obama administration’s regulations on hydraulic fracturing, ruling that the US Bureau of Land Management (BLM) does not have the authority to establish rules over hydraulic fracturing on federal and Indian lands.

A hydraulic fracturing site is situated on the outskirts of Midland, Texas, in the Permian Basin. Credit: Spencer Platt, Getty Images.

In the ruling on 21 June, US District Judge Scott Skavdahl said Congress had not granted the BLM that power and had instead chosen to specifically exclude hydraulic fracturing from federal oversight.

Skavdahl made it clear what he was—and was not—considering in his ruling.

“The issue before this court is not whether hydraulic fracturing is good or bad for the environment or the citizens of the United States,” he wrote. The question, instead, is “whether Congress has delegated to the Department of Interior legal authority to regulate hydraulic fracturing. It has not.”

The BLM rules in question include a requirement that companies drilling for oil and natural gas disclose the chemicals they use in the fracturing process. They also mandate storage protocols for recovered waste water, cement barriers between wells and water zones, and detailed disclosure of the locations of existing wells.

Reuters | 21 June 2106

German Government Agrees To Ban Hydraulic Fracturing Indefinitely

Germany’s coalition government agreed to ban hydraulic fracturing for shale gas indefinitely on 21 June after years of fractious talks over the issue, but environmental groups said the ban did not go far enough and vowed to fight the deal.

Test drilling will be allowed but only with the permission of the respective state government, officials said.

German industry is keen to keep the door open to fracturing, arguing it could help lower energy costs, but opposition is strong in the country, where a powerful green lobby has warned about possible risks to drinking water.

If the law is approved by parliament, Germany will follow France, which has banned the practice, whereas Britain allows it subject to strict environmental and safety guidelines.

Holland & Knight via Mondaq

US House Passes Pipeline Safety Bill; Senate Expected To Pass Soon

The US House of Representatives passed the Protecting Our Infrastructure of Pipelines and Enhancing Safety Act of 2016 (PIPES Act of 2016) unanimously on 8 June 2016. The Senate is expected to pass the bill very soon. The bill is a collaboration between the House and Senate and is an amendment to a bill passed by the Senate in March.

The PIPES Act of 2016 would reauthorize the Pipeline and Hazardous Materials Safety Administration (PHMSA) from fiscal year (FY) 2016 to FY 2019. PHMSA still has not issued 16 of the 42 congressional mandates from the 2011 reauthorization bill (the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011), and stakeholders have advocated for completion of those mandates rather than extensive new requirements.

State Impact | 15 June 2016

EPA Bans Disposal of Fracturing Waste Water at Public Treatment Plants

The US Environmental Protection Agency (EPA) has banned the disposal of hydraulic fracturing waste water at public sewage plants, formalizing a voluntary practice that removed most fracturing waste from Pennsylvania plants starting in 2011.

Waste Treatment Corporation in Warren, Pa. The EPA has banned oil and gas producers from using publicly owned treatment facilities to dispose of hydraulic fracturing waste. Photo courtesy of Clean Water Action.

The EPA on 13 June finalized a rule that prevents operators from disposing of waste from unconventional oil and gas operations at publicly owned treatment works.

The rule is designed to prevent the entry into public water systems of contaminants such as heavy metals, chemical additives, and high concentrations of salt that are associated with hydraulic fracturing and which public water systems are typically not equipped to treat.

Most energy companies stopped sending hydraulic fracturing waste water to public treatment plants starting in 2011 when the administration of former Pennsylvania Gov. Tom Corbett called on the industry to end the practice.

Myron Arnowitt, Pennsylvania director for the environmental group Clean Water Action, said compliance with the Corbett administration’s request was “not 100%” but that most energy companies have since then found other ways of disposing of or treating the water, including industrial treatment plants, underground injection wells, and recycling.

“It’s not going to affect tons of sources right this second,” Arnowitt said.

Norton Rose Fulbright via Mondaq | 15 June 2016

Newfoundland and Labrador Hydraulic Fracturing Review Panel Releases Report

The Canadian province of Newfoundland and Labrador mandated an independent panel to conduct a public review and advise the minister of natural resources on the socioeconomic and environmental implications of hydraulic fracturing in Western Newfoundland. The panel has now issued its report.

