Vol. 80 Tuesday, No. 36 February 24, 2015

Part III

Department of the Interior

Bureau of Safety and Environmental Enforcement 30 CFR Parts 250 and 254 Bureau of Ocean Energy Management 30 CFR Part 550 Oil and Gas and Sulphur Operations on the Outer Continental Shelf— Requirements for Exploratory Drilling on the Arctic Outer Continental Shelf; Proposed Rule

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DEPARTMENT OF THE INTERIOR comments specifically related to the the OCS within the Beaufort Sea and draft Environmental Assessment Chukchi Sea Planning Areas. Bureau of Safety and Environmental conducted under the National BOEM and BSEE have undertaken Enforcement Environmental Policy Act of 1969 extensive environmental and safety (NEPA), please refer to NEPA in the reviews of potential oil and gas 30 CFR Parts 250 and 254 heading of your message. See also, operations on the Arctic OCS. These Public Availability of Comments under reviews, along with concerns expressed Bureau of Ocean Energy Management Procedural Matters. by environmental organizations and • Federal eRulemaking Portal: http:// Alaska Natives, reinforce the need to 30 CFR Part 550 www.regulations.gov. In the Search box, develop additional measures specifically tailored to the operational [Docket ID: BSEE–2013–0011; 15XE1700DX enter BSEE–2013–0011, then click EX1SF0000.DAQ000 EEEE500000] search. Follow the instructions to and environmental conditions of the submit public comments and view Arctic OCS. After considering the input RIN 1082–AA00 supporting and related materials provided by various stakeholders and available for this rulemaking. BOEM DOI’s direct experience from Shell’s Oil and Gas and Sulphur Operations and BSEE will post all submitted 2012 Arctic operations, BOEM and on the Outer Continental Shelf— comments. BSEE have concluded that additional Requirements for Exploratory Drilling • Mail or hand-carry comments to the exploratory drilling regulations would on the Arctic Outer Continental Shelf DOI, BSEE: Attention: Regulations and enhance existing regulations and would AGENCY: Bureau of Safety and Standards Branch, 381 Elden Street, be appropriate for a more holistic Arctic Environmental Enforcement (BSEE); HE3314, Herndon, Virginia 20170–4817. OCS oil and gas regulatory framework. Bureau of Ocean Energy Management Please reference ‘‘Oil and Gas and This proposed rulemaking is intended (BOEM), Interior. Sulphur Operations on the Outer to provide regulations to ensure Arctic OCS exploratory drilling operations are ACTION: Proposed rule. Continental Shelf—Requirements for Exploratory Drilling on the Arctic Outer conducted in a safe and responsible SUMMARY: The Department of the Continental Shelf,’’ 1082–AA00 in your manner that would take into account the Interior (DOI), acting through BOEM comments, and include your name and unique conditions of Arctic OCS and BSEE, proposes to revise and add return address. drilling and Alaska Natives’ cultural new requirements to regulations for • Send comments on the information traditions and need to access exploratory drilling and related collection of this rule to: Interior Desk subsistence resources. The Arctic region operations on the Outer Continental Officer 1082–AA00, Office of is known for its oil and gas resource Shelf (OCS) seaward of the State of Management and Budget; 202–395–5806 potential, its vibrant ecosystems, and Alaska (Alaska OCS). The Alaska OCS (fax); email: OIRA_Submission@ the Alaska Native communities, who has the potential to be an integral part omb.eop.gov. Please also send copies to rely on the Arctic’s resources for of the Nation’s ‘‘all of the above’’ BSEE by one of the means previously subsistence and cultural traditions. The domestic energy strategy. This proposed described. region is characterized by extreme environmental conditions, geographic rule focuses solely on the OCS within FOR FURTHER INFORMATION CONTACT: the Beaufort Sea and Chukchi Sea remoteness, and a relative lack of fixed Mark E. Fesmire, BSEE, Alaska Regional infrastructure and existing operations. Planning Areas (Arctic OCS). The Arctic Office, [email protected], (907) region is characterized by extreme These are key factors in considering the 334–5300; John Caplis, BSEE, Oil Spill feasibility, practicality, and safety of environmental conditions, geographic Response Division, john.caplis@ remoteness, and a relative lack of fixed conducting offshore oil and gas bsee.gov, (703) 787–1364; or David activities on the Arctic OCS. infrastructure and existing operations. Johnston, BOEM, Alaska Regional The proposed rule is designed to ensure This proposed rule would add to, and Office, [email protected], (907) revise existing regulations in, 30 CFR safe, effective, and responsible 334–5200. To see a copy of either exploration of Arctic OCS oil and gas parts 250, 254, and 550 for Arctic OCS information collection request oil and gas activities. The proposed rule resources, while protecting the marine, submitted to OMB, go to http:// coastal, and human environments, and would focus on Arctic OCS exploratory www.reginfo.gov (select Information drilling activities that use MODUs and Alaska Natives’ cultural traditions and Collection Review, Currently Under access to subsistence resources. related operations during the Arctic Review). OCS open-water drilling season. This DATES: Submit comments by April 27, SUPPLEMENTARY INFORMATION: proposed rule would address a number 2015. BOEM and BSEE may not fully Executive Summary of important issues and objectives, consider comments received after this including ensuring that each operator: date. You may submit comments to the Although there is currently a 1. Designs and conducts exploration Office of Management and Budget comprehensive OCS oil and gas programs in a manner suitable for Arctic (OMB) on the information collection regulatory program, DOI engagement OCS conditions; burden in this proposed rule by March with stakeholders reveals the need for 2. Develops an integrated operations 26, 2015. The deadline for comments on new and revised regulatory measures for plan (IOP) that would address all phases the information collection burden does exploratory drilling conducted by of its proposed Arctic OCS exploration not affect the deadline for the public to floating drilling vessels and ‘‘jackup program and submit the IOP to DOI, comment to BOEM and BSEE on the rigs’’ (collectively known as mobile acting through its designee, BOEM, at proposed regulations. offshore drilling units or MODUs) on least 90 days in advance of filing the ADDRESSES: You may submit comments the Arctic OCS. The United States (U.S.) Exploration Plan (EP); on the rulemaking by any of the Arctic region, as recognized by the U.S. 3. Has access to, and the ability to following methods. For comments on and defined in the U.S. Arctic Research promptly deploy, Source Control and this proposed rule, please use and Policy Act of 1984, encompasses an Containment Equipment (SCCE) while Regulation Identifier Number (RIN) extensive marine and terrestrial area, drilling below, or working below, the 1082–AA00 in your message. For but this proposed rule focuses solely on surface casing;

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4. Has access to a separate relief rig could be made in order to decrease the F. Reducing Pollution From Arctic OCS located so that it could timely drill a possibility of an incident occurring. The Exploratory Drilling Operations relief well in the event of a loss of well requirements in the proposed rule are G. Oversight, Management, and control under the conditions expected at also designed to ensure that those plans Accountability of Operations and the site; would be executed in a safe and Contractor Support 5. Has the capability to predict, track, IV. Section-By-Section Discussion environmentally protective manner A. Definitions (§§ 250.105, 254.6, and report, and respond to ice conditions despite the challenges presented by the 550.105) and adverse weather events; Arctic. B. Additional Regulations Proposed by 6. Effectively manages and oversees Table of Contents BOEM contractors; and C. Additional Regulations Proposed by 7. Develops and implements an Oil List of Acronyms and References BSEE Spill Response Plan (OSRP) that is D. Arctic Exploratory Drilling Process designed and executed in a manner I. Introduction Flowchart suitable for the unique Arctic OCS A. Resource Potential V. Conclusion operating environment and has the B. Integrated Arctic Management VI. Procedural Matters C. Overview of Proposed Regulations A. Regulatory Planning and Review (E.O. necessary equipment, training, and D. Potential Costs and Benefits of personnel for oil spill response on the 12866 and E.O. 13563) Proposed Rule B. E.O. 12866 Arctic OCS. II. Background The proposed rule would further the C. E.O. 13563 A. Statutory and Regulatory Overview D. Regulatory Flexibility Act Nation’s interest in exploring frontier B. Factual Overview of the Alaska OCS E. Unfunded Mandates Reform Act of areas, such as those in the Arctic region, Region 1995 (UMRA) and would establish specific operating C. Partner and Stakeholder Engagement F. Takings Implication Assessment models and requirements for the in Preparation for This Proposed Rule G. Federalism (E.O. 13132) extreme, changing conditions that exist D. Expected Benefits Justifying Potential H. Civil Justice Reform (E.O. 12988) on the Arctic OCS. The proposed Costs I. Consultation With Indian Tribes (E.O. regulations would require III. Proposed Regulations for Arctic OCS 13175) comprehensive planning of operations, Exploratory Drilling J. E.O. 12898 especially for emergency response and A. Measures That Address K. Paperwork Reduction Act (PRA) safety systems. The proposed rule Recommendations L. National Environmental Policy Act of B. IOP Requirement 1969 (NEPA) would seek to institutionalize a C. SCCE and Relief Rig Capabilities M. Data Quality Act proactive approach to offshore safety. A D. Planning for the Variability and N. Effects on the Nation’s Energy Supply goal of the proposed rule is to identify Challenges of the Arctic OCS Conditions (E.O. 13211) possible vulnerabilities early in the E. Arctic OCS Oil Spill Response O. Clarity of Regulations planning process so that corrections Preparedness P. Public Availability of Comments

LIST OF ACRONYMS AND REFERENCES

Report to the Secretary of the Interior, review 60-Day report of Shell’s 2012 Alaska offshore oil and gas MODU Mobile offshore drilling units exploration program

AIS ...... Automatic Identification System ...... NARA ...... National Archives and Records Administra- tion. Alaska OCS ...... OCS Seaward of the State of Alaska ...... National Arctic Strat- President’s National Strategy for the Arctic egy. Region issued May 2013. ANCSA ...... Alaska Native Claims Settlement Act ...... NEPA ...... National Environmental Policy Act of 1969. APD ...... Application for Permit to Drill ...... NOAA ...... National Oceanic and Atmosphere Adminis- tration. API ...... American Petroleum Institute ...... NPDES ...... National Pollutant Discharge Elimination Sys- tem. APM ...... Application for Permit to Modify ...... OCS ...... Outer Continental Shelf. Arctic OCS ...... OCS within the Beaufort Sea and Chukchi OCSLA ...... Outer Continental Shelf Lands Act. Sea Planning Areas. ASP ...... Audit Service Provider ...... OMB ...... Office of Management and Budget. BOEM ...... Bureau of Ocean Energy Management ...... OPA ...... Oil Pollution Act of 1990. BOP ...... Blowout Preventer ...... OSRP ...... Oil Spill Response Plan. BP ...... BP Exploration (Alaska), Inc...... PPCS ...... Pre-Positioned Capping Stack. BSEE ...... Bureau of Safety and Environmental Enforce- PRA ...... Paperwork Reduction Act. ment. CAP ...... Corrective Action Plan ...... RFA ...... Regulatory Flexibility Act. CFR ...... Code of Federal Regulations ...... RIA ...... Regulatory Impact Analysis. CWA ...... Clean Water Act ...... RIN ...... Regulation Identifier Number. DOCD ...... Development Operations Coordination Docu- ROV ...... Remotely Operated Vehicle. ments. DOI ...... Department of the Interior ...... RP ...... Recommended Practice. DPP ...... Development and Production Plans ...... SCCE ...... Source Control and Containment Equipment. EA ...... Environmental Assessment ...... Secretary ...... Secretary of the Interior. E.O...... Executive Order ...... SEMS ...... Safety and Environmental Management Sys- tems. EP ...... Exploration Plan ...... SIDs ...... Shut-in Devices. EPA ...... Environmental Protection Agency ...... UMRA ...... Unfunded Mandates Reform Act of 1995. ESA ...... Endangered Species Act ...... U.S...... United States. IC ...... Information Collection ...... USCG ...... U.S. Coast Guard.

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LIST OF ACRONYMS AND REFERENCES—Continued

Report to the Secretary of the Interior, review 60-Day report of Shell’s 2012 Alaska offshore oil and gas MODU Mobile offshore drilling units exploration program

ICAS ...... Inupiat Community of the Arctic Slope ...... USFWS ...... U.S. Fish and Wildlife Service. Initial RIA ...... Initial Regulatory Impact Analysis ...... WCD ...... Worst-Case Discharge. IOP ...... Integrated Operations Plan ...... Working Group ...... Interagency Working Group on Coordination of Domestic Energy Development and Per- mitting in Alaska. ISO ...... International Organization for Standardization.

I. Introduction implementation plan for the National energy strategy articulated in the The Arctic region is known for its oil Arctic Strategy is to ‘‘reduce the risk of National Arctic Strategy. marine oil pollution while increasing and gas resource potential, its thriving B. Integrated Arctic Management and diverse ecosystems, and the Alaska global capabilities for preparedness and Native communities who rely on the response to oil pollution incidents in As ocean and seasonal conditions Arctic’s resources for subsistence and the Arctic.’’ (http:// continue to change in the Arctic, there cultural traditions. The Arctic region is www.whitehouse.gov/sites/default/files/ will be an increasing number of also characterized by extreme docs/implementation_plan_for_the_ stakeholders vying for access to the environmental conditions, geographic national_strategy_for_the_arctic_region_ Arctic OCS and the waters above it. remoteness, and a relative lack of fixed -_fi....pdf). The National Arctic Strategy Both commercial and recreational infrastructure and existing operations. is an example of the types of action the activities are increasing as more areas of These are key factors in considering the U.S. is taking to implement its water open up for longer periods of time feasibility, practicality, and safety of obligations under international due to the increase of melting sea ice. conducting offshore oil and gas agreements, such as the Arctic Council’s The decrease in summer sea ice raises activities on the Arctic OCS. Agreement on Cooperation on Marine legitimate concerns regarding changes to In May 2013, President Obama issued Oil Pollution Preparedness and the environment and the Arctic a document entitled, ‘‘National Strategy Response in the Arctic (available at: resources that Alaska Natives depend on for the Arctic Region (National Arctic www.arctic-council.org/eppr/agreement- for survival and cultural traditions. Strategy).’’ The President affirmed that on-cooperation-on-marine-oil-pollution- Consistent with the Outer Continental emerging economic opportunities exist preparedness-and-response-in-the- Shelf Lands Act (OCSLA), BOEM and in the region, but that ‘‘ . . . we must arctic/). BSEE, the Bureaus responsible for exercise responsible stewardship, using managing oil and gas resources on the A. Resource Potential an integrated management approach and Arctic OCS, are proposing regulations making decisions based on the best The Alaska OCS region is estimated to that take into account the needs of the available information, with the aim of contain a vast amount of undiscovered, multiple users who have an interest in promoting healthy, sustainable, and technically recoverable oil and gas. the future of the U.S. Arctic region (see resilient ecosystems over the long According to BOEM’s 2011 Assessment 43 U.S.C. 1332(6)). term.’’ In keeping with the Nation’s of Undiscovered Technically The U.S. has maintained a comprehensive ‘‘all of the above’’ Recoverable Oil and Gas Resources of longstanding interest in the orderly energy strategy to continue to expand the Nation’s Outer Continental Shelf development of oil and gas resources on safe and responsible domestic energy (mean estimates available at: the Arctic OCS, while also seeking to production, the National Arctic Strategy www.boem.gov/Oil-and-Gas-Energy- ensure the protection of its environment is intended, among other things, to Program/Resource-Evaluation/Resource- and communities. The U.S. has _ _ ‘‘reduce our reliance on imported oil Assessment/2011 National proceeded cautiously to ensure that _ and strengthen our Nation’s energy Assessment Factsheet-pdf.aspx), there laws, regulations, and policies security’’ by working with stakeholders are approximately 23.6 billion barrels of concerning Arctic OCS oil and gas to enable ‘‘environmentally responsible technically recoverable oil and about development are created and production of oil and natural gas.’’ To 104.4 trillion cubic feet of technically implemented based on a thorough provide responsible stewardship of the recoverable natural gas in the Beaufort examination of the multiple factors at Arctic’s environment and resources, the Sea and Chukchi Sea Planning Areas play in the unique Arctic environment. National Arctic Strategy emphasizes the combined. Most of the Alaska OCS BOEM and BSEE have conducted need for integrated and balanced resource potential is located off the extensive research on potential oil and management techniques. Arctic coast within the Chukchi Sea and gas activities in the Arctic OCS in Furthermore, the National Arctic Beaufort Sea Planning Areas. This anticipation of operations (see, e.g., Strategy acknowledges the potential resource potential has received www.bsee.gov/Technology-and- international implications of Arctic oil considerable attention from the oil and Research/Technology-Assessment- and gas activities for ‘‘other Arctic states gas industry and the U.S. government, Programs/Categories/Arctic-Research/), and the international community as a and has precipitated the sale of and have also evaluated the potential whole.’’ The U.S. has committed to do hundreds of leases and the initiation of environmental effects of such activities its part to ‘‘keep the Arctic region subsequent exploration activities. The (see, e.g., http://www.boem.gov/ prosperous, environmentally Alaska OCS region, particularly the akstudies/). These research projects, sustainable, operationally safe, secure, Beaufort Sea and Chukchi Sea Planning along with other initiatives, form the and free of conflict[.]’’ One primary Areas, has the potential to be an integral basis for the most recent National objective outlined in the part of the ‘‘all of the above’’ domestic policies and directives regarding Alaska

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OCS oil and gas development, all of This proposed rule focuses on Arctic program. Experience gained during the which have guided this proposed rule. OCS exploratory drilling activities that 2012 Arctic drilling season has led Coordinating the future uses of the use MODUs (e.g., jack-ups and anchored BOEM and BSEE staff to conclude that Arctic region will require integrated drillships) and related operations during enhanced and more specific action between and among Federal, the Arctic open-water drilling season requirements can help ensure that oil state, and tribal governmental entities. (generally late June to early November). and gas activities in the Arctic OCS are On July 15, 2011, President Obama After the requirements for exploratory conducted in a safe and signed Executive Order (E.O.) 13580, drilling are finalized and applied to environmentally responsible manner. establishing an Interagency Working those activities, DOI will be able to After considering the input provided by Group on Coordination of Domestic assess whether it should apply similar various stakeholders and DOI’s direct Energy Development and Permitting in requirements to development drilling. experience from Shell’s 2012 Arctic Alaska (Working Group), chaired by the BOEM and BSEE will then be in a operations, BOEM and BSEE have Deputy Secretary of DOI. The Working position to consider developing concluded that additional exploratory Group is composed of representatives requirements appropriate for drilling regulations are necessary and from the DOI, Department of Defense, development drilling activities and appropriate as a part of the Arctic OCS Department of Commerce, Department publish a rulemaking for public notice oil and gas regulatory framework. of Agriculture, Department of Energy, and comment in the Federal Register. This proposed rule is a combination Department of Homeland Security, the The requirements may be the same as of prescriptive and performance-based Environmental Protection Agency the final requirements for exploratory requirements that address a number of (EPA), and the Office of the Federal drilling, or BOEM and BSEE may important issues and objectives, Coordinator for Alaska Natural Gas modify these requirements. including, but not limited to, ensuring Transportation Projects. It is charged The Arctic region is known for its that operators: with facilitating ‘‘coordinated and challenging environmental conditions, 1. Design and conduct exploration efficient domestic energy development geographic remoteness, and relative lack programs in a manner suitable for Arctic and permitting in Alaska while ensuring of existing infrastructure. This proposed OCS Conditions (e.g., using equipment that all applicable [health, safety, and rule builds on and would codify input and processes that are capable of environmental protection] standards are received from partners and performing effectively and safely under fully met’’ (E.O. 13580, sec. 1). stakeholders, key components of Shell’s extreme weather and sea conditions and The Working Group was involved in 2012 Arctic exploratory drilling in remote locations with relatively coordinating Federal regulatory and program, as well as the additional limited infrastructure); oversight efforts for the 2012 Alaska measures DOI required to ensure Shell’s 2. Develop an IOP that would address OCS drilling season and played an drilling operations were conducted all phases of their proposed Arctic OCS important role in BOEM’s and BSEE’s safely. exploration program and submit the IOP reviews of plans and permits for Shell’s Though its actual drilling operations to DOI, acting through its designee, 2012 operations. The Working Group’s were conducted without incident, Shell BOEM, at least 90 days in advance of report entitled, ‘‘Managing for the experienced a number of challenges filing the EP; Future in a Rapidly Changing Arctic, A during its 2012 exploratory drilling 3. Have access to, and the ability to Report to the President’’ (March 2013), program. In 2013, DOI released a promptly deploy, SCCE while drilling was the result of substantial ‘‘Report to the Secretary of the Interior, below or working below the surface collaboration and has also played a Review of Shell’s 2012 Alaska Offshore casing; significant role in shaping U.S. Arctic Oil and Gas Exploration Program’’ (60- 4. Have access to a separate relief rig policies. Day Report) (available at: http:// located so that it could timely drill a relief well in the event of a loss of well C. Overview of Proposed Regulations www.doi.gov/news/pressreleases/ upload/Shell-report-3-8-13-Final.pdf). control under the conditions expected at Although there is currently a The 60-Day Report identified a number the site; comprehensive OCS oil and gas of lessons learned and recommended 5. Have the capability to predict, regulatory program, DOI engagement practices to ensure future Arctic oil and track, report, and respond to ice with partners and stakeholders 1 reveals gas exploration activities continue to be conditions and adverse weather events; the need for new and enhanced 6. Effectively manage and oversee carried out in a safe and responsible regulatory measures for Arctic OCS contractors; and manner. 7. Develop and implement OSRPs that exploratory drilling by MODUs. For BOEM and BSEE have undertaken are designed and executed in a manner purposes of this rulemaking, exploratory extensive environmental and safety suitable for the unique Arctic OCS drilling is considered to be ‘‘[a]ny reviews of potential oil and gas operating environment and that describe drilling conducted for the purpose of operations on the Arctic OCS. These the availability of the necessary searching for commercial quantities of reviews, along with concerns expressed equipment, training, and personnel for oil, gas, and sulphur, including the by environmental organizations and oil spill response on the Arctic OCS. drilling of any additional well needed to Alaska Natives, reinforce the need to delineate any reservoir to enable the develop additional measures D. Potential Costs and Benefits of lessee to decide whether to proceed specifically tailored to the operational Proposed Rule with development and production’’ (30 and environmental conditions of the The Initial Regulatory Impact CFR 250.105 and 30 CFR 550.105 (one Arctic OCS. Arctic OCS operations can of the definitions of ‘‘exploration’’)).2 Analysis (RIA) for this proposed rule be complex, and there are challenges estimates that, if implemented as and operational risks throughout every 1 Tribes, State and local governments, and Federal proposed, the new regulations would agencies are ‘‘partners.’’ ‘‘Stakeholders’’ are non- phase of an exploratory drilling result in economic costs ranging from governmental organizations, industry, and other $1.1 to 1.2 billion (at discount rates of entities. definitions used in this proposed rule are intended 7 percent and 3 percent, respectively) 2 This proposed rule uses and defines terms that to apply only to the BSEE and BOEM regulatory may be similar to terms used in other programs by programs covered by this proposed rule, unless over 10 years. The above estimated cost other Federal agencies; however, the terms and otherwise noted. range reflects the increase in costs over

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the baseline costs. As discussed in part in order to meet those expectations. prescribe and amend such rules and VI.B.3, the baseline is calculated by BSEE and BOEM do not anticipate that regulations as [s]he determines to be estimating the costs associated with these proposed requirements, or their necessary and proper in order to current regulatory requirements and associated costs, would prevent lessees provide for the prevention of waste and industry standards. In general, this and operators from conducting conservation of the natural resources of includes the requirements imposed by exploratory drilling on their leases. In the [OCS] . . .’’ which ‘‘shall, as of their DOI during the 2012 drilling season. fact, the additional clarity and effective date, apply to all operations However, even though DOI required the specificity provided by the proposed conducted under a lease issued or availability of a relief rig in 2012, we rule should help the oil and gas maintained under the provisions of have conservatively chosen not to industry to plan better and to more [OCSLA]’’ (43 U.S.C. 1334(a)). include the costs of staging a standby effectively conduct exploratory drilling Prior to commencing exploration for relief rig in the baseline. Although on the Arctic OCS, which in turn should oil and gas on an OCS lease tract, the BOEM and BSEE expect that over time, result in development and production of statute and BOEM regulations require as the number of operating rigs on the oil and gas with lower risk and fewer lessees to submit an EP to the Secretary Arctic OCS increases, operators will use delays than under the current rules. for approval (43 U.S.C. 1340(c)(1); 30 a second operating rig as a relief rig, in Since the potential economically CFR 550.201(a)). An EP must include lieu of a dedicated standby relief rig, we recoverable oil and gas resources from information such as a schedule of have included the capital and activity the Arctic OCS are abundant, as anticipated exploration activities, costs for a standby rig for the first two discussed later in this proposed rule, equipment to be used, the general years (2015–2016) of the 10-year time the positive impact of such production location of each well to be drilled, and period in the economic costs of the on U.S. energy independence and any other information deemed pertinent proposed rule. energy security could be substantial. by the Secretary (43 U.S.C. 1340(c)(3); While the economic and other Thus, this proposed rule would help 30 CFR 550.211 through 550.228)). benefits of the proposed rule—based achieve the National Arctic Strategy However, approval of an EP does not primarily on preventing or reducing the goals of protecting the unique and automatically permit the lessee to severity or duration of catastrophic oil sensitive Arctic ecosystems, as well as proceed with exploratory drilling. The spills—are difficult to quantify, BOEM the subsistence, culture and traditions lessee must submit to the Secretary an and BSEE have determined that it is of the Alaska Native communities, Application for Permit to Drill (APD) appropriate to proceed with this while reducing reliance on imported oil which must be approved before a lessee proposal. Although the probability of a and strengthening National energy may drill a well (43 U.S.C. 1340(d); 30 catastrophic oil spill is low, the security. CFR 250.410). Deepwater Horizon oil spill The Secretary delegated most of the demonstrated that even such low II. Background responsibilities under the OCSLA to probability events can have devastating A. Statutory and Regulatory Overview economic and environmental results BOEM and BSEE, both of which are when they occur. The benefits of the 1. Outer Continental Shelf Lands Act charged with administering and proposed rule include reducing such (OCSLA) regulating aspects of the Nation’s OCS risks associated with Arctic offshore The OCSLA, 43 U.S.C. 1331 et seq., oil and gas program. BOEM and BSEE operations. was first enacted in 1953, and work to promote safety, protect the Reducing the risks of Arctic offshore substantially amended in 1978, when environment, and conserve offshore operations is particularly important Congress established a National policy resources through vigorous regulatory because of the unique significance to of making the OCS ‘‘available for oversight. BOEM manages the Alaska Natives of the fish and marine expeditious and orderly development, development of the Nation’s offshore mammals in the lands and waters subject to environmental safeguards, in energy resources in an environmentally around the Arctic OCS; those resources a manner which is consistent with the and economically responsible way. are critical components of the Alaska maintenance of competition and other BOEM’s functions include leasing; Natives’ livelihood, and they rely on National needs’’ (43 U.S.C. 1332(3)). In exploration, development and fishing and hunting for traditional addition, Congress emphasized the need production plan administration; cultural purposes and for subsistence. to develop OCS mineral resources in a environmental analyses to ensure Similarly, many other Americans place safe manner ‘‘by well-trained personnel compliance with NEPA; environmental a very high value on protecting the using technology, precautions, and studies; resource evaluation; economic health of the ecosystem, including the techniques sufficient to prevent or analysis; and management of the OCS sensitive environment and wildlife, of minimize the likelihood of blowouts, renewable energy program. BSEE this largely frontier area. Thus, the loss of well control, fires, spillages, performs offshore regulatory oversight impact of a catastrophic oil spill, while physical obstruction to other users of and enforcement to ensure safety and a remote possibility, would have the waters or subsoil and seabed, or environmentally sound performance extremely high cultural and societal other occurrences which may cause during operations, and the conservation costs, and prevention of such a damage to the environment or to of offshore resources, by, among other catastrophe would have property, or endanger life or health’’ (43 things, evaluating drilling permits, and correspondingly high cultural and U.S.C. 1332(6)). The Secretary of the conducting inspections to ensure societal benefits. Interior (Secretary) administers the compliance with laws, regulations, lease The proposed requirements— OCSLA’s provisions relating to the terms, and approved plans and permits. specifically tailored to the Arctic OCS— leasing of the OCS and regulation of BOEM evaluates EPs, and BSEE would provide additional specificity mineral exploration and development evaluates APDs, to determine whether regarding BOEM’s and BSEE’s operations on those leases. The the operator’s proposed activities meet expectations for safe and responsible Secretary is authorized to prescribe the OCSLA’s standards and each development of Arctic resources and ‘‘such rules and regulations as may be Bureau’s regulations governing offshore would outline the particular actions that necessary to carry out [OCSLA’s] exploration. The regulatory lessees, owners and operators must take provisions . . . and may at any time requirements include, but are not

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limited to, determining whether the i. They have prepared and submitted OCS since the first exploratory wells proposed drilling operation: ‘‘a plan for responding, to the maximum were drilled in the late 1970s. The i. Conforms to OCSLA, as amended, extent practicable, to a worst case majority of exploratory drilling north of its applicable implementing regulations, discharge, and to a substantial threat of the Arctic Circle has occurred where the lease provisions and stipulations, and such a discharge, of oil . . .;’’ greatest oil and gas resource potential other applicable laws; ii. The plan ‘‘has been approved by exists, namely the Beaufort Sea and ii. Is safe; the President;’’ and Chukchi Sea Planning Areas (defined in iii. Conforms to sound conservation iii. The ‘‘facility is operating in this proposed rule as the Arctic OCS). practices and protects the rights of the compliance with the plan’’ (OPA A total of 30 exploratory wells have U.S. and mineral resources of the OCS; § 4202(a), codified at 33 U.S.C. been drilled on the Beaufort OCS since iv. Does not unreasonably interfere 1321(j)(5)(A)(i) and (F)(i)–(ii)). the first Federal OCS leases were with other uses of the OCS; and E.O. 12777 (October 18, 1991) offered, and more wells have been v. Does not cause undue or serious authorized the Secretary to carry out the drilled beneath the near-shore Beaufort harm or damage to the human, marine, functions of 33 U.S.C. 1321(j)(5) and Sea under the jurisdiction of the State or coastal environments (30 CFR (j)(6)(A). This includes the promulgation of Alaska (see BOEM Alaska Region 250.101 and 250.106; 30 CFR 550.101 of regulations governing the obligation Web site at: http://www.boem.gov/ and 550.202). to prepare and submit OSRPs, the About-BOEM/BOEM-Regions/Alaska- Based on these evaluations, BOEM review and approval of OSRPs, and the Region/Historical-Data/Index.aspx). The and BSEE will approve the lessee’s (or periodic verification of spill response Chukchi Sea Planning Area has a more operator’s) EP and APD, require the capabilities related to these plans. Those limited history of leasing and lessee (or operator) to modify its applicable regulations are administered exploration. Only a total of five submissions, or disapprove the EP or by BSEE and are found at 30 CFR parts exploratory wells have been drilled (see APD (30 CFR 250.410; 30 CFR 550.233). 250 and 254. E.O. 12777 also authorized BOEM Alaska Region Web site at: 2. The Oil Pollution Act of 1990 (OPA) the Secretary to implement 33 U.S.C. www.boem.gov/About-BOEM/BOEM- and Clean Water Act (CWA) 1321(j)(1)(C), which provides for the Regions/Alaska-Region/Historical-Data/ Congress passed the OPA, 33 U.S.C. issuance of regulations ‘‘establishing Index.aspx) and no site was considered 2701 et seq., following the Exxon Valdez procedures, methods, and equipment commercially viable for development oil spill. The OPA amended the CWA, and other requirements for equipment to during that time. 33 U.S.C. 1251 et seq., by, among other prevent discharges of oil and hazardous There have been only three things, adding OSRP provisions for substances from . . . offshore facilities, exploratory wells drilled on the Arctic offshore facilities. The OPA provides for and to contain such discharges. . . .’’ OCS since 1994—the 2003 exploratory prompt federally coordinated responses B. Factual Overview of the Alaska OCS well near Prudhoe Bay in the Beaufort to offshore oil spills and for Region Sea and Shell’s two ‘‘top hole’’ wells compensation of spill victims. It also drilled in 2012 (see BOEM Assessment calls for the issuance of regulations 1. The Arctic OCS Oil and Gas Resource of Undiscovered Technically prohibiting owners and operators of Potential Has Attracted Significant Recoverable Oil and Gas Resources of offshore facilities from operating or Attention Over the Past Three Decades the Nation’s Outer Continental Shelf handling, storing, or transporting oil There has been a renewed interest in (2011)). until: the oil and gas potential of the Alaska BILLING CODE 4310–VH–4310–MR–P

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Except for the Northstar project, input regarding potential approaches to diverse in the world and are of high operated by BP Exploration (Alaska), regulating oil and gas operations on the scientific and public interest, and many Inc. (BP) from State submerged lands in Arctic OCS. BOEM and BSEE recognize are also important for subsistence. the Beaufort Sea, no production has yet the importance of the Arctic region to a Future exploratory drilling could resulted from any of the leases.3 number of partners and stakeholders affect subsistence users in the Arctic There are currently no active Alaska with varying positions on oil and region. Subsistence harvests differ OCS leases located anywhere outside of natural gas development in the region. among Alaska Native coastal the Beaufort Sea and Chukchi Sea Both Bureaus engaged in discussions communities. However, the bowhead Planning Areas. The oil and gas with Alaska Native and State partners, whale is the most important marine industry’s interest in offshore oil and and with environmental and industry mammal species to a majority of Arctic gas exploration on the Arctic OCS stakeholders, in advance of publishing coastal communities because it is the remains high despite the pace of this proposed rule. Those discussions preferred meat and it provides a unique exploration and the challenges of addressed the recommendations from and powerful cultural basis for sharing operating in this unique environment. the 60-Day Report, as well as and community cooperation. information regarding operating Subsistence practices are a highly 2. Challenges to Arctic Oil and Gas conditions and challenges in the Arctic. valued aspect of Alaska Native culture. Operations The then-Acting Assistant Secretary for These practices are an important facet of The challenges to conducting Land and Minerals Management, along Alaska Native economies because they operations and responding to with DOI staff from headquarters and provide viable and essential means for emergencies in the extreme and variable the Alaska Region, held three listening families to support themselves in this environmental and weather conditions sessions and a series of meetings in remote environment. The sharing of in the Arctic are severe. Both the Alaska over the course of several weeks subsistence resources also helps Beaufort Sea and Chukchi Sea Planning in June 2013. Representatives of DOI maintain traditional family and Areas experience sub-freezing also met with conservation community organizations. In addition to temperatures during most of the year, organizations, the Mayor of the North their dietary benefits, subsistence extended periods of low-light visibility, Slope Borough, the Alaska Eskimo resources provide special foods for significant fog cover in the summer, Whaling Commission, the Inupiat religious and social occasions, and strong winds and currents, strong Community of the Arctic Slope (ICAS), materials for personal and family use. storms that produce freezing spray and the Native Village of Barrow, two Alaska Subsistence hunting also links Alaska dangerous sea states, snow, and Native Claims Settlement Act (ANCSA) Native communities to the larger market significant ice cover. During the fall corporations, oil and gas industry economy. Many households within the (September–November), conditions representatives, State of Alaska officials, communities earn money from selling become increasingly inhospitable as air and other local government art work from the crafting of whale temperatures decrease, wind speeds representatives. baleen and walrus ivory, and from increase, storms become more frequent, DOI considered the suggestions and clothing made from fur-bearing and sea ice begins to form, all of which concerns of all partners and mammals. make Arctic OCS exploratory drilling stakeholders to produce a proposed rule The Alaska Eskimo Whaling operations more challenging (see that balances maximizing oil and gas Commission, the North Slope Borough, Environmental Assessments for Shell resource exploration on the Arctic OCS, and others requested that DOI consider Offshore, Inc.’s Revised Outer in furtherance of the Nation’s energy marine mammals’ health as a critical Continental Shelf Lease Exploration security, with appropriate safeguards to part of this proposed rule. Throughout Plan, Camden Bay, Beaufort Sea, Alaska protect human safety and the unique the rule, BOEM and BSEE have (2011) and Shell Gulf of Mexico, Inc.’s Arctic environment, as well as the proposed elements designed to increase Revised Chukchi Sea Exploration Plan cultural sensitivities and subsistence safety of oil and gas exploration in ways that would help protect marine Burger Prospect (2011)); BOEM Alaska needs of the Alaska Native communities mammals by reducing the likelihood Region Web site at: http://www.boem. that might be affected by oil and gas and/or severity of oil spills. The Alaska gov/About-BOEM/BOEM-Regions/ development in the Arctic. Eskimo Whaling Commission and its Alaska-Region/Environment/ 1. Alaska Natives whaling captains have worked with Environmental-Analysis/Environmental- DOI heard a variety of perspectives BOEM to help document traditional Impact-Statements-and—Major- from Alaska Natives during its outreach knowledge pertaining to bowhead Environmental-Assessments.aspx). in advance of the rulemaking, including whales, including movement and Other challenges to conducting interest in the potential economic behavior. Bowhead hunters are operations and responding to opportunities from oil and gas concerned that the effects of offshore oil emergencies on the Arctic OCS include development. However, the overriding and gas exploration might displace the geographical remoteness and concern expressed by Alaska Natives is migrating bowhead whales. relative lack of established the potential for adverse impacts from Accordingly, BSEE proposes to revise infrastructure to support oil and gas oil and gas operations on the marine § 250.300(b) in order to: (i) Require operations. environment and its resources, operators to capture all petroleum-based C. Partner and Stakeholder Engagement including marine mammals, such as mud and associated cuttings that result in Preparation for This Proposed Rule bowhead whales. Alaska Natives from Arctic OCS exploratory drilling requested that the DOI evaluate the operations to prevent their discharge DOI used the recommendations from extent to which oil and gas activities into the marine environment; and (ii) the 60-Day Report as a basis for a series may adversely affect marine resources of clarify the Regional Supervisor’s of discussions with multiple partners the waters overlying the Arctic OCS and discretion to require operators to and stakeholders who provided valuable the subsistence harvest practices of capture water-based mud and associated 3 BP has transferred its interests in the Northstar Alaska Natives. In particular, the marine cuttings from Arctic OCS exploratory project to Hilcorp. Hilcorp is now the operator of mammal fauna of the Beaufort and drilling (after completion of the hole for that project. Chukchi Seas are among the most the conductor casing) to prevent their

