Legislature(2009 - 2010)Anch LIO Rm 220
09/21/2010 10:00 AM Senate RESOURCES
| Audio | Topic |
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| Start | |
| Overview: Status of Alaska's Oil Spill Preparedness and Response Capability | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
ALASKA STATE LEGISLATURE
SENATE RESOURCES STANDING COMMITTEE
September 21, 2010
10:07 a.m.
MEMBERS PRESENT
Senator Lesil McGuire, Co-Chair
Senator Bill Wielechowski, Co-Chair
MEMBERS ABSENT
Senator Charlie Huggins, Vice Chair
Senator Hollis French
Senator Bert Stedman
Senator Gary Stevens
Senator Thomas Wagoner
OTHER LEGISLATORS PRESENT
Representative Bill Stoltze
Representative Dave Guttenberg
Representative Carl Gatto
Representative Craig Johnson
COMMITTEE CALENDAR
Overview: Status of Alaska's Oil Spill Preparedness and Response
Capability
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
MARILYN CROCKETT, Executive Director
Alaska Oil and Gas Association (AOGA)
Anchorage, AK
POSITION STATEMENT: Commented on the status of Alaska's oil
spill preparedness and response capability.
BECKY SILVES, HSE, Alaska Drills and Training Coordinator
ConocoPhillips Alaska
Anchorage, AK
POSITION STATEMENT: Commented on the status of Alaska's oil
spill preparedness and response capability.
PETE SLAIBY, General Manager
Shell Alaska
POSITION STATEMENT: Commented on the status of Alaska's oil
spill preparedness and response capability.
DR. JEFF SHORT, Pacific Science Director
Oceana Alaska
Alaska
POSITION STATEMENT: Commented on the status of Alaska's oil
spill preparedness and response capability.
LOIS EPSTEIN, P.E.
Arctic Program Director
The Wilderness Society
Alaska
POSITION STATEMENT: Commented on the status of Alaska's oil
spill preparedness and response capability.
NANCY WAINWRIGHT, Senior Staff Attorney
Trustees for Alaska
Alaska
POSITION STATEMENT: Commented on the status of Alaska's oil
spill preparedness and response capability.
HAROLD CURRAN, CEO, speaking for Mayor Edward Itta
North Slope Borough
Alaska
POSITION STATEMENT: Commented on the status of Alaska's oil
spill preparedness and response capability.
MIKE MUNGER, Executive Director
Cook Inlet Regional Citizens Advisory Council
Alaska
POSITION STATEMENT: Commented on the status of Alaska's oil
spill preparedness and response capability.
MARK SWANSON, Executive Director
Prince William Sound Regional Citizens Advisory Council (RCAC)
Alaska
POSITION STATEMENT: Commented on the status of Alaska's oil
spill preparedness and response capability.
COMMISSIONER LARRY HARTIG
Department of Environmental Conservation (DEC)
Anchorage, AK
POSITION STATEMENT: Commented on the status of Alaska's oil
spill preparedness and response capability.
LARRY DIETRICK, Director
Division of Spill Prevention and Response
Department of Environmental Conservation (DEC)
Anchorage, AK
POSITION STATEMENT: Commented on the status of Alaska's oil
spill preparedness and response capability.
DAN SEAMOUNT
Geologic Commissioner and chair
Alaska Oil and Gas Conservation Commission (AOGCC)
Anchorage, AK
POSITION STATEMENT: Commented on the status of Alaska's oil
spill preparedness and response capability.
CATHY FOERSTER, Engineering Commissioner
Alaska Oil and Gas Conservation Commission (AOGCC)
Anchorage, AK
POSITION STATEMENT: Commented on the status of Alaska's oil
spill preparedness and response capability.
KEVIN BANKS, Director
Division of Oil and Gas
Department of Natural Resources (DNR)
Anchorage, AK
POSITION STATEMENT: Commented on the status of Alaska's oil
spill preparedness and response capability.
ACTION NARRATIVE
10:07:14 AM
CO-CHAIR WIELECHOWSKI called the Senate Resources Standing
Committee meeting to order at 10:07 a.m.
^Overview: Status of Alaska's oil spill preparedness and
response capability
Overview: Status of Alaska's oil spill preparedness and response
capability
10:07:45 AM
CO-CHAIR WIELECHOWSKI said the idea to hold a meeting to assess
Alaska's oil spill preparedness and response capability arose in
the wake of the Deepwater Horizon spill in the Gulf of Mexico.
In light of that disaster, it seems only prudent to examine
Alaska's laws, regulations, policies, and budgets to ensure that
we have the best possible regulatory structure in place. Alaska
has billions of barrels of oil and trillions of cubic feet of
natural gas sitting on the Outer Continental Shelf (OCS) in
Alaska and on state and federal lands onshore. If we cannot
convince the federal government that we have the strongest
regulatory structure and response capability in place we will
not be able to see those lands opened up for exploration.
He said that both he and Senator McGuire are both strong
supporters of additional oil development in Alaska, both on- and
off-shore. Oil production produces roughly 85 percent of the
state's unrestricted revenue, providing funding for education,
public safety, roads, and other essential services. Yet,
production is declining. The Trans-Alaska Pipeline (TAPS) once
carried 2.1 million barrels of oil every day. It is now down to
671,000. He said:
This reality must lead us all to ask if we are to
encourage more oil production in Alaska, how can we
ensure that it is done in the safest way possible. How
can we minimize impacts on other industries and
aspects of Alaska's economy, on our fish and wildlife?
CO-CHAIR WIELECHOWSKI said they had assembled four expert panels
to help answer these critical questions. He thanked each of the
panelists for participating today and thanked them in advance
for any recommendations they might provide that will help ensure
that oil development in Alaska proceeds in the least risky, most
sustainable manner possible.
CO-CHAIR WIELECHOWSKI asked Co-Chair McGuire if she had any
opening thoughts.
10:09:16 AM
CO-CHAIR MCGUIRE echoed Senator Wielechowski's sentiments that
they wanted to give time for the experts in the Gulf to contain
the oil spill so that these hearings wouldn't be a catalyst for
more controversy, as well as the fact that some of the experts
would have been busy responding to it. She said that she looks
forward to a future where Alaska continues to do it the very
best, and Prudhoe Bay is that world class example of how
resources can be developed in an environmentally sound way.
Alaska is held out across the world as a global leader; and we
want to be a model for OCS development as well. The OCS is much
different than what is being dealt with in the Gulf; it is
shallower-only a couple hundred feet in some cases, it has
Arctic ice and whale migration, and indigenous populations that
depend on that very delicate region of the world. Alaska wants
to do it right. She and Senator Wielechowski hoped to create a
base foundation today for continued dialogue with industry and
with the executive branch. The panel idea is a good one as they
don't want to go forward with one theme. They tried to create a
fair and balanced process to allow each discussion to take place
divided into industry, environment, community and the agencies.
She recognized Representative Craig Johnson in attendance.
CO-CHAIR WIELECHOWSKI announced that the industry panel would
have three presenters: Marilyn Crockett from AOGGA, followed by
Becky Silves of ConocoPhillips, and Pete Slaiby from Shell
Alaska. Each panelist would have about 10 minutes to provide
their assessment of Alaska's oil spill preparedness and response
capability and offer any recommendations for improving it.
10:12:31 AM
MARILYN CROCKETT, Executive Director, Alaska Oil and Gas
Association (AOGA), said this is an appropriate first step to
having an ongoing dialogue on this issue.
MS. CROCKETT said her presentation would be focused on the
importance of prevention in terms of oil industry operations and
capabilities currently in place for responding to a spill if one
does occur.
She said the State of Alaska has long been recognized as the
leader in oil spill and hazardous substance spill prevention and
response laws and regulations. A large number of personnel were
deployed from Alaska to assist in the Gulf of Mexico response.
She stated:
• Prevention is the key. The AOGCC is the agency that is
responsible for the "down hole" activities; they regulated
the oil and gas industry on blow out prevention equipment
(BOPE).
• AOGCC requires BOPE be tested:
- No greater than every 14 days for development wells
- Every 7 days for exploration wells & workover wells
• 98 percent component pass rate for BOPEs over the past four
or five years
• Since 1968, 7 blowouts from 5,000 wells drilled on the
North Slope (last occurrence 1994)
• Since 1962, 4 blowouts in Cook Inlet (last occurrence 1987)
• All were from loss of control in shallow gas zones
• None resulted in injuries or oil spills
10:16:39 AM
MS. CROCKETT said the State of Alaska has 19 approved Primary
Response Action Contractors. Cook Inlet has a spill response
agency called CISPRI; Prince William Sound has Alyeska and SERVS
as well as the individual tanker owners; and Alaska Clean Seas
(ACS) for the North Slope. These organizations are all in place
in addition to the responsibilities of the individual companies.
She said the Alaska Clean Seas has been around for more than 30
years and started off as ABSORB and was reconstituted from a co-
op to a response action contractor in 1990. It is responsible
for providing personnel, equipment and spill response training
in preparing for and cleaning up oil spills. The membership
encompasses companies operating on the North Slope and in the
Arctic offshore (OCS); they have 78 full-time personnel as well
as a great number of trained responders available via NSSRT,
ACRT and VRT.
ACS inventory that they maintain and operate on behalf of ACS
and the companies operating on the North Slope includes:
• $50 million in inventory
• 287,184 feet containment boom
• 160 skimmers (over 19,000 bbls/hr)
• Eight heli-torch aerial ignition systems
• 94 vessels
• Two 128 barrel and twelve 249 barrel mini barges
MS. CROCKETT said ACS provides extensive training not only to
its own personnel, but also to others on the North Slope in 580
Classes in 2009 with 7,310 trainees, and 29,913 student hours.
ACS is a leader in research and development and has been
actively participating in R&D since the early 1980's. They
participated in the SINTEF program for oil spill response in ice
infested and Arctic waters. They are in the process of updating
the Tundra Treatment Manual in connection with the Department of
Environmental Conservation (DEC) on treatment of Arctic tundra
as a result of a spill as well as airborne ground-penetrating
radar to detect oil under ice.
She said that any change to the state's requirements need to
wait until the federal efforts are completed. It wouldn't be
useful for the state to create its own wheel without knowing
what the federal baseline is going to be initially.
10:20:46 AM
REPRESENTATIVE GATTO asked how much money it costs to purchase
and install a blow out preventer.
MS. CROCKETT answered that she didn't know.
REPRESENTATIVE GATTO asked if it's possible to stack them so
that the failure of the first one could default to the second
one.
MS. CROCKETT indicated yes; and said that would be covered in
the next presentation.
REPRESENTATIVE GUTTENBERG said the Alaska Department of
Environmental Conservation (DEC)ADEC had a couple of programs,
the GAP analysis was one, that took a couple of years to
organize, but the national academy shot it down because industry
wasn't participating. He hoped they would do a better job in the
future, because at the end of the day both industry and
government would have a lot of responsibility. Clearly
prevention comes first, but the public expects a quick response
to a spill.
MS. CROCKETT responded that she disagreed with his point that
the industry wasn't cooperating. They were very interested in
cooperating, but the scope of the risk analysis was too big for
the methodology that was developed. The data requested would
have filled this room and the rooms next door and it would not
have been useful to the contractor. So, the project was reduced
and industry has been cooperating. She didn't know the status of
the reports.
