# Oil and Gas and Sulphur Operations on the Outer Continental Shelf-Requirements for Exploratory Drilling on the Arctic Outer Continental Shelf > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3A2015-03609 ## Record - **Collection:** Federal Register - **Document type:** Proposed Rule - **Published:** February 24, 2015 - **Citation:** 80 FR 9916 ## Text 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 [Docket ID: BSEE-2013-0011; 15XE1700DX EX1SF0000.DAQ000 EEEE500000] RIN 1082-AA00 Oil and Gas and Sulphur Operations on the Outer Continental Shelf—Requirements for Exploratory Drilling on the Arctic Outer Continental Shelf AGENCY: Bureau of Safety and Environmental Enforcement (BSEE); Bureau of Ocean Energy Management (BOEM), Interior. ACTION: Proposed rule. SUMMARY: The Department of the Interior (DOI), acting through BOEM and BSEE, proposes to revise and add new requirements to regulations for exploratory drilling and related operations on the Outer Continental Shelf (OCS) seaward of the State of Alaska (Alaska OCS). The Alaska OCS has the potential to be an integral part of the Nation's “all of the above” domestic energy strategy. This proposed rule focuses solely on the OCS within the Beaufort Sea and Chukchi Sea Planning Areas (Arctic OCS). The Arctic region is characterized by extreme environmental conditions, geographic remoteness, and a relative lack of fixed infrastructure and existing operations. The proposed rule is designed to ensure safe, effective, and responsible exploration of Arctic OCS oil and gas resources, while protecting the marine, coastal, and human environments, and Alaska Natives' cultural traditions and access to subsistence resources. DATES: Submit comments by April 27, 2015. BOEM and BSEE may not fully consider comments received after this date. You may submit comments to the Office of Management and Budget (OMB) on the information collection burden in this proposed rule by March 26, 2015. The deadline for comments on the information collection burden does not affect the deadline for the public to comment to BOEM and BSEE on the proposed regulations. ADDRESSES: You may submit comments on the rulemaking by any of the following methods. For comments on this proposed rule, please use Regulation Identifier Number (RIN) 1082-AA00 in your message. For comments specifically related to the draft Environmental Assessment conducted under the National Environmental Policy Act of 1969 (NEPA), please refer to NEPA in the heading of your message. See also, Public Availability of Comments under Procedural Matters. • Federal eRulemaking Portal: http://www.regulations.gov. In the Search box, enter BSEE-2013-0011, then click search. Follow the instructions to submit public comments and view supporting and related materials available for this rulemaking. BOEM and BSEE will post all submitted comments. • Mail or hand-carry comments to the DOI, BSEE: Attention: Regulations and Standards Branch, 381 Elden Street, HE3314, Herndon, Virginia 20170-4817. Please reference “Oil and Gas and Sulphur Operations on the Outer Continental Shelf—Requirements for Exploratory Drilling on the Arctic Outer Continental Shelf,” 1082-AA00 in your comments, and include your name and return address. • Send comments on the information collection of this rule to: Interior Desk Officer 1082-AA00, Office of Management and Budget; 202-395-5806 (fax); email: OIRA_Submission@omb.eop.gov. Please also send copies to BSEE by one of the means previously described. FOR FURTHER INFORMATION CONTACT: Mark E. Fesmire, BSEE, Alaska Regional Office, mark.fesmire@bsee.gov, (907) 334-5300; John Caplis, BSEE, Oil Spill Response Division, john.caplis@bsee.gov, (703) 787-1364; or David Johnston, BOEM, Alaska Regional Office, david.johnston@boem.gov, (907) 334-5200. To see a copy of either information collection request submitted to OMB, go to http://www.reginfo.gov (select Information Collection Review, Currently Under Review). SUPPLEMENTARY INFORMATION: Executive Summary Although there is currently a comprehensive OCS oil and gas regulatory program, DOI engagement with stakeholders reveals the need for new and revised regulatory measures for exploratory drilling conducted by floating drilling vessels and “jackup rigs” (collectively known as mobile offshore drilling units or MODUs) on the Arctic OCS. The United States (U.S.) Arctic region, as recognized by the U.S. and defined in the U.S. Arctic Research and Policy Act of 1984, encompasses an extensive marine and terrestrial area, but this proposed rule focuses solely on the OCS within the Beaufort Sea and Chukchi Sea Planning Areas. BOEM and BSEE have undertaken extensive environmental and safety reviews of potential oil and gas operations on the Arctic OCS. These reviews, along with concerns expressed by environmental organizations and Alaska Natives, reinforce the need to develop additional measures specifically tailored to the operational and environmental conditions of the Arctic OCS. After considering the input provided by various stakeholders and DOI's direct experience from Shell's 2012 Arctic operations, BOEM and BSEE have concluded that additional exploratory drilling regulations would enhance existing regulations and would be appropriate for a more holistic Arctic OCS oil and gas regulatory framework. This proposed rulemaking is intended to provide regulations to ensure Arctic OCS exploratory drilling operations are conducted in a safe and responsible manner that would take into account the unique conditions of Arctic OCS drilling and Alaska Natives' cultural traditions and need to access subsistence resources. The Arctic region is known for its oil and gas resource potential, its vibrant ecosystems, and the Alaska Native communities, who rely on the Arctic's resources for subsistence and cultural traditions. The region is characterized by extreme environmental conditions, geographic remoteness, and a relative lack of fixed infrastructure and existing operations. These are key factors in considering the feasibility, practicality, and safety of conducting offshore oil and gas activities on the Arctic OCS. This proposed rule would add to, and revise existing regulations in, 30 CFR parts 250, 254, and 550 for Arctic OCS oil and gas activities. The proposed rule would focus on Arctic OCS exploratory drilling activities that use MODUs and related operations during the Arctic OCS open-water drilling season. This proposed rule would address a number of important issues and objectives, including ensuring that each operator: 1. Designs and conducts exploration programs in a manner suitable for Arctic OCS conditions; 2. Develops an integrated operations plan (IOP) that would address all phases of its proposed Arctic OCS exploration program and submit the IOP to DOI, acting through its designee, BOEM, at least 90 days in advance of filing the Exploration Plan (EP); 3. Has access to, and the ability to promptly deploy, Source Control and Containment Equipment (SCCE) while drilling below, or working below, the surface casing; 4. Has access to a separate relief rig located so that it could timely drill a relief well in the event of a loss of well control under the conditions expected at the site; 5. Has the capability to predict, track, report, and respond to ice conditions and adverse weather events; 6. Effectively manages and oversees contractors; and 7. Develops and implements an Oil Spill Response Plan (OSRP) that is designed and executed in a manner suitable for the unique Arctic OCS operating environment and has the necessary equipment, training, and personnel for oil spill response on the Arctic OCS. The proposed rule would further the Nation's interest in exploring frontier areas, such as those in the Arctic region, and would establish specific operating models and requirements for the extreme, changing conditions that exist on the Arctic OCS. The proposed regulations would require comprehensive planning of operations, especially for emergency response and safety systems. The proposed rule would seek to institutionalize a proactive approach to offshore safety. A goal of the proposed rule is to identify possible vulnerabilities early in the planning process so that corrections could be made in order to decrease the possibility of an incident occurring. The requirements in the proposed rule are also designed to ensure that those plans would be executed in a safe and environmentally protective manner despite the challenges presented by the Arctic. Table of Contents List of Acronyms and References I. Introduction A. Resource Potential B. Integrated Arctic Management C. Overview of Proposed Regulations D. Potential Costs and Benefits of Proposed Rule II. Background A. Statutory and Regulatory Overview B. Factual Overview of the Alaska OCS Region C. Partner and Stakeholder Engagement in Preparation for This Proposed Rule D. Expected Benefits Justifying Potential Costs III. Proposed Regulations for Arctic OCS Exploratory Drilling A. Measures That Address Recommendations B. IOP Requirement C. SCCE and Relief Rig Capabilities D. Planning for the Variability and Challenges of the Arctic OCS Conditions E. Arctic OCS Oil Spill Response Preparedness F. Reducing Pollution From Arctic OCS Exploratory Drilling Operations G. Oversight, Management, and Accountability of Operations and Contractor Support IV. Section-By-Section Discussion A. Definitions (§§ 250.105, 254.6, and 550.105) B. Additional Regulations Proposed by BOEM C. Additional Regulations Proposed by BSEE D. Arctic Exploratory Drilling Process Flowchart V. Conclusion VI. Procedural Matters A. Regulatory Planning and Review (E.O. 12866 and E.O. 13563) B. E.O. 12866 C. E.O. 13563 D. Regulatory Flexibility Act E. Unfunded Mandates Reform Act of 1995 (UMRA) F. Takings Implication Assessment G. Federalism (E.O. 13132) H. Civil Justice Reform (E.O. 12988) I. Consultation With Indian Tribes (E.O. 13175) J. E.O. 12898 K. Paperwork Reduction Act (PRA) L. National Environmental Policy Act of 1969 (NEPA) M. Data Quality Act N. Effects on the Nation's Energy Supply (E.O. 13211) O. Clarity of Regulations P. Public Availability of Comments List of Acronyms and References 60-Day report Report to the Secretary of the Interior, review of Shell's 2012 Alaska offshore oil and gas exploration program MODU Mobile offshore drilling units AIS Automatic Identification System NARA National Archives and Records Administration. Alaska OCS OCS Seaward of the State of Alaska National Arctic Strategy President's National Strategy for the Arctic 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 Administration. API American Petroleum Institute NPDES National Pollutant Discharge Elimination System. APM Application for Permit to Modify OCS Outer Continental Shelf. Arctic OCS OCS within the Beaufort Sea and Chukchi Sea Planning Areas OCSLA Outer Continental Shelf Lands Act. 