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discharge into the marine environment, stack be available and positioned to The goal of the IOP and the enhanced based on factors such as the proximity arrive at the well within 24 hours after and early dialogue is to have a well- of exploratory drilling operations to a loss of well control and a cap and flow planned, safe operation. Early subsistence hunting and fishing system and that a containment dome be communication on planning is also locations or the extent to which such available and positioned to arrive at the anticipated to minimize the potential for discharges might cause marine well within 7 days after a loss of well project delays. mammals to alter their migratory control. D. Expected Benefits Justifying Potential patterns in a manner that interferes with The Wilderness Society requested that Costs subsistence activities or that might BSEE consider implementing Arctic- otherwise adversely affect marine specific provisions for OSRPs. BSEE The initial RIA for this proposed rule mammals, fish, or their habitat(s). proposes to add several requirements for estimates that it would result in Given the importance of subsistence OSRPs in this rule. In particular, BSEE economic costs ranging from $1.1 to 1.2 hunting and other activities to the proposes to require that operators billion, discounted at 7 percent and 3 percent respectively, over 10 years. The Alaska Native communities, operators conducting exploratory drilling on the above estimated cost range reflects the are encouraged to work directly with Arctic OCS account for how they would increase in costs over the baseline costs, interested parties to help mitigate increase oil encounter rates and the potential impacts to subsistence as discussed elsewhere in this notice. effectiveness of spill response While many of the economic and activities. In addition, BOEM will techniques and equipment when sea ice continue to fund and support studies to other benefits of the proposed rule— is present. BSEE also proposes to add based primarily on preventing or better understand impacts from OCS new provisions to 30 CFR part 254 for operations on marine mammals and reducing the severity or duration of Arctic OCS exploratory drilling catastrophic oil spills—are difficult to subsistence activities.4 operators to, among other things, quantify, BOEM and BSEE have The North Slope Borough also account for enhanced oil spill response determined that the benefits of the expressed concern that oil and gas training and exercises, as well as proposed rule would justify its potential development not overwhelm local address the maintenance of response costs and that it is appropriate to infrastructure, energy supplies, and capabilities in the face of seasonal gaps proceed with this proposal. The services, and that local residents be in operations. probability of a catastrophic oil spill is provided the capacity—both in terms of very low; however, the Deepwater training and resources—to protect their 3. Oil and Gas Operators Horizon oil spill demonstrated that even communities and important subsistence DOI held further meetings throughout such low probability events can have use areas. For this reason, DOI proposes the summer of 2013 with individual oil devastating economic and to require operators to provide and gas companies to hear their environmental results. As of October information about their plans to perspectives on possible regulations for 2014, by its own account, BP spent over minimize the impact of their Arctic OCS operations. The oil and gas $14 billion for cleanup and response exploratory drilling operations on operators emphasized a preference for operations related to the Deepwater community infrastructure and their performance-based rules as opposed to Horizon oil spill. The benefits of the plans to provide the communities with prescriptive rules, and also stressed the proposed rule would accrue from a oil spill cleanup training and resources. need for early engagement with the relief rig, increased safety measures, and 2. Environmental Organizations agencies in order to achieve up-front other requirements that are expected to regulatory consistency. While elements reduce the potential for an incident DOI also met directly with of the proposed rule are prescriptive in resulting in an oil spill associated with environmental organizations to review nature, BOEM and BSEE endeavored to Arctic offshore operations and, if an and discuss recommendations for Arctic identify opportunities where incident occurs, to reduce the duration oil and gas regulations. The PEW performance-based requirements were of a spill. Charitable Trusts requested that BSEE feasible and would achieve the Bureaus’ The Arctic OCS and its surrounding revise 30 CFR 250.447 in order to goals. For these reasons, among others, land and waters have a unique require blowout preventer (BOP) BOEM proposes to add a new significance to Alaska Natives, who rely pressure testing every 7 days for drilling requirement that operators submit an on them for traditional cultural and completion operations (an increase IOP for their proposed Arctic purposes and depend on them for from every 14 days). BSEE proposes to exploratory drilling operations and subsistence. Similarly, many other amend the language in § 250.447 in describe at an early point in the Americans place a very high value on order to require operators on the Arctic planning process how their exploratory protecting the ecosystem, including the OCS to pressure test the BOP system drilling program would be designed and sensitive environment and wildlife, of every 7 days during exploratory drilling conducted in an integrated manner this largely frontier area. Thus, operations. This proposed requirement suitable for Arctic OCS Conditions. The prevention of a catastrophic oil spill, is also a safety measure included in IOP process is intended to facilitate the and reduction of the duration of a spill Shell’s 2012 Arctic exploratory drilling prompt sharing of information among if one occurs, would have extremely program. Additionally, BSEE is the relevant Federal agencies (e.g., important, even though largely proposing to add a new § 250.471, BOEM, BSEE, U.S. Fish and Wildlife unquantifiable, cultural and societal which would require that a capping Service (USFWS), U.S. Coast Guard benefits for the Nation. (USCG), National Oceanic and Moreover, as explained elsewhere, 4 BOEM’s Environmental Studies Program has this proposed rule would help achieve made significant investments into studying Atmospheric Administration (NOAA), potential impacts from operations related to oil and U.S. Army Corps of Engineers, EPA) and the National Arctic Strategy goals of gas exploration. For example, BOEM has funded the State of Alaska. The IOP process protecting the unique and sensitive bowhead whale studies incorporating Traditional would also provide the relevant Arctic ecosystems, as well as the Ecological Knowledge and tagging data to learn subsistence needs, culture and more about bowhead whale migration through the agencies an early opportunity to engage Chukchi Sea in the fall and winter (Quakenbush et in a meaningful and constructive traditions of the Alaska Native al., 2010). dialogue with operators and each other. communities, while reducing reliance

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on imported oil and strengthening in a ‘‘frontier’’ area (typically to mitigating these challenges and risks. National energy security. The proposed characterized by its remote location and One of the key components of this requirements—which are specifically limited infrastructure and operational proposed rule is a requirement that tailored to the Arctic OCS—would history, such as the Arctic OCS region). operators explain how their proposed provide additional clarity and In these cases, BOEM and BSEE have Arctic OCS exploratory drilling specificity regarding BOEM’s and special requirements, such as operations would be fully integrated BSEE’s expectations for safe and information and design requirements for from start to finish in a manner suitable responsible development of Arctic deep-water development projects for Arctic OCS Conditions and that they resources and the particular actions that (§§ 250.286 through 250.295); use of provide this information to DOI at an lessees, owners and operators must take appropriate equipment, third-party early stage of the planning process. in order to meet those expectations. audits, and contingency plans in This rule proposes to require that This additional clarity and specificity is frontier areas or other areas subject to operators develop and submit an IOP to intended to help the oil and gas subfreezing conditions (§§ 250.417(c) DOI, acting through its designee, BOEM, industry to plan better and to more and 250.418(f)); the placement of subsea at least 90 days in advance of filing their effectively conduct exploratory drilling BOP systems in mudline cellars when EP. The purpose of the IOP is to on the Arctic OCS, resulting in the drilling occurs in areas subject to ice- describe, at a strategic or conceptual development and production of oil and scouring (§ 250.451); and emergency level, how exploratory drilling gas with lower risk and fewer delays plans and critical operations and operations will be designed, executed, than have occurred under the current curtailment procedures information in and managed as an integrated endeavor rules. According to BOEM’s 2011 the Alaska OCS Region (§§ 550.220 and from start to finish. The IOP is intended Assessment of Undiscovered 550.251). to be a concept of operations that would Technically Recoverable Oil and Gas Though there is currently a include a description of the various Resources of the Nation’s Outer comprehensive OCS oil and gas aspects of an operator’s proposed Continental Shelf, there are regulatory program, there is a need for exploratory drilling activities and approximately 17.8 billion barrels of new and amended regulatory measures supporting operations and how the economically recoverable oil and about for Arctic OCS exploratory drilling by operator’s program would be designed 50.1 trillion cubic feet of economically MODUs. These proposed regulations, in and conducted in a manner that recoverable natural gas in the Beaufort combination with existing regulations accounts for the challenges presented by Sea and Chukchi Sea Planning Areas (which would continue to apply to Arctic OCS Conditions. The primary combined. Thus, the impact of Arctic OCS operations unless otherwise issues DOI would expect operators to production in the Arctic region on U.S. expressly stated), are intended to ensure address relative to Arctic OCS energy independence and energy that exploratory drilling operations are Conditions include, but are not limited security could be substantial. well planned from the outset and then to: conducted safely and responsibly in 1. Vessel and equipment design and III. Proposed Regulations for Arctic relation to the unique Arctic OCS Exploratory Drilling configurations; environment and the local communities 2. The overall schedule of operations, The existing OCS oil and gas that are closely connected to the region including contractor work on critical regulatory regime is extensive and and its resources. The key elements of components; covers all offshore facilities or the proposed rule are: 3. Mobilization and demobilization operations in any OCS region, as A. Measures That Address operations and maintenance appropriate and applicable. BOEM and Recommendations—The proposed rule schedule(s); BSEE use these regulations in their addresses recommendations contained 4. In-theater drilling program respective oversight of OCS leasing, in several recent reports on OCS oil and objectives and timelines for each exploration, development, production, gas activities (e.g., the Arctic Council, objective; and decommissioning. Depending on Arctic Offshore Oil and Gas Guidelines 5. Weather and ice forecasting and the type of activity, operators are subject (2009); the National Commission on the management capabilities; to the same regulatory requirements, BP Deepwater Horizon Oil Spill and 6. Contractor management and such as: application procedures and Offshore Drilling (2011); Ocean Energy oversight; and information requirements for Safety Advisory Committee 7. Preparation and staging of spill exploration, development, and Recommendations (2013); DOI’s 60-Day response assets. production activities; pollution Report (2013); the Working Group’s DOI recognizes that other Federal prevention and control; safety report entitled, ‘‘Managing for the agencies have primary oversight requirements for casing and cementing Future in a Rapidly Changing Arctic, A responsibility for some of the previously and the use of a BOP and diverter Report to the President’’ (March 2013); listed activities. Upon receipt of the systems; design, installation, use and the National Arctic Strategy (May 2013); IOP, DOI would engage with members maintenance of OCS platforms to ensure and the Arctic Council, Arctic Offshore of the Working Group and promptly structural integrity and safe and Oil and Gas Guidelines: Systems Safety distribute the IOP to the State of Alaska environmentally protective operations; Management and Safety Culture (March and Federal government agencies decommissioning; development and 2014)). involved in the review, approval, or implementation of Safety and B. IOP Requirement - During oversight of various aspects of OCS Environmental Management Systems exploratory drilling operations on the operations. (SEMS); and preparation and Arctic OCS, operators may face However, the IOP process would not submission of OSRPs (see generally 30 substantial environmental challenges require agencies to review or approve CFR parts 250, 254, and 550). and operational risks throughout every the IOP or an operator’s planned The existing regulations also contain phase of the endeavor, including activities. The IOP is a conceptual, provisions that apply to specific regions preparations, mobilization, in-theater informational document designed to or atypical activities or operating drilling operations, emergency response ensure that an operator pays thorough conditions, especially, for example, and preparedness, and demobilization. and early attention to the full suite of where drilling occurs in deep water or Thorough advanced planning is critical regulated activities, and to give

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regulatory agencies a preview of an is limited by changing weather and ice technology and ensure a coordinated operator’s approach to regulatory conditions, particularly at the end of the response system that is designed to compliance and integrated planning. drilling season. Operators may request address the challenges inherent to the Thus, the IOP would enable relevant approval of alternative compliance Arctic region. agencies to familiarize themselves, early measures under existing regulations, if F. Reducing Pollution from Arctic in the planning process, with the they can demonstrate that such OCS Exploratory Drilling Operations— operator’s overall proposed program alternative equipment or procedures Partners, primarily Alaska Natives, and from start to finish. This, in turn, would could provide a level of safety and stakeholders have expressed concern allow DOI and those agencies to environmental protection equal to or that mud and cuttings from exploratory coordinate and provide early input to surpassing the protection provided by drilling could adversely affect marine the operator regarding potential issues the proposed SCCE and relief rig species (e.g., whales and fish) and their presented by the proposed activities requirements (30 CFR 250.141). This habitat and compromise the with respect to any future plan provision enables operators to request effectiveness of subsistence hunting approvals and permitting requirements, approval for innovative technological activities. Existing environmental including aspects of the program that advancements that may provide them analyses support these concerns and might require additional details or additional flexibility, provided that the also demonstrate that such discharges refinement. The proposed IOP operator can establish that such could affect water quality, benthic requirement—and the proposed rule in technology provides at least the same habitat, and marine organisms within general—would not, however, interfere level of protection as the proposed the localized area (see, e.g., Shell Gulf with or supplant operators’ obligations requirements. of Mexico, Inc.’s Revised Chukchi Sea to comply with all other applicable D. Planning for the Variability and Exploration Plan, Burger Prospect Federal agency requirements. Each Challenges of the Arctic OCS Environmental Assessment (2011)). agency that receives an IOP would Conditions—Reliable weather and ice BSEE proposes to require the capture of continue to review the relevant details forecasting play a significant role in all petroleum-based mud and associated of an operator’s planned activities for ensuring safe operations on the Arctic cuttings from Arctic OCS exploratory compliance with that agency’s OCS. Advanced forecasting and tracking drilling operations to prevent their regulatory requirements in the technology, information sharing among discharge into the marine environment. appropriate manner and at the industry and government, and local The new provision would also clarify appropriate time under its own knowledge of the operating environment the Regional Supervisor’s discretionary regulatory program. are essential to managing the substantial authority to require that operators challenges and risks that Arctic OCS capture all water-based mud and C. SCCE and Relief Rig Capabilities— Conditions pose for all offshore associated cuttings from Arctic OCS In Arctic OCS exploratory drilling, there operations. In light of the threats posed exploratory drilling operations (after is a need for operators to demonstrate by ice and extreme weather events, completion of the hole for the conductor that they would have access to, and BOEM and BSEE propose to require that casing) to prevent their discharge into could deploy, well control and operators include in their IOPs, EPs, and the marine environment. This discretion containment resources that would be APDs, at appropriate levels of would be exercised based on various adequate to promptly respond to a loss specificity for each document, a factors such as the proximity of of well control. This equipment is description of their weather and ice exploratory drilling operations to already readily available and accessible forecasting capabilities for all phases of subsistence hunting and fishing in the Gulf of Mexico due to the level their exploration program and their alert locations or the extent to which such of activity in that area. Ensuring that procedures and thresholds for activating discharges might cause marine operators have all necessary ice and weather management systems. mammals to alter their migratory redundancies in place is critical, as Once operations commence, operators patterns in a manner that interferes with there is no guarantee that a single would also be required to: subsistence activities or might adversely measure could control or contain a 1. Notify BSEE immediately of any sea affect marine mammals, fish, or their worst-case discharge (WCD). Therefore, ice movement or condition that has the habitat(s). BSEE proposes to require operators who potential to affect operations or trigger G. Oversight, Management, and use a MODU for Arctic OCS exploratory ice management activities; and Accountability of Operations and drilling to have access to, and the ability 2. Notify BSEE of the start and Contractor Support—An effective risk to deploy, SCCE (e.g., a capping stack, termination of ice management management framework at the cap and flow system, and containment activities and submit written reports beginning of a project incorporates dome) within the timeframes discussed after completing such activities. many components, including planning, elsewhere in this proposed rule and that E. Arctic OCS Oil Spill Response vessel design, contractor selection, and the SCCE be capable of functioning in Preparedness—Operators need to be an assessment of regulatory Arctic OCS Conditions. BSEE also prepared for a quick and effective requirements for all facets of the project. proposes that operators have access to a response in the event of an oil spill on DOI proposes to require that operators separate relief rig that would be staged the Arctic OCS and be ready to provide an explanation, at a conceptual at a location such that it could arrive on coordinate activities with the Federal level, of how they would apply their site and be capable of drilling a relief government and other stakeholders. The oversight and risk management well under anticipated Arctic OCS OSRPs and related activities should be protocols to both personnel and Conditions within specified timeframes. tailored to the unique Arctic OCS contractors to support safe and This equipment is fundamental to safe operating environment to ensure that responsible exploratory drilling on the and responsible operations on the Arctic operators have the necessary equipment, Arctic OCS. It should be noted that OCS, where existing infrastructure is training, and personnel for the Arctic these proposed regulations, and DOI’s sparse, the geography and logistics make OCS. Among other things, this existing regulations concerning OCS oil bringing equipment and resources into rulemaking would establish specific and gas operations, would require the region challenging, and the time planning requirements to maximize the varying levels of information about available to mount response operations application of oil spill response operator safety and oversight

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management at progressive stages of the phases governed by the 30 CFR part 550 It is crucial for OCS oil and gas planning and approval process. This regulations would precede the drilling operators to have a clear understanding would start with the most general approval and oversight phases governed of the conditions they would likely information and narrow down to by 30 CFR part 250 (operations). encounter during exploratory drilling increasing levels of detail with Requirements to prepare for an oil spill, operations and when responding to a successive regulatory submittals, as the which are contained in 30 CFR part 254, loss of well control on the Arctic OCS. project would proceed from planning to may be met at any time before handling, Offshore oil and gas exploration implementation. storing, or transporting oil in operations involves inherent risks to human safety In addition, the proposed rule would BSEE permits under Part 250. Finally, and the environment. If not effectively require Arctic OCS operators to: the Section-by-Section discussion addressed, Arctic OCS Conditions could 1. Report threatening sea ice includes a process flowchart of BOEM’s multiply these risks. Thus, the proposed conditions and ice management and BSEE’s current regulatory definition also recognizes that ‘‘the activities, and unexpected operational framework for Arctic OCS exploratory Arctic’s remote location, limited issues that could result in a loss of well drilling and how the proposed infrastructure, and existence of control; requirements would be integrated into subsistence hunting and fishing areas 2. Increase their BOP pressure testing that framework. are also characteristic of the Arctic frequency; region’’ and must be considered to 3. Conduct real-time monitoring of A. Definitions (§§ 250.105, 254.6, and ensure safe operations and minimize various aspects of well operations, e.g., 550.105) impacts to the environment and to other the BOP control system; Arctic OCS users of the area. Addressing these 4. Increase their SEMS auditing factors would enable industry to frequency; and For the purposes of this proposed proactively safeguard people, facilities, 5. Enhance their oil spill rulemaking, Arctic OCS is defined as the equipment, and the environment. preparedness and response capabilities Beaufort Sea and Chukchi Sea Planning for Arctic OCS operations. Areas, as described in the Proposed B. Additional Regulations Proposed by A summary of the major provisions of Final OCS Oil and Gas Leasing Program BOEM this rulemaking follows. for 2012–2017 (June 2012), available at Definitions (§ 550.200) www.boem.gov/uploadedFiles/BOEM/ IV. Section-By-Section Discussion The acronym ‘‘IOP’’—meaning Oil_and_Gas_Energy_Program/Leasing/ This portion of the preamble provides Integrated Operations Plan—would be Five_Year_Program/2012–2017_Five_ an explanation of the specific regulatory inserted into the proper alphabetical Year_Program/PFP%2012–17.pdf (see changes proposed in this rule and why location within existing § 550.200, for pp.21–24). This definition would appear they are necessary. At the outset, this purposes of the IOP provisions at in §§ 250.105, 254.6, and 550.105. As discussion addresses the proposed proposed § 550.204, as discussed next. definitions of the terms Arctic OCS and described previously, BOEM and BSEE Arctic OCS Conditions for use in both have determined that these areas are When must I submit my IOP for BOEM’s and BSEE’s regulations in order both the subject of current exploration proposed Arctic exploratory drilling to provide context for the rest of the and development interest and subject to operations and what must the IOP proposed provisions. Since this is a conditions that present significant include? (§ 550.204) joint BOEM and BSEE proposed rule, challenges to such operations. This proposed rule would require the the remainder of the Section-by-Section Arctic OCS Conditions operator to develop an IOP for each discussion is organized according to proposed exploratory drilling program how operators would seek to comply Sections 250.105 and 550.105 would on the Arctic OCS, and to submit the with the proposed regulations, rather be revised to add a definition for Arctic IOP to DOI, through its designee, BOEM, than the order in which they would OCS Conditions. The definition is at least 90 days in advance of filing its appear in the Code of Federal necessary because these proposed EP. The IOP would need to describe Regulations. After introducing the regulations are designed largely around how the proposed exploratory drilling definitions of Arctic OCS (for purposes the particular challenges presented by program would be designed and of proposed §§ 250.105, 254.6, and Arctic OCS Conditions. The term Arctic conducted in an integrated manner 550.105) and Arctic OCS Conditions (for OCS Conditions would be defined to suitable for Arctic OCS Conditions and purposes of proposed §§ 250.105 and describe both the environmental would address each of the information 550.105), the Section-by-Section conditions and functional requirements identified in proposed discussion provides an explanation of characteristics (e.g., geographic § 550.204. Operators may also choose to the remainder of BOEM’s proposed remoteness, limited infrastructure, address the requirements in §§ 550.211 regulations (i.e., proposed §§ 550.105, subsistence hunting areas) that oil and through 550.228, which could facilitate 550.200, 550.204, 550.206, and gas operators can reasonably expect to the later formal review of the operator’s 550.220), and then follows with the encounter during exploratory drilling EP. The IOP should be detailed enough remainder of BSEE’s proposed operations and when responding to a to allow DOI, other relevant Federal regulations (i.e., proposed §§ 250.105, loss of well control on the Arctic OCS. agencies, and the State of Alaska to: 250.188, 250.198, 250.300, 250.402, Depending on the time of year, relevant 1. Familiarize themselves with the 250.418, 250.447, 250.452, 250.470, environmental conditions and the proposed operations as an integrated 250.471, 250.472, 250.473, and proposed definition include, but are not project from start to finish; and 250.1920; proposed §§ 254.6, 254.55, limited to, the following: ‘‘extreme cold, 2. Provide constructive feedback to 254.65, 254.70, 254.80, and 254.90). freezing spray, snow, extended periods the operator concerning the conceptual Although BSEE permitting and of low light, strong winds, dense fog, sea plans reflected in its IOP. operational requirements appear earlier ice, strong currents, and dangerous sea DOI recognizes that when the IOP is in Title 30 of the CFR at Part 250, with states.’’ This definition would not affect submitted, operators might not possess the BOEM requirements following in 30 or alter any other existing Federal all the detailed and specific information CFR part 550, in practice the IOP and EP regulatory requirements. that may be more readily available later

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in the planning process; e.g., contracts feedback to the operator concerning its is planning to deploy vessels and for vessels may not be finalized, precise proposed activities and any identifiable equipment capable of operating safely dates of drilling may be uncertain, or issues that might affect future on the Arctic OCS. Operators would the exact staging location of assets, such permitting decisions. DOI would also need to submit information sufficient to as the relief rig or SCCE, may be encourage the assembly of an allow DOI and other relevant agencies unknown. For BOEM’s and BSEE’s interagency coordination team to (e.g., the USCG) to understand the purposes, operators would submit more facilitate and coordinate agency review function of each vessel within the detailed information through the EPs and feedback. Any feedback could be proposed fleet of vessels and how the and APDs, as appropriate. provided individually by the relevant vessels would be capable of performing Though BOEM would review the IOP Federal agencies or the State of Alaska, their identified roles in the proposed to ensure that the operator’s submission or collectively through DOI. exploratory drilling program safely and addresses each of the elements listed in BOEM also plans to promptly post effectively. § 550.204, the IOP would not require each IOP on its Web site. BOEM would approval by DOI or the other relevant not solicit public input on the IOP; Paragraph (b), Exploratory Drilling agencies. Instead, the IOP would be an instead, the IOP would be informational Program Schedule informational document intended to only, affording the public an early facilitate early review of important opportunity to view key concepts of a The proposed rule would require the concepts related to an operator’s proposed exploratory program. This IOP to include an exploratory drilling proposed exploratory drilling program. effort responds to stakeholder concerns program schedule of operations This review would assist DOI and other that BOEM does not provide the public including importantly, contractor work relevant agencies in developing an with sufficient time to participate on critical components of the program understanding of, and familiarity with, meaningfully in BOEM’s administrative (e.g., inspection and testing of critical the operator’s overall proposed process for proposed exploratory equipment such as BOPs or SCCE). exploratory drilling program early in the drilling activities on the Arctic OCS. Thorough advanced planning regarding planning process. Typically, the public first becomes the proposed schedule for operations is DOI recognizes that the information aware of an operator’s plans for an important component of the IOP, requirements of § 550.204 could exploratory drilling when the operator particularly in light of the limits that implicate other Federal agencies’ and submits its EP. BOEM acknowledges returning sea ice can place on the the State of Alaska’s statutory and that public review periods for EPs are drilling season on the Arctic OCS, and regulatory mandates. For example, the relatively short in duration. However, for elements of operations for which USCG administers laws and regulations this is a result of the OCSLA provision operators are relying upon outside governing maritime safety, security, and that requires BOEM to approve, contractor deliverables. Furthermore, it environmental protection and is also disapprove, or require modifications to is important for BOEM and other responsible for inspecting the vessels to an EP within 30 days of BOEM deeming which those laws and regulations apply. the EP submitted (43 U.S.C. 1340(c)(1)), relevant agencies to have information In acknowledging the USCG’s principal thus placing modification of the length regarding how the timing of proposed jurisdiction over vessel safety and of the review period outside the operations aligns with expected security, DOI has determined that discretion or authority of the agency seasonal ice encroachment, as well as information, early in the process, absent Congressional action. An early how the timing of proposed operations pertaining to the safety of operations, opportunity to view the IOP and the key may interact with seasonal marine vessel mobilization, demobilization, and concepts of the proposed exploratory mammal migrations and subsistence tow plans, is also essential to DOI’s drilling program, however, will enhance activities, for purposes of understanding statutory and regulatory responsibilities existing public engagement the potential environmental impacts. related to Arctic OCS oil and gas opportunities. This will help BOEM and other relevant activities. The IOP process is intended agencies develop an understanding of Paragraph (a), Vessels and Equipment to facilitate the sharing of information how the operator proposes to conduct among the relevant Federal agencies and Operators must plan to adapt their operations safely. exploratory drilling operations to Arctic the State of Alaska and to provide the The proposed schedule would need to OCS Conditions. Although generally the relevant agencies an early opportunity include, for example, when an operator to engage in a meaningful and equipment for extracting oil and gas intends to enter waters overlying the constructive dialogue with operators, from the OCS is the same for the Alaska OCS (including transit time to consistent with the policies articulated offshore Arctic as anywhere else on the the proposed drilling site), when in E.O. 13580 (Interagency Working OCS, the equipment might need to be Group on Coordination of Domestic modified, procedures might need to be drilling is expected to commence and Energy Development and Permitting in adjusted, or personnel might need to be conclude, dates of operations, and when Alaska, discussed earlier). specifically trained for work conditions the operator plans to leave the vicinity Upon receipt, DOI would engage on the Arctic OCS. For example, cranes of drilling operations. The schedule fellow members of the Working Group might need to be modified for would also need to include the critical and distribute the IOP to other Federal operations under ice loading that could dates for completion or activation of government agencies involved in the be anticipated during Arctic OCS components under construction, repair, review, approval, or oversight of aspects operations, and be de-rated to account or storage by outside contractors. This of OCS operations (e.g., BOEM, BSEE, for reduced strength in extreme cold provision would help assure DOI and USFWS, USCG, NOAA, and EPA), as temperatures. Accordingly, this other relevant agencies that the operator well as the State of Alaska. Early provision would require that operators and its contractors have developed a engagement by these entities would submit, ‘‘[i]nformation describing how reasonable schedule for executing each allow them to become familiar with the all vessels and equipment will be phase of the exploration program and operator’s overall proposed exploratory designed, built, and/or modified to are capable of conducting exploratory drilling program and could provide a account for Arctic OCS Conditions’’ and drilling activities safely in Arctic OCS meaningful opportunity to offer early is designed to ensure that the operator Conditions.