10:25:57 AM
BECKY SILVES, House Safety and Environment (HSE), Alaska Drills
and Training Coordinator, ConocoPhillips Alaska, said the focus
of her testimony would be on their offshore exploration plans
for the Chukchi Sea as well as their spill prevention for those
activities. ConocoPhillips has 40 years of operating experience
in the Alaska Arctic as well as experience in other high
latitude areas such as Norway. Their Chukchi prospect is about
80 miles offshore; the first well is planned for no earlier than
2012 and most likely will happen later than that given ongoing
unresolved litigation and regulatory uncertainties.
In order to focus their prevention activities ConocoPhillips has
to understand the environment they are operating in. They have
and will continue to do the pre-work in order to conduct safe
exploration activities; they have worked with scientists from
the University of Alaska Fairbanks, as well as industry partners
with Shell and Statoil, in order to implement an integrated
environmental studies program. This program has given them
insight to the various species living in their prospect area and
the physical oceanography that will affect their exploration
activities - such as air temperature, wind direction and
strength, wave height, ocean currents and ice profiling.
They plan to drill their exploration wells during the open water
season, which on average is from mid-July through
October/November and they plan to drill where there is a history
of no ice. However if there is ice, they have developed a system
for managing and responding to ice in the area. Their ice alert
system which requires approval from the Bureau of Ocean Energy
Management, Regulation and Enforcement (BOEMRE) is a systematic
procedure in order to manage ice that comes in to their
operating environment. The key to the system is detection
ability, which includes using satellite tracking that provides
pictures to the five meter resolution. They are actively
gathering data on ice movement in order to predict the length of
time until ice comes into their drilling area. Physical
management of the ice will include the use of two ice breakers
as well as tactics such as pulling the ice away from the area.
She provided a slide of shallow water wells with relatively
shallow formations that helped illustrate how much flexibility
they have in drilling. They can use either a jack up or a
floating drilling vessel. Because of the shallow water, blow out
preventers located on the subsea can easily be accessed by
divers. Furthermore, a well was previously drilled by Shell on
their prospect site which gives them knowledge about the
geological and pressure characteristics there.
MS. SILVES said ConocoPhillips' focus is prevention, but they
will have a BOEM-approved spill response contingency plan that
includes on-site dedicated spill response personnel and
equipment, which will for an immediate response to a Chukchi
incident.
10:29:51 AM
Their spill response strategy is to maintain oil spill response
vessels and a recovered oil storage tanker in the area of the
drill site. ConocoPhillips is planning a near shore barge to
store additional response equipment on the water in order to
have a ready and mobile response fleet able to contain and
recover oil that comes towards the shoreline. Furthermore, they
have developed a shoreline protection plan that identified
priority protection sites along the entire Chukchi Coast with
protection and recovery strategies and tactics for each site.
Emergency preparedness is a part of their culture at
ConocoPhillips, and this contingency plan is being developed
from their experience of operating on the North Slope, Cook
Inlet, and Prince William Sound.
MS. SILVES said training their responders to execute the
contingency plan is also one of their dedicated efforts, and it
is definitely a focus for their current operations. They do this
through table-top scenarios, equipment deployment drills, and
large-scale integrated exercises. They have already begun
conducting training and table-top scenarios for their Chukchi
operations.
In addition to their drills and training program, they are also
actively engaged in research and development for oil spill
response. ConocoPhillips has been participating in R&D projects
that look to improve spill detection and oil monitoring, that
assesses environmental saturation effects on spilled oil, and
enhance and develop response technology. Specifically in the
Arctic, they are working on projects similar to ACS's such as in
situ burning, fire boom testing in Arctic conditions, GIS and
trajectory mapping, viscous oil pumping and mechanical recovery
testing.
MS. SILVES said ConocoPhillips is also a member of a multi-year
joint industry program for oil spill response for Arctic and ice
covered waters that ended last year. The project managed by
SINTEF is one of the largest independent research institutes in
Europe; it is a consortium of Norwegian, US governments and
industry partners across the globe working with some of the
world's experts on oil spills. They uncovered important
knowledge and developed new solutions for oil spill response in
ice-covered waters.
10:31:58 AM
The next program of this magnitude is being planned through an
Arctic Oil Spill Response Task Force under the International
Petroleum Industry Environmental Conservation Association
(IPIECA) and the International Association of Oil and Gas
Producers (OGP). Their goal is to launch this program within the
first quarter of 2011.
REPRESENTATIVE GATTO asked if the five-meter resolution is
through a satellite.
MS. SILVES answered yes; and it is able to see through clouds
and weather - within five meters of their prospect area.
CO-CHAIR WIELECHOWSKI asked her talk about some of the
particular challenges they have in icy waters in the Beaufort
and Chukchi Seas that they might not have in the Gulf [of
Mexico].
MS. SILVES replied that there is no ice in the Gulf of Mexico,
and ConocoPhillips is planning to drill in open water. So the
environment and its challenges will be very similar during their
exploration season.
10:33:51 AM
CO-CHAIR WIELECHOWSKI asked if there was a spill in the Chukchi
and Beaufort Sea in the winter with ice, what kind of challenges
would that present to a cleanup.
MS. SILVES answered that access to the spill would be a
challenge, but she emphasized that they are not planning to
drill in the Chukchi Sea during ice conditions.
CO-CHAIR WIELECHOWSKI said he understood that, but once the
wells is up, if there were an incident in ice covered
conditions, does something additional need to be done. What do
other countries do?
MS. SILVES replied that they are over 10 years away from that,
and multiple public review sessions and where technology could
change over time. Their focus right now is looking at an
exploration well.
10:35:20 AM
CO-CHAIR MCGUIRE said they are looking forward to connecting one
or both of these projects up with the TAPS; and right now they
are assessing open-water season exploration activities and
making sure we have the best response capabilities there. The
next part (having been bifurcated) is what will have to be
considered with full production. She asked if there is any
chance that an ice flow will come in even in mid-July, and what
ConocoPhillips has done to consider that shoulder season.
MS. SILVES answered that is part of what they are using their
satellite detection for now.
REPRESENTATIVE GUTTENBERG asked who they are partnering with now
for tracking ice.
MS. SILVES replied that she wasn't as familiar with that area of
their work, but she would get back to him.
10:37:55 AM
REPRESENTATIVE GUTTENBERG said there is a total lack of
infrastructure on the North Slope, and asked where they would
put workers if they needed to be up there for a spill or an
accident.
MS. SILVES answered that their logistical planning is ongoing
for the Chukchi operations and they are still a few years away
from exploring there. Some initial thoughts go back to "float
hotels" that were used during the Exxon Valdez spill that housed
responders on the water.
CO-CHAIR MCGUIRE said they would have two more hearings during
the Interim that will focus on things like different aspects of
infrastructure. On October 1 the Northern Waters Task Force will
meet and the premise is to discuss whether or not the Coastal
Zone Management Program should be changed; another part of it
will be about infrastructure. They also formed the Arctic caucus
through PNWR that is meeting in December in Barrow to assess
infrastructure in the Arctic in general.
10:40:05 AM
REPRESENTATIVE GATTO recalled that she said ConocoPhillips' BOP
was accessible by divers at about 150 feet, but that is probably
at the outer limit of a diver's ability to function. He asked if
they had access to remote vehicles like the ones (ROBs) that
were used in the Gulf of Mexico or can't they be used in the
Arctic.
MS. SILVES answered that all possibilities for their exploration
activities would be looked at.
10:41:05 AM
PETE SLAIBY, Vice President and General Manager, Shell Alaska,
said he wasn't an expert in oil spill response, but he has
experts behind him that he could call. He said they have 137
Beaufort leases - $84 Million, 275 Chukchi leases - $2.1 Billion
for a total investment in Alaska to date of $3.5 Billion. It has
provided hundreds of millions to Alaskan companies and offshore
service providers.
He said Shell likes the offshore and has been involved there in
over 50 years of being in Alaska. They have drilled four of the
five wells in the Chukchi Sea in the 1990s; and 12 of the 90
wells drilled in the Alaskan portion of the Beaufort Sea and
partnered in another 7. They drilled 33 exploration wells in
Alaska (not counting what they did in Cook Inlet in the 1960s)
of 32 of them were offshore.
10:43:54 AM
He said they had a fairly successful 3-D seismic acquisition in
the last three years with USGS estimates of 25 Billion barrels
of oil and 120 TCF of gas in the Alaska Arctic. So when you look
at OCS, it is material. The only other area with more
hydrocarbons would be the Deepwater Gulf of Mexico (GOM OCS)
with around 44 billion barrels of oil. Alaska offshore exceeds
all the East/West Coast OCS resources combined. It could provide
35,000 jobs per year for Alaska over a 50-year period; and about
$72 billion in payroll. It will extend the life to the TAPS and
has a real capability to open up the NPRA (with a pipeline from
the Chukchi Sea).
MR. SLAIBY said they don't want to ever have a blow out, so they
put a huge effort into prevention. He described their view of
the world as a bowtie; everything on one side is prevention and
where you spend a huge amount of time; the event is the knot in
the tie; and then the other end of the tie would be the
response. Truly successful companies are always ready for the
response and Shell is one of these. They spend a lot on
prevention which doesn't get a lot of air play.
10:47:24 AM
MR. SLAIBY said they have four phases:
Phase I - Proper Planning, Drill Well on Paper (DWOP) workshops,
risk identification, training, routine drills on rig (bop tests,
pit drills, trip drills)
Phase II - Early kick detection and kick response procedures.
continuous monitoring, response, including use of rtoc (shut
down pumps - flow check - shut in - kill well)
Phase III - Mechanical barriers basically blow out preventers
(including at least two special arctic barriers), testing and
inspection criteria in place to ensure competency
Phase IV - Loss of Control - relief well operations, contingency
plans in place for the worst case scenario
One of the things they have committed to doing by 2011 is
putting a containment system in place that could be deployed in
the Arctic to capture hydrocarbons before they are released. He
said that Shell already has a system in place that would keep
the hydrocarbons at their source.
10:48:57 AM
MR. SLAIBY said some of their own assets would be in place, but
some equipment would be shared. They have committed to have this
ready to go for the 2011 season. It has all been available since
2007.
He said Shell has a separate c-plan for the Beaufort and Chukchi
Seas; the assets are either under contract or owned by Shell. It
is based on a three tier system very similar to what
ConocoPhillips just talked about. They view success as not
having a blow out, but the issue will be to keep the oil around
the source if there is one. That has always been their plan.
The vessels they have are the ice class Nanuq, which is designed
to operate and be deployed within one hour from the start of an
incident. It is presently in Dutch Harbor. On the near shore
they have an ice class barge that is in the Port of Seward. The
equipment has met ADEC standards, but most of it has been
designed to twice the specifications. The wells they are
proposing to build in 2011 would be under the ADEC standards,
but possibly the Beaufort Sea wells would not exceed those
standards.
10:51:31 AM
Questions have been raised about what escalation looks like, and
their response is to be there in an hour. They recognize that
they can keep things at bay for a certain amount of time, but
things have to start very quickly thereafter. He showed a world
chart of other resources (including personnel, lodging) that
could be sent up as well. Shell already has quarters up there,
but they would build more.