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 Enforcement PRA Paperwork Reduction Act. 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 Documents ROV Remotely Operated Vehicle. 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 Systems. 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. 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 Permitting in Alaska. ISO International Organization for Standardization I. Introduction The Arctic region is known for its oil and gas resource potential, its thriving and diverse ecosystems, and the Alaska Native communities who rely on the Arctic's resources for subsistence and cultural traditions. The Arctic region is also characterized by extreme environmental conditions, geographic remoteness, and a relative lack of fixed infrastructure and existing operations. These are key factors in considering the feasibility, practicality, and safety of conducting offshore oil and gas activities on the Arctic OCS. In May 2013, President Obama issued a document entitled, “National Strategy for the Arctic Region (National Arctic Strategy).” The President affirmed that emerging economic opportunities exist in the region, but that “ . . . we must exercise responsible stewardship, using an integrated management approach and making decisions based on the best available information, with the aim of promoting healthy, sustainable, and resilient ecosystems over the long term.” In keeping with the Nation's comprehensive “all of the above” energy strategy to continue to expand safe and responsible domestic energy production, the National Arctic Strategy is intended, among other things, to “reduce our reliance on imported oil and strengthen our Nation's energy security” by working with stakeholders to enable “environmentally responsible production of oil and natural gas.” To provide responsible stewardship of the Arctic's environment and resources, the National Arctic Strategy emphasizes the need for integrated and balanced management techniques. Furthermore, the National Arctic Strategy acknowledges the potential international implications of Arctic oil and gas activities for “other Arctic states and the international community as a whole.” The U.S. has committed to do its part to “keep the Arctic region prosperous, environmentally sustainable, operationally safe, secure, and free of conflict[.]” One primary objective outlined in the implementation plan for the National Arctic Strategy is to “reduce the risk of marine oil pollution while increasing global capabilities for preparedness and response to oil pollution incidents in the Arctic.” ( http://www.whitehouse.gov/sites/default/files/docs/implementation_plan_for_the_national_strategy_for_the_arctic_region_-_fi....pdf ). The National Arctic Strategy is an example of the types of action the U.S. is taking to implement its obligations under international agreements, such as the Arctic Council's Agreement on Cooperation on Marine Oil Pollution Preparedness and Response in the Arctic (available at: www.arctic-council.org/eppr/agreement-on-cooperation-on-marine-oil-pollution-preparedness-and-response-in-the-arctic/ ). A. Resource Potential The Alaska OCS region is estimated to contain a vast amount of undiscovered, technically recoverable oil and gas. According to BOEM's 2011 Assessment of Undiscovered Technically Recoverable Oil and Gas Resources of the Nation's Outer Continental Shelf (mean estimates available at: www.boem.gov/Oil-and-Gas-Energy-Program/Resource-Evaluation/Resource-Assessment/2011_National_Assessment_Factsheet-pdf.aspx ), there are approximately 23.6 billion barrels of technically recoverable oil and about 104.4 trillion cubic feet of technically recoverable natural gas in the Beaufort Sea and Chukchi Sea Planning Areas combined. Most of the Alaska OCS resource potential is located off the Arctic coast within the Chukchi Sea and Beaufort Sea Planning Areas. This resource potential has received considerable attention from the oil and gas industry and the U.S. government, and has precipitated the sale of hundreds of leases and the initiation of subsequent exploration activities. The Alaska OCS region, particularly the Beaufort Sea and Chukchi Sea Planning Areas, has the potential to be an integral part of the “all of the above” domestic energy strategy articulated in the National Arctic Strategy. B. Integrated Arctic Management As ocean and seasonal conditions continue to change in the Arctic, there will be an increasing number of stakeholders vying for access to the Arctic OCS and the waters above it. Both commercial and recreational activities are increasing as more areas of water open up for longer periods of time due to the increase of melting sea ice. The decrease in summer sea ice raises legitimate concerns regarding changes to the environment and the Arctic resources that Alaska Natives depend on for survival and cultural traditions. Consistent with the Outer Continental Shelf Lands Act (OCSLA), BOEM and BSEE, the Bureaus responsible for managing oil and gas resources on the Arctic OCS, are proposing regulations that take into account the needs of the multiple users who have an interest in the future of the U.S. Arctic region ( see 43 U.S.C. 1332(6)). The U.S. has maintained a longstanding interest in the orderly development of oil and gas resources on the Arctic OCS, while also seeking to ensure the protection of its environment and communities. The U.S. has proceeded cautiously to ensure that laws, regulations, and policies concerning Arctic OCS oil and gas development are created and implemented based on a thorough examination of the multiple factors at play in the unique Arctic environment. BOEM and BSEE have conducted extensive research on potential oil and gas activities in the Arctic OCS in anticipation of operations ( see, e.g., www.bsee.gov/Technology-and-Research/Technology-Assessment-Programs/Categories/Arctic-Research/ ), and have also evaluated the potential environmental effects of such activities ( see, e.g., http://www.boem.gov/akstudies/ ). These research projects, along with other initiatives, form the basis for the most recent National policies and directives regarding Alaska OCS oil and gas development, all of which have guided this proposed rule. Coordinating the future uses of the Arctic region will require integrated action between and among Federal, state, and tribal governmental entities. On July 15, 2011, President Obama signed Executive Order (E.O.) 13580, establishing an Interagency Working Group on Coordination of Domestic Energy Development and Permitting in Alaska (Working Group), chaired by the Deputy Secretary of DOI. The Working Group is composed of representatives from the DOI, Department of Defense, Department of Commerce, Department of Agriculture, Department of Energy, Department of Homeland Security, the Environmental Protection Agency (EPA), and the Office of the Federal Coordinator for Alaska Natural Gas Transportation Projects. It is charged with facilitating “coordinated and efficient domestic energy development and permitting in Alaska while ensuring that all applicable [health, safety, and environmental protection] standards are fully met” (E.O. 13580, sec. 1). The Working Group was involved in coordinating Federal regulatory and oversight efforts for the 2012 Alaska OCS drilling season and played an important role in BOEM's and BSEE's reviews of plans and permits for Shell's 2012 operations. The Working Group's report entitled, “Managing for the Future in a Rapidly Changing Arctic, A Report to the President” (March 2013), was the result of substantial collaboration and has also played a significant role in shaping U.S. Arctic policies. C. Overview of Proposed Regulations Although there is currently a comprehensive OCS oil and gas regulatory program, DOI engagement with partners and stakeholders 1 reveals the need for new and enhanced regulatory measures for Arctic OCS exploratory drilling by MODUs. For purposes of this rulemaking, exploratory drilling is considered to be “[a]ny drilling conducted for the purpose of searching for commercial quantities of oil, gas, and sulphur, including the drilling of any additional well needed to delineate any reservoir to enable the lessee to decide whether to proceed with development and production” (30 CFR 250.105 and 30 CFR 550.105 (one of the definitions of “exploration”)). 2 This proposed rule focuses on Arctic OCS exploratory drilling activities that use MODUs ( e.g., jack-ups and anchored drillships) and related operations during the Arctic open-water drilling season (generally late June to early November). After the requirements for exploratory drilling are finalized and applied to those activities, DOI will be able to assess whether it should apply similar requirements to development drilling. BOEM and BSEE will then be in a position to consider developing requirements appropriate for development drilling activities and publish a rulemaking for public notice and comment in the Federal Register . The requirements may be the same as the final requirements for exploratory drilling, or BOEM and BSEE may modify these requirements. 1 Tribes, State and local governments, and Federal agencies are “partners.” “Stakeholders” are non-governmental organizations, industry, and other entities. 