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Paragraph (c), Mobilization and those operations; locations of the wells; including mobilization and Demobilization necessary equipment and resources, demobilization. Accordingly, it is This provision would require including information on support important for DOI and other relevant operators to include in their IOP a vessels; and the operator’s contingency agencies to understand the operator’s description of their mobilization and plans in the event that temporary plans for implementing ice and weather demobilization operations, including abandonment would become necessary. forecasting and management systems tow plans suitable for Arctic OCS To the extent that relevant information that would be operational around the submitted with the IOP has not Conditions, as well as their general clock from start to finish. changed, the operator could later maintenance schedules for vessels and incorporate that information into its EP. Paragraph (f), Contractors equipment. This element is designed to Thorough advanced planning of the help DOI and other relevant agencies This provision would require operator’s objectives, as well as clear understand the extent to which operators to provide in their IOP a timelines for the accomplishment of operators: description of work to be performed by each objective, are essential, particularly 1. Have accounted for the conditions contractors supporting their exploratory in light of the limited seasonal drilling likely to be encountered on the Arctic drilling program (including window on the Arctic OCS. OCS; and mobilization and demobilization), how Given the uncertainties created by the such work would be designed or 2. Are prepared to handle the challenging Arctic OCS Conditions, it is substantial environmental challenges modified to account for Arctic OCS equally essential for an operator to Conditions, and operators’ strategy for and associated operational risks present acknowledge and plan for contingencies throughout the mobilization and contractor management, oversight, and and delays that might arise. For risk management. This information is demobilization of personnel and example, an operator would need to equipment. designed to help DOI and other relevant provide general information regarding agencies understand the operator’s The requested information would how it would safely respond to facilitate coordination between DOI and strategies for developing, early in the unanticipated ice encroachment at the planning process, a rigorous and the USCG. Similarly, having drill site, including safe and secure information about where vessels would effective operational management and temporary abandonment of the well and oversight system for its contractors that come from and go to before and after relocation of the drilling rig, as entering the waters overlying the Alaska is specifically tailored for operations on necessary. DOI would need to be the Arctic OCS. Information regarding OCS would aid, for example, DOI’s and provided with information that explains other relevant agencies’ early the nature and timeline of operational how the operator has considered these elements for which the operator would understanding of potential elements of its exploration program, environmental issues, such as aquatic rely on contractors would aid in a full well in advance of operations. Also, if understanding of the various inputs and invasive species that might be carried an operator plans to drill multiple wells, on vessels. contingencies that might affect the DOI must be provided with information planned execution of the proposed This provision would also require regarding the anticipated objectives and operations. consideration of how repairs to, and timelines for each well. Similarly, an maintenance of, vessels and equipment operator would be expected to indicate The IOP would need to describe, for might affect the larger exploratory whether it intends to abandon the example, what types of operations the drilling program. This information well(s) at the end of the season and, if operator would contract out and how could facilitate DOI’s and other relevant the operator intends to abandon the the operator would oversee the agencies’ understanding of potential well, whether such abandonment would contractor to ensure the contractor’s environmental considerations and safety be temporary or permanent. work product would be suitable for aspects of the projected operational Arctic OCS operations. At the IOP stage, schedules. Paragraph (e), Weather and Ice the specific names of contractors would Forecasting and Management not be necessary but could be provided, Paragraph (d), Exploratory Drilling One of the key drivers of this if known. The focus of this proposed Program Objectives, Timelines, and proposed rule is DOI’s need to requirement is to facilitate DOI’s and Contingency Plans understand how operators would other relevant agencies’ understanding This provision would require account for the variable conditions on of how the operator plans to rely on operators to include in their IOP a the Arctic OCS and how those contractors and how it plans to manage description of their ‘‘exploratory drilling conditions might affect drilling its contractor relationships in order to program objectives and timelines for activities. One important component of ensure safe and responsible drilling each objective, including general plans an operator’s overall program is operations. for abandonment of the well(s)’’ under accounting for adverse weather and ice Paragraph (g), Safety a variety of circumstances. This conditions and developing a plan to description would help DOI and other respond to those conditions. BOEM proposes to require that relevant agencies familiarize themselves Consequently, this provision would operators include in their IOP a with the operator’s plans for a well- require operators to describe their description of how they ‘‘will ensure designed, safe operation with clear weather and ice forecasting capabilities operational safety while working in objectives for employees and contractors for all phases of the exploration Arctic OCS Conditions,’’ including but that would allow ample flexibility in program, including a description of how not limited to, the safety principles light of the difficult and variable they would respond to and manage ice applicable to operators and their conditions on the Arctic OCS. hazards and weather events. The contractors, the accountability structure A fully developed exploration challenges presented by Arctic OCS within operators’ organizations for program includes, among other things: Conditions are not limited to the period implementing these principles, how the operator’s general plan of how many of active drilling operations, but would operators would communicate these wells it plans to drill in a particular create difficulties throughout all phases principles to their employees and season; the timing and sequence of of an exploratory drilling program, contractors, and how operators would

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determine successful implementation of they would account for these extent your project will rely on local these principles. conditions, and any guiding principles community workforce and spill cleanup The OCSLA provides that all they would follow to minimize risk to response capacity.’’ This provision operations taking place on the OCS operations, personnel, vessels, and other would encourage operators to engage in ‘‘should be conducted in a safe manner equipment. early planning toward providing local by well-trained personnel using communities, which would incur the technology, precautions, and techniques Paragraph (h), Staging of Oil Spill Response Assets greatest risk of offshore exploration sufficient to prevent or minimize the activities, with the capacity—both in likelihood of blowouts, loss of well BOEM proposes to require that terms of training and resources—to control, fires, spillages, physical operators include in their IOP protect their communities and obstruction to other users of the waters information regarding their important subsistence use areas. It is or subsoil and seabed, or other ‘‘preparations and plans for staging of intended to provide DOI and other occurrences which may cause damage to oil spill response assets.’’ This provision relevant agencies with early insight into the environment or to property, or would facilitate DOI’s, and other whether the proposed operations are endanger life or health’’ (43 U.S.C. relevant agencies’ (e.g., USCG), early being planned safely, with appropriate 1332(6)). Also, operators are required to understanding of the potential effects on environmental safeguards and respect demonstrate through their EPs and local communities from staging spill for the other users of area resources. APDs that they have planned and are response assets near coastal This provision would also allow DOI to prepared to conduct activities in a communities, the safety and develop an early understanding of manner that conforms to the OCSLA environmental implications of plans for industry’s efforts to promote local and applicable implementing mobilization and demobilization of communities’ ability to participate in regulations, and that their activities will related vessels and equipment, the and obtain benefit from future Arctic be conducted safely (see 43 U.S.C. potential environmental impacts of the OCS oil and gas development. 1340(c)(1); 30 CFR 250.106, 250.107, vessels staged in the area for response, 550.202 paragraphs (a) and (b)). The and anticipated response times based on How do I submit the IOP, EP, DPP, or proposed safety information where the equipment will be located. DOCD? (§ 550.206) requirement would help DOI and other This information would be especially DOI recognizes that operators may relevant agencies (e.g., USCG) relevant to the USCG, which is the consider some of the information familiarize themselves with the Federal On Scene Coordinator required by proposed § 550.204 to be operator’s early consideration of how its responsible for developing the North proprietary or commercial in nature. proposed exploratory drilling program Slope Sub-Area Contingency Plan for Pursuant to the proposed revisions to would proceed in a safe manner with Oil and Hazardous Substances § 550.206, operators would be able to appropriate caution and respect for the Discharges/Releases. The USCG and all request the nondisclosure of this extreme and unpredictable conditions appropriate governmental entities at the information using established DOI found offshore in the Arctic and would State and local levels would have an processes. As is currently the case with be consistent with DOI’s and other early understanding of the proposed EPs, Development and Production Plans relevant agencies’ safety requirements. activities. (DPPs), and Development Operations This proposed safety information element is also intended to complement Paragraph (i), Impact of Exploratory Coordination Documents (DOCDs), BSEE’s SEMS program by requiring Drilling on Local Community operators requesting the nondisclosure operators to identify and assess, early in Infrastructure of portions of an IOP should provide the planning stages of their proposed BOEM proposes to require that BOEM with two separate versions of the exploratory drilling program, their operators include in their IOP, a IOP; a public version from which guiding principles for safe Arctic OCS description of their ‘‘efforts to minimize potentially exempt information is operations, and optimal strategies for impacts of [their] exploratory drilling redacted, and a BOEM version with implementing those principles operations on local community such information present, but clearly throughout their workforce. infrastructure, including but not limited marked as proprietary. Proposed 30 CFR 550.204(g) would to housing, energy supplies, and If I propose activities in the Alaska OCS not require an operator to provide the services.’’ This provision would Region, what planning information must same level of detail, if not available, facilitate DOI’s and other relevant accompany the EP? (§ 550.220) concerning safety of operations as agencies’ early understanding of the would be available at the time of the EP potential socioeconomic implications of As described previously, drilling and APD, or to duplicate the detail the proposed exploratory drilling operations, especially on the Arctic provided in its USCG Safety program, including the extent to which OCS, can be complex, and operators Management System program or its the proposed activities might strain the may face substantial environmental BSEE SEMS program. Instead, the IOP limited infrastructure of coastal challenges and operational risks would need to provide a general communities in the Arctic, or reduce the throughout every phase of the endeavor. understanding of the principles that availability of housing, energy, food, One of the main goals of this rulemaking operators would follow to manage risks and health care to local communities is to ensure, through thorough advanced to ensure safety of all exploratory through increased demand and higher planning, that operators are capable of drilling activities and personnel vis-a`- costs caused by the presence of persons operating safely in the extreme and vis the conditions likely to be supporting the exploratory drilling challenging Arctic OCS Conditions. encountered on the Arctic OCS. For program. BOEM first proposes to amend the example, it is reasonably expected that existing ‘‘Emergency Plans’’ provision at operators would experience freezing Paragraph (j), Local Community § 550.220(a) to add fire, explosion, and spray, extended periods of low light, Workforce and Response Capacity personnel evacuation to the events for strong winds, and dense fog during BOEM proposes to require that which emergency plans are required, operations. Operators would need to operators include in their IOP ‘‘[a] and to replace the terms ‘‘blowout’’ with provide a general description of how description of whether and to what ‘‘loss of well control’’ and ‘‘craft’’ with

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‘‘vessel, offshore vehicle, or aircraft’’ for Requiring information about how an own fleet of drilling, resupply, and clarification purposes. operator intends to satisfy the proposed emergency response vessels—were to BOEM next proposes to create a new BSEE regulations at proposed 30 CFR engage in activities simultaneously. § 550.220(c), which would set forth 250.471 and 250.472 would allow Avoiding duplication of relief well rigs, additional information requirements for consideration of these issues at an early oil spill response assets, and other EPs that are proposing exploration planning stage, and would further emergency response vessels and activities on the Arctic OCS. BOEM inform BOEM’s review of proposed EPs equipment would be an effective means proposes to add a new performance- under § 550.202, and other applicable to minimize environmental and social based provision at § 550.220(c)(1) that laws. It would likewise reduce the risk impacts. would require an operator to describe of discrepancy between reviews and BOEM and BSEE strongly encourage how its proposed activities would be approvals conducted at the EP stage and operators proposing exploratory drilling designed and conducted in a manner an operator’s later-submitted APD. activities on the Arctic OCS to enter into suitable for Arctic OCS Conditions and While BOEM anticipates that elements mutual aid agreements for the sharing of how these activities would be managed of the SCCE description required by vessels, relief well rigs, and other assets and overseen as an integrated endeavor. proposed § 550.220(c)(3) and the relief or services associated with responding This description may be summarized well rig description required by to an oil spill or other emergency. from the operator’s IOP or, if proposed § 550.220(c)(4) may be general Notice of these arrangements would appropriate, updated with any at the EP stage, they must be detailed inform BOEM’s and BSEE’s safety and information not available at the time of enough for BOEM to confirm that the environmental review of proposed the IOP. operator would have plans in place for activities to ensure operators are fully BOEM also proposes to add how it would conduct its operations prepared to respond to a loss of well § 550.220(c)(2), which would require safely, in conformance with applicable control. Also, BOEM and BSEE expect operators to include, as part of their EP regulations. The description would also that operators, when planning a response to a loss of well control, would submissions, more detailed and updated need to be detailed enough to enable ensure that an effective and immediate information concerning their weather BOEM to evaluate the potential removal, mitigation, or prevention of a and ice forecasting and management environmental implications of proposed discharge could be achieved, to the plans for all phases of their exploratory SCCE and relief well rig staging and greatest extent practicable, using private drilling activities, including: a operations. Proposed § 550.220(c)(4) sector capability. description of how they would respond would set forth some of the information expected to be available about the relief Finally, proposed § 550.220(c)(6) to and manage ice hazards and weather would add an informational events; their ice and weather alert well rig when the EP is submitted. The proposed § 550.220(c)(5) requirement concerning the conclusion procedures; their procedures and of on-site operations at the end of the thresholds for activating their ice and provision would add an informational requirement concerning any agreements season. An operator would include a weather management systems; and projected date, and information used to confirmation that their ice and weather the operator might have with third parties for the sharing of assets (e.g., determine the date, when on-site management and alert systems would be operations would be completed based operated continuously throughout the SCCE, relief rigs, and oil spill response resources) and/or any agreements to on ice conditions that will likely exist planned operations. As described in the relevant operational area (using previously, DOI needs to be certain that assist each other in response and cleanup efforts in the event of a loss of current Federal ice and weather adequate forecasting equipment and forecasts or other reliable forecasting procedures are in place to predict and well control or other emergency. A cooperative, consortium-based model systems). An operator would also follow developing weather and ice provide a projected date, and supporting conditions that might pose a risk to should offer: 1. Logistical, operational, and information, on when the operator operations. Also, it is essential that commercial efficiencies; would stop drilling operations into operators develop and describe their 2. Less duplication of personnel and zones capable of flowing liquid pre-established thresholds for triggering equipment; hydrocarbons to the surface. That date varying levels of responsive actions in 3. Reduced monetary cost of would need to be consistent with the the face of weather and ice threats, as exploration; relief rig planning requirements under well as the procedures and equipment 4. Reduced environmental footprint; proposed 30 CFR 250.472 and with the necessary to respond to these hazards. 5. Reduced social costs and estimated timeframe for deployment of Furthermore, operators need to interference with other users of the a relief rig under proposed demonstrate that they would be capable OCS; and § 550.220(c)(4). of responding to and managing these 6. A coordinated response and There is no single, definitive ‘‘end of conditions to prevent or minimize the cleanup effort in the event of a loss of drilling season’’ in the Arctic OCS. The risks associated with ice and adverse well control. projected end-of-season dates in any weather. BOEM’s environmental impact specific EP should be based on a variety BOEM next proposes to require analyses have repeatedly shown that the of factors, including the operator’s preliminary information concerning presence of vessels, aircraft, and other equipment, procedures, and capability SCCE capabilities, deployment of a equipment within the Arctic region to effective ly manage and mitigate risk relief well rig, and sharing of SCCE and could result in adverse impacts to that are reasonably likely to occur. spill response and cleanup assets. The subsistence activities and to Other factors include, but are not proposed informational requirements environmental resources (e.g., noise limited to, the prevailing meteorologic concerning SCCE and relief well rigs impacts on marine mammals, increased and oceanic conditions, which vary relate to the operator’s preliminary risk of bird or marine mammal from year to year, and the location of plans for complying with BSEE’s collisions, increased risk of fuel spills, proposed drilling. For example, in a proposed regulations at 30 CFR 250.471 and increased air emissions). The year when the encroachment of sea ice and 250.472, which will be described potential effects would be compounded is projected to occur later, an operator later. if multiple operators—each fielding its may be able to justify a later end of

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season and avoid the need to cease Capping Stack, Containment Dome, and needed, or prepositioned below the riser drilling operations earlier than Source Control and Containment system when the BOP is located on the necessary. By contrast, in a year when Equipment. For an explanation of the deck of a MODU. The pre-positioned the onset of sea ice is projected to occur definitions of Arctic OCS and Arctic capping stack may be created by earlier, the operator would need to plan OCS Conditions, see the discussion of adapting an auxiliary subsea to conclude on-site operations earlier. definitions at the beginning of the intervention device to meet the In projecting when to conclude on- Section-by-Section analysis. The requirements of this proposed rule. site operations, BOEM and BSEE expect remaining definitions are necessary Containment Dome—this term would operators to be flexible and fully because these proposed regulations be defined to mean a non-pressurized responsive to the latest ice and weather would require the defined systems and container that can be used to collect forecasts and the best available equipment under identified fluids escaping from the well or information for ensuring optimal timing circumstances. In addition, the equipment below the sea surface or from for the end of on-site operations. Of definition of District Manager would be seeps by suspending the device over the course, after an EP is approved, an revised for activities on the Alaska OCS discharge or seep location. A operator may request approval to revise such that District Manager would mean containment dome, also known as a its EP if available information regarding Regional Supervisor, because the ‘‘sombrero,’’ ‘‘cofferdam,’’ or ‘‘hat,’’ its operations and anticipated Regional Supervisor in BSEE’s Alaska captures fluids after they have escaped meteorologic and oceanic conditions OCS region performs the District the well, subsea equipment, or a seep, change. Manager’s duties. but before they have reached the For example, BOEM’s approval for Cap and Flow System—this term surface. It consists of a structure that has Shell’s 2012 Arctic operations required would be defined to mean an integrated the ability to capture fluids rising drilling operations in zones where suite of equipment and vessels, through the water column and to convey measurable quantities of liquid including a capping stack and the fluids to a surface vessel or facility hydrocarbons were capable of flowing associated flow lines, that, when for processing or disposal. If a cap and into the well to be concluded 38 days installed or positioned, is used to flow system is unable to stop or control prior to November 1, based on satellite control the flow of fluids escaping from the flow of fluids to the environment, or imagery showing the five-year historical the well by conveying the fluids to the the well system is so damaged that a average of earliest sea ice encroachment surface to a vessel or facility equipped capping stack cannot make a successful over Shell’s drill site and estimates of to process the flow of oil, gas, and connection, the containment dome the time needed to drill a relief well. water. A cap and flow system is a high system would be needed to capture the The purpose of this drilling hiatus was pressure system that includes the hydrocarbons flowing to the to reduce project risk by assuring a capping stack and piping necessary to environment. greater opportunity for response and convey the flowing fluids through the Source Control and Containment cleanup in the unlikely event of a late choke manifold to the surface Equipment (SCCE)—SCCE would be season oil spill. equipment. When a responsible party defined to mean the capping stack, cap BOEM and BSEE invite comments on has been able to successfully cap a well, and flow system, containment dome, what kinds of Arctic weather and ice but conditions will not allow the well and/or other subsea and surface devices, equipment, and vessels whose collective forecasting options are currently (or to be shut in (e.g., due to damage, purpose is to control a spill source and expected to be) available for use by equipment failure or pressure stop the flow of fluids into the operators. In addition, comments may constraints), the cap and flow system environment or to contain fluids being address other factors that should be allows the well cap to be used as a discharged into the environment for considered in determining when on-site connection for the flow lines that proper processing or disposal. This operations are expected to be transport well fluids to the surface for definition is useful for referring completed, or when drilling into certain capture and disposition. In some circumstances, this can relieve the collectively to the various independent hydrocarbon zones should cease each pressure on the capping device or elements of an operator’s SCCE in year, given an operator’s response and tubulars at the well head or in the well portions of the proposed rule that would cleanup capabilities. while maintaining or reestablishing apply to any such equipment and its C. Additional Regulations Proposed by control of the produced fluids, or a capabilities as a unified system, rather BSEE portion thereof. than a specific type of SCCE (see, e.g., Capping Stack—this term would be proposed § 250.470(f)). The SCCE serves Authority defined to mean a mechanical device the purpose of stopping or minimizing The authority citation for 30 CFR part that can be installed on top of a subsea the flow of hydrocarbons into the 250 would be amended to add reference or surface wellhead or BOP to stop the environment after a loss of well control to 33 U.S.C. 1321(j)(1)(C). This statutory flow of fluids into the environment. A event has occurred. The term ‘‘surface provision, in addition to section 5 of the capping stack’s primary function is to devices’’ within the definition of SCCE OCSLA (43 U.S.C. 1334), provides stop the uncontrolled flow of fluids refers to equipment mounted or staged authority to DOI for the portions of the from a well to the environment in the on a barge, vessel, or facility. The proposed revisions to § 250.300 related event that other intervention methods, purpose of this equipment is to separate, to preventing discharge of petroleum- such as a BOP, would fail. The capping treat, store and/or dispose of fluids based mud and cuttings from operations stack is attached to a connector or pipe conveyed to the surface by the cap and that use petroleum-based mud. For stub located on or in the well to achieve flow system or the containment dome. further explanation of those provisions, a pressure-tight seal that would either The SCCE, however, does not include a see the discussion under that section. stop the flow or direct it into a conduit BOP or similar equipment that is used that would transmit the fluids to a in ordinary operations and functions to Definitions (§ 250.105) surface facility that is able to store, maintain well control under normal This section would be revised to add process, or properly dispose of the operational conditions or to prevent a definitions for Arctic OCS, Arctic OCS fluids. Capping stacks may be deployed loss of well control. Finally, ‘‘subsea Conditions, Cap and Flow System, from the surface to the well head, as devices’’ includes, but is not limited to,

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remotely operated vehicles (ROV), the Regional Supervisor of any event Petroleum Institute (API) proposed draft anchors, buoyancy equipment, that, pursuant to the hazard thresholds Recommended Practice (RP) 2N, connectors, cameras, controls and other identified in its EP, would trigger a Recommended Practice for Planning, subsea equipment necessary to facilitate heightened observation requirement, or Designing, and Constructing Structures the deployment, operation and retrieval could potentially result in the need to and Pipelines for Arctic Conditions, of the SCCE. physically manage ice, initiate Third Edition. This document will be a operations to secure the well, or move What incidents must I report to BSEE voluntary consensus standard the drilling rig to avoid a threat caused and when must I report them? addressing the unique Arctic OCS by floating ice. This provision would (§ 250.188) Conditions that affect the planning, also require immediate oral notification design, and construction of systems The current regulation requires of the commencement and completion used in Arctic and sub-Arctic operators to provide oral and written of any ice management activities. environments. This API document— notification to the BSEE District The oral report required by this which is virtually identical to a Manager (who in the Alaska OCS region provision could be a simple direct oral standard previously issued by the is the Regional Supervisor) of, among notification of the basic facts International Organization for other things, any injuries, fatalities, surrounding the relevant circumstances, Standardization (ISO), ‘‘Petroleum and losses of well control, fires and and would not need to contain all of the Natural Gas Industries Arctic Offshore explosions, and incidents affecting detail required of oral reports pursuant Structures,’’ First Edition (2010) (ISO operations. BSEE proposes to add a new to § 250.189. The proposed provision 19906)—would be appropriate for paragraph (c) to this section that would would also require a follow-up written certain aspects of drilling operations, require operators on the Arctic OCS to report regarding any ice management such as accounting for the severe provide an immediate oral report to the activities undertaken by the operator weather and thermal effects on BSEE onsite inspector, if one is present, that must be submitted within 24 hours structures, maintenance procedures, and or to the Regional Supervisor of any sea following completion of those activities. safety. Since this proposed rule is ice movement or condition that has the BSEE proposes this tighter 24-hour focused on the exploratory drilling potential to affect operations or trigger timeline (as opposed to, and in lieu of, phase of operations on the Arctic OCS, ice management activities, as well as the the standard 15 day window under certain portions of API RP 2N, Third start and termination of these activities, § 250.190) due to the immediacy of the Edition (such as those related to issues and any ‘‘kicks’’ or operational issues threats and concerns presented by regarding structural and pipeline that are unexpected and could result in circumstances requiring ice integrity) would not be relevant to the the loss of well control. management activities, and the need for exploration stage. However, many Sea ice, if not properly managed, can BSEE to remain abreast of those events elements of that document, when have a major effect on exploratory in its regulatory and safety oversight published, could be effectively applied drilling operations. Spring and summer role. The written report may be to equipment used in exploratory thawing can produce large ice masses submitted via email or other electronic drilling operations on the Arctic OCS. on the waters overlying the Arctic OCS, means to the inspector or Regional Therefore, proposed §§ 250.198(h)(89) which could cause substantial damage Supervisor and must conform to the and 250.470(g) would incorporate to exploratory drilling equipment and content requirements set forth in appropriate elements of API RP 2N, render operations unsafe, leading to § 250.190. injury, loss of life, or environmental Finally, BSEE proposes to require that Third Edition, for purposes of APD harm. For example, if the well is not operators submit an immediate oral information requirements. properly protected, sea ice that is report of any ‘‘kicks’’ or operational A voluntary consensus standard moving through the surrounding water issues that are unexpected and could indicates acceptance and recognition could cause a loss of well control by result in the loss of well control. across the industry that certain damaging the well head and triggering Operators on the Alaska OCS currently technology is feasible. For example, API the discharge of hydrocarbons into the have to report kicks at the end of every standards are created with input from marine environment. Ice management day on the well activity report Form oil and gas operators, drilling activities, as described in an operator’s BSEE–0133, as required by § 250.468. contractors, service companies, ice management plan, could include However, the proposed requirements of consultants, and regulators. Even physically changing the direction of an this section mean operators would not though the development of a consensus ice floe or using ice breaking techniques be allowed to wait until the end of the standard does not necessarily represent in order to minimize the likelihood of day or some time later to fill out a form. a unanimous agreement by the damage to the exploratory drilling If a kick occurred, they would have to developing body’s members, the API equipment. provide an immediate oral report. The process provides a means for industry It is essential for operators to remain nature of Arctic OCS Conditions, as and regulatory bodies to provide input in close communication with BSEE defined in this proposed rule, into the development of protocols for about sea ice in the area that has the demonstrates that responding to a spill the highly specialized equipment and potential to affect operations. Just as the in the Arctic region would be a difficult procedures used in oil and gas operator needs to have sufficient time to task. Reporting kicks right away is a operations. In the National Technology act in the event that ice poses an safety measure that can improve the Transfer and Advancement Act of 1995 operational hazard, BSEE would need ability of both inspectors and operators (Pub. L. 104–113, 15 U.S.C. 3701 note), sufficient time to oversee the safety of to potentially prevent a loss of well Congress directed Federal agencies to an operator’s reactions and prepare to control. use technical standards that are respond if a response is necessary due developed or adopted by voluntary to a safety or environmental incident Documents incorporated by reference. consensus standards bodies in lieu of resulting from an ice event. (§ 250.198) government-unique standards, unless The proposed paragraph (c) would The proposed rule would add inconsistent with applicable law or require the operator to immediately subsection (h)(89) to existing § 250.198 otherwise impractical (see OMB notify the BSEE inspector on location or as a reference to the American Circular A–119 (Revised), February

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1998, available at www.standards.gov/ and printable versions will continue to petroleum (i.e., oil) as a component. standards_gov/nttaa.cfm). be available for purchase through API. Cuttings generated using petroleum- BSEE frequently uses standards (e.g., BSEE proposes to incorporate, with based mud would be oil-contaminated, codes, specifications, RPs) developed certain exclusions discussed later in this and the discharge of the mud or cuttings through a consensus process, facilitated proposed rule, draft proposed API RP into the environment would result in by standards development organizations 2N, Third Edition, which is available for discharge of that oil into the and with input from the oil and gas free public viewing during the API environment. The proposed rule would industry, as a means of establishing balloting process on API’s Web site at add provisions in paragraphs (b)(1) and requirements for activities on the OCS. http://mycommittees.api.org/standards/ (b)(2) requiring that, during exploratory BSEE may incorporate these standards ecs/sc2/default.aspx (click on the title drilling operations on the Arctic OCS, into its final regulations without of the document to open). When the operator must capture all petroleum- publishing the standards in their finalized by API, that standard will be based mud, and associated cuttings from entirety in the Code of Federal available for free public viewing on operations that use petroleum-based Regulations, a practice known as API’s Web site at: http:// mud, to prevent their discharge into the incorporation by reference. The legal publications.api.org.5 marine environment. These effect of incorporation by reference is In addition, as explained later in this subparagraphs would also clarify the that the incorporated standards become proposed rule, BSEE is considering Regional Supervisor’s discretionary regulatory requirements. Material incorporating by reference ISO 19906 in authority to require operators to also incorporated in a final rule, like any lieu of API RP 2N, Third Edition. ISO capture all water-based mud and other properly issued regulation, has the standards are available for purchase associated cuttings from Arctic OCS force and effect of law, and BSEE holds from ISO at ISO’s publications Web site exploratory drilling operations (after operators, lessees and other regulated at: http://www.iso.org/iso/home/store/ completion of the hole for the conductor parties accountable for complying with catalogue_ics.htm or from commercial casing) to prevent their discharge into the documents incorporated by vendors.6 the marine environment, based on reference in its final regulations. BSEE For the convenience of the viewing factors including, but not limited to: currently incorporates by reference over public who may not wish to purchase or 1. The proximity of the exploratory 100 consensus standards in its offshore view incorporated documents online, drilling operations to subsistence regulations governing oil and gas they may be inspected, upon request, at hunting and fishing locations; operations (see 30 CFR 250.198). our office, 381 Elden Street, Room 3313, 2. The extent to which discharged Federal regulations at 1 CFR part 51 Herndon, Virginia 20170 (phone: 703– mud or cuttings may cause marine govern how BSEE and other Federal 787–1587); or at the National Archives mammals to alter their migratory agencies incorporate various documents and Records Administration (NARA). patterns in a manner that interferes with by reference. Agencies may only For information on the availability of subsistence activities; or incorporate a document by reference in materials at NARA, call 202–741–6030, 3. The extent to which discharged a final rule by publishing the document or go to: www.archives.gov/federal- mud or cuttings may adversely affect title, edition, date, author, publisher, register/cfr/ibr-locations.html. marine mammals, fish, or their habitat. identification number and other If API RP 2N, Third Edition, is BSEE regulates discharges of mud and specified information in the Federal incorporated into the final rule, it would cuttings from OCS facilities under the Register. The Director of the Federal continue to be made available for public OCSLA, which contemplates the Register must approve each publication viewing, when requested, at the imposition of environmental safeguards incorporated by reference in a final rule. addresses indicated in the prior for oil and gas activities on the OCS and Incorporation by reference of a paragraph. Specific information on mandates that they be conducted in a document or publication in a final rule where incorporated documents can be manner that prevents or minimizes the is limited to the specific edition inspected or obtained is also found at likelihood of damage to the approved by the Director of the Federal § 250.198, Documents incorporated by environment. The President has also Register. reference. delegated authority to the Secretary (further delegated to BSEE) to regulate Availability of Incorporated Documents Pollution prevention. (§ 250.300) discharges of oil under Section 311 of for Public Viewing This section would revise BSEE’s the CWA, 33 U.S.C. 1321, which calls When a copyrighted industry pollution prevention regulation as it for the issuance of regulations standard is incorporated by reference pertains to Arctic OCS exploratory establishing procedures, methods, and into our regulations, BSEE is obligated drilling operations. Spent mud and equipment to prevent discharges of oil to observe and protect that copyright. cuttings are generated during and hazardous substances from offshore We typically provide members of the exploratory drilling. Drilling mud may facilities, and to contain such public with Web site addresses where be entirely water-based or may include discharges. BSEE’s pollution prevention these standards may be accessed for regulations are intended to complement viewing—sometimes for free and 5 To access a standard at that API Web site, first requirements imposed by the EPA under sometimes for a fee. The decision to log-in or create a new account, accept API’s ‘‘Terms the CWA. For example, in November and Conditions,’’ then click on the ‘‘Browse charge a fee is made by each standards Documents’’ button, and then select the applicable 2012, the EPA issued general National development organization. The API category (e.g., ‘‘Exploration and Production’’) for Pollutant Discharge Elimination System provides free online public access to at the particular standard(s) you wish to review. (NPDES) permits authorizing certain least 160 key industry standards, 6 Copies of the ISO standards referred to in this discharges from oil and gas exploratory proposed rule may also be viewed, upon request, including a broad range of technical at BSEE’s Regional Offices for Alaska (3801 facilities to Federal waters in the standards. Those standards represent Centerpoint Dr., Suite 500, Anchorage, AK; 907– Beaufort Sea and the Chukchi Sea, almost one-third of all API standards 334–5300), the Pacific (760 Paseo Camarillo, including certain discharges of water- and include all that are safety-related or Camarillo, CA; 805–384–6300), and the Gulf of based drilling fluids and drill cuttings, Mexico (1201 Elmwood Park Blvd., Nw Orleans, are incorporated into Federal LA; 1–800–672–2627) and at BSEE’s Houston office subject to effluent limitations and other regulations. These standards are (701 San Jacinto St., Rm. 115, Houston, TX; 713– requirements. Of note, the EPA NPDES available for review, and hard copies 220–9201). permits do not allow the discharge of

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oil-based drilling fluids, or the specific circumstances (such as What additional information must I discharge of water-based drilling fluids subsistence hunting). In addition, other submit with my APD? (§ 250.418) and drill cuttings during the fall relevant circumstances, such as BSEE proposes to add a new bowhead whale hunt in the Beaufort applicable provisions of a NPDES paragraph (k) to this section, providing Sea. BSEE’s proposed regulations clarify general permit, can be considered when that the information identified in the Regional Supervisor’s authority to exercising that discretionary authority. proposed § 250.470 must be submitted impose operational measures that BSEE invites comments on the potential with an APD for exploratory drilling on complement EPA’s discharge limitations costs to the industry of limiting or the Arctic OCS. The information by considering potential impacts to prohibiting the discharge of mud and required in the proposed section would specific components of the Arctic cuttings that otherwise would not be be necessary to inform BSEE’s environment, such as subsistence prohibited by the NPDES general evaluation of APDs for Arctic OCS activities, marine resources, and coastal permits. exploratory drilling operations (see areas. The discharge of mud and cuttings When and how must I secure a well? discussion of proposed § 250.470). has the potential to affect marine (§ 250.402) When must I pressure test the BOP mammals, fish, and their habitat, as well system? (§ 250.447) as subsistence activities present in the The current regulation requires, The current regulation requires Arctic region. As noted earlier, among other things, that operators operators to pressure test a BOP system subsistence hunting is central to the install a downhole safety device at an when it is installed, at specified time food supply and cultural traditions of appropriate depth whenever there is an intervals, and prior to drilling out each many Alaska Natives. BSEE proposes to interruption in drilling operations. string of casing or a liner. BSEE clarify its authority to limit discharges BSEE proposes to add a new paragraph proposes to revise paragraph (b) of this of any mud and cuttings having the (c)(1), which would require exploratory section to require a BOP pressure test potential to adversely impact marine drilling operators on the Arctic OCS to frequency of one test every 7 days for wildlife or to disrupt subsistence ensure that any equipment left on, near, Arctic OCS exploratory drilling hunting activities. or in a temporarily abandoned well that For example, existing environmental has penetrated below the surface casing operations. However, there is some analyses show that the release of drill be secured in a way that would protect debate over whether more frequent cuttings and drilling mud would result the well head and prevent or minimize testing, beyond the 14-day test in increased turbidity and the likelihood of the integrity of the well frequency prescribed by existing concentrations of total suspended solids or plugs being compromised. The regulations, would be necessary or in the water column, which could primary concern this proposed language advisable. displace marine mammals from the drill is designed to address is the possibility The effectiveness of hydrostatic sites and could adversely affect habitat that ice floes could sever, dislodge, or pressure testing of BOPs has been and prey within and around the drill drag any exploration-related equipment, questioned in the past. The industry has site (see Shell Gulf of Mexico, Inc.’s obstructions or protrusions left on the argued that increasing the number of Revised Chukchi Sea Exploration Plan well or the adjacent seafloor. The pressure tests: (1) may reduce the Burger Prospect Environmental proposed language, however, is drafted reliability of the equipment by Assessment (2011)). In addition, to encompass damage from any degrading the sealing capability of the subsistence hunters, who rely on foreseeable source. The provision in elements within the BOP stack; and (2) traditional ecological knowledge, have paragraph (c)(1) is designed to be does not necessarily demonstrate the future performance of the equipment. expressed concern to BOEM and BSEE performance-based, would allow Furthermore, the industry has claimed that whales are capable of detecting the operators to devise optimal strategies for that the requirement for operators to odors from mud and cuttings and will identifying and accounting for threats to stop drilling operations to perform a avoid areas where these discharges the integrity of equipment left on the pressure test could ultimately increase occur, resulting in similar effects. OCS, and would be limited only to the likelihood of an incident occurring. Hunting farther away from shore to find exploration wells that have penetrated Due to these safety and cost concerns, displaced whales can increase transit below the surface casing. However, for the industry has sought to reduce the time, reduce the likelihood of successful exploration wells located in an area current testing frequency for this harvests, increase exposure to adverse subject to ice scour, based on a shallow equipment (i.e., to longer than every 14 weather and dangerous sea states, and hazards survey, proposed paragraph days). increase safety concerns for subsistence (c)(2) would require a mudline cellar or hunters. Finally, the farther away Ensuring the proper functioning of a equivalent means of protection. The BOP, which is a critical line of defense whales are harvested from a community, BSEE Regional Supervisor will evaluate, the greater the length of towing time against loss of well control, is essential during the APD process, whether a necessary to bring the animals back to to Arctic OCS drilling operations. BSEE proposed equivalent approach is shore for processing. This increased tow is concerned that the integrity of BOPs sufficiently protective. time could negatively affect the viability could be compromised by Arctic of the meat and blubber for food because There are a number of problems that conditions; in particular, BSEE is of spoilage. could occur if operators did not adhere concerned about the possible effects of Marine mammal migrations and to this proposed requirement. For extreme weather conditions on BOPs subsistence hunting patterns vary example, if an ice floe were to contact maintained on surface vessels or greatly in different areas of the Arctic equipment left on, near, or in a well that facilities (such as jackup rigs). At this region and at different times of the year. had penetrated hydrocarbons, the time, pressure tests and functional tests These proposed rules would therefore impact could damage the well and are the primary methods for ensuring clarify the Regional Supervisor’s potentially compromise the cement, the performance of BOPs. A 7-day BOP discretion to require the capture of casing, or safety valves and plugs inside testing cycle was proposed by Shell in water-based mud and cuttings, taking the well and could result in the 2012, and ultimately approved by BSEE, into account location- and season- discharge of hydrocarbons. and we propose to require a similar