He said Shell's c-plan has been through numerous reviews and has
withstood a barrage of litigation from a number of different
sources. It has been reviewed and approved by the BOEM, MMS,
EPA, US Coast Guard, FWS, NMFS, the North Slope Borough and has
been upheld in court. They participate in a number the different
studies that people have talked about as well.
In summary, he said, Shell's view is that they would be
responsible for any operations in the Arctic. There is no
question about that, and they would hold the job of primacy.
Their assets would be ready for any event, Shell or otherwise.
He said Shell supports the Coast Guard moving into the Arctic,
but their role is to run the unified command center (the Coast
Guard didn't collect a drop of oil in the Gulf of Mexico). The
operators are expected to provide the physical assets, and Shell
stands ready to provide those. He said they have contemplated
that Shell will be able to deliver a same-season relief well,
but their primary response would be by the rig that drilled the
well, the Noble Discoverer. To that end, they have purchased a
second set of blow out preventers that would be kept on it.
Obviously, if you're in a blow out situation, your first set of
blow out preventers stay with the well. The second set would
also require the associated casing piping and mud systems.
Besides that they are bolstering their BOPs by putting a second
set of sheer ends in one of the cavities (it's a four-cavity
BOP). The BOPs would have remote access panels. They had
initially planned for four divers and for remote operated
vehicles, but they are doubling those numbers to have good
escalation capability.
10:56:20 AM
Shell Alaska agreed to go to seven day testing for their BOPs.
Federal requirements in the Gulf are 14 days. Even though
Alaska's standards are more rigorous, Shell will adhere to them.
MR. SLAIBY said they also have a second drilling unit, called
Kulluk that was recently pulled out of the Mackenzie Delta; and
it is presently in Dutch Harbor. They have always planned on
warming the rig up regardless of where they are, but they have
agreed to going to the point of activating it. This means it
will have a marine crew and partial deck crew as wells as a
partial rig crew on board. Their drilling contractor has crews
they keep on standby in North America primarily to work in the
maritime provinces of Canada, but they could be used if
mobilization were required. This asset could be ready to respond
in a number of days. This is what they will do until they are
drilling with two drilling rigs in the Arctic Ocean. When they
have two floating drilling units in the Beaufort and Chukchi
Seas there will be no need to have a dedicated relief well rig.
The rig that is drilling the second well would simply stop the
work, temporarily abandon it, and move over.
10:58:22 AM
He said when one looks at complexity, no well is without risk.
But these wells are not Gulf of Mexico wells that are highly
pressured at a profound water depth. They believe Shell has the
highest response planning standard and stricter oversight ever
seen anywhere in the US and the world. He said ongoing
investigations may yield further recommendations.
10:59:16 AM
CO-CHAIR MCGUIRE asked to what extent Shell subcontracts the
operational roles. And is there an agreement in place to adhere
to the standard?
MR. SLAIBY responded that Shell has a number of contractors, but
there is no ambiguity about who ultimately has accountability;
in Alaska; it's Shell. The contractors will be supervised by
Shell people, but they will have their own house safety and
environmental (HSE) management systems that work under Shell's
HSE management system. They are linked by a "bridging document"
that delineates how their responsibilities flow into Shell's
accountabilities to deliver a well. This process requires
management, audit, and review.
11:01:26 AM
CO-CHAIR MCGUIRE said some people have speculated that a methane
gas bubble might have contributed to the Gulf disaster, and
asked if Shell's c-plan had considered how they would factor
into the blow out preventer standard.
MR. SLAIBY answered they are currently clearing drill sites on
Harrison Bank, Shell's area in the Beaufort Sea. They are
required to do a shallow hazard survey that actually seismically
determines if there is shallow gas or hydrates sitting below a
potential drill site. He can't submit a plan to the BOEM until
that work is thoroughly done and analyzed.
REPRESENTATIVE JOHNSON asked what they know about the pressure
and viscosity characteristics of the resource.
MR. SLAIBY answered that they have a number of well control
points for their five wells in the Chukchi and 30 wells in the
Beaufort. The wells here tend to be less pressured than in the
Gulf of Mexico, and it's for a number of different reasons. One
is that the sedimentation process here happened a lot slower. In
the Gulf of Mexico the Mississippi River is a source of the
sediment and when the biological material settled out, there was
a massive amount of "dump" on top of it putting more and more
pressure on volatile materials without a chance to escape. As a
result, over time pressure built up. So, their worse-case
discharge numbers in Alaska are smaller than in deep water Gulf
of Mexico operations. The bulk of Shell's production is coming
from 25 wells with smaller capacity.
REPRESENTATIVE JOHNSON said both ConocoPhillips and Shell have
indicated a fairly extensive response plan and asked if they are
working together.
11:05:50 AM
MR. SLAIBY answered that more and more cooperation is evolving.
The Coast Guard would direct any incident; Shell would work
through them. ConocoPhillips would eventually submit a c-plan
for the work they are going to do. The protocols would be inside
the c-plan, which specify telephone numbers and radio
frequencies et cetera.
CO-CHAIR WIELECHOWSKI said oil spill cleanup is significantly
more difficult in colder temperatures and ice-covered waters,
and asked him how he deals with a blow out in the middle of
January in completely ice-covered water.
MR. SLAIBY answered there is never a good time for that kind of
work, but they will have to work in ice - in areas of the
Beaufort and the Chukchi. Their open water season is mid-July
through October 31, so they don't really plan on being out there
in January.
The way they handle broken ice is with ice management vessels
that carefully break ice - very gingerly, he explained. They
don't want to add noise into the water. They have incidental
harassment authorizations that they take very seriously and
don't want to obstruct or change routines of marine mammals and
other creatures out there. In an oil spill situation all that
changes. Their c-plan provides ways that they can actually
harass animals to keep them out of the area. In that instance,
they would be setting up areas where they could burn or disburse
or mechanically collect oil.
Dwindling hours of light becomes a factor as well, and their
vessels do have infrared capabilities on vessels and spotter
aircraft. They keep the ice away and use burning, which works
better in the Arctic, because the water is shallower, which
means they can physically anchor their burn booms to bottom of
the seafloor. The cold temperature means that the oil tends to
disperse less and combust more completely. Arctic and SINTEF
work actually works pretty well; even in the Gulf of Mexico
burning worked well. Work is being done in Barrow testing the
toxicity of dispersants on Arctic biota and marine animals. Work
is also being done with microbes that will eat and absorb the
oil after the dispersant. Keeping the oil localized and building
a containment dome will also benefit Alaska.
11:12:13 AM
REPRESENTATIVE GATTO asked if they need a relief well drilled in
the Beaufort, how they would move a structure if the ice is 15
ft. thick.
MR. SLAIBY answered they would move the vessel through open
water, and if it was icy they would manage the ice. Three feet
of ice is manageable with their ice breakers. Obviously they
wouldn't break through 15 ft. of ice, but he didn't think they
would be out there drilling in 15 ft. of ice during the
exploration phase. Under normal circumstances in the Beaufort
they are not going to tell their ice management vessels to break
ice because of the noise it would create in the water. If they
had a blow out in those conditions, they would temporarily
abandon the well and bring the rig, which has an ice breaker and
handler dedicated to it, into play. They wouldn't work through a
15 ft. ice pack; they would work south of it.
REPRESENTATIVE GUTTENBERG asked if the plan would be the same
for a production well.
MR. SLAIBY answered that would be different. The structures they
will put out there would be drilling year-round 24/7. They would
be large concrete gravity-based structures that would have a
large amount of containment within the structure itself (like
structures they use in the northern North Sea where conditions
are much worse than in the Chukchi and Beaufort in terms of wind
and waves). It's just colder in the Beaufort and Chukchi Seas.
He also pointed out that while he looks forward to development
there, it is a decade away; and the science they are gathering
now is what they will need to support a large development. In
the last three years they have spent $50 million gathering
science to support the EISs. He estimated that between industry
and the taxpayers they had spent a half billion dollars putting
together the environmental baseline studies that support
exploration drilling.
11:16:18 AM
CO-CHAIR MCGUIRE recalled that the second largest spill in
Alaska was the Selendang Ayu, a freighter, and asked with
possible trade routes opening up in the Arctic, if Shell would
make its assets available to non-oil industry traffic that comes
through the Arctic that might have an incident.
MR. SLAIBY answered yes; and it's not just Shell; it's everybody
who has these assets. Three of every four barrels of oil he has
picked up have been other peoples' oil.
CO-CHAIR MCGUIRE announced a break from 11:18 to 11:31.
11:31:48 AM
CO-CHAIR WIELECHOWSKI called the meeting back to order and
announced that the environmental panel would testify next.
DR. JEFFERY SHORT, Pacific Science Director, Oceana Alaska, an
international marine conservation organization dedicated to
using science, law, policy, and public input to protect the
world's oceans. Prior to that he worked for the National Oceanic
and Atmospheric Administration (NOAA) and in that role, I led
numerous studies on the Exxon Valdez oil spill. His entire
career has been devoted to studying the effects of oil
pollution.
He applauded the presentations they had just seen and all the
oil industry had done to prevent oil spills in Alaska, giving us
the enormous benefits of those revenues at minimal environmental
cost, recognizing that they expend a lot of ingenuity and effort
to do that. He recognized that we're on the cusp of major
decisions regarding the environmental fate of the northern coast
of our state.
11:33:49 AM
While recognizing all that industry has done, Dr. Short said,
there is one fact everyone has to soberly recognize - that every
major marine dependent oil region in the United States has had
at least one major unanticipated oil spill. These projects run
for decades once development begins and it's prudent to expect
if we launch into major development on the north coast of Alaska
offshore that we will very likely have another unanticipated
major spill. No one anticipates these things because they are
almost always unique because and as a result of human error that
combines with an unfortunate set of circumstances that are
impossible to predict. Don't think in terms of if, but when a
major spill occurs.
DR. SHORT said from his perspective the Deepwater Horizon
happened because of an unfortunate combination of lax regulatory
oversight and response performance plans that are based on ideal
test conditions but that have to be applied under conditions
that were almost always less than ideal. In the Arctic they will
often be far from less than ideal. And little noticed, but very
important, are the challenges posed by just the differences in
scale.
He said when they do tests of oil spill response preparedness
they are usually under ideal conditions but they are also small-
maybe consisting of a few barrels. For example, when oil leaked
out of the Exxon Valdez, it created slick at the rate of half a
football field per second for two and a half days. The Deepwater
Horizon was twice that for almost three months. The logistical
challenges of coping with that rate of slick creation become
overwhelming.
11:36:38 AM
Currently evidence is scant that we have adequate technology in
place to cope with a marine spill on the North Slope. One
exercise conducted in 2000 resulted in video documentation that
was far from reassuring. Oceana made a state records request for
all subsequent field tests and got basically nothing. So, they
are not at all persuaded that the response assets are there for
the north coast.
DR. SHORT pointed out they have very little idea of what they
are risking on the North Slope. A lot more science needs to be
done to come up with a credible biological impact management
plan. How much science is enough? They need to know what all the
major species are that inhabit the region, which currently they
don't; they need enough science to construct a quantitative food
web model with conservative basis a credible environmental risk
assessment. By that he means a spill has killed this many marine
mammals. How long will it take for the food web to recover?
Third, they need enough science so that they know where the
important ecological areas and sensitive habitats are so that
they can be prioritized.