2 This proposed rule uses and defines terms that may be similar to terms used in other programs by other Federal agencies; however, the terms and definitions used in this proposed rule are intended to apply only to the BSEE and BOEM regulatory programs covered by this proposed rule, unless otherwise noted. The Arctic region is known for its challenging environmental conditions, geographic remoteness, and relative lack of existing infrastructure. This proposed rule builds on and would codify input received from partners and stakeholders, key components of Shell's 2012 Arctic exploratory drilling program, as well as the additional measures DOI required to ensure Shell's drilling operations were conducted safely. Though its actual drilling operations were conducted without incident, Shell experienced a number of challenges during its 2012 exploratory drilling program. In 2013, DOI released a “Report to the Secretary of the Interior, Review of Shell's 2012 Alaska Offshore Oil and Gas Exploration Program” (60-Day Report) (available at: http://www.doi.gov/news/pressreleases/upload/Shell-report-3-8-13-Final.pdf ). The 60-Day Report identified a number of lessons learned and recommended practices to ensure future Arctic oil and gas exploration activities continue to be carried out in a safe and responsible manner. BOEM and BSEE have undertaken extensive environmental and safety reviews of potential oil and gas operations on the Arctic OCS. These reviews, along with concerns expressed by environmental organizations and Alaska Natives, reinforce the need to develop additional measures specifically tailored to the operational and environmental conditions of the Arctic OCS. Arctic OCS operations can be complex, and there are challenges and operational risks throughout every phase of an exploratory drilling program. Experience gained during the 2012 Arctic drilling season has led BOEM and BSEE staff to conclude that enhanced and more specific requirements can help ensure that oil and gas activities in the Arctic OCS are conducted in a safe and environmentally responsible manner. After considering the input provided by various stakeholders and DOI's direct experience from Shell's 2012 Arctic operations, BOEM and BSEE have concluded that additional exploratory drilling regulations are necessary and appropriate as a part of the Arctic OCS oil and gas regulatory framework. This proposed rule is a combination of prescriptive and performance-based requirements that address a number of important issues and objectives, including, but not limited to, ensuring that operators: 1. Design and conduct exploration programs in a manner suitable for Arctic OCS Conditions ( e.g., using equipment and processes that are capable of performing effectively and safely under extreme weather and sea conditions and in remote locations with relatively limited infrastructure); 2. Develop an IOP that would address all phases of their proposed Arctic OCS exploration program and submit the IOP to DOI, acting through its designee, BOEM, at least 90 days in advance of filing the EP; 3. Have access to, and the ability to promptly deploy, SCCE while drilling below or working below the surface casing; 4. Have access to a separate relief rig located so that it could timely drill a relief well in the event of a loss of well control under the conditions expected at the site; 5. Have the capability to predict, track, report, and respond to ice conditions and adverse weather events; 6. Effectively manage and oversee contractors; and 7. Develop and implement OSRPs that are designed and executed in a manner suitable for the unique Arctic OCS operating environment and that describe the availability of the necessary equipment, training, and personnel for oil spill response on the Arctic OCS. D. Potential Costs and Benefits of Proposed Rule The Initial Regulatory Impact Analysis (RIA) for this proposed rule estimates that, if implemented as proposed, the new regulations would result in economic costs ranging from $1.1 to 1.2 billion (at discount rates of 7 percent and 3 percent, respectively) over 10 years. The above estimated cost range reflects the increase in costs over the baseline costs. As discussed in part VI.B.3, the baseline is calculated by estimating the costs associated with current regulatory requirements and industry standards. In general, this includes the requirements imposed by DOI during the 2012 drilling season. However, even though DOI required the availability of a relief rig in 2012, we have conservatively chosen not to include the costs of staging a standby relief rig in the baseline. Although BOEM and BSEE expect that over time, as the number of operating rigs on the Arctic OCS increases, operators will use a second operating rig as a relief rig, in lieu of a dedicated standby relief rig, we have included the capital and activity costs for a standby rig for the first two years (2015-2016) of the 10-year time period in the economic costs of the proposed rule. While the economic and other benefits of the proposed rule—based primarily on preventing or reducing the severity or duration of catastrophic oil spills—are difficult to quantify, BOEM and BSEE have determined that it is appropriate to proceed with this proposal. Although the probability of a catastrophic oil spill is low, the Deepwater Horizon oil spill demonstrated that even such low probability events can have devastating economic and environmental results when they occur. The benefits of the proposed rule include reducing such risks associated with Arctic offshore operations. Reducing the risks of Arctic offshore operations is particularly important because of the unique significance to Alaska Natives of the fish and marine mammals in the lands and waters around the Arctic OCS; those resources are critical components of the Alaska Natives' livelihood, and they rely on fishing and hunting for traditional cultural purposes and for subsistence. Similarly, many other Americans place a very high value on protecting the health of the ecosystem, including the sensitive environment and wildlife, of this largely frontier area. Thus, the impact of a catastrophic oil spill, while a remote possibility, would have extremely high cultural and societal costs, and prevention of such a catastrophe would have correspondingly high cultural and societal benefits. The proposed requirements—specifically tailored to the Arctic OCS—would provide additional specificity regarding BOEM's and BSEE's expectations for safe and responsible development of Arctic resources and would outline the particular actions that lessees, owners and operators must take in order to meet those expectations. BSEE and BOEM do not anticipate that these proposed requirements, or their associated costs, would prevent lessees and operators from conducting exploratory drilling on their leases. In fact, the additional clarity and specificity provided by the proposed rule should help the oil and gas industry to plan better and to more effectively conduct exploratory drilling on the Arctic OCS, which in turn should result in development and production of oil and gas with lower risk and fewer delays than under the current rules. Since the potential economically recoverable oil and gas resources from the Arctic OCS are abundant, as discussed later in this proposed rule, the positive impact of such production on U.S. energy independence and energy security could be substantial. Thus, this proposed rule would help achieve the National Arctic Strategy goals of protecting the unique and sensitive Arctic ecosystems, as well as the subsistence, culture and traditions of the Alaska Native communities, while reducing reliance on imported oil and strengthening National energy security. II. Background A. Statutory and Regulatory Overview 1. Outer Continental Shelf Lands Act (OCSLA) The OCSLA, 43 U.S.C. 1331 et seq., was first enacted in 1953, and substantially amended in 1978, when Congress established a National policy of making the OCS “available for expeditious and orderly development, subject to environmental safeguards, in a manner which is consistent with the maintenance of competition and other National needs” (43 U.S.C. 1332(3)). In addition, Congress emphasized the need to develop OCS mineral resources in a safe manner “by well-trained personnel using technology, precautions, and techniques sufficient to prevent or minimize the likelihood of blowouts, loss of well control, fires, spillages, physical obstruction to other users of the waters or subsoil and seabed, or other occurrences which may cause damage to the environment or to property, or endanger life or health” (43 U.S.C. 1332(6)). The Secretary of the Interior (Secretary) administers the OCSLA's provisions relating to the leasing of the OCS and regulation of mineral exploration and development operations on those leases. The Secretary is authorized to prescribe “such rules and regulations as may be necessary to carry out [OCSLA's] provisions . . . and may at any time prescribe and amend such rules and regulations as [s]he determines to be necessary and proper in order to provide for the prevention of waste and conservation of the natural resources of the [OCS] . . .” which “shall, as of their effective date, apply to all operations conducted under a lease issued or maintained under the provisions of [OCSLA]” (43 U.S.C. 1334(a)). Prior to commencing exploration for oil and gas on an OCS lease tract, the statute and BOEM regulations require lessees to submit an EP to the Secretary for approval (43 U.S.C. 1340(c)(1); 30 CFR 550.201(a)). An EP must include information such as a schedule of anticipated exploration activities, equipment to be used, the general location of each well to be drilled, and any other information deemed pertinent by the Secretary (43 U.S.C. 1340(c)(3); 30 CFR 550.211 through 550.228)). However, approval of an EP does not automatically permit the lessee to proceed with exploratory drilling. The lessee must submit to the Secretary an Application for Permit to Drill (APD) which must be approved before a lessee may drill a well (43 U.S.C. 1340(d); 30 CFR 250.410). The Secretary delegated most of the responsibilities under the OCSLA to BOEM and BSEE, both of which are charged with administering and regulating aspects of the Nation's OCS oil and gas program. BOEM and BSEE work to promote safety, protect the environment, and conserve offshore resources through vigorous regulatory oversight. BOEM manages the development of the Nation's offshore energy resources in an environmentally and economically responsible way. BOEM's functions include leasing; exploration, development and production plan administration; environmental analyses to ensure compliance with NEPA; environmental studies; resource evaluation; economic analysis; and management of the OCS renewable energy program. BSEE performs offshore regulatory oversight and enforcement to ensure safety and environmentally sound performance during operations, and the conservation of offshore resources, by, among other things, evaluating drilling permits, and conducting inspections to ensure compliance with laws, regulations, lease terms, and approved plans and permits. BOEM evaluates EPs, and BSEE evaluates APDs, to determine whether the operator's proposed activities meet the OCSLA's standards and each Bureau's regulations governing offshore exploration. The regulatory requirements include, but are not limited to, determining whether the proposed drilling operation: i. Conforms to OCSLA, as amended, its applicable implementing regulations, lease provisions and stipulations, and other applicable laws; ii. Is safe; iii. Conforms to sound conservation practices and protects the rights of the U.S. and mineral resources of the OCS; iv. Does not unreasonably interfere with other uses of the OCS; and v. Does not cause undue or serious harm or damage to the human, marine, or coastal environments (30 CFR 250.101 and 250.106; 30 CFR 550.101 and 550.202). Based on these evaluations, BOEM and BSEE will approve the lessee's (or operator's) EP and APD, require the lessee (or operator) to modify its submissions, or disapprove the EP or APD (30 CFR 250.410; 30 CFR 550.233). 