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testing frequency for all Arctic OCS perform its oversight role and to detail found in § 250.417 for drilling exploratory drilling operations. BSEE monitor responses to events as they units. specifically requests comments on the unfold. Finally, this section would, BSEE’s current regulations concerning appropriateness of the proposed 7-day consistent with §§ 250.466 and 250.467, fitness for other types of equipment and testing frequency to demonstrate the require that the data gathered be stored material are more general and reliability of the equipment under at a designated location for performance-based than the Arctic conditions. BSEE also requests recordkeeping purposes after operations requirements proposed in this rule for that commenters identify any additional have concluded, to enable BSEE to Arctic OCS operations. Additionally, safety issues that might arise from this perform audits, investigations, or other since SCCE is a new suite of equipment increased testing and that would be types of analyses, as part of its and materials proposed by this rule, unique to Arctic operations. In addition, regulatory oversight functions. there are no existing fitness for service BSEE invites comments on all potential The following undesignated centered regulations covering these items. drilling impacts related to the proposed heading would be inserted above Therefore, the information required under proposed paragraph (a) for 7-day testing frequency. proposed § 250.470: Note that the only proposed changes equipment and materials would be new. to the existing BOP testing regulation Additional Arctic OCS Requirements Paragraph (b), Well-specific Transition are the phrases specific to exploratory What additional information must I Operations drilling on the Arctic OCS. The submit with my APD for Arctic OCS remaining language is identical to the This provision would require exploratory drilling operations? operators to submit ‘‘[a] detailed wording currently at § 250.447(b) and is (§ 250.470) duplicated in this proposed rule for description of all operations necessary readability. BSEE proposes to add § 250.470, in Arctic OCS Conditions to transition the rig from being under way to What are the real-time monitoring which would require operators to provide Arctic OCS-specific information conducting drilling operations and from requirements for Arctic OCS exploratory ending drilling operations to being drilling operations? (§ 250.452) with their APDs for exploratory drilling. The proposed informational under way, as well as any anticipated BSEE proposes to add a new requirements in the new section would repair and maintenance plans for the performance-based section in Part 250 be necessary to inform BSEE’s drilling unit and equipment.’’ BSEE that would require real-time data evaluation of APDs for Arctic OCS does not intend for this provision to gathering on the BOP control system, exploratory drilling operations. require operators to resubmit any the fluid handling systems on the rig, information already submitted to and, if a downhole sensing system is Paragraph (a), Fitness for Service BOEM. Rather, BSEE would expect installed, the well’s downhole operators to have a fairly detailed plan This provision would require conditions during Arctic OCS when they submit their APD, including operators to submit a detailed exploratory drilling operations. In information such as the identity of description of the environmental, addition, this section would require equipment and vessels to be used, dates meteorologic and oceanic conditions operators to transmit immediately the of planned operations, and a description data during operations to an onshore expected at the well site(s); how their of how the equipment and vessels location, identified to BSEE prior to equipment, materials, and drilling unit would be designed for and be capable of well operations, where it must be stored will be prepared for service in the performing in Arctic OCS Conditions. and monitored by personnel who would conditions, and how the drilling unit For transition operations, BSEE would be capable of interpreting the data and will be in compliance with the need details about all of the activities have the authority, in consultation with requirements of § 250.417. For this necessary to begin and end drilling rig personnel, to initiate any necessary proposed requirement, BSEE would operations, and to move from one action in response to abnormal events or expect the operator to identify the drilling location to the next. Examples data. Such personnel must also have the specific drilling units proposed for use of the types of activities BSEE would capability for continuous and reliable during its operations, verify that the expect an operator to describe include, contact with rig personnel, to ensure the identified equipment and materials are but are not limited to: recovering the ability to communicate information or fit for service, and that the drilling units subsea equipment, including the marine instructions between the rig and conform to the fitness for service riser and the lower marine riser onshore facility in real-time, while requirements of § 250.417. It is package; recovering the BOP; recovering operations are underway. important that operators provide this the auxiliary sub-sea controls and This section would be added, in part, level of detail to ensure that the template; laying down the drill pipe and based on multiple recommendations equipment, materials, and drilling units securing the drill pipe and marine riser; from various Deepwater Horizon proposed for use in Arctic OCS securing the drilling equipment; investigation reports. Having the real- exploratory drilling are capable of transferring the fluids for transport or time, well-related data available to performing their respective tasks under disposal; securing ancillary equipment onshore personnel would increase the Arctic OCS Conditions. like the draw works and lines; refueling level of oversight of well conditions The information requested by this or transferring fuel; offloading waste; during operations. Onshore personnel proposed section for drilling units is not recovering the ROVs; picking up the oil could review data and help rig in addition to the requirements of spill prevention booms and equipment; personnel conduct operations in a safe § 250.417, but rather is designed to and offloading the drilling crew. manner. Also, onshore personnel would make clear that, to satisfy the fitness Finally, BSEE would require be able to assist the rig crew in requirements of § 250.417, operators information regarding any specific identifying and evaluating abnormalities would need to provide details regarding repair and maintenance plans for the that might arise during operations. This Alaska OCS Conditions. Further, BSEE drilling unit and equipment associated section would also require that the real- does not currently have an existing with commencement or completion of time monitoring data be available to provision for drilling equipment and drilling operations. All of the required BSEE upon request, to enable BSEE to materials that requires the same level of information would facilitate BSEE’s

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understanding of an operator’s program itself, whereas the focus of proposed they intend to utilize, including the and ensure that the operator complies § 250.470(c) is on ice management, name of the contractor that would with lease stipulations, EP conditions, meaning the contingency plans for deliver satellite imagery, if applicable. and other permitting requirements. response to the presence of ice in the Such information should also be water, such as temporary abandonment specific to the location and operations Paragraph (c), Well-specific Drilling of a well until the ice in the water associated with the well that is the Objectives and Contingency Plans passes, or management through some subject of the particular APD. This provision would require other technique. For oil and gas Finally, BSEE would require that an operators to submit ‘‘[w]ell-specific exploration, ice management is an operator’s weather and ice management drilling objectives, timelines, and Arctic OCS-specific issue that does not capabilities would be uninterrupted for updated contingency plans for occur elsewhere on the OCS. However, the entirety of their operations while on temporary abandonment of the well.’’ icing and ice-loading can occur during the Arctic OCS. This provision proposes Whereas the corresponding provisions operations on other parts of the OCS, that there would be no gap in weather of the proposed IOP and current EP outside of the Arctic. and ice monitoring activities, including regulations (e.g., § 550.211) relate more during transit between wells. This is to Paragraph (d), Weather and Ice broadly to the objectives and timelines ensure that, upon arrival at a new well Forecasting and Management of the overall proposed exploratory location, there are no unexpected drilling activities, this provision would This performance-based provision weather or ice hazards that would require an operator to provide ‘‘well- would require an operator to submit: a interfere with drilling operations at the specific’’ information at the APD stage. detailed description of its ‘‘weather and new location, or would pose a threat to This information would include the ice forecasting capability for all phases the safety or integrity of the drilling operator’s detailed schedule of the of the drilling operation, including how equipment or personnel. The purpose of following: [it] will ensure continuous awareness of this proposed requirement is to ensure 1. When they will spud the particular potential weather and ice hazards at, that hazards to drilling operations are well (i.e., begin drilling operations at the and during transition between, wells;’’ avoided or managed before they could well site) identified in the APD; its ‘‘plans for managing ice hazards and become a danger or an interruption to 2. How long will it take to drill the responding to weather events;’’ and operations. verification that it has the capabilities well; Paragraph (e), Relief Rig Plan 3. Anticipated depths and geologic described in its EP. Verification could targets, with timelines; be provided, for example, by providing Paragraph (e) would require operators 4. When the operator expects to set appropriate supporting documents (e.g., to provide, with their APD, information and cement each string of casing; contracts) for the forecasting and ice concerning how they would comply 5. When and how the operator would management capabilities. with the relief rig requirements of log the well; BSEE needs to know the details for proposed § 250.472. See the discussion 6. The operator’s plans to test the how the operator would implement the of that provision for an explanation of well; policies and/or plans for managing ice the nature of, and need for, those 7. When and how the operator would and weather events, identified to BOEM, requirements. abandon the well, including specifically for the drilling operations proposed in Paragraph (f), SCCE Capabilities addressing plans for how to move the the APD. It is anticipated that the rig off location and how the operator operator may not know the specific Paragraph (f) would require operators would meet the requirements of details about each vessel and piece of who propose to use a MODU to conduct proposed § 250.402(c); equipment that contributes to its exploratory drilling operations on the 8. A description of what equipment weather and ice forecasting and Arctic OCS to provide with their APD and vessels would be involved in the management capabilities when information concerning their required process of temporarily abandoning the describing those capabilities to BOEM, SCCE capabilities when they are drilling well due to ice; and in connection with the IOP and the EP. below or working below the surface 9. An explanation of how these Also, more detailed plans for managing casing, including a statement that the elements would be integrated into the ice hazards or weather events may be operator owns, or has a contract with a operator’s overall program. necessary and appropriate given the provider for, SCCE capable of Examples of the information the timing and location of the specific well controlling and/or containing its operator would be required to provide at issue than may have been available or identified WCD. Ensuring that an include, but are not limited to: the appropriate for the IOP and EP. Further, operator would be capable of location(s) to which the rig would be BSEE anticipates that weather and ice responding to a loss of well control is moved; the operator’s plans for safely monitoring and forecasting capabilities one of the key goals of this proposed securing the well prior to leaving the may evolve between the approval of the rule. In other parts of the OCS (e.g., the drill site; how temporary abandonment EP and the submittal of the APD, which Gulf of Mexico), there are several well- would affect the operator’s seasonal could yield better data, especially when established contractors readily available drilling plans, including its remaining operations commence. Therefore, this to operators and extensive operations schedule of operations at each well; and proposed provision would require the and infrastructure within the region how crew logistics, such as operator to submit the specific detailed from which resources could be drawn to transportation to and from a drilling rig, information to BSEE in connection with respond to an event. However, resources would be affected. its APD and also to describe, in more are limited in the Arctic region due to It should be noted that the detail and closer in time to the remote location and relative lack of contingency plans proposed in this commencement of drilling, how it infrastructure and operations. Therefore, section of the rule are different from the would implement its weather and ice operators proposing to conduct contingency plans required for ‘‘icing or forecasting and management plan. exploratory drilling on the Arctic OCS ice-loading’’ under existing BSEE would expect operators to must demonstrate that they would have § 250.417(c)(2). That phrase refers to ice identify the specific weather and ice access to, and be capable of promptly build-up on the vessel or equipment forecasting equipment and vessels that deploying, adequate SCCE. Operators

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must also describe how they would requested by this proposed new Sections 6.6.3 and 6.6.4 would be inspect, test, and maintain this paragraph. The proposed provision excluded because they address different equipment in order to ensure that it would require that operators who types of conditions for ice gouging and/ would remain fully functional and propose to conduct exploratory drilling or scouring than are anticipated to occur ready for use. These proposed on the Arctic OCS submit this during the Alaska Arctic open water requirements would help assure BSEE information in conjunction with their drilling season. The foundation criteria that operators conducting exploratory APD. of section 8.4, the piled structure drilling under Arctic OCS Conditions 5. A description of the operator’s plan criteria of section 9.6, the requirements are capable of: (1) Regaining control to ensure that personnel are trained to for permanently moored systems in after a loss of well control event or (2) deploy and operate the equipment and section 9.7, and the requirements for containing escaping fluids from a loss of that they would maintain ongoing seismic analysis of pile foundations in well control event. The information proficiency in source control operations. section 9.10 would be excluded because requirements of paragraph (f) would Standby crews who are not used this rule only applies to MODUs drilling include: regularly to perform their dedicated on a temporary basis, as opposed to the 1. A detailed description of the functions would not develop the more permanent types of structures operator’s or its contractor’s SCCE necessary skills unless they are properly addressed in those provisions. capabilities. The description must trained, and would not maintain those Similarly, section 12 would be excluded include operating assumptions and skills unless that training is reinforced because it applies only to fixed concrete limitations and information by practice. It is therefore imperative structures and is outside the scope of demonstrating that the operator would that the operator demonstrate that these this proposed rule. Section 13.2.1 have access to and the ability to deploy personnel have a plan for acquiring, and (design philosophy for floating such equipment necessary to regain the ability to maintain, the proficiency structures) would be excluded because control of the well. This description necessary to respond when called upon. similar ice forecasting and management would allow BSEE to verify the location This requirement would allow BSEE to issues are covered separately under and availability of this equipment for review those plans and verify that the proposed § 250.470(d). Sections compliance with proposed § 250.471. proficiencies have been acquired and 13.8.1.1, 13.8.2.1, 13.8.2.2, 13.8.2.4 2. An inventory of the equipment, would be maintained. through 13.8.2.7, 13.9.1, 13.9.2, and supplies, and services the operator owns Paragraph (g), API RP 2N, Third Edition 13.9.4 through 13.9.5, would be or has a contract for locally and excluded because they cover vessel regionally, including the identification Paragraph (g) would require that design and procedures requirements of each supplier. This information is operators explain how they utilized API under USCG jurisdiction. Sections important because BSEE would need to RP 2N, Third Edition, in planning their 13.9.6 (inspection and maintenance), verify the existence, condition, and Arctic OCS exploratory drilling 13.9.7 (operations and planning for location of the equipment that the operations. The API is updating this RP safety of personnel, the environment, operator describes in its plans. by adopting the entirety of ISO standard 3. Where SCCE capabilities are and equipment), and 13.9.8 (ice ‘‘Petroleum and natural gas industries management plans) would be excluded obtained through contracting, proof of Arctic offshore structures,’’ First Edition contracts or membership agreements because similar requirements are (2010) (ISO 19906). Since the addressed by other provisions of this with cooperatives, service providers, or requirements of this proposed rule are other contractors, including information proposed rule. Section 14 would be limited only to exploratory drilling excluded because it relates only to demonstrating the availability of the operations, operators would not be personnel and/or equipment on a 24- subsea production systems while this expected to provide an explanation of proposed rule applies to MODUs hour per day basis during operations how they utilized the entire API RP 2N, below the surface casing. In an effort to engaged in exploratory drilling activities Third Edition. This performance-based and because this rule proposes a minimize the environmental and social requirement would be limited to those footprint of, and economic impediments different set of requirements for BOPs portions of that document that are from that set forth in section 14.3.3. to, Arctic OCS operations, BSEE is specifically relevant for exploratory encouraging operators to share Section 15 (topsides design and drilling operations. BSEE proposes to resources, especially standby operation) would be excluded because it exclude the following sections of API equipment. This provision would does not generally apply to MODUs, and RP 2N, Third Edition, from facilitate the identification of those any parts that could be utilized for incorporation: assets, and would allow BSEE to verify MODUs fall under USCG jurisdiction. 1. sections 6.6.3 through 6.6.4; Section 16 (ice engineering topics) the contractual basis of any agreements 2. the foundation recommendations in necessary to provide the services would be excluded because it applies to section 8.4; structures that will remain in the ice required. 3. section 9.6; 4. A description of the procedures for and does not apply to MODUs. Section 4. the recommendations for 18 (escape, evacuation and rescue) inspecting, testing, and maintaining permanently moored systems in section SCCE. SCCE is intended to be standby would be excluded because its 9.7; provisions are already addressed under equipment. However, BSEE needs to be 5. the seismic analysis existing 30 CFR part 250 Subpart S and assured that the equipment would recommendations for pile foundations USCG rules. remain able to function if it were in section 9.10; needed. This provision would allow 6. section 12; BSEE recognizes that, when applied BSEE to verify that the operator, or 7. section 13.2.1; to MODUs, many of the structural contractor, has procedures in place for 8. sections 13.8.1.1, 13.8.2.1, 13.8.2.2, criteria of API RP 2N, Third Edition, are inspecting, testing, and maintaining the 13.8.2.4 through 13.8.2.7; regulated by the USCG and may be equipment so that it would be ready for 9. sections 13.9.1, 13.9.2, 13.9.4 covered by Class requirements for use, if necessary. Operators are already through 13.9.8; marine structures. Classification is a required under existing regulations at 10. sections 14 through 16; and determination made by private § 250.1916 to retain the information 11. section 18. organizations (in accordance with USCG

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requirements) that a vessel has been incorporated into these proposed Arctic straightforward to address in other constructed and maintained in regulations.7 theaters. There is limited ability in the Arctic region to summon additional compliance with industry standards to What are the requirements for Arctic source control and containment be fit for a particular service, in this case OCS source control and containment? resources. Accordingly, operators Ice Class 3. Therefore, application of (§ 250.471) API RP 2N, Third Edition, for the working there must plan for response purposes of this proposed rule would be BSEE proposes to require operators to redundancies and planning limited to the non-marine structural continue to adhere to all applicable complexities not required elsewhere. The proposed requirements would components of MODUs. For example, source control and containment requirements in the current regulations, apply to all exploratory drilling Class requirements do not cover the and to meet additional SCCE operations using a MODU on the Arctic derrick, plumbing, pipes, tubing, and requirements for Arctic OCS exploratory OCS, regardless of the BOP pumps that are all also structural drilling operations. BSEE is required to configuration employed by the components of a MODU and that fall ensure that offshore oil and gas operation. These provisions are under BSEE jurisdiction. If incorporated operations are conducted safely and in designed to ensure that each operator in the final rule, BSEE would expect a manner that protects the environment using a MODU would have access to, operators to comply with API RP 2N, from harm as a result of those and could promptly and effectively Third Edition, for MODU components operations. As stated earlier, the waters deploy and operate, surface and subsea within BSEE jurisdiction. BSEE and the and surrounding environment of the control and containment equipment in USCG have signed a Memorandum of Arctic region support a wide variety of the event of a loss of well control. In Agreement for MODUs outlining the marine mammals and other wildlife, particular, BSEE would require each allocation of responsibilities between including several Endangered Species operator to have the ability, in the event the agencies for fixed offshore facilities Act (ESA) listed species and designated of a loss of well control, to cap the well available at: www.bsee.gov/BSEE- critical habitat. Furthermore, U.S. and to capture, contain, and process or Newsroom/Publications-Library/ obligations under Article 4 of the Arctic properly dispose of any fluids escaping Interagency-Agreements/; click on the Council’s Agreement on Cooperation on from the well. All SCCE must be link for 2013 BSEE/USCG MOA: OCS– Marine Oil Pollution Preparedness and mobilized (i.e., begin transit) to the well 08. Response in the Arctic, require that, for immediately upon a loss of well control. ‘‘areas of special ecological The rule would specifically provide that BSEE specifically requests comment significance,’’ each party ‘‘shall the SCCE is only necessary when on proposed draft API RP 2N, Third establish a minimum level of pre- drilling below or working below the Edition, and on the extent to which positioned oil spill combating surface casing. BSEE should incorporate its provisions equipment, commensurate with the risk This new section would require when finalized into the regulations. As involved, and programs for its use[.]’’ compliance with the following source an alternative to incorporation of API The Arctic contains areas of ecological control and containment requirements RP 2N, Third Edition, BSEE is significance to the Nation as a whole, for all exploration wells drilled on the considering incorporation by reference and especially to Alaska Native Arctic OCS. of ISO 19906, the ISO Arctic standard communities. Paragraph (a), Drilling Below or on which API RP 2N, Third Edition, is Therefore, it is imperative that any Working Below the Surface Casing based. If BSEE incorporates the ISO loss of well control during oil and gas Paragraph (a) would require that the standard in lieu of the API standard, the exploratory drilling operations is operator, when using a MODU to drill final rule would exclude the sections of corrected and/or contained as quickly as below or work below the surface casing, the ISO standard corresponding to the possible to minimize the impact of oil have access to a capping stack excluded sections of API RP 2N pollution on the environment. To positioned to arrive at the well within previously discussed. BSEE requests accomplish this task, it would be 24 hours after a loss of well control, and comments on whether and to what necessary to have all equipment needed a cap and flow system and a extent BSEE should incorporate ISO to cap and/or contain the release of containment dome positioned to arrive 19906 in lieu of proposed draft API RP fluids readily available in the event of at the well within 7 days after a loss of 2N, Third Edition. a loss of well control during Arctic OCS well control. These technologies are exploratory drilling operations. Further, important because they have, either BSEE is also considering operations on the Arctic OCS are incorporating the ISO standard individually or in sequence, been distinct from operations on any other proven to be effective at reacquiring ‘‘Petroleum and natural gas industries— part of the OCS. The logistics and the Site-specific assessment of mobile control of wells and/or containing the transit times necessary to respond to a flow of hydrocarbons after primary well offshore units—Part 1: Jack-ups,’’ First well control event on the Arctic OCS, Edition (2012) (ISO 19905–1), into the control measures (such as well design coupled with the difficulties associated and a BOP) have failed to prevent a well final rule, with application limited only with oil spill response operations in to Arctic OCS exploratory drilling control event. The SCCE is intended to Arctic OCS Conditions, require the provide redundancy in the event of a operations. ISO 19905–1 may be better operator to plan for and be prepared for loss of well control. Some of the well suited than API RP 2N (or ISO 19906) contingencies that would be more control events for which this equipment to guide structural components for jack- 7 would be deployed could require a up rigs. The API RP 2N (or ISO 19906) Copies of ISO 19905–1 may be purchased from relief well to permanently plug and and ISO 19905–1 documents together ISO on its Web site (at http://www.iso.org/iso/ home/store/catalogue_ics.htm) or from commercial abandon the uncontrolled well. would provide the most comprehensive vendors. Copies of the ISO standards referred to in On the Arctic OCS, the exploratory structural requirements for the use of a this proposed rule may also be viewed, upon drilling operator would not be jack-up rig in Arctic conditions. BSEE request, at BSEE’s Herndon, VA, office (at the considered to have the required SCCE requests comments on the extent to address previously) indicated or at BSEE’s Regional Offices for Alaska, the Pacific, and the Gulf of unless it is secured in advance and has which ISO 19905–1 should be Mexico. the capability of arriving at the well

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within the required timeframes. In the pressures on the deck in a stand or retention requirement is necessary to event that a BOP or other prevention stump where it could be visually ensure enough cumulative data is mechanism fails to stop the flow of observed) monthly. The rule would also gathered to assess overall equipment fluids, capping stacks would be require that pre-positioned capping performance and trends. necessary to provide an additional stacks be tested prior to each Paragraph (f) would require the means to control flow from the well, installation on a well to assure BSEE operator to maintain records pertaining where a stub or connector is accessible. that no damage was done during the to use of the SCCE during testing, Capping stacks are the preferred prior deployment or transit. training, and deployment activities for immediate first level redundancy, with at least 3 years and to make them Paragraph (c), Reevaluating SCCE for the goal of controlling the well and available to BSEE upon request. The use Well Design Changes stopping the discharge of fluids, and of the equipment during testing and should be positioned so that they will Paragraph (c) would require a training activities and actual operations arrive at the well within 24 hours after reevaluation of the SCCE capabilities if must be recorded, along with any a loss of well control. Incidents in the well design changes because some deficiencies or failures. These records which the connectors or tubulars are not well design changes may impact the would allow BSEE to address any issues damaged would lend themselves to the WCD rate. If the operator proposes a arising during the usage and to use of a capping stack. change to a well design that impacts the document any trends or time-dependent If the tubulars are damaged and the WCD rate, the operator must provide the problems that would develop over the pressure cannot be managed with the new WCD rate through an Application record retention period. In the event capping stack, the remainder of the cap for Permit to Modify (APM), as required that the equipment is used in a well and flow system must be used as a by § 250.465(a). The operator must then control incident, the records are secondary response. It must be verify that the SCCE would either be necessary to document the effectiveness positioned so that it will arrive at the modified to address the new rate or that of the response and functioning of the well within 7 days of a loss of well the previously proposed system would equipment. control and designed to capture the be adequate to handle the new WCD to Paragraphs (g) and (h), Mobilizing and WCD identified in the EP. If the cap and demonstrate ongoing compliance with Deploying SCCE flow system were unable to stop or the SCCE capability requirements control the flow of fluids to the previously addressed. Paragraph (g) would require operators to mobilize (i.e., initiate transit of) SCCE environment, or the well system were Paragraph (d), SCCE Tests or Exercises damaged to the point that the capping to a well immediately upon a loss of stack could not make a connection, the Paragraph (d) would require the well control and deploy (i.e., position containment dome system, which also operator to conduct tests or exercises of for use) and use SCCE. Paragraph (h) must be positioned to arrive at the well the SCCE when directed by the Regional would give the Regional Supervisor the within 7 days of a loss of well control, Supervisor. Similar to the requirement authority to require the operator to would need to be used to capture the that equipment be tested periodically, deploy and use SCCE independent of an hydrocarbons flowing to the BSEE has concluded that there is a need operator’s determination of whether or environment, as a tertiary response. to ensure that personnel are prepared not to deploy and use SCCE. Requiring Thus, the SCCE system, as a whole, and that they, and the SCCE, would be immediate mobilization would prevent would provide a level of redundancy capable of performing as intended. operators from delaying the transit of and flexibility necessary to operate on Therefore, BSEE proposes to require that SCCE equipment to the well in the hope the Arctic OCS. operators conduct tests and exercises that other source control or containment BSEE specifically requests comment (including deployment), at the direction methods will be successful. This on all of the proposed timeframes for of the Regional Supervisor, to verify the provision would ensure that all SCCE is arrival of SCCE at the well in the event functionality of the systems and the available and ready for use. Also, this of a loss of well control. In particular, training of the personnel. provision is being proposed to clarify BSEE invites comments on whether the Regional Supervisor’s discretion to Paragraphs (e) and (f), SCCE Records such timeframes are appropriate, from a require the deployment and use of SCCE Maintenance logistical and feasibility perspective, to in the event of a loss of well control or address a loss of well control. BSEE also Paragraph (e) would require the for purposes of SCCE training and requests comment on whether the cap operator to maintain records pertaining exercises. The Regional Supervisor’s and flow system and containment dome to testing, inspection, and maintenance authority is specifically addressed here could be available and positioned to of the SCCE for at least 10 years, and to allow the Regional Supervisor to act arrive at the well within 3 days, or some make them available to BSEE upon in a timely manner should a loss of well shorter amount of time than 7 days. request. This information would control occur. facilitate a review of the effectiveness of Paragraph (b), Stump Test the operator’s inspection and What are the relief rig requirements for Paragraph (b) would require monthly maintenance procedures and provide a the Arctic OCS? (§ 250.472) stump tests of dry-stored capping stacks, basis of review for performance during As demonstrated by past loss of well and stump tests prior to installation for any drill, test, or necessary deployment. control events around the globe, in some pre-positioned capping stacks. The Because of the limited drilling season cases it may be necessary to drill a relief presence of the equipment alone is not on the Arctic OCS, the 10-year record well to permanently plug an sufficient to ensure the reliability of the retention requirement is necessary in uncontrolled well. The SCCE is an system. Testing of the equipment must order to ensure the availability of a interim solution designed to minimize be done on a regular basis. This meaningful longitudinal data set. environmental harm from well control proposed rule would impose a Additionally, the limited drilling season events, but the ultimate solution may requirement that any capping stack that means that this equipment would be need to be accomplished by a relief is dry stored must be stump tested infrequently used and might be stored well. Arctic OCS exploratory drilling (function and pressure tested to for long periods of time between operations would take place in a region prescribed minimum and maximum seasons. Thus, a 10-year record that has little or no infrastructure, that

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is subject to variable and sometimes complete relief well operations could be involve work below the surface casing. extreme weather, and in which much shorter than 45 days because the Such work can significantly advance an transportation systems could be second rig would already be operating exploratory drilling project and can help interrupted for significant periods of in the Arctic OCS and would require an operator prepare to conduct work time. Also, Arctic OCS exploratory shorter transit time than a standby relief below the surface casing during the drilling operations are complicated by rig staged in Dutch Harbor or at another following drilling season. BSEE requests the fact that they currently take place location. comments on the different types of work only during the ‘‘open water season,’’ or BSEE considered imposing (above the surface casing) that could be that period of time in the summer and prescriptive geographic limitations on performed during the time period set early fall when ice hazards can be the staging of relief rigs in proximity to aside for a relief well to be drilled, if physically managed and there is no exploratory drilling operations, but needed, as well as the economic benefits continuous ice layer over the water. chose instead to propose a performance- and costs associated with this work. Outside of that window, ice based requirement to provide operators While a relief well is the most encroachment may complicate or the flexibility to choose how best to reliable, and in some circumstances the prevent drilling and transit operations, comply with the relief rig obligations. only available, solution to kill and and for that reason it is critical to ensure Operators would need to demonstrate permanently plug an out-of-control that drilling (including relief well their ability to complete relief well well, there could be circumstances in drilling if necessary) and other operations within a maximum of 45 which control could be regained operations affected by sea ice are days, subject to BSEE’s review in the without intervention by a relief well. concluded before ice encroachment. APD process (see proposed Accordingly, BSEE also requests Furthermore, if there is a loss of well § 250.470(e)). The proposed rule would comment on whether there are any control during the drilling season, it is also authorize the Regional Supervisor alternative technological methods, in also important to ensure that, if a relief to direct an operator to begin drilling addition to a relief well, to kill and rig is necessary to stop the uncontrolled the relief well. permanently plug an out-of-control well flow of oil, the relief rig is available and The relief rig could be stored in before seasonal ice encroachment. able to complete all necessary harbor, staged idle offshore, or actively Comments should include, where operations in as short a time as possible. working, as long as it would be capable possible, specific technological Thus, while conducting exploratory of physically and contractually meeting solutions, descriptions of the conditions drilling operations below the surface the proposed 45-day maximum under which an alternative method casing on the Arctic OCS, it is essential timeframe. However, any relief rig must could successfully kill and permanently to position or designate a relief rig in a be a separate and distinct rig from the plug a well, and any research that primary drilling rig to account for the location that would enable it to transit would demonstrate the effectiveness of possibility that the primary rig could be to the well site, drill a relief well, plug such an alternative. destroyed or incapacitated during the For example, some stakeholders have the original well, plug the relief well, loss of well control incident. proposed that the use of subsea shut-in and demobilize from the site prior to Of course, an operator’s actual devices (SIDs) located on the seafloor expected seasonal ice encroachment. timeframe to drill a relief well would be could help significantly reduce the risk This would require the cessation of based on consideration of the distance of a release of hydrocarbons if the BOP exploratory drilling or other work below between anticipated exploratory drilling system fails. SID equipment is the surface casing far enough in advance sites, the availability of adequate staging specifically designed to act as a of the expected return of seasonal ice to locations for relief rigs, the length and redundant safety system and ensure the allow for completion and abandonment complexity of rig transit under Arctic safe and timely shut-in of a well in an of a relief well. OCS Conditions, and the time necessary emergency. Although BSEE believes that The proposed rule would establish a to complete the requisite operations timely access to a relief rig is the surest 45-day maximum limit on the time once on-site. Thus, BSEE specifically way to permanently resolve a WCD necessary to complete relief well requests comment on whether the event in the Arctic, the use of SIDs operations. This timeframe is necessary maximum time limit for deploying a could reduce the risk of a release of to acknowledge the relative lack of relief rig and drilling a relief well hydrocarbons and potentially justify infrastructure and active operations should be more or less than 45 days. giving operators more flexibility in the from which response resources could be The proposed rule expressly provides staging of relief rigs. drawn in the region, as well as the grave that the relief rig would only be Thus, BSEE requests comments on threats of a prolonged loss of well necessary when drilling below or alternative compliance approaches and control to the Arctic environment. If an working below the surface casing (i.e., specifically requests data on the operator were to use a pure standby rig where contact with hydrocarbons performance of SIDs, including (i.e., a rig that is not otherwise operating capable of flowing into the well could operational issues (such as timeframes in the Arctic), Dutch Harbor is the occur). BSEE recognizes that the needed to activate such alternatives). In nearest deep-water port where the proposed relief rig requirement may particular, BSEE requests comments on standby rig could be stationed. BSEE effectively limit the number of days an appropriate staging requirements for a estimates that it would take 20 days to operator can work below the surface relief rig assuming that an SID has been get the rig ready and to transit from the casing at the end of each drilling season. installed at the exploration well. nearest U.S. deep-water port (Dutch The actual length of this limitation Comments are also requested on the Harbor) to the farthest well location would depend on the operator’s plans need for an operator to have an in- (Beaufort leases), 20 days to drill the for staging and deploying a relief rig and season relief well drilling capability if relief well, and 5 days to plug the could extend up to 45 days before the an SID is used at a location that is not uncontrolled well, test it, and move off end of the drilling season (e.g., the subject to ice scouring. the well site. If, on the other hand, an projected return of sea ice). During this BSEE also requests information or operator were to use a second drilling period, however, an operator may be data comparing the relative safety and rig to serve as a relief rig for another able to conduct a number of different environmental risk levels, as well as the drilling rig, the time required to operations at the well site that do not costs, of the equipment and procedures

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that would be required under the withstand the demands of regional analysis for a facility on the Arctic OCS proposed regulations to the risks and conditions. The Arctic Council made would account for the types of hazards costs of equipment and procedures similar recommendations for equipment expected on the Arctic OCS, like ice under any suggested alternative and materials in its 2009 report on floe. Similarly, Job Safety Analyses must approach. Arctic oil and gas operations (see Arctic account for Arctic OCS Conditions, such In any case, BSEE’s existing Council—Arctic Offshore Oil and Gas as ice, extreme cold, snow, and freezing regulations allow operators the Guidelines (2009)). spray. BSEE would not consider an flexibility to develop new technological BSEE’s existing regulation at operator’s SEMS to be effective under solutions and to seek approval for the § 250.418(f) requires that operators § 250.1924 if it were not specifically use of those solutions to fulfill their include in their APD ‘‘evidence that the tailored to the Arctic OCS Conditions regulatory obligations. Under 30 CFR drilling equipment, BOP systems and reasonably anticipated at the facility in 250.141, operators may request approval components, diverter systems, and other question. to use alternative equipment or associated equipment and materials are Similarly, existing §§ 250.1914 and procedures for any specified suitable for operating’’ in areas subject 250.1924 give BSEE broad authority to requirement, provided that the operator to subfreezing conditions, while require that operators on the Arctic OCS is able to demonstrate an equivalent or proposed § 250.473(a) would establish a provide BSEE with information such as improved level of safety and requirement for use of appropriately the names of contractors and the environmental protection. This rated or de-rated equipment and specific scope of their duties and performance-based provision is a key materials. Operators may ensure that timelines for performance in support of part of BSEE’s regulatory program, proposed materials and equipment are an operator’s drilling activities. For which is a combination of prescriptive rated or de-rated appropriately by example, if an operator planned to use and performance-based requirements, referencing manufacturer specifications a contractor for waste disposal, because it gives operators the ability to and would not need to obtain cementing, or logging, BSEE would comply with regulatory requirements equipment or material rating by an expect the operator to inform BSEE of through a variety of methods if they can independent third-party rating entity. this intent, along with any other make the necessary demonstrations to Upon finalization of this provision, operations contracted out, and the BSEE. It also serves to encourage the failure to use appropriately rated or de- names of those contractors. Because the development and utilization of rated equipment and materials could existing performance-based SEMS alternative technologies to satisfy the subject an operator or its contractor to regulations are adequate to cover Arctic specific requirements contained in the enforcement action by BSEE. OCS operations when properly regulations. Paragraph (b) would require operators implemented, no major modifications to employ measures to address human are needed to Subpart S for the Arctic What must I do to protect health, safety, factors associated with weather OCS. However, additional provisions property, and the environment while conditions that can be reasonably are necessary to bolster auditing operating on the Arctic OCS? (§ 250.473) expected during Arctic OCS exploratory expectations for Arctic OCS exploratory BSEE proposes to add a new § 250.473 drilling operations. This provision is drilling operations. that would require performance-based designed to ensure safety of the This rule proposes to increase the measures in addition to those listed in workforce and protection of the audit frequency and facility coverage for § 250.107 to protect health, safety, environment by requiring operators to intermittent Arctic OCS exploratory property, and the environment during account for weather conditions that drilling operations. While operators are exploratory drilling operations on the might impact decision-making and generally required to conduct their Arctic OCS. personnel health and safety. On the SEMS audit every 3 years after their Paragraph (a) would require that all Arctic OCS, the workforce would initial audit, BSEE believes it would be equipment and materials proposed for encounter harsh environmental critical to perform a SEMS audit of use in exploratory drilling operations on conditions, including extreme cold, Arctic OCS exploratory drilling the Arctic OCS be rated or de-rated for snow, ice, and freezing spray, which operations and all related infrastructure service under conditions that could be could cause, among other medical each year in which drilling is reasonably expected during operations. conditions, frost bite and breathing conducted, because of the particularly Arctic OCS Conditions place strains on difficulties that can impair performance challenging conditions and high-risk operating equipment not experienced and judgment. Measures that operators nature of those activities. This Arctic elsewhere on the OCS. This necessitates would be required to use to address OCS audit would require operators to that such equipment be rated or de-rated human factors include, but are not ensure that all safety systems are in for use under such conditions in order limited to, provision of proper attire and place and functional prior to to ensure that it could operate safely equipment, construction of protected commencing or resuming, activities for and effectively.8 For example, cranes work spaces, and management of shifts. a new drilling season, as well as to must be designed to withstand ice loads conduct the offshore portion of the audit that can be anticipated to build up What are the auditing requirements for while drilling is under way. An operator during Arctic OCS operations and my SEMS program? (§ 250.1920) conducting Arctic OCS exploratory operational limitations of components In 2013, BSEE published an update to drilling operations may not combine its under extreme cold temperatures (e.g., Subpart S, which established additional Arctic OCS facility audit(s) with audits reduced tensile strength) must be measures operators must take to manage of its non-Arctic OCS facilities to satisfy understood and accounted for. Also, safety and to protect the environment the facility sampling requirements capping and containment equipment during their OCS operations. The incorporated into Subpart S. must be specifically designed to requirements under this subpart are As with SEMS audits in other OCS designed to be performance-based to regions, there would be an onshore and 8 It is likely that Arctic Conditions could have an allow operators to tailor their offshore portion. However, for Arctic adverse impact on the performance of some equipment and result in this equipment being management systems to their particular OCS exploratory drilling operations, an operated below the rated maximum performance operations, including operations on the operator would be required to submit a level. Arctic OCS. For example, a hazards separate audit report and corrective