In November 2013, the province imposed a pause in processing approvals of hydraulic fracturing of onshore and onshore-to-offshore wells in Western Newfoundland. The pause was to allow for a review of regulations in other jurisdictions, technical work to assess the local geology, and to allow for public consultation.

The Port au Port Bay area in Western Newfoundland contains the Green Point shale, which is thought to contain an estimated 150 million bbl of recoverable oil and 75 Bcf of gas. Industry had proposed seismic in the area.

The panel’s report does not provide a simple yes or no recommendation as to whether hydraulic fracturing should be allowed. Instead, it identified a number of gaps and deficiencies that need to be addressed and recommended some supplementary measures be implemented and that the regulatory pause continue.

SNL | 6 June 2016

California Regulator Aims for 50% Methane Emissions Cut With Proposed Oil, Gas Rule

The California Air Resources Board (CARB) proposed new greenhouse gas and methane emissions standards for oil and gas facilities that it said will cut these emissions by more than 50%.

CARB anticipates a reduction of 1.5 million metric tons of carbon dioxide equivalent, more than 3,600 tons of volatile organic compounds, and more than 100 tons of toxic air contaminants annually, most of which would occur in the San Joaquin Valley. “California’s rule would be one of the strictest proposed,” CARB said in a 1 June statement.

The proposal document detailed system, treatment, operation, and device standards applicable “at all times” to facilities for onshore and offshore oil or gas production; crude oil, condensate, and produced-water separation and storage; underground storage; gathering and boosting stations; gas-processing plants; and gas transmission compressor stations.

Rigzone | 31 May 2016

How SEMS II Has Changed US Offshore Oil, Gas Operations

The impact of the 2010 Deepwater Horizon accident—in which 11 workers on board the Deepwater Horizon drilling rig were killed when BP’s Macondo well blew out—continues to reverberate across the oil and gas industry. In April of this year, the Bureau of Safety and Environmental Enforcement (BSEE) announced new oil well control rules to prevent another accident like Deepwater Horizon from occurring. Last fall, BP was ordered to pay more than USD 20 billion in criminal and civil penalties and clean-up costs, making the settlement the largest corporate settlement of its kind in US history. The rig’s owner, Transocean, and well partner Anadarko Petroleum also faced litigation and fines over the accident.

Deepwater Horizon—a saga to be retold in a movie debuting later this year—also has affected how audits of offshore oil and gas operations are conducted and how hazards are mitigated.

Brady Austin

Safety and Environmental Management Systems II (SEMS II), which includes 17 elements that oil and gas operators must address in offshore operations, have profoundly affected how oil and gas companies approach operations, Brady Austin, quality, health, safety, and environment service line owner with engineering, technical, and business services firm Lloyd’s Register, said. SEMS II, a nontraditional, performance-based tool used for integrating and managing offshore operations, was created to enhance the safety of operations by reducing the frequency and severity of accidents, according to a statement on BSEE’s website. Currently, SEMS II applies only to operators and lessees in U.S. waters.


EHS Journal | 23 May 2016

Evaluating Executives’ Commitment to EHS Audit Programs

Corporate environmental, health, and safety (EHS) audit programs require a substantial commitment on the part of executive management in order to be successful. Programs must be defined and implemented, resources committed, audits conducted, and deficiencies corrected.  If all goes well, there is a presumption that unwanted surprises and incidents will be rare, resulting in fewer management headaches and no material adverse personal consequences for senior managers.  Truly a win-win for both the company and its executives.

Sadly, it is not always the case that senior corporate executives participate actively in EHS audit programs. A passive approach is much more common as EHS compliance, and performance is often deemed to be the sole responsibility of the EHS and sustainability managers in the organization.  The premise of this article is that this passive approach is perilous for both the individual and the company.  Senior executives should be involved actively, and there are ways to test whether this involvement is real or not. What follows is a discussion of why participation is important and a way to test whether it is truly happening in a given organization.

EHS Journal | 17 May 2016

Environmental Compliance in India Through an Auditor’s Lens

India—A Rapidly Growing Economy
India, counted among the emerging economies of the world, is scripting its growth story today. Its economy grew at an accelerated rate of 7.6% in 2015–16. The Indian manufacturing sector is being given necessary impetus and the National Manufacturing Policy envisages enhancing the share of manufacturing sector in gross domestic product to 25%. To realize this vision and to put the economy on a faster growth track, the Indian government has taken up a series of initiatives with the core objectives of improving the ease of doing business. Some of the noted initiatives to promote industrialization in the country include Make in India, E-Biz Project, Start-Up India Action Plan, Skill development programs, streamlining the process for obtaining environment and forest clearances and labor sector reforms. However, rapid (and, so far, largely inadequately regulated) industrial growth in India over the past 2½ decades has led to an accelerated degradation of the environment, long-term adverse environmental impacts, and socioeconomic conflicts in various parts of the country.