2. The Oil Pollution Act of 1990 (OPA) and Clean Water Act (CWA) Congress passed the OPA, 33 U.S.C. 2701 et seq., following the Exxon Valdez oil spill. The OPA amended the CWA, 33 U.S.C. 1251 et seq., by, among other things, adding OSRP provisions for offshore facilities. The OPA provides for prompt federally coordinated responses to offshore oil spills and for compensation of spill victims. It also calls for the issuance of regulations prohibiting owners and operators of offshore facilities from operating or handling, storing, or transporting oil until: i. They have prepared and submitted “a plan for responding, to the maximum extent practicable, to a worst case discharge, and to a substantial threat of such a discharge, of oil . . .;” ii. The plan “has been approved by the President;” and iii. The “facility is operating in compliance with the plan” (OPA § 4202(a), codified at 33 U.S.C. 1321(j)(5)(A)(i) and (F)(i)-(ii)). E.O. 12777 (October 18, 1991) authorized the Secretary to carry out the functions of 33 U.S.C. 1321(j)(5) and (j)(6)(A). This includes the promulgation of regulations governing the obligation to prepare and submit OSRPs, the review and approval of OSRPs, and the periodic verification of spill response capabilities related to these plans. Those applicable regulations are administered by BSEE and are found at 30 CFR parts 250 and 254. E.O. 12777 also authorized the Secretary to implement 33 U.S.C. 1321(j)(1)(C), which provides for the issuance of regulations “establishing procedures, methods, and equipment and other requirements for equipment to prevent discharges of oil and hazardous substances from . . . offshore facilities, and to contain such discharges. . . .” B. Factual Overview of the Alaska OCS Region 1. The Arctic OCS Oil and Gas Resource Potential Has Attracted Significant Attention Over the Past Three Decades There has been a renewed interest in the oil and gas potential of the Alaska OCS since the first exploratory wells were drilled in the late 1970s. The majority of exploratory drilling north of the Arctic Circle has occurred where the greatest oil and gas resource potential exists, namely the Beaufort Sea and Chukchi Sea Planning Areas (defined in this proposed rule as the Arctic OCS). A total of 30 exploratory wells have been drilled on the Beaufort OCS since the first Federal OCS leases were offered, and more wells have been drilled beneath the near-shore Beaufort Sea under the jurisdiction of the State of Alaska (see BOEM Alaska Region Web site at: http://www.boem.gov/About-BOEM/BOEM-Regions/Alaska-Region/Historical-Data/Index.aspx ). The Chukchi Sea Planning Area has a more limited history of leasing and exploration. Only a total of five exploratory wells have been drilled ( see BOEM Alaska Region Web site at: www.boem.gov/About-BOEM/BOEM-Regions/Alaska-Region/Historical-Data/Index.aspx ) and no site was considered commercially viable for development during that time. There have been only three exploratory wells drilled on the Arctic OCS since 1994—the 2003 exploratory well near Prudhoe Bay in the Beaufort Sea and Shell's two “top hole” wells drilled in 2012 ( see BOEM Assessment of Undiscovered Technically Recoverable Oil and Gas Resources of the Nation's Outer Continental Shelf (2011)). BILLING CODE 4310-VH-4310-MR-P EP24FE15.005 Except for the Northstar project, operated by BP Exploration (Alaska), Inc. (BP) from State submerged lands in the Beaufort Sea, no production has yet resulted from any of the leases. 3 3 BP has transferred its interests in the Northstar project to Hilcorp. Hilcorp is now the operator of that project. There are currently no active Alaska OCS leases located anywhere outside of the Beaufort Sea and Chukchi Sea Planning Areas. The oil and gas industry's interest in offshore oil and gas exploration on the Arctic OCS remains high despite the pace of exploration and the challenges of operating in this unique environment. 2. Challenges to Arctic Oil and Gas Operations The challenges to conducting operations and responding to emergencies in the extreme and variable environmental and weather conditions in the Arctic are severe. Both the Beaufort Sea and Chukchi Sea Planning Areas experience sub-freezing temperatures during most of the year, extended periods of low-light visibility, significant fog cover in the summer, strong winds and currents, strong storms that produce freezing spray and dangerous sea states, snow, and significant ice cover. During the fall (September-November), conditions become increasingly inhospitable as air temperatures decrease, wind speeds increase, storms become more frequent, and sea ice begins to form, all of which make Arctic OCS exploratory drilling operations more challenging ( see Environmental Assessments for Shell Offshore, Inc.'s Revised Outer Continental Shelf Lease Exploration Plan, Camden Bay, Beaufort Sea, Alaska (2011) and Shell Gulf of Mexico, Inc.'s Revised Chukchi Sea Exploration Plan Burger Prospect (2011)); BOEM Alaska Region Web site at: http://www.boem.gov/About-BOEM/BOEM-Regions/Alaska-Region/Environment/Environmental-Analysis/Environmental-Impact-Statements-and—Major-Environmental-Assessments.aspx ). Other challenges to conducting operations and responding to emergencies on the Arctic OCS include the geographical remoteness and relative lack of established infrastructure to support oil and gas operations. C. Partner and Stakeholder Engagement in Preparation for This Proposed Rule DOI used the recommendations from the 60-Day Report as a basis for a series of discussions with multiple partners and stakeholders who provided valuable input regarding potential approaches to regulating oil and gas operations on the Arctic OCS. BOEM and BSEE recognize the importance of the Arctic region to a number of partners and stakeholders with varying positions on oil and natural gas development in the region. Both Bureaus engaged in discussions with Alaska Native and State partners, and with environmental and industry stakeholders, in advance of publishing this proposed rule. Those discussions addressed the recommendations from the 60-Day Report, as well as information regarding operating conditions and challenges in the Arctic. The then-Acting Assistant Secretary for Land and Minerals Management, along with DOI staff from headquarters and the Alaska Region, held three listening sessions and a series of meetings in Alaska over the course of several weeks in June 2013. Representatives of DOI also met with conservation organizations, the Mayor of the North Slope Borough, the Alaska Eskimo Whaling Commission, the Inupiat Community of the Arctic Slope (ICAS), the Native Village of Barrow, two Alaska Native Claims Settlement Act (ANCSA) corporations, oil and gas industry representatives, State of Alaska officials, and other local government representatives. DOI considered the suggestions and concerns of all partners and stakeholders to produce a proposed rule that balances maximizing oil and gas resource exploration on the Arctic OCS, in furtherance of the Nation's energy security, with appropriate safeguards to protect human safety and the unique Arctic environment, as well as the cultural sensitivities and subsistence needs of the Alaska Native communities that might be affected by oil and gas development in the Arctic. 1. Alaska Natives DOI heard a variety of perspectives from Alaska Natives during its outreach in advance of the rulemaking, including interest in the potential economic opportunities from oil and gas development. However, the overriding concern expressed by Alaska Natives is the potential for adverse impacts from oil and gas operations on the marine environment and its resources, including marine mammals, such as bowhead whales. Alaska Natives requested that the DOI evaluate the extent to which oil and gas activities may adversely affect marine resources of the waters overlying the Arctic OCS and the subsistence harvest practices of Alaska Natives. In particular, the marine mammal fauna of the Beaufort and Chukchi Seas are among the most diverse in the world and are of high scientific and public interest, and many are also important for subsistence. Future exploratory drilling could affect subsistence users in the Arctic region. Subsistence harvests differ among Alaska Native coastal communities. However, the bowhead whale is the most important marine mammal species to a majority of Arctic coastal communities because it is the preferred meat and it provides a unique and powerful cultural basis for sharing and community cooperation. Subsistence practices are a highly valued aspect of Alaska Native culture. These practices are an important facet of Alaska Native economies because they provide viable and essential means for families to support themselves in this remote environment. The sharing of subsistence resources also helps maintain traditional family and community organizations. In addition to their dietary benefits, subsistence resources provide special foods for religious and social occasions, and materials for personal and family use. Subsistence hunting also links Alaska Native communities to the larger market economy. Many households within the communities earn money from selling art