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action plan (CAP) for the onshore and include adverse weather conditions on operators develop equipment and offshore portions of its audit. To provide the Arctic OCS and should factor in strategies to respond to such challenges. an opportunity for BSEE to review the anticipated disruptions or delays that The other purpose of this definition is onshore portion of the audit report and could result from operational periods to specifically differentiate terminology CAP prior to commencement of drilling, where conditions would exceed safe used to describe tactics for responding they must be submitted no later than operating parameters and prohibit spill to oil in water containing sea ice from March 1st in any year in which drilling response activities from occurring. is planned. The operator would also be BSEE proposes to add more specific terminology used to describe resources required to start and close the offshore weather terms, i.e., extreme cold, and tactics employed to manage ice portion of the audit within 30 days after freezing spray, snow, and extended during drilling operations. An operator’s first spudding of the well or entry into periods of low light, to this definition OSRP must address ice intervention an existing wellbore for any purpose for clarity regarding the weather practices specifically intended to from that facility. The operator would conditions in which we expect lessees increase the effectiveness of an oil spill be required to submit the audit report or operators to be able to conduct response operation. This term relates to and CAP from the offshore portion of response operations on the Arctic OCS. a new requirement for the ‘‘emergency the audit within 30 days of the close of The addition of this terminology is response action plan’’ section of OSRPs that portion of the audit. This is intended to ensure that operators for Arctic OCS facilities, proposed at designed to enable the auditors to procure equipment that could respond § 254.80(a). Please refer to the analyze offshore operations while they in these difficult, but feasible, discussion related to that provision for are actively underway, and to ensure conditions and utilize spill response further explanation of the need for, and that BSEE is made aware of any issues technology that would be suitable for importance of, this item in operators’ surrounding those operations as soon as weather conditions encountered within OSRPs. practicable. To ensure that any critical the Arctic region. With this outcome in problems that are revealed by the audit mind, we considered establishing Spill response plans for facilities are addressed, BSEE would be able to quantitative descriptions specific to ice located in Alaska State waters seaward order all or part of the operations to be and temperature. For example, to ensure of the coast line in the Chukchi and shut down, if necessary. that identified response capabilities Beaufort Seas. (§ 254.55) would be able to operate in certain Oil Spill Response levels of ice, one option considered was The OSRPs for facilities in State Part 254—Oil-Spill Response to include 30 percent ice coverage as a waters seaward of the coast line must be Requirements for Facilities Located condition under which BSEE would submitted to BSEE for approval and Seaward of the Coast Line expect response activities to proceed. must comply with the requirements in However, BSEE concluded that using Subpart D. The proposed provision Definitions. (§ 254.6) qualitative terms would allow the would require the OSRP for any facility This section would include a revised maximum flexibility in determining the conducting exploratory drilling from a definition of Adverse weather appropriate performance-based MODU in Alaska State waters seaward conditions and add new definitions of approach necessary to respond quickly of the coast line within the Beaufort or Arctic OCS and Ice intervention and effectively to an operator’s WCD to Chukchi Seas to address the additional practices. These definitions are the maximum extent practicable, under requirements set forth in the new necessary because they are important in conditions reasonably anticipated proposed Subpart E, discussed in detail establishing the standard for response during operations. This could encourage later. BSEE has determined that the capability based on environmental research and development, including considerations justifying the various conditions unique to the Arctic region. Federally funded projects, to continue Adverse weather conditions—The to enhance the standard response provisions of proposed Subpart E would current regulations contain a definition capabilities. also apply to these operations. for the term ‘‘adverse weather Arctic OCS — For an explanation of Some requirements in Subpart E conditions,’’ which means conditions the definition of Arctic OCS, see the address planning and exercises related under which spill response activities are definitions discussion at the beginning to the use of source control and subsea difficult but nevertheless required to of the Section-by-Section analysis. containment equipment such as capping proceed. The concept reflects the fact Ice intervention practices—This new stacks or containment domes. Operators that operators are required to pursue oil term describes the equipment, vessels, would be required to have access to and spill response activities in all but the and procedures used to increase the use this equipment when conducting most severe conditions where such effectiveness of response techniques and exploratory drilling from a MODU on activities would become particularly equipment in encountering and the Arctic OCS, pursuant to proposed dangerous or impossible. This term is mitigating the impacts of spilled oil regulations in Part 250, but those important, especially for Arctic OCS when sea ice is present. After oil exploratory drilling, because it describes spreads over a broad area, the ability to conducting similar activities in State the difficult conditions in which a recover, burn, or disperse oil depends waters are not currently subject to the response is still expected to occur and on the rate at which the oil can be same requirements. The State of Alaska, excludes conditions that present too identified, tracked, and encountered however, has State requirements for much of a risk to responder health and (i.e., encounter rate). When ice is source control. As such, a response plan safety for a response to proceed. present during efforts to mitigate the covering operations in State waters of Operators are expected to consider the impacts of spilled oil, the ice could act the Beaufort or Chukchi Seas must delays and challenges resulting from as a barrier that would obscure, limit, or address how the source control adverse weather when developing their prevent access to the oil, and could also procedures selected to comply with OSRP. The resulting response strategies interfere with the proper operation of State law would be integrated into the should reflect the right type and amount response equipment. Accordingly, ice planning, training, and exercise of resources necessary to effectively presents unique and significant requirements of proposed §§ 254.70(a), respond to a WCD scenario that would challenges, and it is important that 254.90(a), and 254.90(c).

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Subpart E—Oil-Spill Response arising from extended periods of time resulting from the prevalence of sea ice Requirements for Facilities Located on without drilling. on portions of the waters overlying the the Arctic OCS Paragraph (a) would address the need Arctic OCS during all but the summer to integrate emergency well control and and early fall months. This limitation Purpose (§ 254.65) containment equipment and personnel precludes active exploratory drilling This rulemaking proposes to create a into spill response planning to ensure operations from MODUs on the OCS for new Subpart E, in order to provide coordination during a loss of well up to 8 months of the year, potentially owners and operators of exploratory control event. Regaining control over leaving associated response equipment, drilling facilities on the Arctic OCS with the well and containing discharged materials, and personnel idle for additional requirements for oil spill liquids is the first line of response to a extended periods of time or leading to response preparedness that would well control incident, following failure their use in other regions of the OCS or address the challenging conditions that of primary prevention devices. elsewhere. operators would likely encounter on the Accordingly, it is critical that those It is important for operators to ensure Arctic OCS. The main purpose for the efforts be integrated and coordinated that their spill response capabilities proposed language is to establish with the spill response efforts designed would not deteriorate or lose their specific planning requirements that to remove or treat oil in the water that effectiveness due to such extended would maximize oil spill response would proceed at the same time. periods of inactivity and to ensure that technology application and emphasize a Although requirements for well control they would remain capable and complete response system that would be and containment equipment operability adequate to conduct a quick and designed to address the environmental and safe use fall under regulations based effective response to an oil spill during and logistical challenges inherent to on the OCSLA, its integration with the active exploratory drilling operations. spill response activities in the Arctic oil spill response activities is While BSEE encourages owners or OCS region. This would include imperative. Active information sharing operators with approved OSRPs to planning for a WCD that occurs late in through coordinated planning efforts commit to a continuous exercise, the drilling season. will ensure that oil spill response and training, and equipment maintenance BSEE chose to create a new subpart source control and containment regime that inherently builds response instead of incorporating the specific operations would be synergistic and skills over time, the Arctic OCS seasonal requirements throughout its existing mutually understood when called upon drilling limitations challenge the regulatory provisions. This is similar to to function together in the event of a practicality of continuously maintaining the approach that was taken to address loss of well control. requirements specific to State waters in Paragraph (b) would address these capabilities while there is not a Subpart D. It is important to note that responder health and safety by ensuring risk of a discharge. To address this Subpart E would add requirements for that the correct resources would be challenge, BSEE would require that operations on the Arctic OCS and that available to protect responders from owners or operators, in connection with all other applicable requirements in Part hazards specific to the Arctic region. It seasonal exploratory drilling activities, 254 would still apply. BSEE chose to is critical for operators to address in review and submit modifications to reserve §§ 254.66 through 254.69; their OSRPs the influence of adverse their OSRP as appropriate, to §§ 254.71 through 254.79; and §§ 254.81 weather conditions, including extreme demonstrate that all required resources through 254.89 within proposed cold, snow, ice, freezing spray, and would be ready, before oil is handled, Subpart E. extended periods of low light, on spill stored, or transported, to respond to a spill to the maximum extent practicable. What are the additional requirements response personnel. These conditions could impair human decision-making This OSRP review and update would for facilities conducting exploratory address resource allocations, changes, drilling from a MODU on the Arctic and physical abilities and create risks to personnel, operations, and the and, most importantly, the re- OCS? (§ 254.70) environment. Accordingly, this establishment of resource readiness well BSEE proposes to add § 254.70 that provision would require that operators before there is a risk of discharge. BSEE would address general oil spill response describe in their OSRPs the steps they would review and approve proposed planning requirements for operators would take to address those factors to OSRPs for resource maintenance during using MODUs to conduct exploratory ensure that their planned oil spill extended periods without drilling drilling on the Arctic OCS. These response activities could be conducted activity through established OSRP requirements include incorporating the in a safe and effective manner. The approval, modification, revision, and support mechanisms for capping stacks, types of considerations that BSEE would update processes described in §§ 254.2, cap and flow systems, containment expect to be addressed include, but are 254.30, and 254.53, and the proposed domes, and other similar subsea and not limited to, proper attire and update described in this section. surface devices and equipment and equipment, protected work spaces, and What additional information must I vessels, required by proposed § 250.471, proper shift management. The objective include in the ‘‘Emergency response into oil spill response incident action would be to ensure that the equipment action plan’’ section for facilities planning. They would also require needed to protect human health against conducting exploratory drilling from a operators to address the influence of adverse weather conditions would be MODU on the Arctic OCS? (§ 254.80) adverse weather conditions on available immediately when a response responders’ health and safety during is required. BSEE also proposes to create a new spill response activities. Finally, they Paragraph (c) would address specific § 254.80 that would focus on additional would require operators, prior to challenges to maintaining preparedness information requirements for the resuming seasonal exploratory drilling to respond to a spill when drilling is emergency response action plan section activities, to review their OSRPs, and seasonal and there are extended periods of an OSRP when the operator proposes modify as necessary, to address changes without any risk of an oil discharge. to conduct exploratory drilling to the location or status of response One of the substantial challenges operations from a MODU on the Arctic resources or the arrangements for presented by operations on the Arctic OCS. The additional requirements supporting logistical infrastructure OCS is the seasonal drilling limitation would include specifics regarding ice

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intervention practices, staging management system to ensure that For oil spill response planning, BSEE considerations, and tracking abilities. vessels and equipment would be readily would not consider it adequate Sea ice could reduce the effectiveness available, along with sufficient preparedness for an operator to assume of spill response techniques by limiting personnel and berthing, to carry out that the Federal On-Scene Coordinator access to spilled oil and decreasing oil response activities. would call upon assets under the encounter rates. Therefore, in paragraph The limited support and response control of other entities during a (a), BSEE would require Arctic OCS capabilities and capacities that exist in response. As previously mentioned in exploratory drilling operators to most Alaska coastal communities the Part 550 discussion, it is important describe their ice intervention practices mandate that operators provide for to note that an effective and immediate and how they would improve the nearly all aspects of an oil spill response removal or mitigation of a discharge effectiveness of spill response on the Arctic OCS. Paragraph (b)(2) must be achieved to the maximum equipment and response strategies in would require operators to identify how extent practicable by private sector the presence of sea ice. Increasing oil they intend to ensure an immediate and efforts. encounter rates when sea ice is present uninterrupted flow of supplies, maximizes efficiency in removing or What are the additional requirements response equipment, personnel, and for exercises of your response personnel mitigating the adverse impacts from oil shore-based support services to sustain in the water as quickly and effectively and equipment for facilities conducting the response activities until terminated exploratory drilling from a MODU on as possible. The necessary practices and 9 by the Unified Command. The the Arctic OCS? (§ 254.90) equipment would work to mitigate the components of the logistics supply impacts of ice on response operations chain include, but are not limited to: BSEE proposes to create a new and extend the period in which oil spill Personnel and equipment transport § 254.90 that would require operators to response activities could occur. They services; airfields and types of aircraft incorporate the additional requirements would also ensure that appropriate ice that can be supported; capabilities to contained within proposed §§ 254.70 management vessels would be included mobilize supplies (e.g., response and 254.80 into their oil spill response when determining equipment equipment, fuel, food, fresh water) and training and exercise activities; would requirements that would enhance all personnel to the response sites; onshore require operators to provide notice of response options and strategies staging areas, storage areas that may be the commencement of covered included in the plan. used en route to staging areas, and camp operations; and would clarify the Operators must ensure that they facilities to support response personnel authority of the Regional Supervisor to would have the capability to initiate a conducting offshore, nearshore and conduct exercises, prior to and during rapid response to the site of an offshore shoreline response; and management of exploratory drilling operations, to test oil spill, as well as to sustain and, when recovered fluid and contaminated debris response preparedness. These necessary, repair response equipment and response materials (e.g., oiled requirements are all essential to ensuring and verifying an operator’s on-site without having to rely on shore- sorbents), as well as waste streams readiness to conduct response activities based assets that could become generated at offshore and on-shore inaccessible due to weather conditions on the Arctic OCS. support facilities (e.g., sewage, food, and As described previously with respect or other factors. Due to the remote medical). Operators must also plan to locations where Arctic OCS exploratory to proposed § 254.70(a), it is essential implement mitigation measures to drilling operations would occur, and the that the relevant support mechanisms reduce the impacts that surged limited infrastructure and logistical (personnel, materials, and vessels) for personnel, equipment, and increased support capabilities in the coastal capping stacks, cap and flow systems, activity would have on communities communities, operators would need to and containment domes, and other where staging areas, camp facilities, and consider strategic staging locations and similar subsea and surface devices and waste handling sites are established. support mechanisms for effectively equipment and vessels, be integrated In paragraph (c), BSEE proposes to deploying and resupplying oil spill and coordinated with the spill response require operators to describe how they response resources. For the Arctic OCS, planning and activities that would take would maintain an effective tracking initial response capabilities, in many place alongside them, and that those and management system that is able to instances, would need to be based arrangements are suitable for locate in real time all response offshore to effectively meet the deployment on the Arctic OCS. equipment and personnel conducting requirements in Part 254. Pursuant to Accordingly, proposed § 254.90(a) response activities, or transiting to and paragraph (b)(1), operators would be would require that operators incorporate from the response site(s), and to required to describe how they would the required personnel and equipment maintain assets in close proximity to maintain a current picture of resources into spill-response training and exploratory drilling operations to ensure entering and exiting staging areas and exercises to ensure the necessary and that adequate response times would be the operational status of those resources. appropriate level of coordination achievable and response operations This system would be essential to between source control and subsea would be sustainable. The weather provide the Unified Command with containment activities and spill conditions that are common to the area information necessary to ensure that response activities. (e.g., dense fog, high sea states) often sufficient personnel and equipment Similarly, to ensure that these training preclude access to the area by small would be available to meet the response and exercise activities would accurately vessels and aircraft for days at a time. needs. reflect and test the full scope of The ability to mount and maintain an Part 254 requires operators to describe response capabilities necessary for expeditious response once a release all equipment they plan to use to Arctic OCS operations, proposed occurs would be negatively impacted if respond quickly and effectively to an oil § 254.90(a) would also require that response assets or supporting materials spill to the maximum extent practicable. operators incorporate other proposed were significantly delayed from arriving response plan features from proposed 9 The Unified Command is a response construct at the spill site due to inclement under the incident command system headed by §§ 254.70 and 254.80 into those weather. Accordingly, operators must Federal authorities and coordinated with the State activities. As outlined in proposed establish an offshore resource and other parties. § 254.90(c), the Regional Supervisor

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may direct operators to deploy response equipment in order to test their exploratory drilling from a MODU on resources, as part of announced or integration and coordination with other the Arctic OCS to provide 60-days’ unannounced exercises, to verify an oil spill response activities. However, notice before handling, storing, or operator’s preparedness for responding SCCE is not required to be deployed transporting oil to give BSEE adequate to a spill on the Arctic OCS. These under the annual and triennial opportunity to verify that the operator’s exercises might include the deployment equipment deployment requirements personnel and equipment are in of capping stacks, cap and flow systems, outlined in § 254.42(b)(2). compliance with existing regulations. containment domes, or other supporting Finally, proposed § 254.90(b) would require operators planning to conduct

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D. Arctic Exploratory Drilling Process Flowchart

BILLING CODE 4310–VH–; 4310–MR–P

•:• Integrated 0Qerations Plan (550.204] •!• -- Indicates proposed new provisions; all existing applicable regulations continue to \11 apply unless otherwise noted; all citations , are to Title 30 of the CFR ExQioration Plan OSRP Submitted for AQQroval • 550.211-228 requirements . In compliance with Part 254; •!• Arctic Suitability [550.220(c)(l)] •!• Including new Subpart E •!• Ice and Weather [550.220(c)(2)] •:• SCCE, Relief Rig [550.220(c)(3)-(4)J •!• Resource Sharing [550.220(c)(5)] ..I r-"""' " \11 "0 " iii" EPApproval OSRP Approval SEMS in place [Part 250, SubpartS] ::> ::> :r I $> "0 ~ "' 5'~ SEMS Onshore Audit $> APD Submission •!• (Report and CAP by March 1) '"::> [250.1920(b)-(e)] c. BOEM- BSEE . 250.410-418 requirements '!? •!• Arctic Suitability [250.470(a)] " "0"' ' ~ •!• Transition Operations [250.470(b)] Arctic OCS ~c;· •!• Objectives, Timelines, and ::> Exploration Contingency Plans [250.470(c)] ' •!• Weather and Ice [250.470(d)] •!• Notification of RS (60 days before ..__ Planning, •!• Relief rig plans [250.470(e)] drilling) [254.90(b)] •!• SCCE Capabilities [250.470(f)] Permitting, and •!• API RP2N description [250.470(g)] Operations I Flowchart ~ APD Approval I I "' I Commence EKQioration Drilling Drilling 0Qerations Reguirements: •!• Start with well cellar (or . Compliance with all generally applicable law and regs f<~ equivalent) if ice scour [250.402] •!• Properly rated/de-rated equipment and materials [250.473(a)] -- •!• Address human factors in weather conditions [250.473(b)] ~ 5' •!• Offshore Portion of SEMS Audit with report and CAP [250.1920(b)-(e)] O'Q •!• Capture of Mud and Cuttings (as required) [250.300(b)] 0 'tl t •!• Real-time operational monitoring [250.452] "' •!• Weather and Ice tracking and forecasting [250.470(d)] a·~ Drilling or Working Below Surface •!• Reporting of ice, ice management, and kicks [250.188(c)] ~ Casing •:• Monthly Capping Stack stump tests [250.471(b)] •!• 7-day BOP pressure testing [250.447(b)] •!• SCCE Staged [250.471(a)] •!• Personnel training [250.470(f)(5); 254.70(a); 254.90(a)] -- •!• Relief Rig Staged [250.472] ·~ •!• Drills and exercises (SCCE and OSR) [250.471(d) & (g); 254.90(a) & (c)] •!• Protection of well and equipment upon TA (250.402(c)] I J, ......

Offseason 0 "~ •!• Spill response readiness and Conclusion of on-site operations maintenancel[~&.70(c)] iE"""""""""""- (including abandonment) 5'~ •!• Maintenance of data and records •!• Transition per APD (250.470(b)] .. [250.452(b); 250.471(e) & (f)] ;-

BILLING CODE 4310–VH–; 4310–MR–C

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V. Conclusion State, local, or tribal governments or perform under existing regulatory Overall, the proposed rule would communities (also referred to as authorities. After considering the input further the Nation’s energy goals in ‘‘economically significant’’); received and our direct experience from prudently exploring frontier areas, such 2. Creates serious inconsistency or Shell’s 2012 Arctic operations, BOEM as those in the Arctic OCS, by otherwise interferes with an action and BSEE have concluded that establishing operating models and taken or planned by another agency; additional exploratory drilling 3. Materially alters the budgetary requirements tailored specifically to the regulations would enhance and clarify impacts of entitlement grants, user fees, extreme, unpredictable, and rapidly existing regulations and would be loan programs, or the rights and changing conditions that exist in the appropriate as a part of the Arctic OCS obligations of recipients thereof; or Arctic region. The proposed regulations oil and gas regulatory framework. 4. Raises novel legal or policy issues The proposed rule would further the reflect the need for earlier and more arising out of legal mandates, the comprehensive planning of operations, Nation’s interest in exploring frontier President’s priorities, or the principles particularly with respect to emergency areas, such as those in the Arctic OCS set forth in E.O. 12866. response and safety systems. The region, safely and responsibly, and proposed Arctic OCS exploratory B. E.O. 12866 would establish specific operating models and requirements that account drilling rule would institutionalize a E.O. 12866 provides that OMB’s for both the extreme, changing proactive approach to safety. Office of Information and Regulatory conditions that exist on the Arctic OCS Vulnerabilities would be identified in Affairs will review all significant rules. and Alaska Natives’ cultural traditions the planning phase and corrections Pursuant to the procedures established and need to access subsistence would be made to reduce the likelihood to implement § 6 of E.O. 12866, OMB resources. The proposed regulations of an incident occurring. The proposed has determined that this proposed rule would require comprehensive planning rule would also ensure that those plans is significant because the estimated of operations, especially for emergency would be carried forward and executed annual costs or benefits exceed $100 response and safety systems. The in a manner that would ensure safety million in at least one year of the proposed rule would seek to and environmental protection under the analysis period. The following institutionalize a proactive approach to challenges presented to operations by discussion summarizes the economic offshore safety. A goal of the proposed Arctic OCS Conditions. analysis; a more detailed Initial RIA can Finally, the proposed rule would rule is to identify potential be found in the regulatory docket for integrate emergency response, vulnerabilities early in the planning this proposed rule at comprehensive operational and safety process so that corrections can be made www.regulations.gov (in the Search box, planning, contractor oversight, and to decrease the potential of an incident use BSEE–2013–0011). BOEM and BSEE upfront mutual aid agreements. The occurring. The requirements in the request comments on the assumptions proposed combination of prescriptive proposed rule also are designed to used in the Initial RIA and on other and performance-based requirements ensure that those plans would be possible alternatives to consider, would precipitate robust consideration executed in a safe and environmentally including alternatives to the specific of how safe exploration of the Arctic protective manner despite the provisions contained in the proposed region is to be achieved. challenges the Arctic OCS presents. rule. VI. Procedural Matters In particular, this proposed rule 1. Need for Regulation would address several important A. Regulatory Planning and Review This proposed rule seeks to enhance objectives, including ensuring that (E.O. 12866 and E.O. 13563) requirements for safe, effective, and operators: Changes to Federal regulations must responsible Arctic OCS oil and gas i. Design and conduct exploration undergo several types of economic activities. Although there is currently a programs in a manner suitable for Arctic analyses. First, E.O. 12866 and E.O. comprehensive OCS oil and gas OCS conditions; 13563 direct agencies to assess the costs regulatory program, DOI engagement ii. Develop an IOP that would address and benefits of available regulatory with partners and stakeholders, all phases of their proposed Arctic OCS alternatives and, if regulation is including environmental groups and exploration program and submit the IOP necessary, to select a regulatory Alaska Natives, reveals the need for new to BOEM at least 90 days in advance of approach that maximizes net benefits and enhanced regulatory measures for filing an EP; (accounting for the potential economic, Arctic OCS exploratory drilling. The iii. Have access to and the ability to environmental, public health, and safety current rulemaking focuses primarily on promptly deploy SCCE while drilling effects). E.O. 13563 emphasizes the reasonably foreseeable Arctic OCS below or working below the surface importance of quantifying both costs exploratory drilling activities that use casing; and benefits, reducing costs, MODUs, and on related operations iv. Have access to a separate relief rig harmonizing rules, and promoting during the Arctic open-water drilling located so that it could timely drill a flexibility. Under E.O. 12866, an agency season (generally late June to early relief well, in the event of a loss of well must determine whether a regulatory November). After the proposed control, under the conditions expected action is significant and, thus, subject to requirements for exploratory drilling are at the site; the requirements of the E.O. and OMB finalized and applied to those activities, v. Have the capability to predict, review. Section 3(f) of E.O. 12866 DOI will be able to assess whether it track, report, and respond to ice defines a ‘‘significant regulatory action’’ should apply similar requirements to conditions and adverse weather events; as any rule that: development drilling. vi. Effectively manage and oversee 1. Has an annual effect on the This proposed rule builds on input contractors; and economy of $100 million or more, or received from partners and vii. Develop and implement OSRPs adversely affects in a material way the stakeholders, key components of Shell’s designed and executed in a manner economy, a sector of the economy, 2012 Arctic exploratory drilling suitable for the unique Arctic OCS productivity, competition, jobs, the program, and the additional measures operating environment and have the environment, public health or safety, or BOEM and BSEE required Shell to necessary equipment, training, and

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personnel for oil spill response on the environmental concerns in the Arctic control were to occur and drilling a Arctic OCS. region that partners and stakeholders relief well becomes necessary. Although The following provisions of the have raised, and thus would not achieve a relief rig was required by DOI during proposed rule are expected to result in the objectives of this proposed rule. In Shell’s 2012 Arctic operations, and additional costs, above the baseline, to addition, the proposed rule would although BOEM and BSEE anticipate the affected industry: confer additional protections on the that we would exercise our existing i. Additional Incident reporting environment and Alaska Native cultural authorities to require a relief rig for any requirements; activities. future exploratory drilling on the Arctic ii. Additional pollution prevention OCS, we chose not to include the capital requirements; 3. Economic Analysis costs associated with staging a relief rig iii. Additional requirements for BOEM and BSEE evaluated the that may not be conducting exploratory securing wells; potential cost impacts of the proposed drilling (i.e., a standby rig) in the iv. Additional BOP pressure testing rule against the baseline. The analysis baseline.11 Instead, we conservatively requirements; reflects only the activities and capital chose to include such costs as part of v. Real-time monitoring requirements; investments the proposed rule requires the costs of the rule, in the detailed vi. Additional information that represent a change from the economic analysis contained in the requirements for APDs; baseline. The analysis covers 10 years Initial RIA. These costs are estimated at vii. Incorporation of proposed draft (2015 through 2024) to ensure it $276 million per year per standby rig. API RP 2N, Third Edition; captures important benefits and costs Based on EPs and other information, viii. Additional SCCE requirements; that could result from the proposed however, BOEM and BSEE believe that, ix. Relief rig requirements; rule.10 When summarizing the costs and in the future operators would likely x. Additional auditing requirements; benefits, we present the estimated designate a second operating rig to be a xi. Real-time location tracking annual effects and the 10-year relief rig (instead of staging a dedicated requirements; discounted totals using discount rates of standby relief rig) because, over time, xii. IOP requirements; 3 and 7 percent, per OMB Circular A– the increased presence of multiple xiii. Additional requirements for EPs; 4, ‘‘Regulatory Analysis.’’ BOEM and operating rigs on the Arctic OCS would and BSEE welcome comments on this make it easier for one operating rig to be xiv. Industry familiarization with the analysis, including comments on the designated as a relief rig for another rule. assumptions, the baseline, the methods operating rig. Nonetheless, because an 2. Alternatives used, and on the potential sources of operator may choose to deploy a data or information on the costs and dedicated standby relief rig, the As explained in the Initial RIA, BOEM potential benefits of this proposed rule. economic analysis conservatively and BSEE have considered three i. Assumptions includes the estimated costs for a alternatives for dealing with the safety The baseline refers to existing standby rig for 2015 and 2016. and environmental concerns that regulatory requirements, industry In addition, costs associated with exploratory drilling activities on the standards, and operator prudence. documenting a relief rig plan are not Arctic OCS have raised: According to OMB’s Circular A–4, the included in the baseline for the analysis i. Promulgate the rule changes baseline should be ‘‘the best assessment and are included in the economic described in this proposed rule; or of the way the world would look absent analysis. ii. Promulgate the rule changes the proposed action.’’ Thus, the b. Relief Rig Activity Costs: The described in the proposed rule without economic analysis excluded activities or proposed rule would establish a 45-day including the 7-day BOP pressure capital investments that existing maximum limit on the time necessary to testing requirement for Arctic OCS regulations require as well as impacts complete the relief well operations exploratory drilling operations (in resulting from the incorporation of activities. This provision effectively § 250.447 of the proposed rule); or industry standards with which industry would require the cessation of iii. Take no regulatory action and voluntarily complies. The baseline also exploratory drilling or other work below continue to rely on existing oil and gas includes only costs associated with the surface casing far enough in advance regulations, industry standards, and requirements that BOEM or BSEE have of the expected return of seasonal ice to operator prudence. previously routinely imposed in other allow for completion and abandonment BSEE has decided not to issue a regions under their existing regulatory of a relief well. BOEM and BSEE proposed rule without the 7-day BOP authorities, but does not include the approved plans for Shell’s 2012 Arctic testing requirement. The additional costs described as follows: operations required drilling operations testing requirement would help ensure a. Relief Rig Capital Costs: The in zones that can support the flow of that BOPs deployed in the Arctic OCS proposed rule requires Arctic OCS liquid hydrocarbons in measurable function properly and reduce the risk of operators to have access to a separate quantities into the well to be concluded blowouts. BSEE has determined that the relief rig located such that it could 38 days before November 1, based on total cost to industry of including this timely drill a relief well if a loss of well satellite imagery showing the 5-year requirement is approximately $135.1 historical average of earliest million over the 10-year analysis period 10 As explained in the Initial RIA, we used a 10- encroachment of sea ice over the (with 7 percent discounting). The cost year period for this analysis because of the applicant’s drill site and the estimated summary tables below present the total uncertainty associated with predicting industry’s time required to drill a relief well. Thus, costs of the proposed rule with and activities and the advancement of technical capabilities. For example, the costs associated with without the additional BOP pressure a particular new technology may decrease as the 11 Although Shell included a relief rig testing requirements. technology is adopted more broadly over time. In requirement in its Beaufort Sea and Chukchi Sea BOEM and BSEE also have decided to other cases, an existing technology may be replaced EPs for the 2012 season (which BOEM approved move forward with this proposed rule, by a lower-cost alternative. Extrapolating results and which were subsequently incorporated in beyond this 10-year time frame would produce Shell’s APDs, as approved by BSEE), BOEM would in lieu of taking no regulatory action, more ambiguous results and, therefore, be have required that a relief rig be included in Shell’s because relying on the regulatory status disadvantageous in determining actual costs and EPs under the authority currently found in 30 CFR quo would not address the safety and benefits likely to result from this proposed rule. 550.213 and 550.220 in any event.

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the baseline for this analysis includes of drilling, is equivalent to $12 million was not allowed to drill into this 38-day requirement from 2012. per day in sunk costs.12 hydrocarbon bearing zones). If the Accordingly, the potential costs of the Any calculation of opportunity costs alternative work was of similar proposed 45-day maximum timeframe should include an estimated return on economic value, there would be no include only the costs of the additional investment. Such a calculation could be opportunity cost. However, it is likely 7 days (45 days minus 38 days) not based on the OMB Circular A–4 the alternative work would have a lesser included in the baseline, during which estimate of the average before-tax rate of value than the forgone work, and thus drilling or work below the surface return to private capital in the U.S. only partially offset the opportunity casing could not take place. economy (7 percent) or could be based cost. on the industry stated average return on The Initial RIA assumes that, during We recognize that the requirement to capital (10 percent). 10 years of exploratory drilling have the capability to drill a relief well Any calculation of opportunity costs operations, primary rigs (up to four per to permanently kill an out-of-control should also estimate the number of days season during 2018–2024) will conduct well may lead to a reduction in the per season that the operator could not a total of 32 drilling campaigns. During number of days during which operators conduct work below the surface casing. those drilling campaigns, costs can perform work below the surface While the proposed rule would impose associated with each rig will be highly casing during the drilling season. There a maximum period of 45-days for a variable. Current estimates of these costs will be costs and benefits associated relief rig to deploy and complete a relief range from $ 2 million to $12 million with this requirement. Those costs well and, thus, a maximum of 45-days per day. The breadth of this range, (including ‘‘opportunity costs’’) may during which work below the surface combined with the number of also include costs resulting from a casing would not occur, the actual significant additional variables (number reduction in the number of wells that number of days during which an of days affected; rate of return), makes can be drilled during the term of the operator would not be able to conduct it difficult to estimate a range of annual lease under which the operator is drilling or other work below the surface opportunity costs. Additional data conducting exploratory drilling casing is subject to a number of related to operating costs, forecasted operations. variables. As discussed previously, we positioning of relief rigs, the economic estimate that it would take 20 days to The Initial RIA for the proposed rule effect of operating two rigs in theater prepare and transport a rig from the during the same season, and other discusses the challenges associated with nearest U.S. deep water port (Dutch significant variables may provide the estimating opportunity costs. Because Harbor) to the farther well location basis for meaningful estimates of annual the Arctic OCS is a frontier area for (Beaufort leases), 20 days to drill the opportunity costs associated with the drilling operations, there are very few relief well, and five days to plug the requirement that a relief rig be able to data points that would provide the basis uncontrolled well, test it, and move off deploy and complete a relief well for accurate estimates. Any attempt to the well site. Further, the actual time within 45 days of the end of the drilling calculate opportunity costs would have needed for completing a relief well season. We encourage comments on to take into account the significant operation would vary depending on a such estimated costs, as well as benefits, number of uncertainties associated with number of factors. For example, the with supporting data, including data on exploratory drilling, the nature of the estimated actual time needed would the uses to which a primary rig could be economic benefits sought to be achieved depend on how an operator proposes to put during the time it is not working by such operations (e.g. booking stage a relief rig; e.g., if it chooses to below the surface casing. Any such reserves), and a variety of other factors. deploy a dedicated standby relief rig or estimates should, if appropriate, include These factors will often depend upon to designate a second operating rig as a estimated return on capital that would the decisions an operator makes on how relief rig. In the latter case, a relief rig be forgone as a result of these to conduct drilling operations during operating in the near vicinity of the requirements. each drilling season and the nature of primary rig, as proposed by Shell in its c. BOP Pressure Testing the opportunities for other productive revised Exploration Plan for 2015,13 Requirements: We do not include the 7- use of the assets. may be able to reach the site of a day BOP pressure-testing requirements Data available to BOEM and BSEE blowout and complete a relief well in as in the baseline for the analysis because, indicate that the estimated daily little as 25 days, assuming no transit although Shell agreed to this operating cost of a drilling rig located in time for the rig. requirement as a condition of its 2012 Moreover, other work, which will operations, Shell ultimately did not the Arctic OCS is approximately $2 likely have significant economic benefit, conduct these BOP pressure tests during million. This estimate includes all of the may continue under the proposed rule that operating season. Thus, we costs associated with operating a rig during the period that work below the conservatively include the costs (e.g., including the costs of the rig crew). surface casing is not allowed, providing associated with the increased BOP This figure is based upon an analysis of economic benefits from other activities pressure testing requirements in the the daily costs of rigs currently that could be conducted during this analysis of the costs for Alternative 1. operating in the Gulf of Mexico, period (for example, in 2012, Shell Based on BOEM’s and BSEE’s adjusted significantly upward to drilled top holes during the period it knowledge of operators engaged in, or account for the harsh operating likely to be engaged in, Arctic OCS conditions in the Arctic. The actual 12 During a meeting conducted with OMB exploration activities, we also made operating costs for a rig operating in the pursuant to E.O. 12866, Shell stated that its total several assumptions about the number Arctic OCS will likely vary greatly from costs for a 100-day drilling season were $1.5 billion and that 80% of those costs ($1.2 billion) were of operators, rigs, and wells operating season to season. Industry data ‘‘sunk.’’ Dividing these costs by 100 (the assumed on the Arctic OCS over the 10-year presented in the course of this length of the drilling season) yields an estimate of analysis period. We based all rulemaking indicated that the fixed $12 million per day. These costs have not been assumptions on our experience with costs of drilling in the Arctic for one independently validated by BOEM and BSEE, and it is not known if the industry figure provided recent and expected industry practices season are $1.2 billion, which, already included the expected return on capital. for operators on the Arctic OCS, amortized over an entire 100-day season 13 http://www.boem.gov/EP–PUBLIC–VERSION/. including information submitted to

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BOEM and BSEE by lessees and for the analysis period. Exhibit 1 Exhibit 1. Assumptions About the operators and other available presents these assumptions. We seek Affected Population of Operators and information related to planned or comments on the reasonableness of Drilling Operations potential industry exploratory activities these assumptions.

