Environmentalists nab one big win in Arctic drilling plans

WASHINGTON — Environmentalists who oppose offshore drilling were enraged over the Obama administration’s decision to green-light Shell’s broad plan for boring exploratory oil wells in the Chukchi Sea, but they scored one big victory.

That’s because the approval — and newly proposed government mandates for Arctic oil development — insist that Shell and other companies drilling in the region have a second rig nearby to bore a relief well in case of a blowout, like the one that destroyed a BP Gulf of Mexico well in 2010.

And Shell is being forced to shave off roughly a month of precious potential drilling days to leave time to bore a relief well in case of such an emergency.

Read more: Obama administration gives thumbs up to Shell’s Arctic drilling plans

Oil industry lobbyists have bitterly fought the same season relief well requirement, at one point convincing a White House inter-agency review office that it is unnecessary and prohibitively expensive, given rig rental rates of $500,000 per day or more.

And Shell’s executive vice president for the Arctic, Ann Pickard, has boldly proclaimed that other methods for reining in a runaway well are just as good — if not better — than using a rig to drill a relief well for intercepting the failed one.

“The latest well control technologies are designed to stem the flow of oil in minutes, hours or days, compared with weeks or even months,” Pickard told attendees at the Offshore Technology Conference in Houston earlier this month. “They can provide a superior alternative to same-season relief well and oil spill containment systems.”

Representatives from Shell and other oil companies made the same argument to the White House’s Office of Information and Regulatory Affairs, or OIRA, as it reviewed the Interior Department’s proposed Arctic drilling standards.

Read more: Shell and ConocoPhillips plead White House for flexibility in Arctic

And they were apparently convincing. The budget-minded analysts at OIRA took those cost concerns to regulators at the Interior Department, urging them to pare back the mandate for same-season relief wells before unveiling the Arctic drilling rule in February.

But top Interior Department officials successfully pushed back, insisting that when it comes to the remote, forbidding and often-frozen Arctic, it is essential to have all the equipment on hand to swiftly intervene in case of an emergency.

They had help from environmentalists who lobbied OIRA in support of requiring same-season relief well capabilities.

“Blowouts occur for a variety of reasons, so there’s not a one-size-fits-all solution to stopping it,” said Marilyn Heiman, director of the Arctic Program at Pew Charitable Trusts. “Right now, relief wells are the most reliable way to permanently stop a blowout.”

The U.S. Arctic waters eyed by oil companies are isolated, some 1,000 miles from the nearest major port. They are also often covered with thick pack ice; exploratory drilling into potential oil- and gas-bearing zones is only allowed in the relatively ice-free summer months.

Because “capping and containment may not always work,” and “the Arctic drilling season is short, . . . we need an effective system to guarantee well control and protect this vulnerable ecosystem,” Heiman said.

At BP’s failed Macondo well in the Gulf of Mexico, a containment cap was used to temporarily corral most leaking oil beginning in mid-July 2010. And cement was pumped into the top of the Macondo well that August, plugging it to further keep crude at bay. Although that “static kill” job may have been enough to seal the well off for good, BP officials and the federal leader of the response effort, retired Coast Guard Adm. Thad Allen, insisted then that the truly lethal prescription was the relief well that ultimately intercepted Macondo and delivered a “bottom kill” at its base in September 2010.

Environmentalists say the episode proves that relief wells are the most dependable way to control a blowout — valuable as a last resort when surface interventions fail and often launched at the same time just in case the other techniques are unsuccessful. And they point to at least 16 incidents since the 1970s when relief wells were used to permanently kill a blowout.

But oil industry representatives argue that the fight to control BP’s Macondo well shows that the capping stake and static kill did the job long before the relief well was finished. At blowouts around the world, the flow of oil has always been stopped before a relief rig intervened, Shell’s Pickard says.

She wants federal regulators to ensure the final Arctic drilling rule leaves room for them to shift away from a relief well requirement to alternative techniques down the road.

“What I’m trying to get them to (do) is to create the space, so that with proof, with good science, with good studies, they can change away from that,” she said, and “set up a process that enables them to be challenged at some point in the future.”

The Interior Department is accepting public comments on the proposed Arctic drilling standards until May 27 and could make changes to the initial draft based on what they hear. That could include modifications to the same-season relief requirement, including an exception when regulators determine other well control and intervention techniques are sufficient.

If approved to drill in the Chukchi Sea, Shell plans to stash a containment system in Kotzebue, Alaska, allowing it to be tapped relatively quickly in case of a blowout at its planned wells. As described in an oil spill response plan approved by the Bureau of Safety and Environmental Enforcement, the company would be able to employ a capping stack over a damaged well or turn to other subsea devices designed to capture “low-flow rate leaks.”

“We’ve got all the tools out there to move very quickly,” Pickard said. “You want to go in that direction — to stop the flow. That’s the most important thing. You can always come back later if you need to to kill the well, permanently, forever, with another relief rig.”

Related story: Shell tries to contain skepticism in Arctic

The company also argues that the wells it aims to drill in shallow Chukchi Sea waters would target low-pressure, low-risk formations — unlike the more challenging wells now being bored miles below the seabed in deep Gulf of Mexico water.

Shell asserts that those geological factors combine with redundant emergency equipment on the planned wells to make a blowout extremely unlikely.

Because Shell plans to use two drilling rigs in the Chukchi Sea — each boring separate wells — it satisfies the government’s insistence on a second rig. But oil industry leaders are mindful that what Shell does this year provides a baseline and sets expectations for future activity in the area, appearing to validate the same-season relief well requirements embedded in the Interior Department’s proposed Arctic drilling rule.

Industry leaders are also eager to work through the entire brief drilling window in the Arctic, with the open-water season expected to begin as early as July 1 and estimated to close by Oct. 31. The Interior Department’s Bureau of Ocean Energy Management has told Shell it must stop drilling on Sept. 28 this year, to leave roughly a month for relief-well drilling before ice closes in.