work from the crafting of whale baleen and walrus ivory, and from clothing made from fur-bearing mammals. The Alaska Eskimo Whaling Commission, the North Slope Borough, and others requested that DOI consider marine mammals' health as a critical part of this proposed rule. Throughout the rule, BOEM and BSEE have proposed elements designed to increase safety of oil and gas exploration in ways that would help protect marine mammals by reducing the likelihood and/or severity of oil spills. The Alaska Eskimo Whaling Commission and its whaling captains have worked with BOEM to help document traditional knowledge pertaining to bowhead whales, including movement and behavior. Bowhead hunters are concerned that the effects of offshore oil and gas exploration might displace migrating bowhead whales. Accordingly, BSEE proposes to revise § 250.300(b) in order to: (i) Require operators to capture all petroleum-based mud and associated cuttings that result from Arctic OCS exploratory drilling operations to prevent their discharge into the marine environment; and (ii) clarify the Regional Supervisor's discretion to require operators to capture water-based mud and associated cuttings from Arctic OCS exploratory drilling (after completion of the hole for the conductor casing) to prevent their discharge into the marine environment, based on factors such as the proximity of exploratory drilling operations to subsistence hunting and fishing locations or the extent to which such discharges might cause marine mammals to alter their migratory patterns in a manner that interferes with subsistence activities or that might otherwise adversely affect marine mammals, fish, or their habitat(s). Given the importance of subsistence hunting and other activities to the Alaska Native communities, operators are encouraged to work directly with interested parties to help mitigate potential impacts to subsistence activities. In addition, BOEM will continue to fund and support studies to better understand impacts from OCS operations on marine mammals and subsistence activities. 4 4 BOEM's Environmental Studies Program has made significant investments into studying potential impacts from operations related to oil and gas exploration. For example, BOEM has funded bowhead whale studies incorporating Traditional Ecological Knowledge and tagging data to learn more about bowhead whale migration through the Chukchi Sea in the fall and winter (Quakenbush et al., 2010). The North Slope Borough also expressed concern that oil and gas development not overwhelm local infrastructure, energy supplies, and services, and that local residents be provided the capacity—both in terms of training and resources—to protect their communities and important subsistence use areas. For this reason, DOI proposes to require operators to provide information about their plans to minimize the impact of their exploratory drilling operations on community infrastructure and their plans to provide the communities with oil spill cleanup training and resources. 2. Environmental Organizations DOI also met directly with environmental organizations to review and discuss recommendations for Arctic oil and gas regulations. The PEW Charitable Trusts requested that BSEE revise 30 CFR 250.447 in order to require blowout preventer (BOP) pressure testing every 7 days for drilling and completion operations (an increase from every 14 days). BSEE proposes to amend the language in § 250.447 in order to require operators on the Arctic OCS to pressure test the BOP system every 7 days during exploratory drilling operations. This proposed requirement is also a safety measure included in Shell's 2012 Arctic exploratory drilling program. Additionally, BSEE is proposing to add a new § 250.471, which would require that a capping stack be available and positioned to arrive at the well within 24 hours after a loss of well control and a cap and flow system and that a containment dome be available and positioned to arrive at the well within 7 days after a loss of well control. The Wilderness Society requested that BSEE consider implementing Arctic-specific provisions for OSRPs. BSEE proposes to add several requirements for OSRPs in this rule. In particular, BSEE proposes to require that operators conducting exploratory drilling on the Arctic OCS account for how they would increase oil encounter rates and the effectiveness of spill response techniques and equipment when sea ice is present. BSEE also proposes to add new provisions to 30 CFR part 254 for Arctic OCS exploratory drilling operators to, among other things, account for enhanced oil spill response training and exercises, as well as address the maintenance of response capabilities in the face of seasonal gaps in operations. 3. Oil and Gas Operators DOI held further meetings throughout the summer of 2013 with individual oil and gas companies to hear their perspectives on possible regulations for Arctic OCS operations. The oil and gas operators emphasized a preference for performance-based rules as opposed to prescriptive rules, and also stressed the need for early engagement with the agencies in order to achieve up-front regulatory consistency. While elements of the proposed rule are prescriptive in nature, BOEM and BSEE endeavored to identify opportunities where performance-based requirements were feasible and would achieve the Bureaus' goals. For these reasons, among others, BOEM proposes to add a new requirement that operators submit an IOP for their proposed Arctic exploratory drilling operations and describe at an early point in the planning process how their exploratory drilling program would be designed and conducted in an integrated manner suitable for Arctic OCS Conditions. The IOP process is intended to facilitate the prompt sharing of information among the relevant Federal agencies ( e.g., BOEM, BSEE, U.S. Fish and Wildlife Service (USFWS), U.S. Coast Guard (USCG), National Oceanic and Atmospheric Administration (NOAA), U.S. Army Corps of Engineers, EPA) and the State of Alaska. The IOP process would also provide the relevant agencies an early opportunity to engage in a meaningful and constructive dialogue with operators and each other. The goal of the IOP and the enhanced and early dialogue is to have a well-planned, safe operation. Early communication on planning is also anticipated to minimize the potential for project delays. D. Expected Benefits Justifying Potential Costs The initial RIA for this proposed rule estimates that it would result in economic costs ranging from $1.1 to 1.2 billion, discounted at 7 percent and 3 percent respectively, over 10 years. The above estimated cost range reflects the increase in costs over the baseline costs, as discussed elsewhere in this notice. While many of the economic and other benefits of the proposed rule—based primarily on preventing or reducing the severity or duration of catastrophic oil spills—are difficult to quantify, BOEM and BSEE have determined that the benefits of the proposed rule would justify its potential costs and that it is appropriate to proceed with this proposal. The probability of a catastrophic oil spill is very low; however, the Deepwater Horizon oil spill demonstrated that even such low probability events can have devastating economic and environmental results. As of October 2014, by its own account, BP spent over $14 billion for cleanup and response operations related to the Deepwater Horizon oil spill. The benefits of the proposed rule would accrue from a relief rig, increased safety measures, and other requirements that are expected to reduce the potential for an incident resulting in an oil spill associated with Arctic offshore operations and, if an incident occurs, to reduce the duration of a spill. The Arctic OCS and its surrounding land and waters have a unique significance to Alaska Natives, who rely on them for traditional cultural purposes and depend on them for subsistence. Similarly, many other Americans place a very high value on protecting the ecosystem, including the sensitive environment and wildlife, of this largely frontier area. Thus, prevention of a catastrophic oil spill, and reduction of the duration of a spill if one occurs, would have extremely important, even though largely unquantifiable, cultural and societal benefits for the Nation. Moreover, as explained elsewhere, this proposed rule would help achieve the National Arctic Strategy goals of protecting the unique and sensitive Arctic ecosystems, as well as the subsistence needs, culture and traditions of the Alaska Native communities, while reducing reliance on imported oil and strengthening National energy security. The proposed requirements—which are specifically tailored to the Arctic OCS—would provide additional clarity and specificity regarding BOEM's and BSEE's expectations for safe and responsible development of Arctic resources and the particular actions that lessees, owners and operators must take in order to meet those expectations. This additional clarity and specificity is intended to help the oil and gas industry to plan better and to more effectively conduct exploratory drilling on the Arctic OCS, resulting in the development and production of oil and gas with lower risk and fewer delays than have occurred under the current rules. According to BOEM's 2011 Assessment of Undiscovered Technically Recoverable Oil and Gas Resources of the Nation's Outer Continental Shelf, there are approximately 17.8 billion barrels of economically recoverable oil and about 50.1 trillion cubic feet of economically recoverable natural gas in the Beaufort Sea and Chukchi Sea Planning Areas combined. Thus, the impact of production in the Arctic region on U.S. energy independence and energy security could be substantial. III. Proposed Regulations for Arctic OCS Exploratory Drilling The existing OCS oil and gas regulatory regime is extensive and covers all offshore facilities or operations in any OCS region, as appropriate and applicable. BOEM and BSEE use these regulations in their respective oversight of OCS leasing, exploration, development, production, and decommissioning. Depending on the type of activity, operators are subject to the same regulatory requirements, such as: application procedures and information requirements for exploration, development, and production activities; pollution prevention and control; safety requirements for casing and