Inputs 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Operators ...... 1 1 1 3 3 3 3 3 3 3 Primary rigs...... 2 2 2 4 4 4 4 4 4 4 Standby relief rig 1 ...... 1 1 0 0 0 0 0 0 0 0 Exploratory wells drilled each year ...... 2 4 4 4 4 6 6 6 6 6 Applications for permit to drill ...... 2 4 4 4 4 6 6 6 6 6 Exploration plans...... 1 2 2 2 2 2 2 2 2 2 Integrated operations plans...... 2 2 2 2 2 2 2 2 2 2 Oil spill response plans...... 2 2 2 2 2 2 2 2 2 2 1 Standby relief rigs are rigs that are not conducting exploratory drilling and are assumed to incur different costs than relief rigs that are con- ducting exploratory drilling (i.e., ‘‘primary rigs’’).

Other data inputs and assumptions that the drilling season on the Arctic one is present, or to the Regional common to many of the calculations OCS lasts 138 days.14 Supervisor of any sea ice movement or include the following: f. BSEE Burden to Review Paperwork condition that has the potential to affect d. SCCE and Resource Sharing: The Submissions: For each paperwork operations or trigger ice management submission, we assume that for every proposed rule requires operators to have activities, the start and termination of hour that industry devotes to compile access to, and the ability to promptly such activities, and any ‘‘kicks’’ or and submit information, BSEE will need deploy, SCCE while conducting Arctic operational issues that are unexpected one half hour to review the OCS exploratory drilling or work below and could result in the loss of well submission.15 control. Operators also would be the surface casing. In the cost analysis, g. Wage Rates and Loaded Wage we assume that the operator conducting required to submit a follow-up written Factors: For this analysis, we obtained report regarding any ice management exploratory drilling beginning in 2015 median industry wage rates from the already owns the required SCCE. We activities undertaken within 24 hours, Bureau of Labor Statistics May 2012 following completion of those activities. also assume that the operator with two Occupational Employment Statistics for primary rigs in 2017 will use one set of ii. Pollution Prevention Requirements: the industry labor categories. We also Operators would be required to capture SCCE to satisfy the SCCE requirements obtained wage rates for BOEM and BSEE for both of its rigs. Finally, we assume all petroleum-based mud and cuttings personnel from the Office of Personnel from operations that use petroleum- that, of the two operators entering in Management 2012 General Schedule for 2018, one will purchase the SCCE and based mud. In addition, these the government labor categories. To subparagraphs clarify the Regional the other will select the least-cost means account for employee benefits, we to comply with the proposed rule and Supervisor’s discretionary authority to multiplied the hourly wage rates by require operators to capture all water- enter into resource sharing with an appropriate loaded wage factors to operator who has already purchased the based muds and associated cuttings generate hourly compensation rates. The from Arctic OCS exploratory drilling SCCE. Initial RIA for the proposed rule operations after completion of the hole includes details on wage rates and Because the industry does not for the conductor casing to prevent their loaded wage factors used in the currently engage in resource sharing on discharge into the marine environment. analysis. the Arctic OCS, BOEM and BSEE have iii. Additional Requirements for no details on how the process would be 4. Costs Securing Wells: Operators that move a conducted and whether or to what drilling rig off a well prior to degree, for example, an operator would The analysis presented in the Initial RIA describes the potential costs of the completion or permanent abandonment charge for access to equipment. The would be required to ensure that any SCCE resource-sharing assumptions proposed rule compared to the baseline. Exhibit 2, which follows, summarizes equipment left on, near, or in a well represent the most likely scenario based bore that has penetrated below the on BSEE’s knowledge of the industry. these proposed requirements and their associated costs to industry and surface casing is positioned to protect BOEM and BSEE also considered a low- the well head and prevent or minimize cost scenario and a high-cost scenario government. Please see the Initial RIA for details on the exact assumptions and the likelihood of compromising the that vary the assumptions for resource down-hole integrity of the well or well sharing and purchase of SCCE by calculations. i. Additional Incident Reporting plug effectiveness. Additionally, in operators. The Initial RIA for the Requirements: Operators would be areas of ice scour, operators would be proposed rule discusses the costs required to provide an immediate oral required to use a well cellar or an associated with these scenarios. report to the BSEE onsite inspector, if equivalent means of minimizing the risk e. Daily Rig Operating Costs: Based on of damage to the wellhead. BSEE estimates and cost estimation 14 We assume a 138-day drilling season for all iv. Additional BOP Pressure Testing methodologies from the BOEM Case purposes other than the prior discussion of Requirements: Operators conducting Study, we assume that rigs on the Arctic opportunity costs, which uses a 100-day drilling season as assumed in the industry presentation to Arctic OCS exploratory drilling OCS have a daily operating cost of $2 OMB. See n.13. operations would be required to begin million. For the purposes of the 15 The submissions to BOEM under Part 550 of testing the BOP system before midnight analysis, we assume that the daily rig the proposed rule do not follow this standard on the seventh day following the operating costs remain constant over the review estimate because these submissions would require a more time-intensive review by several conclusion of the previous test. This 10-year analysis period. We also assume employees. proposed requirement would represent

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an increased testing frequency used in Arctic and sub-Arctic should account for the benefits of other (compared to the current requirement environments. operations (such as maintenance and, in for testing every 14 days). viii. Additional SCCE Requirements: some cases, drilling a second top hole) v. Real-time Monitoring There are several proposed SCCE that could continue on the site after Requirements: These proposed new requirements, including equipment, drilling or work below the surface real-time monitoring requirements for stump testing, well design change casing ceases. Arctic OCS exploratory drilling information requirements, test and x. Additional Auditing Requirements: operations include real-time data exercise, records maintenance, and This provision would increase the gathering and monitoring capability for documentation. Because the industry SEMS audit frequency and facility data on the BOP control system, the does not currently engage in resource coverage for Arctic OCS exploratory fluid handling systems on the rig, and sharing on the Arctic OCS, BOEM and drilling operations. the well’s downhole conditions. They BSEE do not have details on how that also include onshore data transmission, process would be conducted and xi. Real-time Location Tracking monitoring, storage, and notification whether, for example, an operator Requirements: This proposed provision and availability of data to BSEE. would charge for access to equipment. describes additional information vi. Additional Information The SCCE resource sharing assumptions requirements for the emergency- Requirements for APDs: This provision represent the most likely scenario based response action plan section of the would require operators to submit on BSEE’s knowledge of the industry. OSRP for operators conducting Arctic OCS-specific information with BSEE also considered a low cost exploratory drilling on the Arctic OCS. APDs for Arctic OCS exploratory scenario and a high cost scenario for Operators would be required to describe drilling. This includes a detailed these proposed requirements that vary how they would maintain an effective description of how the drilling unit, the assumptions for resource sharing tracking and management system that is equipment, and materials will be and purchase of SCCE by operators. See able to locate in real-time all response prepared for service in Arctic OCS Section 4.e of the Initial RIA for details equipment and personnel conducting Conditions. Operators would be on the costs associated with these response activities, or transiting to and required to submit a detailed scenarios. from the response site(s), and to description of all operations necessary ix. Relief Rig Requirements: When maintain a current picture of resources in Arctic OCS Conditions to transition conducting exploratory drilling or entering and exiting staging areas and the rig from being underway to working below the surface casing, the operational status of those resources. commencing drilling operations and operators on the Arctic OCS would be xii. IOP Requirements: The proposed from concluding drilling operations to required to have a relief rig, different rule would require operators proposing being underway, as well as any from their primary drilling rig, staged in to conduct exploratory drilling anticipated repair and maintenance a location such that it can arrive on site, operations on the Arctic OCS to develop plans for the drilling unit and drill a relief well, kill and abandon the an IOP for each proposed exploratory equipment. Operators would also be original well, and abandon the relief drilling program on the Arctic OCS, and required to submit well-specific drilling well prior to expected seasonal ice to submit the IOP to BOEM at least 90 objectives, timelines, and updated encroachment at the drill site, but no days in advance of filing an EP. contingency plans for temporary later than 45 days after the loss of well abandonment of the well. Finally, control. In estimating the costs of this xiii. Planning Information operators would be required to submit provision, BSEE included relief rig Requirements to Accompany EPs: This information on weather and ice equipment capital costs and relief rig includes proposed additional forecasting capability for all phases of documentation costs, but did not information requirements for planning drilling operations. include potential costs of the maximum information that must accompany EPs vii. Incorporation of Proposed Draft 7 additional days (above the baseline) for operators proposing to conduct API RP 2N, Third Edition: This that drilling or work below the surface exploration activities in the Arctic OCS provision would require operators to casing could not take place each season Region. submit a detailed description of how the as a result of the maximum 45-day xiv. Industry Familiarization with the relevant aspects of proposed draft API timeframe. ISOBSEE lacks data on how New Rule: Assuming the new regulation RP 2N, Third Edition, ‘‘Planning, such a limitation would affect future takes effect, industry would need to Designing, and Constructing Structures exploratory drilling operations. BSEE read and interpret the rule. Through this and Pipelines for Arctic Conditions,’’ requests information on the potential review, operators would familiarize are addressed in the planning of costs, if any, due to the cessation of themselves with the structure of the exploratory drilling operations. API RP drilling or other work below the surface new rule and identify any new 2N is a voluntary consensus standard casing up to 7 days (beyond the provisions relevant to their operations. that addresses the unique Arctic baseline) earlier than would otherwise Operators also would evaluate whether conditions that affect the planning, occur without the proposed relief rig they must take any new action to design, and construction of systems requirement. Any such comments achieve compliance with the rule.

EXHIBIT 2—10-YEAR AVERAGE ANNUAL COSTS BY PROVISION (WITH NO DISCOUNTING)

1-year average 10-year average annual costs: al- annual costs: al- ternative 2 (with- Provision ternative 1 (with 7- out 7-day BOP day BOP testing testing require- requirement) ment)

a. Additional Incident Reporting Requirements ...... $5,374 $5,374 b. Additional Pollution Prevention Requirements ...... $13,585 $13,585 c. Additional Requirements for Securing Wells ...... $24,000,000 $24,000,000

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EXHIBIT 2—10-YEAR AVERAGE ANNUAL COSTS BY PROVISION (WITH NO DISCOUNTING)—Continued

1-year average 10-year average annual costs: al- annual costs: al- ternative 2 (with- Provision ternative 1 (with 7- out 7-day BOP day BOP testing testing require- requirement) ment)

d. Additional BOP Pressure Testing Requirements ...... $19,2000,000 $0 e. Real-time Monitoring Requirements ...... $2,208,000 $2,208,000 f. Additional Information Requirements for APDs ...... $16,771 $16,771 g. Incorporation of API RP 2N, Third Edition ...... $9,240 $9,240 h. Additional SCCE Requirements ...... $31,471,823 $31,471,823 i. Relief Rig Requirements ...... $55,208,133 $55,208,133 j. Additional Auditing Requirements ...... $249,482 $249,482 k. Real-time Location Tracking Requirements ...... $121,044 $121,044 l. IOP Requirements ...... $125,167 $125,167 m. Planning Information Requirements to Accompany EPs ...... $28,702 $28,702 n. Industry Familiarization with the New Rule ...... $313 $313 TOTAL ...... $132,657,635 $113,457,635

We also estimated the costs for Exhibit 3 summarizes the costs for both with 7-percent discounting over 10 Alternative 1, the proposed rule with alternatives using discount rates of 3 years. This estimate assumes the cost the additional BOP pressure testing percent and 7 percent. Alternative 1, the associated with staging a standby relief requirement, and Alternative 2, the proposed rule, would result in rig as outlined in Section VI.B.3.(i.e., proposed rule without the additional economic costs of $1.2 billion with 3- Relief Rig Capital Costs. BOP pressure testing requirements. percent discounting and $1.1 billion

EXHIBIT 3—SUMMARY OF MONETIZED COSTS 12

Industry costs: Industry costs: Government Total costs: Total costs: Year alternative 1 alternative 2 costs alternative 1 alternative 2 A B C D = A + C E = B + C

2015 ...... 294,689,955 288,689,955 155,932 294,845,887 288.845,887 2016 ...... 304,631,665 298,631,665 171,956 304,803,620 298,803,620 2017 ...... 35,717,099 23,717,099 162,221 35,879,320 23,879,320 2018 ...... 322,562,375 298,562,375 225,779 322,788,154 298,788,154 2019 ...... 52,406,644 28,406,644 214,296 52,620,941 28,620,941 2020 ...... 62,678,863 38,678,863 172,010 62,850,873 38,850,873 2021 ...... 63,065,863 39,065,863 225,271 63,291,135 39,291,135 2022 ...... 63,129,138 39,129,138 225,271 63,354,409 39,354,409 2023 ...... 62,678,863 38,678,863 172,010 62,850,873 38,850,873 2024 ...... 63,065,863 39,065,863 225,271 63,291,135 39,291,135 Undiscounted 10- year total ...... 1,324,626,328 1,132,626,328 1,950,018 1,326,576,346 1,134,576,346 PV 10-year total with 3% discounting ..... 1,221,896,314 1,057,816,579 1,701,450 1,223,597,763 1,059,518,028 PV 10-year total with 7% discounting..... 1,110,686,488 975,624,608 1,441,797 1,112,128,285 977,066,405 Annualized with 3% discounting ...... 143,243,524 124,008,373 199,462 143,442,986 124,207,835 Annualized with 7% discounting ...... 158,136,768 138,906,995 205,279 158,342,048 139,112,275 1 Totals might not add because of rounding. 2 For explanation of the 3-percent and 7-percent discounting methodology, see n. 2 in Exhibit 24 of the Initial RIA.

5. Benefits is to ensure safe and responsible oil and and the effectiveness of stopping or Many of the potential benefits of the gas drilling on the Arctic OCS resulting containing a spill already underway. proposed rule—based primarily on in increased safety for personnel; The following break-even analysis preventing or reducing the duration or protection of the coastal, human, and describes the reduction in the duration severity of catastrophic oil spills—are marine environments and of species; of a catastrophic oil spill that would be difficult to quantify. The proposed rule and reducing potential conflicts needed to generate certain quantifiable would benefit society and the between OCS oil and gas activities and benefits equal to or greater than the environment by reducing the potential the Alaska Natives’ ability to conduct estimated costs associated with this for an incident resulting in an oil spill subsistence activities. The magnitude of proposed rule. In addition, because the and, if an incident does occur, by these benefits, however, is uncertain probability and length of a catastrophic reducing the duration or severity of the and highly dependent on the actual oil spill would be reduced, other spill. The objective of the proposed rule reduction in the probability of incidents benefits—beyond what we captured in

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the break-even analyses—would result catastrophic oil spill and the proposed rule to achieve at least zero from the proposed rule. Due to uncertainty and measurement problems net benefits. Any avoided days of challenges in measuring these associated with several categories of spilled oil greater than these break-even additional benefits, we do not offer a benefits.16 points result in the proposed rule’s quantitative assessment of them; For the proposed rule, using the achieving positive net benefits, should a instead, we present a qualitative estimated discounted costs at 3 and 7 catastrophic spill occur (i.e., it is cost- discussion. percent and the potential benefits (in beneficial). We also show the estimated i. Break-Even Analysis: BOEM and terms of avoided costs of incidents), we total cost of a catastrophic oil spill BSEE conducted a break-even analysis calculated a break-even number of relative to the total cost of the proposed of the proposed rule (Alternative 1) avoided days of spilled oil if a rule. Exhibit 4 presents the total cost of because of the difficulties associated catastrophic oil spill were to occur. This with estimating the benefits of reducing estimate reflects the number of avoided a catastrophic spill and the 10-year cost the probability and consequences of a days of spilled oil needed for the of the rule.

EXHIBIT 4—TOTAL COST OF A CATASTROPHIC OIL SPILL COMPARED TO THE 10-YEAR COST OF THE RULE

Cost of a spill 10-year cost of the rule Location ($ millions) ($ millions) Low High 7% Discounting 3% Discounting

Chukchi Sea ...... $10,074.2 $15,752.6 $1,112 $1,224 Beaufort Sea ...... 12,155.9 27,771.5 1,112 1,224

Quantifiable costs of a catastrophic oil probability of a catastrophic oil spill is the limited drilling history on the Arctic spill in the Chukchi Sea range from very low. A catastrophic spill resulting OCS, projections cannot be made with $10.07 billion to $15.75 billion and in from exploratory drilling on the Arctic certainty. Exhibit 5 presents a summary the Beaufort Sea from $12.16 billion to OCS, for example, is considered of the results of the break-even analysis $27.77 billion. Thus, quantifiable costs unlikely due to the nature of the for the proposed rule; a full description of an oil spill are more than the cost of geology, shallow water depth, and of the results and methodology is the proposed rule; however, the simplicity of the wells. However, due to contained in the Initial RIA.

EXHIBIT 5—BREAK-EVEN RESULTS: NUMBER OF DAYS OF OIL SPILL PREVENTED

Cost of spill per 10-year cost of the rule Break-even Location day ($ millions) number of days ($ millions) 7% Discounting 3% Discounting 7% Discounting 3% Discounting

Chukchi Sea ...... $177.5 $1,112 $1,224 6.3 6.9 Beaufort Sea ...... 113.6 1,112 1.224 9.8 10.8

Over the 10-year cost analysis period, and methods used in this break-even monetize. Natural resource valuation is the number of avoided/reduced days of analysis, as described fully in the Initial complex; many factors contribute to a catastrophic oil spill needed to break- RIA. We also invite comments on how society values a resource, including even is between 6.3 and 6.9 days for the whether there is a better alternative both use and non-use values of the Chukchi Sea and 9.8 and 10.8 days for method for evaluating the costs and resources. Many use values can be the Beaufort Sea. To provide context, benefits of the proposed rule. estimated by behavior and market the BOEM Case Study estimates that the ii. Qualitative Benefits: Because transactions (for example, using the duration of a catastrophic incident in BOEM and BSEE used a conservative harvest value of yields in the Arctic the Chukchi Sea could be between 40 approach in the valuation of an oil spill OCS region). Many other use values, and 75 days and an incident in the in the break-even analysis, the however, might not be related to a Beaufort Sea could be between 60 and identified cost of a catastrophic oil spill market and are, therefore, difficult to 300 days. One of the key goals of the can be considered a lower bound of the monetize. For example, Alaska Native proposed SCCE and relief rig provisions true cost of such an event to society and communities place a high value on the is to reduce the duration of such a spill of the potential benefits from preventing cultural amenities related directly to the should one occur. such an event. Although the break-even use of the region. Because communities BOEM and BSEE believe that this analysis captures some of the do not trade cultural amenities in break-even analysis is an appropriate environmental damage associated with a markets, we are unable to estimate a way to evaluate the costs and benefits of catastrophic oil spill, the analysis is direct value of these resources. the proposed rule under the limited because it only considers the Non-use values are much harder to circumstances. However, we invite environmental amenities that estimate; common non-use values comments on the assumptions, data, researchers could identify and include existence values and bequest

16 A catastrophic oil spill is a low-probability, event actually occurring, or to precisely determine of oil, the location of the spill, the areal distribution high-consequence event because it is an event that the reduction in the probability of occurrence that of the release, the sensitivity of the ecosystem occurs infrequently, but has large consequences a proposed regulation would actually achieve. In affected, and the weather. when it does occur. For such events, it is difficult addition, the consequences of an oil spill depend to know with any certainty the probability of the on several factors, including the type and amount

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values. Individuals place a value on EXHIBIT 6—EXAMPLES OF QUALITATIVE C.E.O. 13563 environmental amenities by knowing BENEFITS BY PROVISION—Continued E.O. 13563 reaffirms the principles of that preservation and protection of the E.O. 12866 while calling for region exists even if those individuals Provision Primary benefits improvements in the Nation’s regulatory do not intend to visit the region. c. Additional Require- Reduces risk of a system to promote predictability, to Bequest values relate to individuals reduce uncertainty, and to use the best, placing a value on the preservation of ments for Securing spill. Wells. most innovative, and least burdensome regions for future generations even if d. Additional BOP Reduces risk of a tools for achieving regulatory ends. In they do not intend to use the resource Pressure Testing spill. addition, E.O. 13563 directs agencies to themselves. For example, many non- Requirements. consider regulatory approaches that native Alaskans, and many other e. Real-time Moni- Reduces risk of a reduce burdens and maintain flexibility Americans who do not live in Alaska, toring Require- spill. and freedom of choice for the public place a very high value on protecting ments. where these approaches are relevant, the health of the ecosystem, including f. Additional Informa- Improves oversight of tion Requirements operations by Fed- feasible, and consistent with regulatory the sensitive environment and wildlife, for APDs. eral agencies. objectives. It also emphasizes that of this largely frontier area. Thus, the g. Incorporation of Reduces risk of a regulations must be based on the best impact of a catastrophic oil spill, would API RP 2N, Third spill. available science and that the have extremely high cultural and Edition. rulemaking process must allow for societal costs, and prevention of such a h. Additional SCCE Improves containment public participation and an open catastrophe would have Requirements. of a spill. exchange of ideas. We developed this correspondingly high cultural and i. Relief Rig Require- Improves containment proposed rule in a manner consistent societal benefits. Capturing these ments. of a spill. with these requirements. BOEM and j. Additional Auditing Improves oversight of complex values is difficult because they Requirements. operations by Fed- BSEE worked closely with engineers are not traded in markets. Because we eral agencies. and technical staff to ensure this are unable to monetize all aspects of the k. Real-time Location Improves oversight of rulemaking follows sound engineering consequences of an oil spill, the Tracking Require- operations by Fed- principles and options through research, estimate we used in the break-even ments. eral agencies. standards development, and interaction analysis captures only a portion of the l. IOP Requirements Reduces risk of a with industry. value to society. spill. m. Planning Informa- Improves oversight of D. Regulatory Flexibility Act The objective of the proposed tion Requirements operations by Fed- The Regulatory Flexibility Act (RFA), rulemaking is to ensure safe and to Accompany EPs. eral agencies. 5 U.S.C. 601–612, requires agencies to n. Industry Famil- General. responsible oil and gas drilling on the analyze the economic impact of Arctic OCS, which would result in iarization with the New Rule. proposed regulations when a significant increased safety for personnel, economic impact on a substantial protection of the marine environment 6. Conclusion number of small entities is likely and to and species, protection of Alaska consider regulatory alternatives that will Natives’ cultural values, and removal of The proposed rule would reduce both achieve the agency’s goals while impediments to Alaska Natives’ the overall risk of oil spills on the Arctic minimizing the burden on small subsistence use. In addition, the OCS and the consequences of a spill if entities. In addition, the Small Business proposed rule achieves better one were to occur. We conducted a Regulatory Enforcement Fairness Act of coordination among BSEE, BOEM, and break-even analysis of the benefits of the 1996, 5 U.S.C. 601note, requires other government agencies. For proposed rule. In addition, we included agencies to produce compliance example, the information required in a qualitative discussion of potential guidance for small entities if the rule proposed § 550.204 would facilitate benefits of the proposed rule that could has a significant economic impact. For interagency coordination between DOI not be quantified or monetized. The the reasons explained in this section, and other relevant Federal agencies, as break-even analysis showed that for the BOEM and BSEE have concluded that recommended in the 60-Day Report. Chukchi Sea, a minimum reduction of the proposed rule is likely to have a Exhibit 6 presents the provisions of 6.3 to 6.9 days for a catastrophic oil spill significant economic impact on a the proposed rule along with their would result in a cost-beneficial rule substantial number of small entities primary qualitative benefits, such as over the 10-year study period. For the and, therefore, a regulatory flexibility improving oversight of operations by Beaufort Sea, we estimated that a analysis is required. This Initial Federal agencies, minimizing natural minimum reduction of between 9.8 and Regulatory Flexibility Analysis assesses resource and ecosystem impacts, 10.8 days for a catastrophic oil spill the impact of the proposed rule on small reducing the risk of a spill, improving would result in a cost-beneficial rule entities, as defined by the applicable containment of a spill, and a general over the 10-year study period. Small Business Administration size benefit. In addition to the quantifiable standards. benefits, there are significant qualitative 1. Description of the Reasons Why EXHIBIT 6—EXAMPLES OF QUALITATIVE benefits, including protection of Alaska Native communities’ cultural resources Action by the Agency Is Being BENEFITS BY PROVISION and subsistence needs and other Considered unquantifiable environmental, cultural, Although a comprehensive OCS oil Provision Primary benefits and societal benefits. Accordingly, and gas regulatory program exists, DOI a. Additional Incident Improves oversight of BOEM and BSEE have determined that engagement with partners and Reporting Require- operations by Fed- the benefits of the proposed rule justify stakeholders reveals the need for new ments. eral agencies. its potential costs and that it is and revised regulatory measures for b. Pollution Preven- Minimizes natural re- appropriate to proceed with this exploratory drilling by floating drilling tion Requirements. source impacts. proposed rule. vessels and ‘‘jackup rigs’’ (collectively

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known as MODUs) on the Arctic OCS. below or working below the surface 3. Succinct Statement of the Objectives The U.S. Arctic region, as recognized by casing; of, and Legal Basis for, the Proposed the U.S. and defined in the U.S. Arctic iv. Have access to a separate relief rig Rule Research and Policy Act of 1984, located so that it could timely drill a The objectives and legal basis are encompasses an extensive marine and relief well, in the event of a loss of well described in part II, Background, of the terrestrial area; but this proposed rule control, under the conditions expected proposed rule. focuses solely on the OCS within the at the site; Beaufort Sea and Chukchi Sea Planning v. Have the capability to predict, 4. Description of and, Where Feasible, Areas. track, report, and respond to ice an Estimate of the Number of Small BOEM and BSEE have undertaken conditions and adverse weather events; Entities to Which the Proposed Rule extensive environmental and safety vi. Effectively manage and oversee Will Apply reviews of potential oil and gas contractors; and The RFA defines small entities as operations on the Arctic OCS. These vii. Develop and implement OSRPs small businesses, small nonprofits, and reviews, along with concerns expressed designed and executed in a manner small governmental jurisdictions. We by environmental organizations and suitable for the unique Arctic OCS have identified no small nonprofits or Alaska Natives, reinforce the need to operating environment and have the small government jurisdictions that the develop additional measures necessary equipment, training, and proposed rule would impact, so this specifically tailored to the operational personnel for oil spill response on the analysis focuses on impacts on small and environmental conditions of the Arctic OCS. businesses (hereafter referred to as Arctic OCS. After considering the input The proposed rule would further the ‘‘small entities’’). A small entity is one provided by various partners and that is ‘‘independently owned and stakeholders and DOI’s direct Nation’s interest in exploring frontier areas, such as those in the Arctic region, operated and which is not dominant in experience from Shell’s 2012 Arctic its field of operation.’’ 17 The definition operations, BOEM and BSEE have and would establish specific operating models and requirements for the of small business varies from industry to concluded that additional exploratory industry to capture industry size drilling regulations would enhance and extreme, changing conditions that exist on the Arctic OCS. The proposed differences properly. clarify existing regulations and would The proposed rule would affect be appropriate for a more holistic Arctic regulations would require comprehensive planning of operations, operators and holders of Federal oil and OCS oil and gas regulatory framework. gas leases that could conduct This proposed rulemaking is intended especially for emergency response and exploratory drilling on the Arctic OCS. to ensure that Arctic OCS exploratory safety systems. The proposed rule According to BOEM’s list of drilling operations are conducted in a would seek to institutionalize a leaseholders on the Arctic OCS as of safe and responsible manner that proactive approach to offshore safety. A May 2014, 10 businesses hold leases on considers the unique conditions of goal of the proposed rule is to identify the Arctic OCS.18 Three of these Arctic OCS drilling and Alaska Natives’ possible vulnerabilities early in the businesses are anticipated to conduct cultural traditions and need to access planning process so that corrections can exploratory drilling on the Arctic OCS subsistence resources. The Arctic region be made to decrease the potential for an over the next 10 years, although any is known for its oil and gas resource incident occurring. The requirements in business holding a lease could conduct potential, its vibrant ecosystems, and the proposed rule also are designed to exploratory drilling on the Arctic OCS the Alaska Native communities. ensure that those plans would be and would thus be subject to the Extreme environmental conditions, executed in a safe and environmentally protective manner, despite the requirements of this proposed rule. geographic remoteness, and a relative Businesses subject to this rule fall lack of fixed infrastructure and existing challenges the Arctic presents. 2. We identified the following under North American Industry operations characterize the region. Classification System codes 211111 These factors are key in considering the provisions of the proposed rule as having a cost to industry: (Crude Petroleum and Natural Gas feasibility, practicality, and safety of Extraction) and 213111 (Drilling Oil and i. Additional incident reporting conducting offshore oil and gas Gas Wells). For these classifications, a requirements; activities on the Arctic OCS. small business is defined as one with This proposed rule would add to and ii. Pollution prevention requirements; fewer than 500 employees. Based on revise existing regulations in 30 CFR iii. Additional requirements for this criterion, only one business parts 250, 254, and 550 for Arctic OCS securing wells; currently holding a Federal oil and gas oil and gas activities. The proposed rule iv. Additional BOP pressure testing lease on the Arctic OCS is considered would focus on Arctic OCS exploratory requirements; small. Although BOEM and BSEE do not drilling activities that use MODUs and v. Real-time monitoring requirements; expect a small entity to conduct related operations during the Arctic vi. Additional information exploratory drilling on the Arctic OCS OCS open-water drilling season. This requirements for APDs; during the 10-year analysis period, any proposed rule would address several vii. Incorporation of proposed draft business holding a lease could operate important issues and objectives, API RP 2N; on the Arctic OCS. Using the number of including ensuring that operators: viii. Additional SCCE requirements; i. Design and conduct exploration businesses holding such leases as the ix. Relief rig requirements; programs in a manner suitable for Arctic universe subject to this rule, 10 percent OCS conditions; x. Additional auditing requirements; (1 of 10) of the firms are considered ii. Develop an IOP that would address xi. Real-time location tracking small. Thus, the proposed rule would all phases of the proposed Arctic OCS requirements; affect a ‘‘substantial number’’ of small exploration program and submit the IOP xii. IOP requirements; 17 to BOEM at least 90 days in advance of xiii. Additional requirements for EPs; See 5 U.S.C. 601. and 18 See www.boem.gov/uploadedFiles/BOEM/ filing the EP; About_BOEM/BOEM_Regions/Alaska_Region/ iii. Have access to and the ability to xiv. Industry familiarization with the Leasing_and_Plans/Leasing/Alaska_Lease_ promptly deploy SCCE, while drilling rule. Holdings_by_Owner_or_Partial_Owner.pdf.

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entities, defined by BOEM and BSEE as estimated the costs per rig to capture discussed later. For the Regional 10 percent or more of the potentially and transport mud and cuttings to be Supervisor-initiated tests, we estimated affected entities. Thus, although we do $4,245. For the additional requirements a per-rig cost of $500,000. For the stump not expect that a small entity would for securing wells, we included both the tests, we assumed that the operator conduct exploratory drilling during the capital costs ($2,000,000) and the labor would use a pre-positioned capping analysis period, to be conservative, we and operational costs ($3,000,000) for a stack (PPCS) and estimated that each have conducted this RFA analysis to total per-well cost of $5,000,000. PPCS stump test costs $160,208 per demonstrate the likely effects the We assessed the costs for Alternative well. We assumed one stump test before proposed rule would have on a 1 (the proposed rule with the additional installation on each well and one stump hypothetical small operator. BOP pressure-testing requirements) and test before deployment. Although the Alternative 2 (the proposed rule without operator could instead use a dry-stored 5. Description of the Projected the additional BOP pressure-testing capping stack, we conservatively Reporting, Recordkeeping and Other requirements). For the additional BOP assumed that the operator would use a Compliance Requirements of the pressure-testing requirements included PPCS, which results in higher costs. For Proposed Rule, Including an Estimate of under Alternative 1, BSEE included the the proposed information requirements the Classes of Small Entities That Will per-rig labor cost of $6,000,000. These for the well design change, we estimated Be Subject to the Requirement and the costs are not included in the cost a per-well labor cost of $959. We also Type of Professional Skills Necessary estimates for Alternative 2. (See Section estimated a per-well labor cost of $1,174 for Preparation of the Report or Record 6 following for details on the to maintain the SCCE records and a per- BOEM and BSEE have estimated the alternatives.) For the proposed real-time well labor cost of $5,755 for the APD incremental costs for small oil and gas monitoring requirements, we estimated documents. The total SCCE leaseholders that decide to engage in a per-rig labor cost of $690,000. For the requirements sum to $271,700,000 per exploratory drilling on the Arctic OCS. proposed additional information rig and $328,305 per well.22 This analysis reflects only costs requirements for the APDs, we For the proposed relief rig associated with activities and capital estimated a per-rig labor cost of $1,491 requirements, we included the costs investments required by the proposed and a per-well labor cost of $1,305. For associated with the proposed rule that represent a change from the the proposed incorporation of draft API information documentation baseline. The baseline for this proposed RP2N, Third Edition, we estimated a requirements for the relief rig. We rule includes existing regulations, per-rig labor cost of $1,918. For the estimated the labor cost associated with standard industry practices, operator enhanced auditing requirements, we the documentation requirements for the prudence, and assumptions based on estimated a per-rig labor cost of relief rig to be $14,591 per rig. As requirements for Shell’s 2012 Arctic $129,000. For the proposed real-time discussed in the Initial RIA, we do not OCS operations that were imposed by tracking requirements, we estimated a include costs associated with the BOEM or BSEE under their existing per-OSRP labor cost of $401. proposed 45-day maximum limit on the 19 In addition, we included a cost of regulatory authorities. Cost estimates time necessary to complete the required $102,624 ($63,274 upfront cost plus included in this analysis for the relief rig activities under Section $39,350 annual cost) per rig to account provisions of the proposed rule are 250.472 because we lack information for the purchase, operation, and those presented in detail in the Initial regarding potential costs, if any, above maintenance of an Automatic RIA. the baseline that might accrue from the Identification System (AIS) as an cessation of drilling or other work below i. Total Cost Estimates by Provision example of costs to comply with the the surface casing under this proposed BOEM and BSEE assessed the costs real-time tracking requirements for oil requirement. associated with the proposed regulation spill response resources.21 For the by estimating the cost for a hypothetical proposed IOP requirements, we We present the least-cost means to small operator. We assumed that this estimated a per-IOP labor cost of $8,633. comply with the proposed rule, and operator would conduct an exploratory For the proposed planning information thus assume that a small entity would drilling program with one rig, two wells, requirements to accompany the EPs, we not incur the costs of a standby relief rig two APDs, and one OSRP, IOP, and EP estimated a per-EP labor cost of $4,316. and would enter into a resource sharing each. For each provision, we estimated Finally, we estimated a per-operator agreement to comply with the relief rig the per-rig, per-well/APD, per-OSRP, cost of $1,042 for the time needed for an requirements. If, however, a small entity per-IOP, and per-EP cost, where operator to become familiar with the chooses to deploy a dedicated standby applicable. Following is a summary of rule. relief rig to comply with regulatory the unit costs using the estimates The proposed SCCE requirements requirements, it could incur costs of developed in the RIA.20 Please refer to have several different cost components approximately $276 million per rig, per the Initial RIA for details on the cost for both rigs and wells. We estimated a season. estimates. one-time capital cost per rig of Exhibit 7 presents the unit costs per For the incident reporting activities, $270,000,000 and an annual provision for a small operator. These we estimated the per-rig cost at $1,146, redeployment cost of $1,200,000 per rig. estimates include the full cost of the including both the costs for ice For the aggregate cost of the SCCE, we proposed SCCE requirements, assuming movement activity oral reports ($313 varied the assumptions for purchase and no resource sharing with another per rig) and the costs associated with redeployment costs based on whether operator, and costs associated with the written reports ($834 per rig). For the the operator purchases the equipment or enhanced BOP pressure testing pollution prevention requirements, we engages in resource sharing, as requirements under Alternative 1.

