The Hill | 3 May 2016

EPA Offers No Timetable for Methane Rule at Current Drilling Sites

A top Environmental Protection Agency (EPA) official said regulations on methane leaks from new oil and gas well are coming “soon” but sidestepped questions on when a similar rule for existing wells will come out.

The Obama administration is focused on first collecting data for a potential existing well rule, said Janet McCabe, head of the EPA’s Office of Air and Radiation. That type of information, she said, will help EPA regulators write a rule to cut down on drilling-site emissions of methane, a potent greenhouse gas.

But, challenged at a Bloomberg Government event on 27 April whether such a regulation will come before Obama leaves office, McCabe would not say. “We have been moving in a very methodical manner to address pollution in ways that withstood legal challenges and are making a difference on the ground, and that is what we’re doing,” she said. “We’re proceeding step by step by step, using our legal authorities to address these important issues. Every step that we’re taking is focused in that direction.”

Establishing rules on methane is one of the EPA’s top priorities before Obama leaves office next year.

The Durango Herald | 18 April 2016

Study: Energy Industry Supports Methane Rules in Colorado

Colorado’s oil and gas industry is generally supportive of the state’s comprehensive methane emissions regulations and views them as a cost-effective step toward reducing the venting, flaring, and leaking of natural gas from industrial drilling operations, a study released on 15 April shows.

The study, conducted by Keating Research on behalf of the Center for Methane Emissions Solutions, asked oil and gas representatives to discuss the impact of Colorado’s Regulation 7 on their operations. The center represents the interests of companies in the methane mitigation industry, such as those conducting leak detections and repairs.

Patrick Von Bargen, executive director of the center, said the first-of-its-kind study examined the impact of methane emissions regulations on the oil and gas industry. “The reason we commissioned this Colorado report is that Colorado has the most comprehensive set of methane regulations in the country right now,” Von Bargen said. “And as we were working with industry and with policymakers, we heard a lot of anecdotal information about how it was working in Colorado.”

Reuters | 14 April 2016

US Sets New Offshore Oil Safety Rules

The Obama administration on 14 April unveiled new oil well control rules to prevent the kind of blowout that happened 6 years ago on a BP rig in the Gulf of Mexico.

The Interior Department’s Bureau of Safety and Environmental Enforcement announced the finalized regulations, which include more stringent design requirements and operational procedures for offshore oil and gas operations.

The new standards come nearly 6 years after a deadly explosion and fire on the Deepwater Horizon oil rig off the cost of Louisiana, which led to the worst oil spill of all time.

The Macondo well blowout and the fire on 20 April 2010 killed 11 workers.

Interior Secretary Sally Jewell told reporters the rule took 6 years to complete because the agency wanted to understand the root cause of the disaster.

“There are a number of things that went wrong,” she said. “It was important that we understood those things and the evolution of technology.”

The Interior Department said it took into account industry and other stakeholder feedback since it first proposed the rule last April.

To improve the “culture of safety” on oil rigs and prevent future spills or blowouts, the new rule tightens requirements for blowout preventers, well design, well control casing, cementing, and subsea containment.

It also calls for real-time monitoring, third party reviews of equipment, regular inspections, and safe drilling margin requirements.

The agency estimates the new rule would cost the industry $890 million over a 10-year period, but would yield $1.5 billion in benefits.

Offshore Energy Today | 13 April 2016

Safety Watchdog Keeps an Eye on Statoil’s New Drilling Method

The Petroleum Safety Authority (PSA) has carried out an audit of how Statoil is meeting regulatory requirements relating to the use of a new method for drilling and well intervention at Gullfaks C, in the North Sea.

The PSA in December 2015 carried out an audit of Statoil’s planning and execution of the through tubing rotary drilling (TTRD) method for intervention, drilling, and completion of wells at Gullfaks C. The audit was conducted at Statoil’s premises at Sandsli.

TTRD involves drilling a sidetrack well from an existing, conventional well. According to Statoil, the greatest benefit of this method is that new reservoirs can be reached without the need to remove existing trees, production tubing, or casings.

Statoil also claimed that TTRD wells are particularly useful for reaching isolated pockets of oil and gas on mature fields in a cost-efficient manner.

In its report, the PSA said that these types of well operations differ in many respects from conventional methods and, therefore, may entail a different risk scenario.

The objective of the audit was to monitor how Statoil, along with its drilling contractor KCA Deutag and other stakeholders, is safeguarding the planning, experience transfer, and execution of TTRD operations with regard to the regulations and its own requirements, the PSA said. | 6 April 2016

Colorado Governor, Industry Urge Cautious Hand in Regulating Oil and Gas

Collaboration and negotiation allowed Colorado to draw up oil and gas regulations that protect the public and the environment while encouraging a lucrative state industry, the governor and the president of an industry group say.

Gov. John Hickenlooper and American Petroleum Institute President Jack Gerard talked on 31 March about regulation, the future of the industry, and the possibility of limits on hydraulic fracturing.

Hickenlooper—a Democrat and a former petroleum geologist—and Gerard appeared together at an industry forum in Denver. Gerard discussed the industry later in an interview.

EHS Journal | 31 March 2016

Column: The Problems With Many Corporate Audits

Many companies have policies in place that specify the frequency of their internal environmental audits. Once a year or every other year, a company does an internal audit or hires external auditors to do it.

When a company has a major chemical accident, investigative bodies such as the US Chemical Safety Board looks into the causes of the accident. More often than not, these investigative bodies discover that internal audits had identified the root cause of these accidents.

And, yet, the facility still blew up and killed hundreds of workers. Why is that? Why didn’t senior management pay heed to the warning signs highlighted in the audit reports?

There are basically several underlying reasons.