cementing and the use of a BOP and diverter systems; design, installation, use and maintenance of OCS platforms to ensure structural integrity and safe and environmentally protective operations; decommissioning; development and implementation of Safety and Environmental Management Systems (SEMS); and preparation and submission of OSRPs ( see generally 30 CFR parts 250, 254, and 550). The existing regulations also contain provisions that apply to specific regions or atypical activities or operating conditions, especially, for example, where drilling occurs in deep water or in a “frontier” area (typically characterized by its remote location and limited infrastructure and operational history, such as the Arctic OCS region). In these cases, BOEM and BSEE have special requirements, such as information and design requirements for deep-water development projects (§§ 250.286 through 250.295); use of appropriate equipment, third-party audits, and contingency plans in frontier areas or other areas subject to subfreezing conditions (§§ 250.417(c) and 250.418(f)); the placement of subsea BOP systems in mudline cellars when drilling occurs in areas subject to ice-scouring (§ 250.451); and emergency plans and critical operations and curtailment procedures information in the Alaska OCS Region (§§ 550.220 and 550.251). Though there is currently a comprehensive OCS oil and gas regulatory program, there is a need for new and amended regulatory measures for Arctic OCS exploratory drilling by MODUs. These proposed regulations, in combination with existing regulations (which would continue to apply to Arctic OCS operations unless otherwise expressly stated), are intended to ensure that exploratory drilling operations are well planned from the outset and then conducted safely and responsibly in relation to the unique Arctic environment and the local communities that are closely connected to the region and its resources. The key elements of the proposed rule are: A. Measures That Address Recommendations —The proposed rule addresses recommendations contained in several recent reports on OCS oil and gas activities ( e.g., the Arctic Council, Arctic Offshore Oil and Gas Guidelines (2009); the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling (2011); Ocean Energy Safety Advisory Committee Recommendations (2013); DOI's 60-Day Report (2013); the Working Group's report entitled, “Managing for the Future in a Rapidly Changing Arctic, A Report to the President” (March 2013); the National Arctic Strategy (May 2013); and the Arctic Council, Arctic Offshore Oil and Gas Guidelines: Systems Safety Management and Safety Culture (March 2014)). B. IOP Requirement - During exploratory drilling operations on the Arctic OCS, operators may face substantial environmental challenges and operational risks throughout every phase of the endeavor, including preparations, mobilization, in-theater drilling operations, emergency response and preparedness, and demobilization. Thorough advanced planning is critical to mitigating these challenges and risks. One of the key components of this proposed rule is a requirement that operators explain how their proposed Arctic OCS exploratory drilling operations would be fully integrated from start to finish in a manner suitable for Arctic OCS Conditions and that they provide this information to DOI at an early stage of the planning process. This rule proposes to require that operators develop and submit an IOP to DOI, acting through its designee, BOEM, at least 90 days in advance of filing their EP. The purpose of the IOP is to describe, at a strategic or conceptual level, how exploratory drilling operations will be designed, executed, and managed as an integrated endeavor from start to finish. The IOP is intended to be a concept of operations that would include a description of the various aspects of an operator's proposed exploratory drilling activities and supporting operations and how the operator's program would be designed and conducted in a manner that accounts for the challenges presented by Arctic OCS Conditions. The primary issues DOI would expect operators to address relative to Arctic OCS Conditions include, but are not limited to: 1. Vessel and equipment design and configurations; 2. The overall schedule of operations, including contractor work on critical components; 3. Mobilization and demobilization operations and maintenance schedule(s); 4. In-theater drilling program objectives and timelines for each objective; 5. Weather and ice forecasting and management capabilities; 6. Contractor management and oversight; and 7. Preparation and staging of spill response assets. DOI recognizes that other Federal agencies have primary oversight responsibility for some of the previously listed activities. Upon receipt of the IOP, DOI would engage with members of the Working Group and promptly distribute the IOP to the State of Alaska and Federal government agencies involved in the review, approval, or oversight of various aspects of OCS operations. However, the IOP process would not require agencies to review or approve the IOP or an operator's planned activities. The IOP is a conceptual, informational document designed to ensure that an operator pays thorough and early attention to the full suite of regulated activities, and to give regulatory agencies a preview of an operator's approach to regulatory compliance and integrated planning. Thus, the IOP would enable relevant agencies to familiarize themselves, early in the planning process, with the operator's overall proposed program from start to finish. This, in turn, would allow DOI and those agencies to coordinate and provide early input to the operator regarding potential issues presented by the proposed activities with respect to any future plan approvals and permitting requirements, including aspects of the program that might require additional details or refinement. The proposed IOP requirement—and the proposed rule in general—would not, however, interfere with or supplant operators' obligations to comply with all other applicable Federal agency requirements. Each agency that receives an IOP would continue to review the relevant details of an operator's planned activities for compliance with that agency's regulatory requirements in the appropriate manner and at the appropriate time under its own regulatory program. C. SCCE and Relief Rig Capabilities —In Arctic OCS exploratory drilling, there is a need for operators to demonstrate that they would have access to, and could deploy, well control and containment resources that would be adequate to promptly respond to a loss of well control. This equipment is already readily available and accessible in the Gulf of Mexico due to the level of activity in that area. Ensuring that operators have all necessary redundancies in place is critical, as there is no guarantee that a single measure could control or contain a worst-case discharge (WCD). Therefore, BSEE proposes to require operators who use a MODU for Arctic OCS exploratory drilling to have access to, and the ability to deploy, SCCE ( e.g., a capping stack, cap and flow system, and containment dome) within the timeframes discussed elsewhere in this proposed rule and that the SCCE be capable of functioning in Arctic OCS Conditions. BSEE also proposes that operators have access to a separate relief rig that would be staged at a location such that it could arrive on site and be capable of drilling a relief well under anticipated Arctic OCS Conditions within specified timeframes. This equipment is fundamental to safe and responsible operations on the Arctic OCS, where existing infrastructure is sparse, the geography and logistics make bringing equipment and resources into the region challenging, and the time available to mount response operations is limited by changing weather and ice conditions, particularly at the end of the drilling season. Operators may request approval of alternative compliance measures under existing regulations, if they can demonstrate that such alternative equipment or procedures could provide a level of safety and environmental protection equal to or surpassing the protection provided by the proposed SCCE and relief rig requirements (30 CFR 250.141). This provision enables operators to request approval for innovative technological advancements that may provide them additional flexibility, provided that the operator can establish that such technology provides at least the same level of protection as the proposed requirements. D. Planning for the Variability and Challenges of the Arctic OCS Conditions —Reliable weather and ice forecasting play a significant role in ensuring safe operations on the Arctic OCS. Advanced forecasting and tracking technology, information sharing among industry and government, and local knowledge of the operating environment are essential to managing the substantial challenges and risks that Arctic OCS Conditions pose for all offshore operations. In light of the threats posed by ice and extreme weather events, BOEM and BSEE propose to require that operators include in their IOPs, EPs, and APDs, at appropriate levels of specificity for each document, a description of their weather and ice forecasting capabilities for all phases of their exploration program and their alert procedures and thresholds for activating ice and weather management systems. Once operations commence, operators would also be required to: 1. Notify BSEE immediately of any sea ice movement or condition that has the potential to affect operations or trigger ice management activities; and 2. Notify BSEE of the start and termination of ice management activities and submit written reports after completing such activities. E. Arctic OCS Oil Spill Response Preparedness —Operators need to be prepared for a quick and effective response in the event of an oil spill on the Arctic OCS and be ready to coordinate activities with the Federal government and other stakeholders. The OSRPs and related activities should be tailored to the unique Arctic OCS operating environment to ensure that operators have the necessary equipment, training, and personnel for the Arctic OCS. Among other things, this rulemaking would establish specific planning requirements to maximize the application of oil spill response technology and ensure a coordinated response system that is designed to address the challenges inherent to