U.S. Releases Final Rules for Offshore Drilling in the Arctic

The Shell-contracted Noble Discoverer drilling rig in Dutch Harbor, Alasks in Summer 2012. Photo: Shell Alaska

The U.S. Department of Interior on Thursday released its final regulations over any future offshore exploratory drilling activities on the U.S. Arctic Outer Continental Shelf to ensure safety and environmental protection in the Arctic region.

The Arctic-specific regulations focus solely on Outer Continental Shelf exploratory drilling operations from floating vessels within the U.S. Beaufort and Chukchi Seas.

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

More specifically, the final rule requires operators to develop an Integrated Operations Plan addressing all phases of a proposed Arctic OCS exploration program and submit it to Bureau of Ocean Energy Management (BOEM) in advance of filing an Exploration Plan. Companies are also required to have access to – and the ability to promptly deploy – well control and containment equipment, such as capping stacks and containment domes, while drilling below or working below the surface casing.

Further, operators also must have access to a separate relief rig able to drill a timely relief well under the conditions expected at the site in the event of a loss of well control; have the capability to predict, track, report, and respond to ice conditions and adverse weather events; effectively manage and oversee contractors; and develop and implement an Oil Spill Response Plan designed and executed in a manner that accounts for the unique Arctic OCS operating environment, and is supported with the necessary equipment, training, and personnel for oil spill response on the Arctic OCS, according to the Department of Interior.

“With the United States as Chair of the Arctic Council, we are committed to demonstrating our leadership in governance and activities in the Arctic Region,” said Assistant Secretary Schneider. “The regulations we are issuing today support the Administration’s thoughtful and balanced approach to any oil and gas exploration in the Arctic region. The rules help ensure that any exploratory drilling operations in this highly challenging environment will be conducted in a safe and environmentally responsible manner, while protecting the marine, coastal, and human environments, and Alaska Natives’ cultural traditions and access to subsistence resources.”

A DOI press release said the new regulations complement the April-issued Final Well Control Rule, which applies across the entirety of the U.S. OCS, including the Arctic OCS, but the final Arctic regulations announced Thursday go beyond the scope of the Well Control Rule and address the unique challenges posed by the Arctic environment, especially provisions to reduce risk and safeguard Alaska’s North Slope coastal communities and the sensitive Arctic environment.

The DOI notes that although some oil companies have relinquishment their leases in the Arctic region, some operators, including Shell, continue to hold a number of leases in the Beaufort Sea Planning Area and one in the Chukchi Sea Planning Area.

“Finalizing these regulations will ensure that, should operators decide to act upon their leases or any future leases in these Planning Areas, they will operate with robust safety and environmental protections in place,” the Department of Interior said.

The finalized regulations come as interest in Arctic drilling has waned with the crash in the price oil during last two years and the added costs and regulatory burdens associated drilling Arctic drilling. 

In October 2015, the Department of the Interior cancelled the remaining two Arctic oil and gas lease sales scheduled to occur under the current 2012-2017 leasing program, at the time citing market conditions.