19 See the Initial RIA for the proposed rule for 21 As explained in the initial RIA, proposed 22 These totals are derived, respectively, as details on baseline assumptions. We state all costs § 254.80(c) does not require any specific real-time follows: ($270,000,000 + $1,200,000 + $500,000) in 2012 constant dollars. tracking system, so we used AIS as a representative and ($160,208 + $160,208 + $959 + $1,174 + 20 Totals might not add because of rounding. system for costs analysis purposes. $5,755).

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EXHIBIT 7—UNIT COST OF THE PROPOSED RULE BY PROVISION (WITH NO RESOURCE SHARING)

Cost per operator Provision Cost per rig Cost per well/APD (EP/IOP/OSRP)

a. Additional Incident Reporting Requirements ...... $1,146 ...... b. Pollution Prevention Requirements ...... 4,245 ...... c. Additional Requirements for Securing Wells ...... 5,000,000 ...... d. Additional BOP Pressure Testing Requirements ...... 6,000,000 ...... e. Real-time Monitoring Requirements ...... 690,000 ...... f. Additional Information Requirements for APDs ...... 1,491 1,305 ...... g. Incorporation of draft API RP 2N, Third Ed...... 1,918 ...... h. Additional SCCE Requirements ...... 271,700,000 328,305 ...... i. Relief Rig Requirements ...... 14,591 ...... j. Additional Auditing Requirements ...... 129,000 ...... k. Real-time Location Tracking Requirements ...... 102,624 ...... 401 l. IOP Requirements ...... 8,633 m. Planning Information Requirements to Accompany Eps ...... 4,316 n. Industry Familiarization with the New Rule ...... 1,042

Total Annual Cost Per Rig/Well/Operator 1 ...... 278,645,016 5,329,610 14,393 1 Totals might not add because of rounding.

ii. Total Cost Burden for Small Entities would employ resource sharing of SCCE under each scenario and the total first- We calculated the cost to a single and would not be subject to the year costs as a percentage of average small operator under different additional BOP pressure-testing annual revenue. Under all scenarios, the alternatives and differing assumptions requirements (as in Alternative 2). We first-year costs as a percentage of regarding resource sharing of the SCCE. also estimated the costs of Alternative 1 revenue surpass the 1-percent threshold We assumed that the SCCE purchase assuming resource sharing of SCCE. used to define a significant economic cost would be $270,000,000 and the Next, we estimated the average annual impact. Even under the lowest-cost annual redeployment cost would be revenue of an affected small operator. scenario, assuming that the operator $1,200,000. We used an annual revenue estimate of would engage in resource sharing of the We estimated the highest-cost $45.7 million for the small operator as SCCE and would not be subject to the scenario for a small operator to present calculated in the final RIA for BSEE’s additional BOP pressure-testing the most conservative estimate possible ‘‘Oil and Gas and Sulphur Operations requirements (as in Alternative 2), the of the potential for a significant on the Outer Continental Shelf: Oil and small operator would experience a total Gas Production Safety Systems’’ economic impact. Under this highest- first-year cost equal to 29 percent of rulemaking (77 FR 50856, Aug. 22, cost scenario, the small operator would their average annual revenue. For the need to purchase and deploy the SCCE 2012).23 We used this estimate of scenarios that assume no resource (i.e., no resource sharing) and would be average annual revenue to calculate the sharing of SCCE, the total first-year costs subject to the additional BOP pressure- ratio of total costs of the proposed rule testing requirements under Alternative as a percentage of average annual as a percentage of revenue are greater 1. We also estimated the costs of revenue to determine if the proposed than 100 percent, indicating that the Alternative 2 (i.e., no additional BOP rule would result in a significant total first-year costs the small operator pressure-testing requirements) assuming economic impact on small entities. would experience would be greater than no resource sharing of SCCE. Under the Exhibit 8 presents estimates of the its total average annual revenue.24 lowest-cost scenario, the small operator total first-year costs to a small operator

EXHIBIT 8—FIRST-YEAR COSTS AS A PERCENTAGE OF AVERAGE ANNUAL REVENUE PER OPERATOR

Total first-year cost Total first-year cost as Scenario percent of revenue A B = A/$45.7 million

Alternative 1 with No Resource Sharing of SCCE ...... $289,318,628 633 Alternative 2 with No Resource Sharing of SCCE ...... 283,318,628 620 Alternative 1 with Resource Sharing of SCCE ...... 19,318,628 42 Alternative 2 with Resource Sharing of SCCE ...... 13,318,628 29

Exhibit 9 presents estimates of the the second year and after) to a small costs incurred on an annual basis after, total annual ongoing costs (the costs in operator under each scenario, or the and not including, the first-year of the

23 See 77 FR 50856 (August 22, 2012). The final calculated the average revenue per small business exploratory drilling on the Arctic OCS during the RIA for that rulemaking can be viewed at by dividing the total small business revenue by the 10-year period of this analysis, although we have www.regulations.gov/#!documentDetail;D=BSEE– number of small businesses ($4,113,000,000/90) to prepared this analysis to be conservative (since one 2012–0002–0047. The data in the source document obtain an average of $45,700,000 per operator. current Arctic OCS lessee is a small entity). Thus, are from the Office of Natural Resources Revenue. 24 this analysis considers the average annual revenue The data source reports the total 2009 small As stated earlier, BOEM and BSEE do not business revenue to be $4,113,000,000. We expect an actual small operator to conduct of small OCS operators.

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analysis period. Exhibit 9 also presents 2, total annual ongoing costs to small of revenue in every year of the analysis the total annual ongoing costs as a operators would be equal to 29 percent period. Although costs are anticipated percentage of average annual revenue. of average annual revenue. Costs after to be lower for operators after the first Under all scenarios, the annual ongoing the first year do not vary based on SCCE year, during which the operator is costs as a percentage of revenue surpass resource-sharing assumptions because assumed to purchase capital equipment, the 1-percent threshold used to define a we assumed that SCCE capital costs (if annual costs are still estimated to be significant economic impact. Under any) would be incurred in the first year. well above the 1-percent threshold in Alternative 1, a small operator would BOEM and BSEE conclude that the the subsequent years of the 10-year experience total annual ongoing costs proposed rule would have a ‘‘significant analysis period. equal to 42 percent of their average economic impact’’ on small operators annual revenue, and under Alternative because costs are greater than 1 percent

EXHIBIT 9—ANNUAL ONGOING COSTS AS A PERCENTAGE OF AVERAGE ANNUAL REVENUE PER SMALL OPERATOR

Total annual ongoing Total annual ongoing cost cost as percent of Scenario revenue A B = A/$45.7 million

Alternative 1 with No Resource Sharing of SCCE ...... $19,125,311 42 Alternative 2 with No Resource Sharing of SCCE ...... 13,125,311 29 Alternative 1 with Resource Sharing of SCCE ...... 19,125,311 42 Alternative 2 with Resource Sharing of SCCE ...... 13,125,311 29

The conclusion that the rule would Federal rules that may duplicate, requirement is intended to help ensure have a ‘‘significant economic impact’’ overlap, or conflict with the proposed that BOPs deployed in the Arctic OCS on small operators is based on past rule. function properly and reduce the risk of revenue of operators and does not blowouts. 7. Description of Significant account for any potential increase in Alternatives to the Proposed Rule BOEM and BSEE also have decided to revenue that operators might experience move forward with this proposed rule, if Arctic OCS exploratory drilling Several provisions of the proposed in lieu of taking no regulatory action, operations lead to production. Operators rule are performance based, which will because relying on the regulatory status conducting exploratory drilling on the enable operators to devise optimal quo would not address the safety and Arctic OCS that experience a significant, strategies for reducing the cost burden environmental concerns partners and economically viable discovery of oil or of the proposed rule. In addition, stakeholders have raised and thus natural gas and that proceed to the operators might be able to reduce costs would not achieve the objectives of this production phase could experience a through resource sharing. BOEM and proposed rule. In addition, the proposed significant increase in revenue. Thus, BSEE strongly encourage operators rule would confer additional protections the analysis presented in this section proposing exploratory drilling activities on the environment and Alaska Native could understate the revenue, resulting on the Arctic OCS to enter into mutual cultural activities. Further, the projected in an overstatement of the impact of the aid agreements for the sharing of potential for impacts on small entities is rule when expressed as the ratio of costs vessels, relief well rigs, and other assets mitigated by the fact that the agencies to annual revenue.25 or services associated with responding do not anticipate any small entity to an oil spill or other emergency. independently pursuing exploration 6. Identification of All Relevant Federal BOEM and BSEE have considered Rules That May Duplicate, Overlap, or drilling on the Arctic OCS during the three major regulatory alternatives for 10-year analysis period. Conflict With the Proposed Rule dealing with the safety and The proposed rule does not conflict environmental concerns raised by E. Unfunded Mandates Reform Act of with any relevant Federal rules or exploration activities on the Arctic OCS: 1995 (UMRA) duplicate or overlap with any Federal i. Promulgate the rule changes This proposed rule would not impose rules in any way that would proposed in this proposed rule for the an unfunded Federal mandate on State, unnecessarily add cumulative Arctic OCS; or local, or tribal governments but would, regulatory burdens on small entities ii. Promulgate the rule changes if finalized, create a Federal private without any gain in regulatory described in the proposed rule without sector mandate that could require benefits.26 However, BOEM and BSEE including the 7-day BOP pressure- expenditures exceeding $100 million in request comments identifying any testing requirement for Arctic OCS exploratory drilling operations (in a single year by offshore oil and gas exploration companies operating on the 25 Conversely, oil and gas exploration has § 250.447 of the proposed rule); or inherent financial risk in that the exploration iii. Take no regulatory action and Arctic OCS. Accordingly, DOI has activities might not yield an economically viable continue to rely on existing OCS oil and prepared written statements satisfying discovery of oil or natural gas. gas regulations, industry standards, and the applicable requirements of the 26 The proposed revision to 30 CFR 250.300(b) operator prudency. UMRA, 2 U.S.C. 1501 et seq. Those that would prohibit the discharge of petroleum- requirements are addressed in the Initial based mud and associated cuttings may overlap BSEE has decided not to issue a with existing EPA general permits for the Beaufort proposed rule without the 7-day BOP RIA and initial RFA analyses for this and Chukchi Seas under the National Pollution testing requirement. Although proposed rule and in the proposed rule Discharge Elimination System regulations (40 CFR itself. part 122) while those permits remain in effect. maintaining the testing frequency at 14 However, the proposed rule would not add any days would reduce the total costs of the Among other things, the proposed regulatory burden to any small entity in that regard. proposed rule, the additional testing rule, Initial RIA, and/or Initial RFA:

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1. Identify the provisions of Federal indirect impacts, if any, such decisions evaluated and determined that the law (OCSLA, CWA, and OPA) under could have on future regional budgets. subject matter of this rulemaking would which this rule is being proposed; Similarly, BOEM and BSEE have have tribal implications for Alaska 2. Include a quantitative assessment determined that it is not reasonably Natives. As described earlier, future of the anticipated costs to the private feasible to accurately estimate the Arctic OCS exploratory drilling sector (i.e., expenditures on labor and potential effects, if any, of the proposed activities conducted pursuant to this equipment) of the proposed rule; and rule on the National economy (e.g., proposed rule could affect Alaska 3. Include qualitative and quantitative productivity, economic growth, Natives, particularly their ability to assessments of the anticipated benefits employment, international engage in subsistence and cultural of the proposed rule. competitiveness). The proposed rule, if activities. Since all of the anticipated finalized, would only affect exploratory BOEM and BSEE are committed to expenditures by the private sector drilling activities on the Arctic OCS, regular and meaningful consultation analyzed in the Initial RIA and the and any potential impact on the and collaboration with tribes on policy Initial RFA analyses would be borne by National economy would depend on decisions that have tribal implications the offshore oil and gas exploration individual business decisions made by including, as an initial step, through industry in the Arctic region, the Initial regulated entities (e.g., whether or not to complete and consistent RIA and Initial RFA analyses satisfy the hire new employees). Moreover, any implementation of E.O. 13175, together UMRA requirement to estimate any such decisions would likely be either with related orders, directives, and disproportionate budgetary effects of the local or regional in effect and unlikely guidance. Therefore, BOEM and BSEE, proposed rule on a particular segment of to have any significant National in coordination with the Office of the the private sector (i.e., the offshore oil economic impacts. Secretary of the Interior’s Senior Alaska and gas industry). F. Takings Implication Assessment Representative, engaged in listening As discussed in the Regulatory sessions, Government-to-Government Planning and Review section of this Under the criteria in E.O. 12630, this Tribal consultations, and Government- proposed rule, and explained fully in proposed rule would not have to-ANCSA Corporations consultations to the Initial RIA, BOEM and BSEE significant takings implications. The discuss the subject matter of the considered three major regulatory proposed rule is not a governmental proposed rule and solicit input in the alternatives for dealing with the safety action capable of interference with development of the proposed rule. and environmental concerns raised by constitutionally protected property Government-to-Government exploration activities on the Arctic OCS. rights. A Takings Implication consultation was held in Barrow BOEM and BSEE have decided to move Assessment is not required. between BOEM, BSEE, and the ICAS on forward with this proposed rule, in lieu G. Federalism (E.O. 13132) June 6, 2013, to both provide of the other alternatives, because those background to and obtain information Under the criteria in E.O. 13132, this alternatives would not as efficiently or from ICAS leaders and council proposed rule would not have effectively address the safety, members. The following day, June 7, federalism implications. This proposed environmental or sociocultural concerns 2013, BOEM and BSEE met with leaders rule would not substantially and raised by various stakeholders on the and council members of the Native directly affect the relationship between Arctic OCS or achieve the objectives of Village of Barrow in a separate the Federal and State governments. To this proposed rule. Government-to-Government the extent that State and local consultation. All Alaska Native input BOEM and BSEE have determined governments have a role in OCS provided during the meetings was that the proposed rule would not activities, this proposed rule would not subsequently provided to DOI in writing impose any unfunded mandates or any affect that role. A Federalism and has been included in the other requirements on State, local or Assessment is not required. tribal governments; thus, the proposed administrative record for this proposed rule would not have disproportionate H. Civil Justice Reform (E.O. 12988) rule. budgetary effects on such governments. This proposed rule complies with the BOEM and BSEE also held public Assuming, however, that the proposed requirements of E.O. 12988. listening sessions in South-central rule might result in budgetary effects on Specifically, this rule: Alaska (Anchorage) and on the North the Arctic region, BOEM and BSEE have 1. Meets the criteria of § 3(a) requiring Slope (Barrow) on June 6 and 7, 2013. determined that it is not practical to that all regulations be reviewed to The BOEM Alaska Region notified accurately estimate such effects. Since eliminate errors and ambiguity and be Alaska Native Tribes and ANCSA the proposed rule would not impose any written to minimize litigation; and Corporations of the June 6 and 7, 2013, requirements on any entities, other than 2. Meets the criteria of § 3(b)(2) public listening sessions and companies and their contractors requiring that all regulations be written Government-to-Government engaged in Arctic OCS exploration in clear language and contain clear legal consultations through phone calls, activities, any budgetary effects in that standards. emails, newspaper announcements, and area would be at least indirect, BOEM’s Web site. secondary results of actions or decisions I. Consultation With Indian Tribes (E.O. A series of follow-on meetings and taken by regulated (or unregulated) 13175) listening sessions were held June 17–20, entities, based on a variety of Under the criteria in E.O. 13175, 2013, in Anchorage resulting, in part, in circumstances (such as the price of oil, Consultation and Coordination with Government-to-Government each entity’s overall financial health, Indian Tribal Governments (dated consultation between BOEM, BSEE, and and the prospects of success of any November 6, 2000), DOI’s Policy on the Native Village of Nuiqsut and exploratory drilling). Because each of Consultation with Indian Tribes Government-to-ANCSA Corporation those factors is variable and (Secretarial Order 3317, Amendment 2, consultations between BOEM, BSEE, unpredictable, it is not practical to dated December 31, 2013), and the and the NANA Regional Corporation estimate how those factors might affect Alaska Native Corporation Consultation and the Cully Corporation (ANCSA an entity’s future decisions, or what Policy (dated August 12, 2012), we Village Corporation) from Point Lay.

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Among the most frequent input DOI K. Paperwork Reduction Act (PRA) capable of safely operating in the unique received through listening sessions and This rule contains new information environmental conditions of the Arctic tribal consultation were comments collection (IC) requirements for both and to make informed decisions on relating to impacts on, and protection BOEM and BSEE regulations, and a whether to approve EPs as submitted or of, subsistence hunting and fishing areas submission under the PRA is required. whether modifications are necessary. and species, including consideration of Therefore, an IC request for each Bureau BOEM also plans to share the mammal and fish migratory patterns, is being submitted to OMB for review preliminary information submitted in hunting and fishing seasons, and and approval under 44 U.S.C. 3501 et the IOP with other relevant agencies to impacts of pollutants and equipment seq. The PRA provides that an agency provide them the opportunity to engage movements. Concerns also included the may not conduct or sponsor, and a in constructive dialogue/feedback with relative lack of infrastructure, such as person is not required to respond to, an operators, and each other, early in the roads, housing, and equipment, in IC unless it displays a currently valid process. The proposed rule adds new coastal communities near proposed OMB control number. The IC aspects requirements under § 550.204 for Arctic OCS oil and gas exploration affecting each Bureau are discussed operators to develop an IOP for each areas, and inclusion of local Alaska separately. Instructions on how to comment follow those discussions. exploratory drilling program on the Natives in monitoring and other Arctic OCS, and to submit it to BOEM activities. Commenters also requested BOEM Information Collection—30 CFR at least 90 days in advance of filing their that we incorporate traditional Part 550 EP. The IOP addresses all phases of the knowledge of the Arctic OCS into our This proposed rule adds new operator’s proposed Arctic exploration decision-making for proposed requirements for submitting EPs and drilling activities at a strategic or regulations. We reviewed all comments other information before conducting oil conceptual level, showing how received to date and have, where and gas exploration drilling activities on operations will be designed, executed, appropriate, crafted proposed measures the Arctic OCS. The title of the and managed as an integrated endeavor to address Alaska Native concerns. DOI collection for the rulemaking is 30 CFR from start to finish. intends to continue consultation with 550, Subpart B, Arctic OCS Activities— The proposed rule also revises the IC affected tribes and ANCSA Corporations New. The burdens for the current for plans submission by expanding the following publication of the proposed planning requirements under 30 CFR requirements under § 550.220 to address rule. 550, Subpart B, regulations are the specific conditions (e.g., ice approved by OMB under Control management procedures) associated J. E.O. 12898 Number 1010–0151 (190,480 hours, with oil and gas activity on the Arctic E.O. 12898 requires Federal agencies $3,713,665 non-hour costs; expiration OCS. The rule provisions are intended to make achieving environmental justice 12/31/14; current collection can be to ensure that operators on the Arctic part of their mission by identifying and viewed at www.reginfo.gov/public/). OCS design and conduct their exploration drilling activities in a addressing disproportionately high and When final regulations become manner suitable for the area’s unique adverse human health or environmental effective, the new IC burdens for this conditions. effects of their programs, policies, and rulemaking will be consolidated into the existing collection for Subpart B. BOEM estimates that the new activities on minority populations and Respondents for this rulemaking are requirements will add a total of 270 low-income populations in the U.S. DOI Federal oil, gas, or sulphur lessees and/ burden hours to the already approved has determined that this proposed rule or operators on the Arctic OCS. burdens for plans. Because not all EPs does not have a disproportionately high Submissions are mandatory and submitted to BOEM will involve Arctic or adverse human health or generally on occasion. BOEM collects OCS exploration drilling, we are environmental effect on native, the information to ensure that planned separating the Arctic-specific minority, or low-income communities operations will be safe; will not requirements and burdens from the because its provisions are designed to adversely affect the marine, coastal, or national EP requirements. The burden increase environmental protection and human environments; will respond to table that follows this paragraph minimize any impact of exploration the special conditions on the Arctic outlines the new and expanded drilling on subsistence hunting OCS; and will conserve the resources of requirements and burdens associated activities and Alaska Native community the Arctic OCS. BOEM uses the with this rulemaking. BOEM has not resources and infrastructure. information to ensure, through identified any non-hour cost burdens advanced planning, that operators are associated with these requirements.

BURDEN BREAKDOWN

Average Citation 30 CFR Part 550 Sub- number of Burden part B Reporting & Recordkeeping Requirement Hour burden annual re- hours sponses

Arctic Integrated Operations Plan (IOP)

New 2041 ...... For New Arctic OCS Exploration Activities: Submit IOP, including 90 2 180 all required information.

Contents of Exploration Plans (EP)

206 ...... General requirements for plans...... Burdens already covered 0 220 ...... Submit Alaska-specific information...... under plans in 1010–0151.

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BURDEN BREAKDOWN—Continued

Average Citation 30 CFR Part 550 Sub- number of Burden part B Reporting & Recordkeeping Requirement Hour burden annual re- hours sponses

Expanded 220 ...... For New Arctic OCS Exploration Activities: Submit required Arc- 15 2 30 tic-specific information with EP, including confirmations. Expanded 220 ...... For Existing Arctic OCS Exploration Activities: Revise and resub- 30 2 60 mit Arctic-specific information, as required.

Total Burden for Proposed ...... 6 270 Rule. 1 Industry already compiles this information internally for planning and contract oversight; therefore, the burden expected is minimal, just to pre- pare and submit to BOEM.

BSEE Information Collection—30 CFR (60,198 hours); current collections can to, submit equipment statement Parts 250 and 254 be viewed at www.reginfo.gov/public/. showing capable of controlling WCD, The title of the collection of When final regulations are promulgated, explanation of your or your contractor’s information for this rule is 30 CFR part the new IC burdens for these subparts/ SCCE capabilities; inventory of supplies 250, subparts A, D, S and 30 CFR part parts will be incorporated into the and services, along with relevant 254, Arctic Oil & Gas Exploratory respective collections of information for supplier information; proof of contracts Drilling Operations—New. The those regulations. or membership agreements to provide proposed regulations establish The following table provides a SCCE or supplies, services; description requirements for safe, responsible, and breakdown of the paperwork and non- of procedures for inspecting, testing, environmentally protective Arctic OCS hour cost burdens for this proposed and maintaining SCCE; how all oil and gas exploration, and the rule. For the current requirements personnel operating SCCE received information is used in our efforts to retained in the proposed rule, we used training to deploy and operate— protect life and the environment, the OMB approved estimated hour and including dates of prior and planned conserve natural resources, and prevent non-hour cost burdens, where training; and how the operator waste. discernible. However, there are several incorporated API RP 2N, Third Edition, Potential respondents comprise new requirements in the proposed rule into its planned drilling operations Federal OCS oil, gas, and sulphur as follows: (+324 hours). operators and lessees on the Arctic OCS. 1. Subpart A: In § 250.471(c), (e), and (f), we The frequency of response varies In § 250.188(c), we have added propose to add requirements that depending upon the requirement. immediate oral reporting of anysea ice operators: Submit a reevaluation of Responses to this collection of movement/conditions, start and SCCE capabilities, including any new information are mandatory; they are termination of ice management WCD rate, and demonstrate compliance submitted on occasion, annually, or as activities, or kicks or unexpected with proposed § 250.470(f); maintain all a result of situations encountered, operational issues, and submission of a SCCE inspection and maintenance depending upon the requirement. The written report within 24 hours after records for at least 10 years; make IC does not include questions of a completing ice management activities records available to BSEE upon request; sensitive nature. BSEE will protect (+11 hours). maintain all records relating to use of proprietary information according to the 2. Subpart D: SCCE during testing, training, and Freedom of Information Act (5 U.S.C. In § 250.452(a) and (b), we have added deployment activities for at least 3 552) and DOI’s implementing real-time data gathering, monitoring, years; and make records available to regulations (43 CFR part 2), 30 CFR part and storing related to the BOP control BSEE upon request (+100 hours). 252, and 30 CFR 250.197, which address system, fluid handling, and downhole In § 250.472(c), we propose to add a disclosure of data and information to be conditions, etc.; notify BSEE of location provision stating that operators may made available to the public. of data; make data available to BSEE request approval for alternative As discussed earlier in the preamble, upon request (+288 hours). compliance measures for relief rig the proposed rule encompasses multiple In § 250.470, we have added requirements in accordance with subparts and focuses on Arctic OCS information requirements including, but existing § 250.141 (+0 hours). exploratory drilling activities and not limited to, detailed descriptions of: 3. Subpart S: related operations. This proposed rule Environmental, meteorologic, and In § 250.1920(b), (c), (d), and (e), the revises several existing collections oceanic conditions expected at well additional non-hour cost burdens under BSEE regulations. The site(s), and, how drilling units and pertaining to Audit Service Provider requirements and burdens for these equipment will be prepared for service; (ASP) audits every year in the Arctic in regulations are currently approved by transitioning rig from being underway to which exploration drilling is conducted OMB under 30 CFR part 250, subpart A, drilling and vice versa, along with would apply (+$129,000 non-hour cost). 1014–0022, expiration 8/3/2017 (84,391 anticipated repair and maintenance 4. 30 CFR part 254: hours, $1,371,458 non-hour cost plans; specific drilling objectives, Operators currently submit burdens); subpart D, 1014–0018, timelines, and updated contingency information with their spill response expiration 10/31/17 (102,512 hours); plans for temporary abandonment; plans (§§ 254.20–29) that is related to subpart S, 1014–0017, expiration 3/31/ weather and ice forecasting and the requirements in this rulemaking 16 (651,728 hours, $9,444,000 non-hour management; compliance with relief under proposed §§ 254.70, 254.80, and cost burdens); and 30 CFR part 254, well rig requirements; SCCE 254.90; therefore, we believe that the 1014–0007, expiration 12/31/2015 capabilities, including, but not limited current burden sufficiently covers the

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proposed modifications. We have added used to maintain real time monitoring a new requirement in § 254.80(c) for (+12 hours). submitting a description of the system

BURDEN TABLE

Citation 30 CFR parts Average number of 250 and 254 Reporting and recordkeeping requirements Hour burden annual responses Annual burden hours

30 CFR Part 250, Subpart A

188(c); 190 ...... NEW—Provide BSEE immediate oral re- Oral 1.5 ...... 2 notifications ...... 3. port of sea ice movement/conditions; start and termination of ice management activities; kicks or unexpected oper- ational issues. 188(c); 190 ...... NEW—Submit a written report within 24 Written 4 ...... 2 reports ...... 8. hours after completing ice management activities.

Subtotal ...... 4 responses ...... 11 hours.

30 CFR Part 250, Subpart D

418 ...... Additional information that is to be submitted with an APD is covered under the specific re- 0. quirement listed in this burden table under 30 CFR 250.470. 452(a), (b) ...... NEW—Immediately transmit real-time data 12 ...... 1 transmittal ...... 12. gathering and monitoring to record, store, and transmit data relating to the BOP control system, fluid handling, downhole conditions; prior to well oper- ations, notify BSEE of monitoring loca- tion and make data available to BSEE upon request. 452(b) ...... NEW—Store and monitor all information re- 1 ...... 2 wells × 138 drilling 276. lating to § 250.452(a); make data avail- days = 276. able to BSEE upon request.

452(b) ...... Store and retain all monitoring records per Burden covered under 30 CFR 250, Subpart 0. requirements of §§ 250.466 and 467. D, 1014–0018.

470(a); 417; 418 ...... NEW—Submit detailed descriptions of en- 10 ...... 1 submittal ...... 10. vironmental, meteorologic, and oceanic conditions expected at well site(s); how drilling unit, equipment, and materials will be prepared for service; how the drilling unit will be in compliance with § 250.417. 470(b); 418...... NEW—Submit detailed description of 4 ...... 2 each well—under- 16. transitioning rig from being underway to way to drilling; drill- drilling and vice versa. ing to underway = 4. 470(b); 418 ...... NEW—Submit detailed description of any 2 ...... 2 submittals ...... 4. anticipated repair and maintenance plans for the drilling unit and equipment. 470(c); 418 ...... NEW—Submit well specific drilling objec- 4 ...... 2 submittals ...... 8. tives, timelines, and updated contingency plans etc., for temporary abandonment. 470(d); 418...... NEW—Submit detailed description con- 6 ...... 1 submittal ...... 6. cerning weather and ice forecasting for all phases; including how to ensure con- tinuous awareness of weather/ice haz- ards at/between each well site; plans for managing ice hazards and responding to weather events; verification of capabili- ties. 470(e); 418; 472...... NEW—Submit a detailed description of 140 ...... 1 explanation ...... 140. compliance with relief rig plans.

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BURDEN TABLE—Continued

Citation 30 CFR parts Average number of 250 and 254 Reporting and recordkeeping requirements Hour burden annual responses Annual burden hours

470(f); 471(c); 418...... NEW—SCCE capabilities; submit equip- 60 ...... 2 submittals ...... 120. ment statement showing capable of con- trolling WCD; detailed description of your or your contractor’s SCCE capabilities in- cluding operating assumptions and limi- tations; inventory of local and regional supplies and services, along with sup- plier relevant information; proof of con- tract or agreements for providing SCCE or supplies, services; detailed description of procedures for inspecting, testing, and maintaining SCCE; and detailed descrip- tion of your plan ensuring all members of the team operating SCCE have received training to deploy and operate, include dates of prior and planned training. 470(g); 418 ...... NEW—Submit a detailed description of uti- 20 ...... 1 submittal ...... 20. lizing best practices of API RP 2N during operations. 471(c); 470(f); 465(a) ..... NEW—Submit with your APM, a reevalua- 10 ...... 2 submittals ...... 20. tion of your SCCE capabilities if well de- sign changes; include any new WCD rate and demonstrate that your SCCE capabilities will comply with § 250.470(f). 471(e) ...... NEW—Maintain all SCCE testing, inspec- 20 ...... 2 records ...... 40. tion, and maintenance records for at least 10 years; make available to BSEE upon request. 471(f) ...... NEW—Maintain all records pertaining to 20 ...... 2 records ...... 40. use of SCCE during testing, training, and deployment activities for at least 3 years; make available to BSEE upon request.

472(c) ...... Request approval for alternative compli- Burden covered under 30 CFR 250, Subpart A, 0. ance for relief rig requirements. 1014–0022

Subtotal ...... 297 responses ...... 712 hours

30 CFR Part 250, Subpart S

1920(b), (c), (e) ...... ASP audit for High Activity Operator ...... 1 operator × $129,000 audit for high activity = $129,000. NOTE: An audit once every 3 years in POCSR and GOMR; an audit in the Arc- tic in every year in which drilling is con- ducted.

1920(c) ...... Submit to BSEE after completed audit, an Burden covered under 30 CFR 250, Subpart S, 0 audit report of findings and conclusions, 1014–0017. including deficiencies and required sup- porting information/documentation.

1920(d) ...... Submit/resubmit a copy of your CAP that . will address deficiencies identified in audit.

Subtotal ...... 1 response ...... 0

$129,000 Non Hour Cost Burdens.

30 CFR Part 254, Subpart E

55; 70; 80; 90 ...... Submit spill response plan for OCS facili- Burden covered under 30 CFR 254, 1014– 0. ties with all information required in regu- 0007. lations and related documents.

80(c) ...... NEW—Submit a description of system 6 ...... 2 descriptions ...... 12. used to maintain real-time location track- ing for all response resources.

90(a) ...... Include in your training and exercise activi- Burden covered under 30 CFR 254, 1014– 0. ties the requirements of this section. 0007.

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BURDEN TABLE—Continued

Citation 30 CFR parts Average number of 250 and 254 Reporting and recordkeeping requirements Hour burden annual responses Annual burden hours

90(b) ...... Notify BSEE 60 days prior to handling, storing, or transporting oil.

Subtotal ...... 2 responses ...... 12 hours. Total Hour Burden ...... 304 Responses ...... 735 Hours.

...... $129,000 Non-Hour Cost Burdens. Note: For FY 2015, we calculated the burden with 2 rigs (same operator), each rig drilling 1 well.

