Sunday, July 29, 2012

Bromwich: Shell drilling should proceed if it meets regulations

—Alan Bailey

Michael Bromwich, the erstwhile director of the Bureau of Safety and Environmental Enforcement and now managing principal of the Bromwich Group, has weighed in on the controversy over Shell’s planned drilling in the Beaufort and Chukchi seas.

Bromwich, the man placed in charge of the U.S. Department of the Interior offshore oil and gas regulations in the aftermath of the Deepwater Horizon disaster, was responding to a question posed on July 23 in a blog on the National Journal website, asking whether the United States is ready to venture into oil drilling in “a new frontier of offshore oil and gas drilling in the Arctic Ocean.”

“If Shell is able to fully satisfy the remaining regulatory requirements, they should be allowed to move forward with a necessarily shortened drilling program this summer; if not, then they should not,” Bromwich wrote, reflecting on delays that have already impacted the start of Shell’s planned drilling program. “These should be decisions made by experienced regulators, not decisions driven by politics or influence.”

Drilling delay

Shell originally planned to start moving its drilling fleet into the Chukchi Sea in early July, but unusually large amounts of early summer sea ice in the Chukchi have caused a delay into early August. In addition, Shell has not yet obtained Coast Guard certification of its oil spill containment barge, an essential component of the company’s oil spill response assets. And Shell has had to ask the Environmental Protection Agency to approve modifications to the air quality permits for its drilling vessels.

“The wells that Shell proposes to start drilling in the Arctic’s Chukchi and Beaufort seas in the next few weeks are almost surely the most widely litigated, hotly debated and heavily scrutinized wells in the country’s history,” Bromwich wrote. “The extraordinary level of interest that has existed for some time has increased as the time for Shell to begin drilling has drawn closer, focusing most recently on the complications and difficulties Shell has experienced.”

Bromwich listed a series of issues that he views as heightening the interest in Shell’s plans: the massive investment of time and money by Shell in its Arctic program; the significance of Shell’s program as a first step for the oil and gas industry in the Arctic offshore; concerns about the fragility of the Arctic ecosystem; painful memories of the Deepwater Horizon disaster; concerns about the feasibility of responding to an oil spill in the Arctic; and concerns about the potential impact of an oil spill on Alaska Native communities.

“In short, Shell’s proposal brings into stark relief the difficult question of how to appropriately balance the need to continue developing our offshore energy resources, especially in a region with such vast resources, with the need to preserve and protect the environment in one of the most fragile and treasured ecosystems in the world,” Bromwich wrote.

Balancing interests

By law, the government has to balance the various interests of different stakeholders when regulating programs such as Shell’s Arctic venture.

“Even though the wells Shell proposes to drill in the Chukchi and Beaufort are in shallow water, have low pressure, and are relatively simple as a technical matter, they have received extensive regulatory scrutiny,” Bromwich said.

And the Department of the Interior has yet to approve the permits for any of Shell’s planned wells — the applications for those permits must satisfy the more stringent regulatory requirements that went into effect after the experience of Deepwater Horizon. Those requirements now include an oil containment system for dealing with a subsea well blowout and a mandate to station government inspectors at drilling operations. The Environmental Protection Agency and the U.S. Coast Guard also have responsibilities to ensure that Shell’s activities comply with other regulatory requirements, including air emission limits and the seaworthiness of Shell’s vessels.

Assessing risks

Deepwater Horizon demonstrated that offshore drilling is not without risk.

“But just as the risks should not be minimized, they also should not be exaggerated, as has been frequently been in the case in the debate over Arctic drilling,” Bromwich said. “The risks of an oil spill are extremely small, and never have so many precautions been taken to minimize the chances of a low probability, high consequence event in the world of offshore drilling.”

If Shell can satisfy the regulatory requirements, the company should be allowed to move forward.

“Ironically, the final approval lies in the hands of Mother Nature and whether the sea ice melts in time. That is a powerful reminder of the formidable challenges presented by the Arctic,” Bromwich said.