11:38:41 AM
The coastal native cultures are also at risk, he said. These
people have lived there for 8,000 years and have a very intimate
relationship with the marine environment that become threatened
existentially by an offshore oil spill - because, as they have
seen on the Deepwater Horizon and every other major marine
spill, whenever on happens people become terrified that the
seafood is no longer safe. In the case of coastal maintenance,
this severs the generational link between the young and the old
because they no longer trust the food supply to go out and
continue their subsistence way of life. And you end up with a
problem that money can't fix and that can't be remedied by any
means.
11:39:17 AM
He implored them if they are going forward with developing
offshore resources on the north coast that they at least do
three things: increase fund for science with a nickel a barrel
tax and remove the $50 million cap. Second, require realistic
response and rescue capabilities and demonstrated technology
under realistic field conditions. Finally, allow for meaningful
community involvement so that the decisions don't have potential
devastating impacts on the local residents.
11:40:55 AM
REPRESENTATIVE GATTO said everyone is an environmentalist.
Everything they do adds something to the environment that
someone is going to object to.
11:42:05 AM
DR. SHORT said that is why he began his comments with
recognizing the efforts and cooperation industry is displaying.
11:42:54 AM
REPRESENTATIVE JOHNSON asked him to explain his second point
more fully.
DR. SHORT responded by referencing the video documentation of
the field exercise in 2001 to see how oil spill cleanup would
work in the Beaufort Sea; it was not impressive and far from
reassuring. These exercises occur under close to ideal
conditions, which are rarely going to be the case in actual
operations off the north coast of Alaska where it could be
foggy; it could have major storms, high winds, and darkness.
Oceana Alaska would like to see some credible demonstration that
response approaches would work under those conditions.
REPRESENTATIVE JOHNSON asked if his group had done anything to
develop a reasonable response other than listing criteria.
11:44:36 AM
DR. SHORT replied that they have recommended that much more
resources go into research; he didn't have the capacity to do
oil spill response research.
REPRESENTATIVE JOHNSON said there will be drilling in the
Arctic, and it might not be the United States. Someone else
might not have the same high standards that we do. Is he working
with Canada, Norway, the former Soviet Union?
DR. SHORT answered that they are working with those countries -
China, Russia, Norway, and Canada. The US could benefit from a
closer relationship with Norwegian and Canadian communities.
Much of the Gulf capability came from Canada.
11:47:38 AM
CO-CHAIR MCGUIRE asked if Oceana had looked at what other
agencies might fill the financial gap that is a result of a
decline in production.
DR. SHORT answered that removing the cap would be one way.
CO-CHAIR MCGUIRE asked if they had taken a position on whether
the state should invest in research through its university
system. Part of that discussion comes from the need to establish
first hand and local data that is unbiased.
DR. SHORT answered Oceana encourages and endorses the State of
Alaska to broaden its research capability and infrastructure
through the university, especially in collaboration with Norway.
REPRESENTATIVE GUTTENBERG asked what Oceana is and what it does.
DR. SHORT answered that they are an international marine
conservation organization that tries to combine science, law and
policies to effect change in management of ocean resources to
the benefit of those ecosystems. They want to make more fish for
everybody.
REPRESENTATIVE GUTTENBERG asked that they don't conduct drills;
they just advise.
DR. SHORT said that was correct.
CO-CHAIR WIELECHOWSKI thanked him and introduced Ms. Epstein.
11:50:16 AM
LOIS EPSTEIN, P.E., Arctic Program Director, The Wilderness
Society, a national conservation organization with an office in
Anchorage, said she has spent over 25 years, 9 in Alaska,
working on oil and gas technical and policy issues as a
consultant and as an employee of non-profit organizations. She
has served for many years on federal advisory committees for the
U.S. Department of Transportation on oil pipeline safety and for
the US Environmental Protection Agency on petroleum refining,
and was one of 15 outside technical advisors on the report to
the President in May 2010 containing recommendations to increase
offshore drilling safety. She was in Houston two weeks ago
speaking on a Bureau of Ocean Energy Management panel on safety.
As someone who has commented on and utilized Alaska Department
of Environmental Conservation (DEC) regulations covering
pipelines and c-plans since 2001 , Ms. Epstein said she
recognized that there are a number of good components to those
regulations, and to Alaska Oil and Gas Conservation Commission
(AOGCC) regulations on wells. The key problem lies, however, in
regulatory implementation. Everyone knows that even the best
regulations are not valuable unless they are enforced
effectively. This is the number one problem with the state's oil
spill prevention and response program.
This past summer it became clear to most Americans that the
Minerals Management Service - the federal offshore drilling
regulatory agency was dysfunctional. One of its biggest problems
was the conflict of interest the agency had in regulating
offshore drilling while simultaneously collecting federal
leasing and royalty income. Without effective enforcement of
even the best regulations, what you have is self-regulation
which could lead to worst-case scenarios as it did this summer
in the case of BP's Deepwater Horizon tragedy. Unfortunately,
the State of Alaska has this same conflict of interest problem
in that the state seeks to increase revenue by maximizing
leasing and production. This means, in certain instances,
enforcement might not be pursued because that would change the
revenue picture.
To many state leaders, a strong and effective enforcement
program means that some oil companies may choose to locate where
regulations and/or enforcement are looser. Another way to look
at this situation, however, is that industry leaders do not need
to worry about enforcement while industry laggards would choose
not to operate in Alaska. According to a statement made by a
DEC representative just two weeks ago in Anchorage before former
Lt. Governor Fran Ulmer and Co-Chair Bill Reilly of the National
Oil Spill Commission, the State of Alaska has "zero tolerance"
for oil spills. In reality, though, spills like those from BP's
North Slope pipelines in 2006 which resulted in revenue loss to
the state could have been prevented with an effective state
enforcement program; in fact, those leaking low-stress pipelines
were regulated by the state and not regulated federally, which
is true for many gathering lines, flow-lines, produced water
lines, and well piping. In the case of the BP North Slope
spills in 2006, which resulted in revenue loss to the state
could have been prevented with an effective state enforcement
program. The state was the only entity that regulated those
pipelines not the federal government, and there was not enough
preventive enforcement activity prior to those spills occurring.
So, clearly our zero tolerance did not work in that case.
In 2004, she completed a report for Cook Inlet Keeper entitled
"Cops Off the Beat" that identified three types of releases
regulators should focus enforcement resources on: high spill
volumes, repeated spills (which are and indicator of ongoing
problems), and spills to environmentally (and historic or
culturally) sensitive areas. The report also makes the case for
increased criminal enforcement for egregious conduct. Fair,
clear, visible, and consistent enforcement, including criminal
enforcement in egregious instances, is critical to a well-
functioning regulatory system.
To ensure improved enforcement and prevent oil spills, and to
some extent address the conflict of interest that is inherent at
the state level, she suggested that they require DEC and AOGCC
to provide the legislature and the public by the start of the
upcoming legislative session with reports of their enforcement
actions for each of the past five years on oil-spill related
issues, along with annual updates. These reports should contain,
at a minimum, information on the numbers and types of
inspections, civil and criminal penalties assessed, a listing of
which operators had enforcement actions brought against them,
and descriptions of any releases or other violations resulting
in enforcement actions. This way they could look at trends, see
whether enforcement is primarily focused on operators or
individuals.
A second key way to help ensure a well-functioning regulatory
system that prevents oil spills is to support creation and
mandatory industry funding of regional citizen advisory
committees or RCACs, especially for the Trans-Alaska Pipeline
System (TAPS). These committees, like the Prince William Sound
RCAC, are the eyes and ears of the public on the ground working
on spill prevention. RCAC funding would support staff that
would conduct or supervise public interest research on issues
like pipeline safety. Additionally, creation of RCACs promotes
ongoing dialogue among the public, industry, and regulators.
Such entities would ensure ongoing vigilance and prevent the
complacency that leads to problems.
11:55:36 AM
MS. EPSTEIN said she continues to support the following measures
to prevent and mitigate oil spills which I submitted to DEC in
2009 as a package of alternatives to its problematic oil spill
risk assessment process:
1. Create an oil and gas Ombudsman position on the North Slope
and in Cook Inlet to receive and act on public and
whistleblower-identified problems. The Ombudsman position would
have funds for field investigations and analysis;
2. Strengthen regulations where needed so Alaska would, in fact,
have the best possible oil and gas regulatory system in the
world. This can be done by conducting a comparative analysis.
Note that the state's limited corrosion prevention requirements
for state-only regulated oil pipelines is a particular problem
at this time which needs to be remedied;
3. Contract with accident investigators so severe/significant
accidents are investigated for root causes, with recommendations
made to prevent future similar events. This is needed because
the National Transportation Safety Board and the Chemical Safety
and Hazard Investigation Board rarely, if ever, come to Alaska
to investigate oil and gas industry accidents. They need that
kind of independent analysis, and;
4. Develop a reporting requirement for "near misses" which would
protect confidential business information but provide enough
information to ensure that the Ombudsman and state regulators
would be able to detect problematic patterns of behavior.
She also provided the committee with some recommendations on
spill response provided to me by conservation community
colleagues with many years of experience in this area:
1. Require that there be a relief well drilling capability at
the ready during offshore drilling to address a blowout
scenario. Alaska has had several blowouts in Cook Inlet in past
decades and Arctic blowouts during shallow water drilling are
possible;
2. Create a navigation system equivalent to Prince William Sound
for tankers and other large vessels in Cook Inlet and Unimak
Pass, including tug escorts;
3. Ensure that abandoned wells, pipelines, and platforms are
shut-in, flushed, and removed, respectively. One exception
might be if a platform could be used for another purpose, e.g.,
to support renewable energy generation;
4. Require c-plan holders to enter into binding contracts with
experienced and capable responders, and to list spill response
assets in the region of the spill;
5. Require c-plans to provide realistic "Effective Daily
Recovery Capacities," and;
6. Given the likelihood of another eruption of Redoubt and the
Drift River terminal's problematic location, require Cook Inlet
operators to install a pipeline to replace the terminal's
operations.
11:58:58 AM
A final comment she said is that while Alaska may have high
standards, they still are inadequate. The Alaska Response
Planning Standard, for example, is nowhere close to addressing a
Deepwater Horizon size spill; it's an order of magnitude too low
and it's required for too few days. It's important to
acknowledge that oil spill cleanup will be limited regardless of
the resources deployed by Shell and others. She thought that was
even an area of agreement among the stakeholders.
CO-CHAIR WIELECHOWSKI thanked her for her testimony and
introduced the next speaker, Ms. Wainwright.
11:59:24 AM
NANCY WAINWRIGHT, Senior Staff Attorney, Trustees for Alaska,
commended this committee on examining this issue at this time,
the best guarantee for not sustaining future oil spills is
vigilance every year to ensure that the state's standards are
met and lessons are learned from other spills and near spills.
She encouraged them to use this as a beginning of having ongoing
review. She said she would focus on the current capability and
limitations of the state's oil spill prevention and response
statutes and recommendations.
Since 1980, she said, the Alaska legislature has required that
oil spill contingency plans (c-plans) have best available
technology (BAT). After the Exxon spill the legislature
reconfirmed that BAT was required for prevention and response in
Alaska. In about 1997, the statute was amended to say that DEC
may prepare findings and make a list of BAT technologies that
are considered best available. This change has proven to be
somewhat problematic. First, DEC held no BAT conferences for
many years, and a search of their website today reveals a 2004
BAT conference that addressed a limited set of technologies. The
findings for that conference were not released until 2006, when
they were already outdated.