the Arctic region. F. Reducing Pollution from Arctic OCS Exploratory Drilling Operations —Partners, primarily Alaska Natives, and stakeholders have expressed concern that mud and cuttings from exploratory drilling could adversely affect marine species ( e.g., whales and fish) and their habitat and compromise the effectiveness of subsistence hunting activities. Existing environmental analyses support these concerns and also demonstrate that such discharges could affect water quality, benthic habitat, and marine organisms within the localized area ( see, e.g., Shell Gulf of Mexico, Inc.'s Revised Chukchi Sea Exploration Plan, Burger Prospect Environmental Assessment (2011)). BSEE proposes to require the capture of all petroleum-based mud and associated cuttings from Arctic OCS exploratory drilling operations to prevent their discharge into the marine environment. The new provision would also clarify the Regional Supervisor's discretionary authority to require that operators capture all water-based mud and associated cuttings from Arctic OCS exploratory drilling operations (after completion of the hole for the conductor casing) to prevent their discharge into the marine environment. This discretion would be exercised based on various factors such as the proximity of exploratory drilling operations to subsistence hunting and fishing locations or the extent to which such discharges might cause marine mammals to alter their migratory patterns in a manner that interferes with subsistence activities or might adversely affect marine mammals, fish, or their habitat(s). G. Oversight, Management, and Accountability of Operations and Contractor Support —An effective risk management framework at the beginning of a project incorporates many components, including planning, vessel design, contractor selection, and an assessment of regulatory requirements for all facets of the project. DOI proposes to require that operators provide an explanation, at a conceptual level, of how they would apply their oversight and risk management protocols to both personnel and contractors to support safe and responsible exploratory drilling on the Arctic OCS. It should be noted that these proposed regulations, and DOI's existing regulations concerning OCS oil and gas operations, would require varying levels of information about operator safety and oversight management at progressive stages of the planning and approval process. This would start with the most general information and narrow down to increasing levels of detail with successive regulatory submittals, as the project would proceed from planning to implementation. In addition, the proposed rule would require Arctic OCS operators to: 1. Report threatening sea ice conditions and ice management activities, and unexpected operational issues that could result in a loss of well control; 2. Increase their BOP pressure testing frequency; 3. Conduct real-time monitoring of various aspects of well operations, e.g., the BOP control system; 4. Increase their SEMS auditing frequency; and 5. Enhance their oil spill preparedness and response capabilities for Arctic OCS operations. A summary of the major provisions of this rulemaking follows. IV. Section-By-Section Discussion This portion of the preamble provides an explanation of the specific regulatory changes proposed in this rule and why they are necessary. At the outset, this discussion addresses the proposed definitions of the terms Arctic OCS and Arctic OCS Conditions for use in both BOEM's and BSEE's regulations in order to provide context for the rest of the proposed provisions. Since this is a joint BOEM and BSEE proposed rule, the remainder of the Section-by-Section discussion is organized according to how operators would seek to comply with the proposed regulations, rather than the order in which they would appear in the Code of Federal Regulations. After introducing the definitions of Arctic OCS (for purposes of proposed §§ 250.105, 254.6, and 550.105) and Arctic OCS Conditions (for purposes of proposed §§ 250.105 and 550.105), the Section-by-Section discussion provides an explanation of the remainder of BOEM's proposed regulations ( i.e., proposed §§ 550.105, 550.200, 550.204, 550.206, and 550.220), and then follows with the remainder of BSEE's proposed regulations ( i.e., proposed §§ 250.105, 250.188, 250.198, 250.300, 250.402, 250.418, 250.447, 250.452, 250.470, 250.471, 250.472, 250.473, and 250.1920; proposed §§ 254.6, 254.55, 254.65, 254.70, 254.80, and 254.90). Although BSEE permitting and operational requirements appear earlier in Title 30 of the CFR at Part 250, with the BOEM requirements following in 30 CFR part 550, in practice the IOP and EP phases governed by the 30 CFR part 550 regulations would precede the drilling approval and oversight phases governed by 30 CFR part 250 (operations). Requirements to prepare for an oil spill, which are contained in 30 CFR part 254, may be met at any time before handling, storing, or transporting oil in operations BSEE permits under Part 250. Finally, the Section-by-Section discussion includes a process flowchart of BOEM's and BSEE's current regulatory framework for Arctic OCS exploratory drilling and how the proposed requirements would be integrated into that framework. A. Definitions (§§ 250.105, 254.6, and 550.105) Arctic OCS For the purposes of this proposed rulemaking, Arctic OCS is defined as the Beaufort Sea and Chukchi Sea Planning Areas, as described in the Proposed Final OCS Oil and Gas Leasing Program for 2012-2017 (June 2012), available at www.boem.gov/uploadedFiles/BOEM/Oil_and_Gas_Energy_Program/Leasing/Five_Year_Program/2012-2017_Five_Year_Program/PFP%2012-17.pdf ( see pp.21-24). This definition would appear in §§ 250.105, 254.6, and 550.105. As described previously, BOEM and BSEE have determined that these areas are both the subject of current exploration and development interest and subject to conditions that present significant challenges to such operations. Arctic OCS Conditions Sections 250.105 and 550.105 would be revised to add a definition for Arctic OCS Conditions. The definition is necessary because these proposed regulations are designed largely around the particular challenges presented by Arctic OCS Conditions. The term Arctic OCS Conditions would be defined to describe both the environmental conditions and functional characteristics ( e.g., geographic remoteness, limited infrastructure, subsistence hunting areas) that oil and gas operators can reasonably expect to encounter during exploratory drilling operations and when responding to a loss of well control on the Arctic OCS. Depending on the time of year, relevant environmental conditions and the proposed definition include, but are not limited to, the following: “extreme cold, freezing spray, snow, extended periods of low light, strong winds, dense fog, sea ice, strong currents, and dangerous sea states.” This definition would not affect or alter any other existing Federal regulatory requirements. It is crucial for OCS oil and gas operators to have a clear understanding of the conditions they would likely encounter during exploratory drilling operations and when responding to a loss of well control on the Arctic OCS. Offshore oil and gas exploration involves inherent risks to human safety and the environment. If not effectively addressed, Arctic OCS Conditions could multiply these risks. Thus, the proposed definition also recognizes that “the Arctic's remote location, limited infrastructure, and existence of subsistence hunting and fishing areas are also characteristic of the Arctic region” and must be considered to ensure safe operations and minimize impacts to the environment and to other users of the area. Addressing these factors would enable industry to proactively safeguard people, facilities, equipment, and the environment. B. Additional Regulations Proposed by BOEM Definitions (§ 550.200) The acronym “IOP”—meaning Integrated Operations Plan—would be inserted into the proper alphabetical location within existing § 550.200, for purposes of the IOP provisions at proposed § 550.204, as discussed next. When must I submit my IOP for proposed Arctic exploratory drilling operations and what must the IOP include? (§ 550.204) This proposed rule would require the operator to develop an IOP for each proposed exploratory drilling program on the Arctic OCS, and to submit the IOP to DOI, through its designee, BOEM, at least 90 days in advance of filing its EP. The IOP would need to describe how the proposed exploratory drilling program would be designed and conducted in an integrated manner suitable for Arctic OCS Conditions and would address each of the information requirements identified in proposed § 550.204. Operators may also choose to address the requirements in §§ 550.211 through 550.228, which could facilitate the later formal review of the operator's EP. The IOP should be detailed enough to allow DOI, other relevant Federal agencies, and the State of Alaska to: 1. Familiarize themselves with the proposed operations as an integrated project from start to finish; and 2. Provide constructive feedback to the operator concerning the conceptual plans reflected in its IOP. DOI recognizes that when the IOP is submitted, operators might not possess all the detailed and specific information that may be more readily available later in the planning process; e.g., contracts for vessels may not be finalized, precise dates of drilling may be uncertain, or the exact staging location of assets, such as the relief rig or SCCE, may be unknown. For BOEM's and BSEE's purposes, operators would submit more detailed information through the EPs and APDs, as appropriate. Though BOEM would review the IOP to ensure that the operator's submission addresses each of the elements listed in § 550.204, the IOP would not require approval by DOI or the other relevant agencies. Instead, the IOP would be an informational document intended to facilitate early review of important concepts related to an operator's proposed exploratory drilling program. This review would assist DOI and other relevant agencies in developing an understanding of, and familiarity with, the operator's overall proposed exploratory drilling program early in the planning process. DOI recognizes that the information requirements of § 550.204 could implicate other Federal agencies' and the State of Alaska's statutory and