The first reason is that many corporate auditors look for “consistent” audits. They want to see consistency year after year. Yet, good audits are never consistent. At a recent conference of auditors, many environmental managers said they wanted the same old external auditors to do their audits every year in order to get “consistent” results. They didn’t want to spend time explaining their manufacturing process to a new external auditor. They wanted someone who is very familiar with their operation.

Fuelfix | 17 March 2016

Obama Tightens Air Standards on Offshore Drilling

The Obama administration continued its crack down on air pollution from oil and gas operations on 17 March, this time targeting offshore drilling.

The Bureau of Ocean Energy Management (BOEM) announced it was developing new air standards for the first time in more than three decades. Looking at operations in the Gulf of Mexico and Arctic Ocean, the proposed rules are designed to rein in emissions on everything from offshore platforms to the ice breakers that clear the way off the coast of Alaska.

With proposals already pending on natural gas leaks and the practice of flaring gas at oil wells, the administration is seeking to clean up an industry that had largely avoided the tough air pollution standards placed on power plants and other large industrial operations.

“This proposal incorporates key aspects of today’s practices into our regulations, while also bringing our regulations up to speed with the best available science,” BOEM Director Abigail Hopper said in a statement.

Fuelfix | 3 March 2016

Top US Official Says Adjustments Made on Offshore Drilling Rule Following “Alarmist” Industry Response

A new federal rule designed to reduce the chance of another offshore drilling accident off the Gulf coast like Deepwater Horizon has undergone some “adjustments” in response to intense industry criticism, a top US energy official told a House subcommittee on 2 March.

In this April 2010 file photo, oil can be seen in the Gulf of Mexico, more than 50 miles southeast of Venice on Louisiana’s tip, as a large plume of smoke rises from fires on BP’s Deepwater Horizon offshore oil rig. (AP Photo/Gerald Herbert, File)

Brian Salerno, director of the Bureau of Safety and Environmental Enforcement, said changes to the new offshore drilling standards had merely codified what was standard practice at his agency—that inspectors did not rigidly follow the letter of the law but worked with operators on offshore drilling rigs to find safe and reasonable solutions.

“There’s been a lot of alarmist language associated with this,” Salerno said, following a hearing before the House Subcommittee on Energy and Mineral Resources. “To believe it you would have to ignore the way this agency has historically operated.”

Salerno declined to go into specific changes, citing the fact that what is known as the well control rule is still under review at the Office of Management and Budget.

Osler, Hoskin & Harcourt via Mondaq | 25 February 2016

New Canadian Offshore Liability Regime Becomes Effective 26 February

The Energy Safety and Security Act (ESSA), passed in 2014 by the Harper government, introduced changes to the liability regimes governing Canada’s offshore oil and gas industries. These changes are slated to be effective on 26 February and include increasing the amount of security required to be provided to CAD 100 million, raising the cap on absolute, or no-fault, liability from CAD 30 million (CAD 40 million in the Arctic) to CAD 1 billion and empowering offshore regulators to issue administrative monetary penalties.

In their current form, the guidelines and regulations indicate that participants in Canada’s offshore oil and gas industries will be required to post CAD 100 million security in respect of each operations authorization for the drilling for or development or production of petroleum. While not perhaps initially appreciated, this change in regulatory practice may be one of the most significant changes implemented by ESSA. However, ESSA provides relief from this financial responsibility requirement where participants demonstrate their participation in a pooled fund that is maintained at a minimum of CAD 250 million.

The Washington Times | 15 February 2016

Alaska Adopts New Rules for Dispersant Use in Oil Spills

Alaska oil spill responders have adopted new rules for the rapid use of chemical dispersant but say dispersant will continue to be considered only rarely when mechanical cleanup is not practical.

Chemical dispersant has been used on an oil spill just once in Alaska in the last 40 years—in tests during the 11-million-gallon crude oil spill that followed the 1989 grounding of the Exxon Valdez oil tanker. The preferred method of cleanup is mechanical, usually using boom to corral oil and skimmers to lift it from the water.

The plan sets up one “preauthorization zone” that would allow a federal on-scene coordinator to authorize mobilization of dispersant and the elaborate gear needed to spread it. A final decision on actually using dispersant would be made after consultation with wildlife experts, tests of the dispersant and other steps.

Offshore Energy Today | 11 February 2016

US To Enlarge Funds for Oil and Gas Regulatory Bodies

US President Barack Obama’s fiscal year 2017 budget, announced on 9 February, includes a request of USD 175.1 million to fund the Bureau of Ocean Energy Management’s (BOEM) mission to manage offshore energy and mineral resources and a request of USD 204.87 million for the Bureau of Safety and Environmental Enforcement (BSEE).

According to BOEM, the request would provide BOEM with resources needed to effectively manage oil and gas development, renewable energy, and mineral resources on the US outer continental shelf (OCS) in a way that promotes efficient and environmentally responsible development.

“The president’s budget request for BOEM will support ongoing efforts and important initiatives that are vital to our mission and critical to advancing Administration priorities,” said BOEM Director Abigail Ross Hopper.

“This request reflects the resources and personnel needed to develop our capacity and to carry out our mission carefully, responsibly, and efficiently.”

Wyoming Tribune Eagle | 11 February 2016

Wyoming Regulators Approve Tougher Well Flaring Rules

Wyoming oil and gas regulators approved new rules on 9 February to limit how much and for how long natural gas petroleum developers may vent or burn off gas from newly drilled wells.

Companies would need approval to vent or flare longer than 6 months under the rules approved by the Wyoming Oil and Gas Conservation Commission in Casper.

Lower volumes of gas could be vented, or released without burning. Higher volumes would need to be burned off for safety and to limit air pollution.

Gas vented or flared from a well couldn’t exceed 45 million cubic feet, or 600 times more gas than an average US household uses in a year, without commission approval.