12:03:39 PM
DEC is under budgetary constraints, so unless the legislature
mandates that doing a review every five years and issuing a
timely report is a priority, the technologies will forever be
outdated. One example is that leak detection for pipelines was
addressed in 2004 and it is current applied. It must be able to
detect 1 percent of the daily throughput of the pipeline; yet
the technology exists today for a .5 percent throughput
detection and it is occurring at some operations in Alaska. It's
very important that DEC update these findings, and particularly
given the North Slope spills on the pipeline that there be a
redundant leak detection system.
The way the state handles leak detection is to negotiate at
every c-plan renewal with the operators. This puts a tremendous
burden on DEC; so they recommend that there be a minimum
standard requirement that DEC doesn't have to renegotiate every
time a c-plan comes along.
MS. WAINRIGHT recommended a BAT for ice-class vessels in the
Arctic. Right now there are none. Likewise, she recommended an
Arctic-grade oil spill response organization. Ozro is an oil
spill response organization and is certified for rivers and
offshore response but none for the Arctic environment. After the
Gulf spill, Alaska should require the best and most improved
blow out preventer design and much of that information is being
developed by the federal government at this time. So, she
recommended that the DEC not wait years to implement it, but
instead require best available BOP today and more frequent
testing and inspections.
12:06:00 PM
She said there have been few, if any, unannounced spill response
drills in Alaska. Even when the operators have had knowledge of
the drill being called, they have frequently failed to meet
their response requirements when their c-plan is tested. Those
exercises are a learning experience. Every time they have oil
spill prevention and response drill it is improved. She
recommended at least one unannounced drill per operator in each
c-plan cycle of the operator. This would ensure the operator
would improve by the next c-plan. She recommended eliminating
or revising that section so that you don't allow old out-dated
technology to meet the response planning standards.
One of the DEC response planning standards for wells is 5500
barrels day times the number of days it will take to control the
well. This assumes a 15-day time to control the well, but that
is very unrealistic if one looks at the Gulf of Mexico spill.
This issue needs to be addressed in legislation to insure that
the time for response to this bill and the number of barrels per
day assumed is realistic and not something that is developed
from theory.
MS. WAINRIGHT said they recommend also that there be no offshore
exploration allowed until there is a drill rig vessel is present
and under contract to drill a relief well. And the legislature
should consider whether statutory changes are needed to require
better coordination among the AOGCC regulation of blow out
preventer devices with DEC's c-plan oversight role.
12:09:10 PM
BP's spill in the Gulf of Mexico shows that the commonly used
method in Alaska for skimmer effectiveness is fatally flawed. BP
claims there that the ability to recover more than 491,000
barrels a day and they actually deployed equipment to contain
1.2 million barrels a day. But they actually recovered only 1800
barrels a day. So, again, realistic standards are needed on the
ground. Drilling and tests would give us those more realistic
standards.
12:10:00 PM
She referred again to the 2000/01 DEC Minerals Management
Service and USGS drill on the North Slope that was referenced by
Dr. Short and said that the North Slope Borough ICAF and others
have highlighted this problem of the inability to respond in
realistic conditions on the North Slope. So, if Alaska is going
to continue to permit exploration and production in areas where
ice may seasonally be present, at the very least the legislature
should require strict seasonal drilling restrictions or increase
preventative measures during those times.
12:10:37 PM
MS. WAINWRIGHT said some recommendations had been covered
before, but they recommend zero ballast water discharge for
tankers with ballast water originating out of the state,
particularly in state critical habitat areas. Smithsonian
research has found over a dozen invasive species in Kachemak Bay
presumably from ballast water. Ensure that the Cook Inlet
terminal is not allowed to be used any more for storage and that
a pipeline be installed instead. Cook Inlet fisheries deserve
the same protections as those in Prince William Sound, and
therefore they recommend that tug escorts be mandatory for all
large tankers. They also recommend a mandatory pipeline mapping
inspection reporting system be made available at the Joint
Pipeline Office so that interested members of the public and
regional citizens' advisory councils can review where those
pipelines are located and assist DEC in its oversight of them.
Finally, Ms. Wainwright addressed dispersants, which were
heavily used in the Gulf of Mexico. They recommend that the
state work with the Alaska Regional Response Team to clearly
define when, where and in what volumes dispersants are safe and
effective. When the National c-plan was first adopted the use of
COREXIT 9527 was allowed in Alaska, it had to be at least 50
percent effective. But unfortunately laboratory tests showed
that dispersant was not effective on North Slope's low crude; it
was only 30 percent effective. So, they said well, we'll average
its effectiveness. So, its effectiveness on Louisiana crude is
70 percent, on North Slope crude it's 30 percent. "Boom it's 50
percent effective, but in fact it's not." You would have to use
a lot more dispersant. So, whatever is used in Alaska needs to
be tested for its effectiveness in Arctic and cold conditions as
well as on the species present in its waters.
REPRESENTATIVE GATTO said the term "best available technology"
is almost scary - because it would preclude big projects from
ever getting built. Within reason, he asked, do they want to be
80 percent of the best or 90? It has to be a different number
than 100. Do you have a number?
MS. WAINWRIGHT replied that she didn't have a number, but that
is why the technology forums that the legislature recommended
that DEC have are so important. "We don't want to have an
outlandish BAT standard that nobody can meet; we want to be
realistic." When you get good minds together, have those
conferences and come up with best recommended technology.
REPRESENTATIVE JOHNSON said two people testified that they
should get rid of the Drift River terminal and build a pipeline
and asked if she would convince her organization to support a
pipeline if that is what happens.
12:15:01 PM
MS. WAINWRIGHT replied that comment came from a member of her
staff, and they would definitely work with everyone to supplant
that terminal with a pipeline.
12:15:20 PM
lunch break
1:35:28 PM
CO-CHAIR MCGUIRE called the meeting back to order at 1:35, and
announced that that the panel from impacted communities would
testify next.
1:36:44 PM
HAROLD CURRAN, CEO, speaking for Mayor Edward Itta, North Slope
Borough, said the ability to respond to an oil spill is
constrained by arctic conditions, including prolonged darkness,
extreme cold, absence of or remoteness from response
infrastructure and equipment, a lack of facilities to house,
feed, and otherwise support large numbers of response personnel,
and - perhaps most challenging - extreme and variable ice
conditions. Broken ice, fall slush ice and solid ice conditions
that trap oil under ice or in amongst ice flows make a
successful oil spill response unlikely with existing equipment
and technologies. Their primary goal is to try and put measures
in place to keep oil from being spilled.
Their first recommendation is to upgrade blowout preventers and
well pressure control devices to insure best technology and
practices are used including type of control, secondary control
of that system, inspection maintenance and repair program. You
can't just assume that these systems are in place and
functioning well. The Gulf of Mexico has demonstrated that.
Upgrade blowout preventer and well pressure control devices to
ensure best technology and practices are used, including: the
type of control system; secondary control of that system;
inspection; maintenance; and repair programs.
BOPs must have two sets of blind shear rams to prevent BOP
failure. They must have reliable emergency back-up control
systems and immediate access to sufficient remote operating
vehicles to manually activate a subsea BOP if needed.
BOPs should be required to be tested more frequently, 7 days, as
opposed to every 14 days, which is the interval that is the
normal standard today. They also would like BOPs to have
reliable emergency backup control systems; so it's not just the
preventer itself, but the control systems that are duplicated.
They also want immediate access to vehicles to manually activate
a BOP if needed. If a subsea blowout preventer is used, require
a second redundant blowout preventer on the floating drilling
unit, when technically feasible. So, they are asking for two
BOPs. They are also recommending codifying a minimum two-barrier
policy - two BOPs and two barriers.
Seasonal drilling should be used in the OCS where it is
effective to prevent offshore oil spills during broken ice
conditions. Offshore pipelines should be required as the
transportation method for the Arctic Ocean. Industry has a lot
of information on where the major spills come from, and in terms
of industry spills it comes from tankers. So, tankers should not
be used.
There are some risks with pipelines and so they have
recommendations to try to address those. One is to codify that
offshore pipelines must be buried below ice gouging and strudel
scour depths. Industry as a matter of practice does testing to
find out what those depths are and generally plans to do that,
but it ought to be codified. They recommend requiring redundant
leak detection systems for offshore pipelines and updating leak
detection standards to reflect best available technology; if
dispersants are to be used they should be tested to determine
whether they are safe or not. Once tested and determined safe,
they ought to be pre-approved. Using dispersants in the Gulf of
Mexico was very controversial and there were many time delays in
justifying their use. Arctic oil spill response equipment
standards should be established; a lot of equipment doesn't
function well in the Arctic. A same-season relief well plan
should be required just like the Canadians have. Shell has
relief well plans, but they ought to be required.
1:43:03 PM
MR. CURRAN said they would like to see worse case oil spill
planning and not go light in terms of how long it's going to
take to drill a relief well or the quantities of oil that will
be discharged during that time period. If you don't plan for the
worst then you will just aggravate that possibility. Require
well blowout containment equipment or caps on subsea wells.
Equipment should be onsite or readily available nearby along
with the expertise to safely deploy it and use it effectively. A
cap or top hat is what BP eventually used on its BOP. It can sit
down over the well and capture the oil so that it can be brought
up to the surface and put in a container.
1:44:02 PM
Oil spill response: Require a signed contract for a relief well
rig, with trained and qualified personnel and equipment needed
to drill the relief well. All of that will make the response
more effective and timely. Require an operator to plan for the
Absolute Open Flow Potential (AOFP) for an uncontrolled well
blowout with no backpressure. Alaska's default blowout rate of
5,500 bbl/day (wells in Cook Inlet plus wells on the North
Slope) for exploration wells needs to be increased to account
for higher rate Arctic wells. The average is not fair to wells
in Cook Inlet which could have less deliverability, and it
undermines proper planning for North Slope wells, which
generally exceed that.
MR. CURRAN said three assembly members went down to the Gulf of
Mexico and talked to local representatives and elected officials
from the communities in Louisiana and asked what they would do
differently. This is their list of activities:
•Inventory of boats available in coastal communities
•Train boat operators and crews
•Train beach responders
•Evaluate disposal locations
•Develop a chain of command and response plan
•Plan for additional fuel needs
•Enhance Coast Guard presence on the North Slope
Having the infrastructure in place is important - if you're
going to mobilize people to respond to an oil spill, they have
to stay somewhere. You're not going to put them in a tent on the
North Slope in Arctic conditions. It's very important to provide
them with beds, food, and a heated facility if they are going to
function properly.
1:46:27 PM
REPRESENTATIVE GUTTENBERG asked if he thought best industry
standards needed more clarification.
MR. CURRAN answered that a lot of their recommendations are best
industry standards. They have looked at other countries and
Arctic nation and have found good standards.
1:49:09 PM
REPRESENTATIVE GUTTENBERG asked where the coastal zone
management stops offshore. Does it include a drill rig a couple
miles off?
MR. CURRAN replied that whatever is done in the OCS has to be
consistent with the state plan if it has been approved by the
federal government. It's not an absolute standard, but if there
is a conflict between federal law and the state's coastal zone
management program, then there is an administrative process that
occurs in the Department of Commerce.