Foundations of Environmental Regulations in India
India has a parliamentary form of government with separate executive, legislative, and judicial branches. The Indian constitution is one of the few in the world that contains provision relating to environment conservation. Article 21 of the Constitution of India guarantees the right to life and personal liberty as a fundamental right. The Supreme Court of India in 1978 breathed substantive life to this article in the case of Maneka Gandhi v Union of India (1978). In the case Subhash Kumar v State of Bihar (1991), the Supreme Court of India declared that Article 21 “includes the right of enjoyment of pollution-free water and air for full enjoyment of life”. Since then, right to live in a healthy environment has emerged as an inherent part of the Right to Life enshrined in Article 21. Introduction of the Public Interest Litigation (PIL) concept in India led to consequent liberalization of locus standi. The first PIL on environmental issues in the country before the Supreme Court of India was the case, Rural Litigation and Entitlement Kendra v State of UP (1988).

India has a number of acts and rules along with national and subnational policies and standards covering various environmental aspects. Environmental Democracy Index ranked India at the 20th position out of 70 countries by acknowledging India’s progress in enacting national laws to promote environmental democracy. However, the country does lack on the implementation and enforcement front of these laws and regulations.

How This Article Can Help
Often, those responsible for the implementation of these regulations in industries (e.g., the factory manager or the health, safety, and environment manager) are unaware of all the nuances of environmental regulations or are unclear about their interpretation, attracting avoidable liabilities for their facility and organisation. Hence, this article is designed as a quick review of some of the most common violations observed in India and reasons for the same.

It is to be noted that the status of compliance with environmental regulations and the drivers for achieving compliance vary widely between different industry sectors, scales of operations, and states. This article is based on the most common trends observed by the authors across various industry sectors and states in India. The views presented here do not represent the condition of any specific sector or group of industries; nor do they represent conditions in any particular state within India.

Offshore Energy Today | 17 May 2016

Regulator Rejects BP’s Environment Plan for Drilling Offshore Australia

Australian offshore petroleum regulator NOPSEMA has once again told BP to modify and resubmit their environment plan for exploration drilling in the Great Australian Bight because the plan does not meet the regulatory requirements.

BP’s environment plan was previously dismissed by the agency in November 2015, also because of a failure to meet the regulatory requirements.

According to the regulator, if BP accepts this opportunity, the modified plan is expected to be resubmitted by 15 July, at which time NOPSEMA will restart the assessment.

The regulator explained that an opportunity to modify and resubmit the plan was a normal part of its environment plan assessment process. In fact, NOPSEMA said, the regulator is required by law to provide a titleholder (the company proposing the activity) a reasonable opportunity to modify and resubmit their plan if it doesn’t meet the regulatory requirements for acceptance.

Rigzone | 16 May 2016

EPA Unveils New Rules To Cut Oil, Gas Methane Emissions

Oil and gas industry groups are calling the Obama administration’s final rule to cut methane emissions from US oil and gas production costly and unnecessary. They argue the industry already has made headway in reducing emissions through innovation and improvement in exploration and production methods.

The US Environmental Protection Agency (EPA) on 12 May said it is finalizing new regulations aimed at reducing methane, volatile organic compounds (VOCs), and toxic air emissions from new, modified, and reconstructed sources in US oil and gas operations.

The final standards for new and modified sources are expected to reduce 510,000 short tons of methane in 2025, the equivalent of reducing 11 million metric tons of carbon dioxide, the EPA said in a 12 May press statement. They also are expected to reduce 210,000 short tons of ozone-forming VOCs in 2025, along with 3,900 tons of air toxins, such as benzene, toluene, ethylbenzene, and xylene. These emissions are associated with health issues such as asthma, suspected in causing cancer and other health problems, EPA said.

EPA estimates the final rule will yield climate benefits of USD 690 million in 2025, which will outweigh estimated costs of USD 530 million in 2025. EPA also expects benefits to be seen from reductions in VOCs and air toxics but could not quantify those benefits.