Commenting on Information Collections Burden Table. We solicit your 1. It is not likely to have a significant As part of our continuing effort to comments on any non-hour costs. For adverse effect on the supply, reduce paperwork and respondent reporting and recordkeeping only, your distribution or use of energy; and burdens, BOEM and BSEE invite the response should split the cost estimate 2. It has not been designated as a public to comment on any aspect of the into two components: (1) Total capital significant energy action by the reporting and recordkeeping burdens. If and startup cost component and (2) Administrator of OIRA. Thus, a Statement of Energy Effects is you wish to comment on the IC aspects annual operation, maintenance, and purchase of services component. not required. of these regulations, you may send your Your estimates should consider the Due to the inherent practical comments directly to by email to OMB _ costs to generate, maintain, and disclose difficulties of exploration and (OIRA [email protected]) or by or provide the information. You should production in the area, to date there has fax 202–395–5806, with a copy to BSEE describe the methods you use to been relatively little exploration (see Addresses section). Please identify estimate major cost factors, including activity, and very little production of oil your comments with RIN: 1082–AA01. system and technology acquisition, and gas, on the Arctic OCS. The only To see a copy of either IC request expected useful life of capital existing oil production from the Arctic submitted to OMB, go to equipment, discount rate(s), and the OCS is through the Northstar Island www.reginfo.gov (select Information period over which you incur costs. facility. Since the proposed rule does Collection Review, Currently Under Generally, your estimates should not not apply to development or production Review). You may obtain a copy of the include equipment or services activities, it would not reduce or inhibit supporting statement for the new IC by purchased: (1) Before October 1, 1995; production of oil and gas and would contacting each Bureau’s Information (2) to comply with requirements not have no adverse impact on oil and gas Collection Clearance Officer: Cheryl associated with the IC; (3) for reasons supplies or prices. Blundon, BSEE, (703) 787–1607, and other than to provide information or Arlene Bajusz, BOEM, (703) 787–1025. keep records for the Government; or (4) O. Clarity of this Regulation The OMB is required to make a as part of customary and usual business We are required by E.O. 12866, E.O. decision concerning the ICs contained or private practices. 12988, and by the Presidential in these proposed regulations between Memorandum of June 1, 1998, to write 30 and 60 days after publication of this L. National Environmental Policy Act of all rules in plain language. This means document in the Federal Register. 1969 (NEPA) that each rule we publish must: Therefore, a comment to OMB is best BOEM and BSEE developed a draft 1. Be logically organized; assured of having its full effect if OMB Environmental Assessment (EA) to 2. Use the active voice to address receives it by March 26, 2015. determine whether this proposed rule readers directly; BOEM and BSEE specifically solicit would have a significant impact on the 3. Use clear language rather than comments on the following questions: quality of the human environment jargon; 1. Is the proposed collection of under the NEPA. The draft EA is 4. Be divided into short sections and information necessary for the Bureaus to available for review and public sentences; and properly perform their functions, and comment in conjunction with this 5. Use lists and tables wherever will it be useful? proposed rule at www.regulations.gov possible. 2. Are the estimates of the burden (in the Search box, enter BSEE–2013– If you believe we have not met these hours of the proposed collection 0011). requirements, send us comments by one reasonable? of the methods listed in the ADDRESSES 3. Do you have any suggestions that M. Data Quality Act section. To better help us revise the would enhance the quality, clarity, or In developing this rule, we did not rule, your comments should be as usefulness of the information to be conduct or use a study, experiment, or specific as possible. For example, you collected? survey requiring peer review under the should tell us the numbers of the 4. Is there a way to minimize the IC Data Quality Act (Pub. L. 106–554, app. sections or paragraphs that you find burden on those who are to respond, C § 515, 114 Stat. 2763, 2763A–153– unclear, which sections or sentences are including through the use of appropriate 154). too long, or the sections where you automated electronic, mechanical, or believe lists or tables would be useful. other forms of information technology? N. Effects on the Nation’s Energy Supply In addition, the PRA requires agencies (E.O. 13211) P. Public Availability of Comments to estimate the total annual reporting Although this proposed rule is a BOEM and BSEE encourage you to and recordkeeping non-hour cost significant regulatory action under E.O. participate in this proposed rule by burden resulting from the collection of 12866, it is not a significant energy submitting written comments as information. BSEE has identified one action under the definition of that term discussed in the ADDRESSES and DATES non-hour cost burden in the BSEE in E.O. 13211 because: sections of this proposed rule. Before

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including your address, phone number, ■ 1. The authority citation for 30 CFR equipment necessary to capture and email address or other personal part 250 is revised to read as follows: convey fluids to the surface. identifying information in your Authority: 30 U.S.C. 1751, 31 U.S.C. 9701, * * * * * comment on this proposed rule, you 33 U.S.C. 1321(j)(1)(C), 43 U.S.C. 1334. District manager means the BSEE should be aware that your entire officer with authority and responsibility ■ 2. Amend § 250.105 by: comment—including your personal for operations or other designated identifying information—may be made ■ a. Revising the definition of ‘‘District program functions for a district within publicly available at any time. While Manager’’ and a BSEE Region. For activities on the you can ask us in your comment to ■ b. Adding new definitions for ‘‘Arctic Alaska OCS, any reference in this part withhold your personal identifying OCS’’, ‘‘Arctic OCS conditions’’, ‘‘Cap to District Manager means the BSEE information from public review, we and flow system’’, ‘‘Capping stack’’, Regional Supervisor. cannot guarantee that we will be able to ‘‘Containment dome’’ and ‘‘Source * * * * * do so. control and containment equipment Source control and containment (SCCE)’’ in alphabetical order, to read as List of Subjects equipment (SCCE) means the capping follows: stack, cap and flow system, containment 30 CFR Part 250 § 250.105 Definitions. dome, and/or other subsea and surface devices, equipment, and vessels whose Continental shelf, Environmental * * * * * impact statements, Environmental collective purpose is to control a spill Arctic OCS means the Beaufort Sea protection, Government contracts, source and stop the flow of fluids into and Chukchi Sea Planning Areas, as Incorporation by reference, the environment or to contain fluids described in the Proposed Final OCS Oil Investigations, Mineral royalties, Oil escaping into the environment. ‘‘Surface and Gas Leasing Program for 2012–2017 and gas development and production, devices’’ refers to equipment mounted (June 2012). Oil and gas exploration, Oil and gas or staged on a barge, vessel, or facility reserves, Penalties, Pipelines, Public Arctic OCS conditions means, for the to separate, treat, store and/or dispose of lands—mineral resources, Public purposes of this part, the conditions fluids conveyed to the surface by the lands—rights of-way, Reporting and operators can reasonably expect during cap and flow system or the containment recordkeeping requirements, Sulphur operations on the Arctic OCS. Such dome. ‘‘Subsea devices’’ includes, but is development and production, Sulphur conditions, depending on the time of not limited to, remotely operated exploration, Surety bonds. year, include, but are not limited to: vehicles, anchors, buoyancy equipment, Extreme cold, freezing spray, snow, connectors, cameras, controls and other 30 CFR Part 254 extended periods of low light, strong subsea equipment necessary to facilitate Continental shelf, Intergovernmental winds, dense fog, sea ice, strong the deployment, operation and retrieval relations, Oil and gas exploration, Oil currents, and dangerous sea states. of the SCCE. The SCCE does not include pollution, Pipelines, Public lands— Remote location, relative lack of a blowout preventer. mineral resources, Reporting and infrastructure, and the existence of * * * * * recordkeeping requirements. subsistence hunting and fishing areas ■ 3. Amend § 250.188 by adding a new are also characteristic of the Arctic paragraph (c) to read as follows: 30 CFR Part 550 region. * * * * * § 250.188 What incidents must I report to Administrative practice and BSEE and when must I report them? procedure, Environmental impact Cap and flow system means an * * * * * statements, Environmental protection, integrated suite of equipment and (c) On the Arctic OCS, in addition to Federal lands, Government contracts, vessels, including a capping stack and the requirements of paragraphs (a) and Oil, Oil and gas exploration, Oil and gas associated flow lines, that, when (b) of this section, you must provide to development, Outer continental shelf, installed or positioned, is used to the BSEE inspector on location, if one Penalties, Pipelines, Public lands— control the flow of fluids escaping from is present, or to the Regional Supervisor mineral resources, Public lands—right- the well by conveying the fluids to the both of the following: of-way, Reporting and recordkeeping surface to a vessel or facility equipped (1) An immediate oral report if any of requirements, Sulphur development and to process the flow of oil, gas, and the following occur: production, Energy, Oil and gas water. A cap and flow system is a high (i) Any sea ice movement or condition reserves, Natural gas, Natural resources, pressure system that includes the that has the potential to affect your Continental shelf, Offshore structures, capping stack and piping necessary to operation or trigger ice management Petroleum, Bonds, Surety bonds. convey the flowing fluids through the activities; Dated: February 18, 2015. choke manifold to the surface (ii) The start and termination of ice Janice M. Schneider, equipment. management activities; or Assistant Secretary, Land and Minerals Capping stack means a mechanical (iii) Any ‘‘kicks’’ or operational issues Management. device that can be installed on top of a that are unexpected and could result in the loss of well control. For the reasons stated in the subsea or surface wellhead or blowout preventer to stop the uncontrolled flow (2) Within 24 hours after completing preamble, BOEM and BSEE amend 30 ice management activities, a written CFR parts 250, 254, and 550 as follows: of fluids into the environment. * * * * * report of such activities that conforms to TITLE 30—MINERAL RESOURCES the content requirements in § 250.190. Containment dome means a non- ■ CHAPTER II—BUREAU OF SAFETY AND 4. Amend § 250.198 by adding pressurized container that can be used paragraph (h)(89) to read as follows: ENVIRONMENTAL ENFORCEMENT, to collect fluids escaping from the well DEPARTMENT OF THE INTERIOR or equipment below the sea surface or § 250.198 Documents incorporated by PART 250—OIL AND GAS AND SULPHUR from seeps by suspending the device reference. OPERATIONS IN THE OUTER CONTINENTAL over the discharge or seep location. The * * * * * SHELF containment dome includes all of the (h) * * *

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(89) API RP 2N, Third Edition, (i) The proximity of your exploratory ■ 9. Add new § 250.452 to read as ‘‘Recommended Practice for Planning, drilling operation to subsistence follows: Designing, and Constructing Structures hunting and fishing locations; and Pipelines for Arctic Conditions;’’ (ii) The extent to which discharged § 250.452 What are the real-time monitoring requirements for Arctic OCS incorporated by reference at cuttings may cause marine mammals to exploratory drilling operations? § 250.470(g); alter their migratory patterns in a manner that impedes subsistence users’ (a) When conducting exploratory * * * * * drilling operations on the Arctic OCS, ■ 5. Amend § 250.300 by revising access to, or use of, those resources, or increases the risk of injury to you must have real-time data gathering paragraphs (b)(1) and (b)(2) to read as and monitoring capability to record, follows: subsistence users; or (iii) The extent to which discharged store, and transmit data regarding all § 250.300 Pollution prevention. cuttings may adversely affect marine aspects of: mammals, fish, or their habitat. (1) The BOP control system; * * * * * (2) The well’s fluid handling systems (b)(1) The District Manager may * * * * * on the rig; and restrict the rate of drilling fluid ■ 6. Amend § 250.402 by adding a new (3) The well’s downhole conditions as discharges or prescribe alternative paragraph (c) to read as follows: monitored by a downhole sensing discharge methods. The District system, when such a system is installed. Manager may also restrict the use of § 250.402 When and how must I secure a well? (b) During well operations, you must components which could cause immediately transmit the data identified * * * * * unreasonable degradation to the marine in paragraph (a) of this section to a environment. No petroleum-based (c) For Arctic OCS exploratory drilling operations, in addition to the designated onshore location where it substances, including diesel fuel, may must be stored and monitored by be added to the drilling mud system requirements of paragraphs (a) and (b) of this section: qualified personnel who have the without prior approval of the District capability for continuous contact with Manager. For Arctic OCS exploratory (1) If you move your drilling rig off a well prior to completion or permanent rig personnel and who have the drilling, you must capture all authority, in consultation with rig petroleum-based mud to prevent its abandonment, you must ensure that any equipment left on, near, or in a well personnel, to initiate any necessary discharge into the marine environment. action in response to abnormal data or The Regional Supervisor may also bore that has penetrated below the surface casing is positioned in a manner events. Prior to well operations, you require you to capture, during your must notify BSEE where the data will be Arctic OCS exploratory drilling to: (i) Protect the well head; and monitored during those operations, and operations, all water-based mud from you must make the data available to operations after completion of the hole (ii) Prevent or minimize the likelihood of compromising the down- BSEE, including in real time, upon for the conductor casing to prevent its request. After well operations, you must discharge into the marine environment, hole integrity of the well or the effectiveness of the well plugs. store the data at a designated location based on various factors including, but for recordkeeping purposes as required not limited to: (2) In areas of ice scour, you must use a well mudline cellar or an equivalent in §§ 250.466 and 250.467. (i) The proximity of your exploratory ■ means of minimizing the risk of damage 10. Add new undesignated centered drilling operation to subsistence heading ‘‘ADDITIONAL ARCTIC OCS hunting and fishing locations; to the well head. ■ 7. Amend § 250.418 by adding a new REQUIREMENTS’’ and §§ 250.470 (ii) The extent to which discharged paragraph (k) to read as follows: through 250.473 in Subpart D to read as mud may cause marine mammals to follows: alter their migratory patterns in a § 250.418 What additional information manner that impedes subsistence users’ must I submit with my APD? Additional Arctic OCS Requirements access to, or use of, those resources, or * * * * * § 250.470 What additional information increases the risk of injury to (k) For Arctic OCS exploratory must I submit with my APD for Arctic OCS subsistence users; or drilling operations, you must provide exploratory drilling operations? (iii) The extent to which discharged the information required by § 250.470. In addition to all other applicable mud may adversely affect marine ■ 8. Amend § 250.447 by revising requirements included in this part, you mammals, fish, or their habitat. paragraph (b) to read as follows: must provide with your APD all of the (2) Approval of the method of following information pertaining to your disposal of drill cuttings, sand, and § 250.447 When must I pressure test the BOP system? proposed Arctic OCS exploratory other well solids shall be obtained from drilling: the District Manager. For Arctic OCS * * * * * (a) A detailed description of: exploratory drilling, you must capture (b) Before 14 days have elapsed since (1) The environmental, and all cuttings from operations that utilize your last BOP pressure test, or for Arctic meteorologic and oceanic conditions petroleum-based mud to prevent their OCS exploratory drilling operations you expect to encounter at the well discharge into the marine environment. before 7 days have elapsed since your site(s); The Regional Supervisor may also last BOP pressure test. You must begin (2) How your equipment, materials, require you to capture, during your to test your BOP system before midnight and drilling unit will be prepared for Arctic OCS exploratory drilling on the 14th day (or for Arctic OCS service in the conditions in paragraph operations, all cuttings from operations exploratory drilling operations, the 7th (a)(1) of this section, and how your that utilize water-based mud after day) following the conclusion of the drilling unit will be in compliance with completion of the hole for the conductor previous test. However, the District the requirements of § 250.417. casing to prevent their discharge into Manager may require more frequent (b) A detailed description of all the marine environment, based on testing if conditions or BOP operations necessary in Arctic OCS various factors including, but not performance warrant; and Conditions to transition the rig from limited to: * * * * * being under way to conducting drilling

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operations and from ending drilling (e) A detailed description of how you best practices included in API RP 2N operations to being under way, as well will comply with the requirements of during your exploratory drilling as any anticipated repair and § 250.472. operations. You are not required to maintenance plans for the drilling unit (f) A statement that you own, or have incorporate the following sections of and equipment. The description should a contract with a provider for, source API RP 2N into your drilling operations: include, but not be limited to: control and containment equipment (1) Sections 6.6.3 through 6.6.4; (1) Recovering the subsea equipment, (SCCE) that is capable of controlling (2) The foundation recommendations including the marine riser and the lower and/or containing a worst case in Section 8.4; marine riser package; discharge, as described in your BOEM- (3) Section 9.6; (2) Recovering the BOP; approved EP, when proposing to use a (4) The recommendations for (3) Recovering the auxiliary sub-sea MODU to conduct exploratory drilling permanently moored systems in Section controls and template; operations on the Arctic OCS. The 9.7; (4) Laying down the drill pipe and following information must be included (5) The recommendations for pile securing the drill pipe and marine riser; in your SCCE submittal: foundations in Section 9.10; (5) Securing the drilling equipment; (1) A detailed description of your or (6) Section 12; (6) Transferring the fluids for your contractor’s SCCE capabilities, (7) Section 13.2.1; transport or disposal; including operating assumptions and (8) Sections 13.8.1.1, 13.8.2.1, (7) Securing ancillary equipment like limitations, reflecting that you have 13.8.2.2, 13.8.2.4 through 13.8.2.7; the draw works and lines; access to, and the ability to deploy in (9) Sections 13.9.1, 13.9.2, 13.9.4 (8) Refueling or transferring fuel; accordance with § 250.471, all SCCE through 13.9.8; (9) Offloading waste; necessary to regain control of the well, (10) Sections 14 through 16; and including the ability to evaluate the (10) Recovering the ROVs; (11) Section 18. performance of the well design to (11) Picking up the oil spill determine how a full shut-in can be § 250.471 What are the requirements for prevention booms and equipment; and achieved without having reservoir fluids Arctic OCS source control and (12) Offloading the drilling crew. containment? discharged into the environment; (c) Well-specific drilling objectives, (2) An inventory of the local and You must meet the following timelines, and updated contingency regional SCCE, supplies, and services requirements for all exploration wells plans for temporary abandonment of the that you own or for which you have a drilled on the Arctic OCS: well, including but not limited to the contract with a provider. You must (a) If you use a MODU when drilling following: identify each supplier of such below or working below the surface (1) When you will spud the particular equipment and services and provide casing, you must have access to: well (i.e., begin drilling operations at the their locations and telephone numbers; (1) A capping stack, positioned to well site) identified in the APD; (3) Where applicable, proof of ensure that it will arrive at the well (2) How long you will take to drill the contracts or membership agreements location within 24 hours after a loss of well; with cooperatives, service providers, or well control and can be deployed as (3) Anticipated depths and geologic other contractors that will provide you directed by the Regional Supervisor targets, with timelines; with the necessary SCCE or related pursuant to paragraph (h) of this (4) When you expect to set and supplies and services if you do not section; cement each string of casing; possess them. The contract or (2) A cap and flow system, positioned (5) When and how you would log the membership agreement must include to ensure that it will arrive at the well well; provisions for ensuring the availability location within 7 days after a loss of (6) Your plans to test the well; of the personnel and/or equipment on a well control and can be deployed as (7) When and how you intend to 24-hour per day basis while you are directed by the Regional Supervisor abandon the well, including specifically drilling below or working below the pursuant to paragraph (h) of this addressing your plans for how to move surface casing; section. The cap and flow system must the rig off location and how you will (4) A detailed description of the be designed to capture at least the meet the requirements of § 250.402(c); procedures for inspecting, testing, and amount of hydrocarbons equivalent to (8) A description of what equipment maintaining your SCCE; and the calculated worst case discharge rate and vessels will be involved in the (5) A detailed description of your plan referenced in your BOEM-approved EP; process of temporarily abandoning the to ensure that all members of your and well due to ice; and operating team who are responsible for (3) A containment dome, positioned (9) An explanation of how these operating the SCCE have received the to ensure that it will arrive at the well elements will be integrated into your necessary training to deploy and operate location within 7 days after a loss of overall program. such equipment in Arctic OCS well control and can be deployed as (d) A detailed description of your Conditions and demonstrate ongoing directed by the Regional Supervisor weather and ice forecasting capability proficiency in source control operations. pursuant to paragraph (g) of this section. for all phases of the drilling operation, You must also identify and include the The containment dome must have the including: dates of prior and planned training. capacity to pump fluids without relying (1) How you will ensure continuous (g) Where it does not conflict with on buoyancy. awareness of potential weather and ice other requirements of this subpart, and (b) You must conduct a monthly hazards at, and during transition except as provided below, you must stump test of dry-stored capping stacks. between, wells; comply with the requirements of API RP If you use a pre-positioned capping (2) Your plans for managing ice 2N, Third Edition ‘‘Planning, Designing, stack, you must conduct a stump test hazards and responding to weather and Constructing Structures and prior to each installation on each well. events; and Pipelines for Arctic Conditions’’ (c) As required by § 250.465(a), if you (3) Verification that you have the (incorporated by reference as specified propose to change your well design, you capabilities described in your BOEM- in § 250.198), and provide a detailed must submit an APM. For Arctic OCS approved EP. description of how you will utilize the operations, your APM must include a

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reevaluation of your SCCE capabilities conditions that can be reasonably PART 254—OIL-SPILL RESPONSE for any new WCD rate, and a expected during your operations; and REQUIREMENTS FOR FACILITIES demonstration that your SCCE (b) Measures to address human factors LOCATED SEAWARD OF THE COAST capabilities will meet the criteria in associated with weather conditions that LINE § 250.470(f) under the changed well can be reasonably expected during your ■ design. 12. The authority citation for 30 CFR operations including, but not limited to, part 254 continues to read as follows: (d) You must conduct tests or provision of proper attire and Authority: 33 U.S.C. 1321. exercises of your SCCE, including equipment, construction of protected deployment of your SCCE, when work spaces, and management of shifts. ■ 13. Amend § 254.6 by: directed by the Regional Supervisor. ■ a. Revising the definition of ‘‘Adverse ■ (e) You must maintain records 11. Amend § 250.1920 by: weather conditions,’’ pertaining to testing, inspection, and ■ a. Adding a new last sentence to ■ b. Adding a new definition for ‘‘Arctic maintenance of your SCCE for at least paragraphs (b)(5), (c), and (d); and OCS’’ in alphabetical order, and 10 years and make the records available ■ c. Adding a new definition for ‘‘Ice ■ b. Adding new paragraphs (e) and (f) to any authorized BSEE representative intervention practices’’ in alphabetical to read as follows: upon request. order. (f) You must maintain records § 250.1920 What are the auditing § 254.6 Definitions. pertaining to the use of your SCCE requirements for my SEMS program? * * * * * during testing, training, and deployment * * * * * activities for at least 3 years and make Adverse weather conditions means, the records available to any authorized (b) * * * for the purposes of this part, weather BSEE representative upon request. (5) * * * For exploratory drilling conditions found in the operating area (g) Upon a loss of well control, you operations taking place on the Arctic that make it difficult for response must initiate transit of all SCCE OCS, you must conduct an audit, equipment and personnel to clean up or identified in paragraph (a) of this consisting of an onshore portion and an remove spilled oil or hazardous section to the well. offshore portion, including all related substances. These conditions include, (h) You must deploy and use SCCE infrastructure, once per year for every but are not limited to: Fog, inhospitable when directed by the Regional year in which drilling is conducted. water and air temperatures, wind, sea Supervisor. ice, extreme cold, freezing spray, snow, * * * * * currents, sea states, and extended § 250.472 What are the relief rig (c) * * * For exploratory drilling periods of low light. Adverse weather requirements for the Arctic OCS? operations taking place on the Arctic conditions do not refer to conditions (a) In the event of a loss of well OCS, you must submit an audit report under which it would be dangerous or control, the Regional Supervisor may of the audit findings, observations, impossible to respond to a spill, such as direct you to drill a relief well using the deficiencies and conclusions for the a hurricane. relief rig described in your APD. Your onshore portion of your audit no later Arctic OCS means the Beaufort Sea relief rig must comply with all other than March 1 in any year in which you and Chukchi Sea Planning Areas, as requirements of this part for drilling plan to drill, and for the offshore described in the Proposed Final OCS Oil operations, and it must be able to drill portion of your audit, within 30 days of and Gas Leasing Program for 2012–2017 a relief well under anticipated Arctic the close of the audit. (June 2012). OCS Conditions. (d) * * * For exploratory drilling * * * * * (b) When you are drilling below or Ice intervention practices means the operations taking place on the Arctic working below the surface casing during equipment, vessels, and procedures Arctic OCS exploratory drilling OCS, you must provide BSEE with a used to increase oil encounter rates and operations, you must have access to a copy of your CAP for addressing the effectiveness of spill response relief rig, different from your primary deficiencies or nonconformities techniques and equipment when sea ice drilling rig, staged in a location such identified in the onshore portion of the is present. audit no later than March 1 in any year that it can arrive on site, drill a relief * * * * * in which you plan to drill, and for the well, kill and abandon the original well, 14. Add § 254.55 to Subpart D to read and abandon the relief well prior to offshore portion of your audit, within 30 as follows: expected seasonal ice encroachment at days of the close of the audit. the drill site, but no later than 45 days (e) For exploratory drilling operations § 254.55 Spill response plans for facilities after the loss of well control. taking place on the Arctic OCS, during located in Alaska State waters seaward of (c) Operators may request approval of the coast line in the Chukchi and Beaufort the offshore portion of each audit, 100 Seas. alternative compliance measures to the percent of the facilities operated must Response plans for facilities relief rig requirement in accordance be audited while drilling activities are with § 250.141. conducting exploratory drilling underway. The offshore portion of the operations from a MODU seaward of the § 250.473 What must I do to protect health, audit for each facility must be started coast line in Alaska State waters in the safety, property, and the environment while and closed within 30 days after the first Chukchi and Beaufort Seas must follow operating on the Arctic OCS? spudding of the well or entry into an the requirements contained within In addition to the requirements set existing wellbore for any purpose from subpart E of this part, in addition to the forth in § 250.107, when conducting that facility. other requirements of this subpart. Such exploratory drilling operations on the (f) For exploratory drilling operations response plans must address how the Arctic OCS, you must protect health, taking place on the Arctic OCS, if BSEE source control procedures selected to safety, property, and the environment determines that the CAP or progress comply with State law will be integrated by using the following: toward implementing the CAP is not into the planning, training, and exercise (a) Equipment and materials that are satisfactory, BSEE may order you to shut requirements of §§ 254.70(a), 254.90(a), rated or de-rated for service under down all or part of your operations. and 254.90(c) in the event that the

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proposed operations do not incorporate drilling activities, and all resulting support response personnel conducting the capping stack, cap and flow system, modifications must be submitted to the offshore, nearshore and shoreline containment dome, and/or other similar Regional Supervisor. If this review does response; and subsea and surface devices and not result in modifications, you must (v) Management of recovered fluid inform the Regional Supervisor in equipment and vessels referenced in and contaminated debris and response those sections. writing that there are no changes. The materials (e.g., oiled sorbents), as well ■ 15. Add new subpart E to read as requirements of this subsection are in as waste streams generated at offshore follows: lieu of the requirements in § 254.30(a). and on-shore support facilities (e.g., Subpart E—Oil-Spill Response §§ 254.71 through 254.79 [Reserved] sewage, food, and medical). Requirements for Facilities Located on the Arctic OCS § 254.80 What additional information must (c) A description of the system you Sec. I include in the ‘‘Emergency response will use to maintain real-time location 254.65 Purpose. action plan’’ section for facilities tracking for all response resources while 254.66 through 254.69 [Reserved] conducting exploratory drilling from a operating, transiting, or staging/ 254.70 What are the additional MODU on the Arctic OCS? maintaining such resources during a requirements for facilities conducting In addition to the requirements in spill response. exploratory drilling from a MODU on the § 254.23, you must include the Arctic OCS? following information in the emergency §§ 254.81 through 254.89 [Reserved] 254.71 through 254.79 [Reserved] response action plan section of your 254.80 What additional information must I response plan: § 254.90 What are the additional include in the ‘‘Emergency response (a) A description of your ice requirements for exercises of your action plan’’ section for facilities intervention practices and how they response personnel and equipment for conducting exploratory drilling from a facilities conducting exploratory drilling will improve the effectiveness of the oil MODU on the Arctic OCS? from a MODU on the Arctic OCS? 254.81 through 254.89 [Reserved] spill response options and strategies 254.90 What are the additional that are listed in your OSRP in the In addition to the requirements in requirements for exercises of your presence of sea ice. When developing § 254.42, the following requirements response personnel and equipment for the ice intervention practices for your apply to exercises for your response facilities conducting exploratory drilling oil spill response plan, you must personnel and equipment for facilities from a MODU on the Arctic OCS? consider, at a minimum, the use of conducting exploratory drilling from a specialized tactics, modified response MODU on the Arctic OCS: Subpart E—Oil-Spill Response equipment, ice management assist (a) You must incorporate the Requirements for Facilities Located on vessels, and technologies for the the Arctic OCS identification, tracking, containment personnel, materials, and equipment identified in § 254.70(a), the safe § 254.65 Purpose. and removal of oil in ice. (b) On areas of the Arctic OCS where working practices identified in This subpart describes the additional a planned shore-based response would § 254.70(b), the ice intervention requirements for preparing spill not satisfy § 254.1(a): practices described in § 254.80(a), the response plans and maintaining oil spill (1) A list of all resources required to offshore-based response requirements in preparedness for facilities conducting ensure an effective offshore-based § 254.80(b), and the resource tracking exploratory drilling operations from a response capable of operating in adverse requirements in § 254.80(c) into your MODU on the Arctic OCS. weather conditions. This list must spill-response training and exercise §§ 254.66 through 254.69 [Reserved] include a description of how you will activities. ensure the shortest possible transit (b) For each season in which you plan § 254.70 What are the additional times, including but not limited to to conduct exploratory drilling requirements for facilities conducting establishing an offshore resource operations from a MODU on the Arctic exploratory drilling from a MODU on the management capability (e.g., sea-based Arctic OCS? OCS, you must notify the Regional staging, maintenance, and berthing In addition to meeting the applicable logistics); and Supervisor 60 days prior to handling, requirements of this part, your response (2) A list and description of logistics storing, or transporting oil. plan must: resupply chains, including waste (c) After the Regional Supervisor (a) Describe how the relevant management, that effectively factor in receives notice pursuant to § 254.90(b), personnel, equipment, materials, and the remote and limited infrastructure the Regional Supervisor may direct you support vessels associated with the that exists in the Arctic and ensure you to deploy and operate your spill capping stack, cap and flow system, can adequately sustain all oil spill response equipment and/or your containment dome, and other similar response activities for the duration of capping stack, cap and flow system, and subsea and surface devices and the response. The components of the containment dome, and other similar equipment and vessels will be logistics supply chain include, but are integrated into oil spill response subsea and surface devices and not limited to: equipment and vessels, as part of incident action planning; (i) Personnel and equipment transport announced or unannounced exercises or (b) Describe how you will address services; human factors, such as cold stress and (ii) Airfields and types of aircraft that compliance inspections. For the cold related conditions, associated with can be supported; purposes of this section, spill response oil spill response activities in adverse (iii) Capabilities to mobilize supplies equipment does not include the use of weather conditions and their impacts on (e.g., response equipment, fuel, food, blowout preventers, diverters, heavy decision-making and health and safety; fresh water) and personnel to the weight mud to kill the well, relief wells, and response sites; or other similar conventional well (c) Undergo plan-holder review prior (iv) Onshore staging areas, storage control options. to handling, storing, or transporting oil areas that may be used en route to in connection with seasonal exploratory staging areas, and camp facilities to

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CHAPTER V—BUREAU OF OCEAN (b) A schedule of your exploratory § 550.206 How do I submit the IOP, EP, ENERGY MANAGEMENT, DEPARTMENT OF drilling program, including contractor DPP, or DOCD? THE INTERIOR work on critical components of your (a) Number of copies. When you program; PART 550—OIL AND GAS AND submit an IOP, EP, DPP, or DOCD to (c) A description of your mobilization SULPHUR OPERATIONS IN THE BOEM, you must provide: and demobilization operations, OUTER CONTINENTAL SHELF (1) Four copies that contain all including tow plans suitable for Arctic required information (proprietary ■ 16. The authority citation for 30 CFR OCS Conditions, as well as your general copies); part 550 continues to read as follows: maintenance schedule for vessels and (2) Eight copies for public distribution Authority: 30 U.S.C. 1751; 31 U.S.C. 9701; equipment; (public information copies) that omit 43 U.S.C. 1334. (d) A description of your exploratory information that you assert is exempt drilling program objectives and ■ 17. Amend § 550.105 by adding new from disclosure under the Freedom of timelines for each objective, including Information Act (FOIA) (5 U.S.C. 552) definitions for ‘‘Arctic OCS’’ and general plans for abandonment of the ‘‘Arctic OCS conditions’’ in alphabetical and the implementing regulations (43 well(s), such as: CFR part 2); and order to read as follows: (1) Contingency plans for temporary (3) Any additional copies that may be abandonment in the event of ice § 550.105 Definitions. necessary to facilitate review of the IOP, encroachment at the drill site; * * * * * (2) Plans for permanent abandonment; EP, DPP, or DOCD by certain affected Arctic OCS means the Beaufort Sea and States and other reviewing entities. and Chukchi Sea Planning Areas, as (3) Plans for temporary seasonal (b) Electronic submission. You may described in the Proposed Final OCS Oil abandonment; submit part or all of your IOP, EP, DPP, and Gas Leasing Program for 2012–2017 (e) A description of your weather and or DOCD and its accompanying (June 2012). ice forecasting capabilities for all phases information electronically. If you prefer Arctic OCS conditions means, for the of the exploration program, including a to submit your IOP, EP, DPP, or DOCD purposes of this part, the conditions description of how you would respond electronically, ask the Regional operators can reasonably expect during to and manage ice hazards and weather Supervisor for further guidance. operations on the Arctic OCS. Such events; (c) Withdrawal after submission. You conditions, depending on the time of (f) A description of work to be may withdraw your proposed IOP, EP, year, include, but are not limited to: performed by contractors supporting DPP, or DOCD at any time for any extreme cold, freezing spray, snow, your exploration drilling program reason. Notify the appropriate BOEM extended periods of low light, strong (including mobilization and OCS Region if you do. winds, dense fog, sea ice, strong demobilization), including: ■ 21. Amend § 550.220 by: currents, and dangerous sea states. (1) How such work will be designed ■ a. Revising paragraph (a), and Remote location, relative lack of or modified to account for Arctic OCS ■ b. Adding a new paragraph (c). infrastructure, and the existence of Conditions; and subsistence hunting and fishing areas (2) Your concepts for contractor § 550.220 If I propose activities in the are also characteristic of the Arctic management, oversight, and risk Alaska OCS Region, what planning region. management. information must accompany the EP? * * * * * (g) A description of how you will * * * * * ■ 18. Amend § 550.200 paragraph (a) by ensure operational safety while working (a) Emergency Plans. A description of adding the term ‘‘IOP’’ in alphabetical in Arctic OCS Conditions, including but your emergency plans to respond to a order: not limited to: fire, explosion, personnel evacuation, or (1) The safety principles that you loss of well control, as well as a loss or § 550.200 Definitions. intend to apply to yourself and your disablement of a drilling unit, and loss * * * * * contractors; of or damage to a support vessel, (a) * * * (2) The accountability structure offshore vehicle, or aircraft. IOP means Integrated Operations within your organization for * * * * * Plan. implementing such principles; (c) If you propose exploration (3) How you will communicate such * * * * * activities on the Arctic OCS, the ■ principles to your employees and 19. Add a new § 550.204 to read as following planning information must follows: contractors; and (4) How you will determine also accompany your EP: § 550.204 When must I submit my IOP for successful implementation of such (1) Suitability for Arctic OCS proposed Arctic exploratory drilling principles. conditions. A description of how your operations and what must the IOP include? (h) Information regarding your exploratory drilling activities will be If you propose exploratory drilling preparations and plans for staging of oil designed and conducted in a manner activities on the Arctic OCS, you must spill response assets; suitable for Arctic OCS conditions and submit an Integrated Operations Plan (i) A description of your efforts to how such activities will be managed (IOP) to the Regional Supervisor at least minimize impacts of your exploratory and overseen as an integrated endeavor. 90 days prior to filing your EP. Your IOP drilling operations on local community (2) Ice and weather management. A must describe how your exploratory infrastructure, including but not limited description of your weather and ice drilling program will be designed and to housing, energy supplies, and forecasting and management plans for conducted in an integrated manner services; and all phases of your exploratory drilling suitable for Arctic OCS Conditions and (j) A description of whether and to activities, including: include the following information: what extent your project will rely on (i) A description of how you will (a) Information describing how all local community workforce and spill respond to and manage ice hazards and vessels and equipment will be designed, cleanup response capacity. weather events; built, and/or modified to account for ■ 20. Revise § 550.206 to read as (ii) Your ice and weather alert Arctic OCS Conditions; follows: procedures;

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(iii) Your procedures and thresholds rig, the anticipated staging area of the (i) The completion of on-site for activating your ice and weather relief well rig, an estimate of the time it operations, which is contingent upon management system(s); and would take for the relief well rig to your capability in terms of equipment (iv) Confirmation that you will arrive at the site of a loss of well control, and procedures to manage and mitigate operate ice and weather management how you would drill a relief well if risks associated with Arctic OCS and alert systems continuously necessary, and the approximate Conditions; and throughout the planned operations, timeframe to complete relief well (ii) The termination of drilling including mobilization and operations. demobilization operations to and from operations into zones capable of flowing (5) Resource-sharing. Any agreements the Arctic OCS. liquid hydrocarbons to the surface (3) Source control and containment you have with third parties for the consistent with the relief rig planning equipment capabilities. A general sharing of assets or the provision of requirements under § 250.472 of this description of how you will comply mutual aid in the event of an oil spill title and with your estimated timeframe with § 250.471 of this title. or other emergency. under paragraph (c)(4) of this section for (4) Deployment of a relief well rig. A (6) Anticipated end of seasonal completion of relief well operations. general description of how you will operations dates. Your projected end of [FR Doc. 2015–03609 Filed 2–20–15; 4:15 pm] comply with § 250.472 of this title, season dates, and the information used including a description of the relief well to identify those dates, for: BILLING CODE 4310–VH–4310–MR–P

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