REPRESENTATIVE GUTTENBERG asked if that process is in place for
the North Slope Borough.
MR. CURRAN answered they don't have an approved district
program.
CO-CHAIR MCGUIRE asked him to review the North Slope Borough's
efforts over the Interim to prepare for the Northern Waters Task
Force meeting on October 1, so that Alaskans know generally how
he is fairing with the state's neighbors who will arguably be
the most impacted by development in negotiations with the
federal and state governments.
MR. CURRAN prefaced that by saying that whatever happened in the
Gulf of Mexico has changed the playing field. But, since 2007
they have been in negotiations with Shell on discharge and
baseline science issues, and they have been responsive on both.
They are close to signing an agreement with them where they will
fund some baseline science that would be managed by the North
Slope Borough. On discharge they have orally indicated they may
modify their proposals to reduce the amount of discharge for
their drilling activities.
In terms of what used to be MMS, Mr. Curran said, he sat down
with them about three days before the Gulf of Mexico and
developed an MOU to try negotiate eight points that Mayor Itta
had identified that should occur in the OCS to see if those
could be addressed administratively as opposed to legislatively.
They were slowed down as a result of the Gulf of Mexico, but are
committed to following up on that. Also, he hoped that BOEM
would require the same mitigation of impacts to hunting of the
Bowhead whale that has been put into their permits for the first
time last summers.
MR. CURRAN said response is being seen from both the federal
government and industry. He said the NSB is a cooperating agency
with the BLM in its area-wide EIS for the NPRA, as well as with
AEC [Army Environmental Command] with NMFS and its analysis of
trying to mitigate impacts to marine mammals in the Arctic Ocean
for future oil and gas activities. But he still thinks more can
be done.
1:52:54 PM
CO-CHAIR MCGUIRE said there is a perception that the North Slope
Borough opposes drilling or any kind of activity in the OCS, but
that hasn't been her experience. Rather it's that they want it
done right.
MR. CURRAN added that the Mayor knows the Borough ultimately
doesn't get to make decisions about ANWR or OCS, and
understanding that the federal government will make a decision
to go into the OCS, they are putting a lot of energy into
improving the standards. Their preference is still that oil and
gas that is available on land be explored and developed before
anybody goes in the OCS.
1:54:46 PM
MIKE MUNGER, Executive Director, Cook Inlet Regional Citizens
Advisory Council, thanked the committee for the opportunity to
speak this afternoon. He said their board is comprised of 13
members. Municipality members represent the communities of
Anchorage, Kenai, Homer, Seldovia, and Kodiak; also the Kodiak
Island and Kenai Peninsula Boroughs. Stakeholder members include
the Alaska State Chamber of Commerce, representing tourism,
commercial fishing, aquaculture, Native, recreation, and
environmental organizations. Cook Inlet Regional Citizen's
Advisory Council's mission is to represent the citizen's of Cook
Inlet in promoting environmentally safe marine transportation
and oil facility operations in Cook Inlet. Oil spill prevention
and response are key focuses for the Council.
He said the Senate Resources Committee's interest in Alaska's
oil spill preparedness and response capacity is very much in
line with the Council's. In fact, it has just undertaken a
project to review Alaska oil spill statutes and regulations and
to develop recommendations for possible changes. That project is
on a fast track. His comments would be followed-up in writing
once the project is completed.
1:56:11 PM
First question: How would they assess Alaska oil spill
preparedness? Alaska is one of the best prepared states in the
US. Yet, there is room for improvement.
They have four very capable primary response action contractors
- CISPRI, SERVS, ACS, and Alaska Chadux - with an impressive
array of equipment and highly trained responders. Alaska's
current response capability is one of the highest in the world.
However, everyone needs to realize that no matter how much
response equipment and how many responders are required there
will never be an adequate response to a catastrophic spill like
the one in the Gulf of Mexico. The realities of the harsh
environment in Alaska and the basic physics of oil on the water,
means that it is not possible to put the genie back in the
bottle. Mr. Munger said we have to be prepared to do the best
job humanly possible and we have to require a robust oil spill
response system, but we must place our primary focus on
preventing a major spill from occurring in the first place.
1:57:37 PM
Second question: What changes, if any, would you make to state
laws, regulations, procedures or budgets to improve our
preparedness and response capability? His response was:
Continuous Improvement: Our current laws and regulation do not
adequately force continuous improvement of oil spill response
technology. There should be incentives for developing better
response technologies. The issue is not that we need more
equipment; the issue is we need better equipment. There is a
Best Available Technology (BAT) analysis requirement in the
Alaska Department of Environmental Conservation regulations but
it does not apply to response equipment used to meet a response
planning standard. As long as the c-plan holder meets the
standard, their equipment is considered BAT. This removes any
incentive for continuous improvement.
There are a few exceptions, but for the most part the spill
response technology being used today has not changed in the last
20 years. Whether it is funded directly or incentives are
created, focus should be on more research and development in
spill response technology. One exception he considered a
significant improvement was the fuzzy disc skimmer system
recently brought to Alaska. This has a high volume recovery
capacity but its greatest feature is virtually no water is
recovered during the operation. He explained that on water
temporary storage of recovered oil is always a large factor in
spill response. The skimmer was brought to Alaska through the
efforts of Tesoro. CISPRI, the response action contractor in the
Cook Inlet area, has recently received four of the skimmer
systems to complement their response inventory.
Equipment Standards: We should also look at requiring plan
holders to utilize equipment that meets minimum standards. The
American Society for Testing and Materials (ASTM) has developed
standard testing protocols for booms and skimmers. Contingency
plans utilizing boom or skimmers that have not been tested using
these protocols and found to meet a minimum standard should not
be approved.
Field Trials: The development of full-scale trials designed to
measure the limitations and effectiveness of an entire response
system, such as an open-water recovery task force should be
encouraged. The capability of the task force is limited by its
weakest component; that weak component might be people, vessels,
boom, or skimmers, but without trials, they won't know and they
can't be fixed.
2:00:16 PM
Oil Well Blowout Planning: He recommended that oversight and
approval responsibility for well control and blowout planning be
transferred from the ADEC to the Alaska Oil and Gas Conservation
Commission (AOGCC). AOGCC is responsible for the approval of
normal drilling operations and it only makes sense that they
would be responsible for the review and approval of emergency
response plans for blowouts. AOGCC has drilling engineers on
staff and ADEC does not, so the proper expertise for reviewing
well control plans is in the Commission. Given the recent
blowout event in the Gulf of Mexico, we probably need to review
our standards for emergency well control plans, but this process
should not begin until the responsibility is transferred between
agencies.
Unannounced Drills: Many people use the terms exercise and drill
interchangeably, and in fact they are not distinguished in the
current laws and regulations. But they are different things with
different purposes. An exercise is planned ahead and everyone
knows it is coming; it is valuable for training and practice,
but it is not a test of response readiness. On the other hand
drills should be unexpected and designed to test response
capability. Currently too few unannounced drills are conducted,
because ADEC does not have enough resources to plan and conduct
them.
Funding: They strongly support more funding for the ADEC
Division of Spill Prevention and Response. Their staff reviews
contingency plans, conducts inspections and unannounced drills,
and responds to actual spill events. Like most agencies they
have seen their budgets cut in the past few years. Without
adequate funding, none of our other recommendations will be
implemented.
CO-CHAIR MCGUIRE asked if any other authority would work.
MR. MUNGER answered they see this as the natural thing and now
the DEC doesn't have that. The review needs to be finished.
2:03:38 PM
MARK SWANSON, Executive Director, Prince William Sound Regional
Citizens Advisory Council (RCAC), said in the RCAC was formed
after the Exxon Valdez oil spill to provide citizen oversight of
crude oil transportation in Prince William Sound. In 1994, the
Alaska Legislature passed a law that included a requirement for
a review of best available oil spill prevention and response
technology each time an Oil Discharge Prevention and Contingency
Plan (more commonly called a contingency plan) is approved. The
goal of the 1994 law was to ensure continuous improvement of oil
spill prevention and response technology in Alaska.
He said Alaska's laws and regulations requiring best available
technology assessment and implementation for oil spill
prevention have resulted in a number of oil spill prevention
improvements across Alaska. In Prince William Sound, the most
notable oil spill prevention improvement came in the form of
today's tug escort system, along with improvements to leak
detection technology, corrosion control, tank overfill controls,
and improved maintenance practices. However, Alaska's laws and
regulations requiring BAT assessment and implementation for oil
spill response have not yielded comparable improvements.
State statutory amendments in 2002 and regulatory amendments in
2004 eliminated the requirement to conduct a rigorous technical
and economic assessment of Best Available Technology for most
mechanical oil spill response equipment.These amendments
affected skimmers, booms, and other mechanical oil spill
response equipment required to meet the state's Response
Planning Standard. This standard requires operators to be able
to contain, control, and clean up 300,000 barrels of spilled oil
in Prince William Sound within 72 hours. Today, the only oil
spill response equipment and procedures required to undergo a
rigorous BAT assessment are: communications; source control
procedures; trajectory analysis and forecasting; and wildlife
capture, treatment and release programs.
2:06:13 PM
The ADEC's 2004 regulatory amendments weakened oil spill
response requirements by allowing operators to substitute non-
mechanical response techniques for mechanical response during
severe weather. This change was made despite the fact that the
Prince William Sound Regional Citizens' Advisory Council and
other stakeholders oppose chemical dispersant use, which is a
primary non-mechanical response tactic. Additionally,
dispersants and in situ burning (another common non-mechanical
response technique involving the burning of spilled oil while it
is still on the water) suffer from the same limitations as
mechanical response equipment in severe weather.
The steady erosion of the state's best available technology
requirements over the past 16 years has left Alaska with an
arsenal of oil spill response equipment based largely on late
1990s technology. Minor improvements have been made voluntarily
by some c-plan holders, but the ADEC has not compelled or
alternatively provided adequate incentives to tanker operators
and other contingency plan holders to drive more significant and
much needed updates and changes.
If Alaska is to be held up as the "gold standard" for BAT for
oil spill prevention and response equipment, the state will need
to revise its laws and regulations to require that all oil spill
response equipment- including skimmers, booms, and response
vessels-undergo a Best Available Technology assessment at least
once every five years (each time a contingency plan is renewed),
and to require that enhanced oil spill prevention measures be
taken during periods when even the best available mechanical
response technology cannot operate.
In addition to the problems just outlined, the state Division of
Spill Prevention and Response, which is responsible for
enforcing Alaska's regulations on oil spill prevention and
response, faces an ever-worsening funding shortage. The
division's budget is tied to a per-barrel surcharge on oil
production in Alaska, which is steadily declining. As a result,
the division's funding is steadily being reduced, even though
its workload is not.
Recommendations:
-Require all equipment including individual components of
recovery systems used to meet the state response planning
standards and undergo a best available technology review.
- Require contingency plan holders to inspect, test, and certify
that all Response Planning Standard equipment is Best Available
Technology.
- Within 30 days of a spill response, require c-plan holders to
re-inspect and test Response Planning Standard equipment used in
the response to verify it remains suitable for continued
service.
- Require c-plan holders to inspect, test, clean, and repair
equipment on a state-approved schedule as part of their
contingency plans.
- Require that Response Planning Standard equipment not be over
20 years of age unless it has been inspected, tested, and
certified by the Alaska Department of Environmental Conservation
as suitable for continued use.
- Require that enhanced oil spill prevention measures-such as
double booming or daylight-only operations-be negotiated in
advance and enforced when weather is too severe for Best
Available Technology mechanical response equipment to operate.
- Clarify in regulation that the contingency planning process
does not allow non-mechanical response techniques - such as
dispersants and in situ burning - to be used to meet the
Response Planning Standard, and that only mechanical response
equipment can be used to meet the Response Planning Standard.
- Consider increased financial incentives to plan holders to
enhance spill response capabilities outside the normal five year
plan cycle.
- Provide inflation-adjusted funding for the state Division of
Spill Prevention and Response to ensure it has an adequate
budget to meet its responsibilities.
2:10:07 PM
REPRESENTATIVE GUTTENBERG asked how accurate it is now that
Alaska is the gold standard.
MR. SWANSON replied it remains very accurate. Standards are much
higher in Alaska than anywhere else in the nation. Most
equipment works well in good weather but not in bad weather or
icy conditions.
2:12:00 PM
five minute break
2:23:57 PM
CO-CHAIR WIELECHOWSKI called the meeting back to order at 2:23
and announced that the state agencies' panel would comment next.
2:24:21 PM
LARRY HARTIG, Commissioner, Department of Environmental
Conservation (DEC), said he would provide an overview of how DEC
addresses the risk of a major crude oil spill to marine waters
in Alaskan, and in light of the additional information that will
be coming in from the expert panels looking into the Gulf of
Mexico spill, where they anticipate putting additional attention
as DEC continues to reduce the risk of crude oil spills in
Alaska waters. They must reduce the probability of the events
that could lead to a spill and be prepared to contain, control
and the stop the flow of oil quickly if a spill occurs.
COMMISSIONER HARTIG said his overview would be broken down into
four parts:
• A quick summary of the legal framework that allocates
responsibilities among the regulated community, and federal and
state agencies;
• The primary measures implemented by DEC to reduce the risk of
spills;
• The primary response measures in place to prepare for and
respond to marine spills in Alaska; and
• A summary of areas where they will likely be focusing our
attention as reports stemming from the Gulf spill are reviewed.
2:26:47 PM
COMMISSIONER HARTIG said the incident in the Gulf was a wake-up
call to the Nation. It reminds us of the need for vigilance. But
it is also important to be mindful that:
• The systems and measures we have in place in Alaska to prevent
and respond to marine spills have been developed over decades by
people with Alaska experience and expertise, and we don't want
to make unnecessary changes or import something new that won't
work here;
• In many areas, spill prevention and response are very
technical areas and any changes we might consider should be
supported by good science and engineering, and
• There is a tremendous amount of work underway by some of the
best experts in the Nation to look at oil spill prevention and
response, and we should take that body of work into account as
we decide which lessons apply here and the best way to respond
to them.
2:28:13 PM
LEGAL FRAMEWORK:
A prerequisite to assessing Alaska's oil spill risks and our
capacity to respond is an understanding of the legal framework
that governs who is responsible, who is liable, and who is
required to respond. Both the federal and state statutory
frameworks require that the "spiller" or responsible party
immediately respond and contain, control and clean up a spill.
He commented that many people thought the Coast Guard had an
armada of spill responders that would be immediately launched
for a big spill, where actually under federal law the spiller
has that responsibility and the Coast Guard has oversight and
coordinating responsible.
Certain facilities, such as oil terminals, exploration and
production facilities, pipelines, tank vessels, non tank vessels
and, in Alaska, the railroad, are further required to have an
"oil discharge prevention and contingency plan" and to meet
"financial responsibility" standards set by state statute and
regulation.
Oil spill c-plans detail spill prevention measures and equipment
that must be in place. They also specify a "response planning
standard," which is the size of spill and the conditions under
which an operator must be prepared to respond to a spill. The
response planning standard dictates the requirements for
equipment, vessels and trained personnel the operator must have
available and be ready to contain, control and clean up a spill.
Spill response is regulated by the state and federal government.
If a response is inadequate, the governments may augment or
direct the response. The state or federal response organizations
are able to augment a response typically by engaging their own
spill response contractors looking outside the state for help,
or bringing their own resources to bear.
2:30:17 PM
PREVENTION:
There are a number of ways DEC strives to reduce the risk of
crude oil spills:
1) Identifying or developing technical standards and other
requirements to assure the integrity of critical equipment used
in the storage and transport of crude oil;
2) Incorporating these requirements into regulations or
contingency plan approvals;
3) Reviewing and inspecting records, operations and equipment to
assure compliance with applicable requirements; and
4) Instituting enforcement actions as needed to compel
compliance.
2:30:58 PM
COMMISSIONER HARTIG explained that in the marine environment,
DEC shares jurisdiction with other federal and state agencies.
On the Outer Continental Shelf (OCS), the federal agencies,
including the Bureau of Ocean Energy Management, Regulation and
Enforcement (BOEM) (formerly MMS), have primary if not exclusive
jurisdiction. However, DEC spill prevention requirements still
apply in the OCS through the Alaska Coastal Management Program
(ACMP). They must show consistency with the ACMP plans which
incorporate their c-plans. In state waters and on-shore, DEC
strives to prevent spills through requirements contained in
regulations and state-approved c-plans.
Regulatory requirements have been developed for training,
transfer operations, laden tank vessels and oil barges,
exploration and production facilities, flow lines, crude oil
transmission pipelines, storage tanks, facility piping and
secondary containment, all of which may be incorporated into the
c-plan requirements. Both DEC's approval of c-plans and the
comparable ACMP process that extends state requirements into the
OCS include a public process. The public has an opportunity to
review and comment in advance of any final decision by DEC.
2:32:16 PM
PREPAREDNESS:
Response preparedness activities are also included in c-plan
requirements. Facilities with contingency plans are subject to
inspections, drills, exercises, and table top drills. In Alaska,
as at the national level, the spiller and the state and federal
governments use the incident command system (ICS) as the
response management framework. Typically you would see DEC, EPA,
the Coast Guard, the RCAC, local officials and the spiller and
their contractor all be centralized in one facility managing the
response together. He said, also, unique to Alaska is an
emergency response fund of $50 million paid for through a
conservation surcharge on crude oil produced in the state, which
is available to the state to respond to spills. In the event of
a large spill, one of the first things that happen is he gets a
memo from the division director saying this is the estimated
cost to the response asking to tap the fund. If appropriate, he
would authorize tapping the fund; notice goes to the legislature
and the governor.
2:33:46 PM
COMMISSIONER HARTIG said they have been strengthening the
state's c-plan requirements ever since the Exxon Valdez spill.
Progress has been made in many areas over the last 20 years. The
steps in this process include:
- Evaluation of general response procedures, deployment
strategies and response strategies. State law requires applying
best available technology in the review of for certain
components of the c-plan, and they hold a BAT conference at
least every five years. A year or two ago they held a conference
on digging and corrosion issues relating to the North Slope
events.
- Evaluation of technologies and their application to determine
they are the best available.
- Establishment of response planning standards based on the
maximum and most damaging oil discharge that could occur based
on the size, location, capacity and analysis of possible mishaps
during the lifetime of the facility or vessel. Today they heard
that there is a 5500 barrel per day response plan requirement
that was based on the average flows at the time from oil being
produced in Alaska when the standard was set. But they have the
ability to go back with AOGCC help and look at the actual
reservoir pressures and what the flow might be from a particular
reservoir and adjust that and adjust the c-plan requirement.
- Evaluation of incident management teams, equipment, vessels
and trained personnel to immediately respond to meet the
established response planning standards and other c-Plan
requirements. He said the state also has a unique requirement in
the case of exploratory and development wells; the c-plan holder
must have a plan in place to regain well control within 15 days
of loss of well control.
- In the case of exploratory and development wells, the c-plan
holder also must have a plan in place to regain well control
within 15 days of loss of well control. They are currently
looking for recommendations. DEC regulations require having a c-
plan, but it has no review process yet. However, the DEC is
probably not the right agency to do that and would defer to
AOGCC (either give it to them and their answer back or transfer
authority to them).
2:35:28 PM
COMMISSIOHNER HARTIG said they continue to learn from the Gulf
event and are looking at recommending changes to:
• Accuracy and methods for estimating crude oil flow rates,
which form the basis for the response planning standard and
planning a response, from exploration and production wells;
• Technologies for regaining control of a blowout;
• Planning and resource requirements to respond to a "worst
case" spill; and
• Evaluation of mechanical and non mechanical (dispersants and
in situ burning) technologies for oil recovery or dispersion.
He said they are considering the advisability of having the
ability to quickly deploy dispersants that were used quite
extensively in the Gulf, more than at any other time. They are
very interested in what the long-term benefits and effects are.
Again, the commissioner said, embedded in these issues are
highly technical questions that demand data, analysis and
expertise to answer. It is too early to say what changes will be
warranted in Alaska in these areas, but the legislature would be
getting recommendations from all the state agencies
2:38:51 PM
CO-CHAIR WIELECHOWSKI asked his position on using best available
technologies.
COMMISSIONER HARTIG answered that using BAT is a requirement in
state statute; they are to be employed in the c-plans. Then
every five years a conference is required where the BATs can be
selected. During renewal of c-plans new technologies can be
recognized. The bottom line is that the response planning
standards have to be met.
They are looking at having future conferences in light of some
of the questions that have arisen in the Gulf including well
control, blow out preventers, well safety and regaining control
of a well if there is a blow out. Funding could come from
funding requests or industry. They are expecting cooperation
with RCACs and the industry.
2:40:39 PM
CO-CHAIR WIELECHOWSKI asked what he thought about the use of
unexpected drills that might need more funding.
COMMISSIONER HARTIG replied that there are pros and cons. There
are safety concerns with any drill in open water, and especially
large ones; but he is a great believer in them. He turned that
answer over to Mr. Dietrick.
2:41:50 PM
LARRY DIETRICK, Director, Division of Spill Prevention and
Response, Alaska Department of Environmental Conservation (DEC),
said he was available for questions. He said they all agree that
a robust drill program is a key part of verification to make
sure spill response preparedness capability is in place. They
had two unannounced drills in the last couple of months and more
than that on a fiscal year basis. That is reported annually
through the budget process.
The state has to look at a large number of facilities statewide.
In deciding who to drill, they frequently look at the product
type and the facilities that they store, transport or produce -
persistent products get first attention. Spill histories,
inspection results, incidents at the facility all go into
"triaging" which facilities are picked for a drill. They also
try to target specific objectives and then carry them out with a
full field deployment. They coordinate with the federal
government for maximum efficiency; many of the facilities are
also required to have federal c-plans and are subject to federal
drill requirements.
CO-CHAIR MCGUIRE asked what he thought about the blanket
requirement that equipment can't be over 20 years and older
unless it has been tested and specifically certified by the
state.
MR. DIETRICK answered that was an interesting concept. The BAT
requirement is in two parts; one is for prevention and the other
part is for response. The BAT is set by the response planning
standards which gives the operators some flexibility to pick
from approved equipment. It doesn't eliminate any one operator
and has worked well.
With regard to age, the equipment is tested during the drills
and inspection program where it gets actually tested in the
water. If they should test and recertify 20-year old equipment,
in the skimmer world, for instance, new products come out, but
he didn't know if a testing program would enhance their
capability. He would have to consider it.
2:48:36 PM
CO-CHAIR MCGUIRE said there was also a suggestion that they
transfer authority for blow out prevention and well response
plans from DEC to AOGCC, given that they have the engineers on
staff and asked his response.
COMMISSIONER HARTIG replied they are already looking at that,
and are in discussions with AOGCC and the Division of Oil and
Gas. Regulations already require exploratory and production well
c-plans to have a well control plan where they would regain
control of the within 15 days after losing control (a blow out
situation). It is true they don't have the same expertise AOGCC
has and would turn to them anyway for advice. They are not
trying to protect turf, but he wants to make sure that the
issues go to the experts one way or the other to get it done
right.
2:50:33 PM
CO-CHAIR MCGUIRE asked with respect to "the smaller guys" like
Pioneer, to what end is DEC looking at assessing the federal
recommendations, and various financial positions and locations
for drilling operations of these different companies. She
doesn't want to end up putting smaller explorers and operators
out of business.
COMMISSIONER HARTIG replied that the economics of a particular
project and what a company can afford are not part of the c-plan
approval process; rather they look at the realistic maximum
discharge scenario. But there is a way to make the economics
better, which what the companies have done; they have formed co-
ops where they can share equipment.
2:52:32 PM
DAN SEAMOUNT, Geologic Commissioner and Chair of the Alaska Oil
and Gas Conservation Commission (AOGCC), said the committee
asked them two questions and their "AOGCC Statement to the
Governor" and the Compass piece they sent into the Anchorage
Daily News regarding blow out prevention goes to question one.
Question two is if they can do other things to mitigate the risk
of a blow out even more; handout number three addresses that.
He stated that a previous presenter said the state has a
conflict in that it oversees the regulators and the revenue
generators with the state, but that's not the case with AOGCC.
They used to be under the Department of Natural Resources (DNR),
but were split away from them in 1977 when someone actually did
perceive that conflict. They are a totally independent agency
and report to the legislature and the people of Alaska.
First question: How would you assess Alaska's oil spill
preparedness and its capability to respond to oil spills?
MR. SEAMOUNT said he would speak to issues that only AGOCC has
authority over. They don't have authority over oil spill
cleanup, but they do have oversight over well operations and
relief well drilling in order to control the blow out.
They have very important authority over oil spill prevention,
which should be heavily emphasized. Prevention makes a response
unnecessary. They maintain a technically comprehensive and
codified well permitting process and a rigorous, interactive
well operations inspection program administered by a highly
experienced and professional staff.
All Alaska oil and gas (and soon, geothermal) wells must be
permitted by the AOGCC. All drilling and completion permit
applications are thoroughly reviewed by competent, experienced
geologists and state-licensed petroleum engineers. Among other
things, the staff insures that the well plan includes adequate
mud weights (first line of defense), proper casing and cement
design (second line of defense), and properly working blow out
preventers (third line of defense). They oversee other elements
of well integrity after the well is drilled and completed.
If an application fails to meet all of AOGCC regulations, fails
to be compliant or in any other way satisfy good engineering
practices the well operator is required to make the necessary
changes or the application gets denied.
A robust AOGCC field well inspection program follows permitting
to ensure regulatory and permit compliance. AOGCC employs 5
Petroleum Inspectors with an average 30 years oil and gas
experience (private industry and AOGCC) per inspector, tasked
with witnessing critical tests of equipment used in the
drilling, production and measurement of hydrocarbons, and the
proper abandonment of wells.
He explained that AOGCC performs periodic compliance inspections
to ensure the equipment being used is consistent with the
approved application, provides redundant levels of safety and
protection for the well operations being performed, and is
suitable for the environment in which activities are being
conducted.
Blowout prevention equipment inspections and witnessing tests
per the regulatory frequency is a particular emphasis for AOGCC
inspections. The AOGCC requires that BOPE must be tested at a
frequency no greater than every 14 days for development wells
and every 7 days for exploration wells and well work-overs. In
essence, every active rig in Alaska is inspected by the AOGCC at
least once every 60 days. All blowout prevention test results
must be provided to the AOGCC for review and records must be
maintained by the operator to substantiate the tests. If any
major component on the BOPE fails a test, drilling operations
are suspended until it passes.
2:59:23 PM
MR. SEAMOUNT said since Prudhoe Bay Field was discovered in 1968
there have been seven blowouts from the 5000 wells drilled on
the North Slope. The last one was in 1994. All except one were
the result of loss of control within shallow gas zones. Since
1962, there have been four offshore blowouts in Cook Inlet, the
last in 1987. All were from loss of control in shallow gas
zones. None of the blowouts on the North Slope and Cook Inlet
has resulted in injuries or oil spills. Since then, due to
improvement and seismic acquisition, geologic knowledge,
improved drilling technology and increased regulatory
requirements, the risk of blowouts from shall gas has been
greatly reduced.
He explained that after a well is completed, AOGCC requires
installation, use and maintenance of safety valve systems that
do for a producing well what a blow out preventer does for a
drilling well - if there is a release it will shut the well in
immediately. They inspect and require testing of safety valve
systems, and he didn't know of a failed safety valve system in
Alaska that has resulted in a loss of well control.
MR. SEAMOUNT said that they also require that wells maintain
mechanical integrity over their operating life. If an operator
can't demonstrate this to their inspectors, he is required to
shut in the well and insure the well is safe until the problem
is fixed.
3:01:32 PM
ENFORCEMENT ACTIONS: Failure to comply with AOGCC regulations
results in one or more of the following enforcement actions:
increased testing and oversight; restricted operations; notice
of violation (with timeframe for corrective actions); civil
penalty; or criminal penalty. All deficiencies found during
AOGCC inspections or reviews of operator reports must be
corrected. He said enforcement actions are available on their
website and are accessible by the public.
He said they continuously work to keep their regulatory
oversight current, recently revising their blow out prevention
equipment, well safety valve system, and suspended well
regulations. Ultimately, though, as evidenced by their strong
regulations, they believe prevention is the key to protecting
the people, environment and natural resources of the state of
Alaska.
3:03:05 PM
Second Question: What changes if any would you make to state
laws regulations, procedures or budgets to improve our
preparedness and response capability?
MR. SEAMOUNT said they have been working on the regulations and
making them tighter, but they have also provided a notice of
inquiry and possible changes (handout 3) in AOGCC Docket OTH-10-
16, evaluating if changes or additions are needed to commission
regulations governing well control in offshore and ultra-
extended reach wells. He said they would hold meetings within 30
days after the public report of investigation results by the
National Committee on BP's Deepwater Horizon oil spilled
offshore drilling. They will discuss the 14 things on that
notice. He said the public was invited.
CATHY FOERSTER, Engineering Commissioner, AOGCC, said he did a
good job.
CO-CHAIR WIELECHOWSKI thanked them for testifying.
3:05:07 PM
CO-CHAIR MCGUIRE said they look forward to hearing the results
of talks.
3:05:48 PM
KEVIN BANKS, Director, Division of Oil and gas, Department of
Natural Resources (DNR), highlighted a few points. Obviously,
OCS development is going to be exceedingly important for our
future as well as being a key part of our nation's energy
endowment. He hoped the state can demonstrate it can take care
of its own business and can establish some confidence among all
the states that we can take care of our offshore development.
He said a Northern Economics and ICER study indicates there is
130 tcf of undiscovered recoverable natural gas in the OCS, 27
bb/oil in OCS that could add 35,000 jobs to the Alaska economy
with payrolls of $27 billion over that period. It will add to
longevity to the North Slope facilities and TAPS. By having that
equipment up and running more of our own state lands will be
developed.
Alaska has long-standing experience in offshore development.
Endicott was started up in 1987 and has produced 490 barrels
from two artificial drilling islands, the North Star project is
in its 9th year and has produced about 140 mm barrels of oil
which exceeds their mean estimate, Oooguruk is now up and
Nakiachuk will start soon, both of which have artificial islands
components.
3:08:21 PM
He said obviously these are shallower waters, and not only does
that give us better access to the sea floor, but it also means
that we are using different kinds of equipment than in the Gulf
of Mexico. In some of the most shallow, gravity-based bottom
founded structures can be used like ice or grave islands for
temporary drilling and exploration.
MR. BANKS said our reservoirs don't have the same kind of
pressure because of the depth and deposition is much different,
and we already have a handle on the drilling environment. So we
know what to expect when it comes time to establish requirements
for blow out prevention in the OCS.
3:09:54 PM
What changes will administration recommend? Commissioner Hartig
already talked about a dialogue within the administration
regarding the role of AOGCC in broader responsibilities for oil
spill prevention. That was conducted in part under an offshore
oversight team that the governor established earlier in the
summer. Their work continues and involves members of state
agencies involved in oil and gas development, including DEC,
AOGCC and the DNR. Recommendations will be forthcoming. The
Petroleum Systems Integrity Office has undertaken the GAP
analysis, and when that is completed it will generate much
further discussion on changes.
MR. BANKS pointed out that as serious an event as the Deepwater
Horizon was something of a rare event. So, they should remember
to make reasonable changes that are efficient and work rather
than being a reaction to an event this highly unlikely to occur
here.
3:12:29 PM
Also, he said the Petroleum Systems Integrity Office is
completing program development stage for a performance based
management system assessment program, a program in which the
core of the PSIOs' activities will be to examine and oversee the
kinds of qualify management program that the industry itself has
put into place to regulate itself. This is in keeping the
requirements of AO 234. They intend to coordinate that program
with the industry and the administration.
3:14:03 PM
CO-CHAIR WIELECHOWSKI thanked everyone for coming. Staff would
put recommendations together so people will have an idea of what
happened at the hearing. He invited members of the public to
submit comments.
CO-CHAIR MCGUIRE thanked everyone, too.
CO-CHAIR WIELECHOWSKI adjourned the meeting at 3:15.
| Document Name | Date/Time | Subjects |
|---|---|---|
| AOGCC Compass.pdf |
SRES 9/21/2010 10:00:00 AM |
|
| AOGCC Inquiry Docket #OTH-10-16 (2).pdf |
SRES 9/21/2010 10:00:00 AM |
|
| AOGCC Statement to Gov.pdf |
SRES 9/21/2010 10:00:00 AM |
|
| DEC Response Fund Overview - February 11 2010 (2).pdf |
SRES 9/21/2010 10:00:00 AM |
|
| Jeff Short Senate ResourcesTestimony 21 Sept 2010.pdf |
SRES 9/21/2010 10:00:00 AM |
|
| DEC - Senate Resources Hrng 09-21-10.pdf |
SRES 9/21/2010 10:00:00 AM |
|
| (Show Format) NSB PowerPoint 9-21-10.ppsx |
SRES 9/21/2010 10:00:00 AM |
|
| ConocoPhillips Oil Spill Testimony_9.21.10- (FINAL-For Event).ppt |
SRES 9/21/2010 10:00:00 AM |
|
| Crockett Presentation to S Resources 09 21 10.ppt |
SRES 9/21/2010 10:00:00 AM |
|
| Shell Senate Resource Cttee Hearing final.pptx |
SRES 9/21/2010 10:00:00 AM |