regulatory mandates. For example, the USCG administers laws and regulations governing maritime safety, security, and environmental protection and is also responsible for inspecting the vessels to which those laws and regulations apply. In acknowledging the USCG's principal jurisdiction over vessel safety and security, DOI has determined that information, early in the process, pertaining to the safety of operations, vessel mobilization, demobilization, and tow plans, is also essential to DOI's statutory and regulatory responsibilities related to Arctic OCS oil and gas activities. The IOP process is intended to facilitate the sharing of information among the relevant Federal agencies and the State of Alaska and to provide the relevant agencies an early opportunity to engage in a meaningful and constructive dialogue with operators, consistent with the policies articulated in E.O. 13580 (Interagency Working Group on Coordination of Domestic Energy Development and Permitting in Alaska, discussed earlier). Upon receipt, DOI would engage fellow members of the Working Group and distribute the IOP to other Federal government agencies involved in the review, approval, or oversight of aspects of OCS operations ( e.g., BOEM, BSEE, USFWS, USCG, NOAA, and EPA), as well as the State of Alaska. Early engagement by these entities would allow them to become familiar with the operator's overall proposed exploratory drilling program and could provide a meaningful opportunity to offer early feedback to the operator concerning its proposed activities and any identifiable issues that might affect future permitting decisions. DOI would also encourage the assembly of an interagency coordination team to facilitate and coordinate agency review and feedback. Any feedback could be provided individually by the relevant Federal agencies or the State of Alaska, or collectively through DOI. BOEM also plans to promptly post each IOP on its Web site. BOEM would not solicit public input on the IOP; instead, the IOP would be informational only, affording the public an early opportunity to view key concepts of a proposed exploratory program. This effort responds to stakeholder concerns that BOEM does not provide the public with sufficient time to participate meaningfully in BOEM's administrative process for proposed exploratory drilling activities on the Arctic OCS. Typically, the public first becomes aware of an operator's plans for exploratory drilling when the operator submits its EP. BOEM acknowledges that public review periods for EPs are relatively short in duration. However, this is a result of the OCSLA provision that requires BOEM to approve, disapprove, or require modifications to an EP within 30 days of BOEM deeming the EP submitted (43 U.S.C. 1340(c)(1)), thus placing modification of the length of the review period outside the discretion or authority of the agency absent Congressional action. An early opportunity to view the IOP and the key concepts of the proposed exploratory drilling program, however, will enhance existing public engagement opportunities. Paragraph (a), Vessels and Equipment Operators must plan to adapt their exploratory drilling operations to Arctic OCS Conditions. Although generally the equipment for extracting oil and gas from the OCS is the same for the offshore Arctic as anywhere else on the OCS, the equipment might need to be modified, procedures might need to be adjusted, or personnel might need to be specifically trained for work conditions on the Arctic OCS. For example, cranes might need to be modified for operations under ice loading that could be anticipated during Arctic OCS operations, and be de-rated to account for reduced strength in extreme cold temperatures. Accordingly, this provision would require that operators submit, “[i]nformation describing how all vessels and equipment will be designed, built, and/or modified to account for Arctic OCS Conditions” and is designed to ensure that the operator is planning to deploy vessels and equipment capable of operating safely on the Arctic OCS. Operators would need to submit information sufficient to allow DOI and other relevant agencies ( e.g., the USCG) to understand the function of each vessel within the proposed fleet of vessels and how the vessels would be capable of performing their identified roles in the proposed exploratory drilling program safely and effectively. Paragraph (b), Exploratory Drilling Program Schedule The proposed rule would require the IOP to include an exploratory drilling program schedule of operations including importantly, contractor work on critical components of the program ( e.g., inspection and testing of critical equipment such as BOPs or SCCE). Thorough advanced planning regarding the proposed schedule for operations is an important component of the IOP, particularly in light of the limits that returning sea ice can place on the drilling season on the Arctic OCS, and for elements of operations for which operators are relying upon outside contractor deliverables. Furthermore, it is important for BOEM and other relevant agencies to have information regarding how the timing of proposed operations aligns with expected seasonal ice encroachment, as well as how the timing of proposed operations may interact with seasonal marine mammal migrations and subsistence activities, for purposes of understanding the potential environmental impacts. This will help BOEM and other relevant agencies develop an understanding of how the operator proposes to conduct operations safely. The proposed schedule would need to include, for example, when an operator intends to enter waters overlying the Alaska OCS (including transit time to the proposed drilling site), when drilling is expected to commence and conclude, dates of operations, and when the operator plans to leave the vicinity of drilling operations. The schedule would also need to include the critical dates for completion or activation of components under construction, repair, or storage by outside contractors. This provision would help assure DOI and other relevant agencies that the operator and its contractors have developed a reasonable schedule for executing each phase of the exploration program and are capable of conducting exploratory drilling activities safely in Arctic OCS Conditions. Paragraph (c), Mobilization and Demobilization This provision would require operators to include in their IOP a description of their mobilization and demobilization operations, including tow plans suitable for Arctic OCS Conditions, as well as their general maintenance schedules for vessels and equipment. This element is designed to help DOI and other relevant agencies understand the extent to which operators: 1. Have accounted for the conditions likely to be encountered on the Arctic OCS; and 2. Are prepared to handle the substantial environmental challenges and associated operational risks present throughout the mobilization and demobilization of personnel and equipment. The requested information would facilitate coordination between DOI and the USCG. Similarly, having information about where vessels would come from and go to before and after entering the waters overlying the Alaska OCS would aid, for example, DOI's and other relevant agencies' early understanding of potential environmental issues, such as aquatic invasive species that might be carried on vessels. This provision would also require consideration of how repairs to, and maintenance of, vessels and equipment might affect the larger exploratory drilling program. This information could facilitate DOI's and other relevant agencies' understanding of potential environmental considerations and safety aspects of the projected operational schedules. Paragraph (d), Exploratory Drilling Program Objectives, Timelines, and Contingency Plans This provision would require operators to include in their IOP a description of their “exploratory drilling program objectives and timelines for each objective, including general plans for abandonment of the well(s)” under a variety of circumstances. This description would help DOI and other relevant agencies familiarize themselves with the operator's plans for a well-designed, safe operation with clear objectives for employees and contractors that would allow ample flexibility in light of the difficult and variable conditions on the Arctic OCS. A fully developed exploration program includes, among other things: the operator's general plan of how many wells it plans to drill in a particular season; the timing and sequence of those operations; locations of the wells; necessary equipment and resources, including information on support vessels; and the operator's contingency plans in the event that temporary abandonment would become necessary. To the extent that relevant information submitted with the IOP has not changed, the operator could later incorporate that information into its EP. Thorough advanced planning of the operator's objectives, as well as clear timelines for the accomplishment of each objective, are essential, particularly in light of the limited seasonal drilling window on the Arctic OCS. Given the uncertainties created by the challenging Arctic OCS Conditions, it is equally essential for an operator to acknowledge and plan for contingencies and delays that might arise. For example, an operator would need to provide general information regarding how it would safely respond to unanticipated ice encroachment at the drill site, including safe and secure temporary abandonment of the well and relocation of the drilling rig, as necessary. DOI would need to be provided with information that explains how the operator has considered these elements of its exploration program, well in advance of operations. Also, if an operator plans to drill multiple wells, DOI must be provided with information regarding the anticipated objectives and timelines for each well. Similarly, an operator would be expected to indicate whether it intends to abandon the well(s) at the end of the season and, if the operator intends to abandon the well, whether such abandonment would be temporary or permanent. Paragraph (e), Weather and Ice Forecasting and Management One of the key drivers of this proposed rule is DOI's need to understand how operators would account for the variable conditions on the Arctic OCS and how those conditions might affect drilling activities. One important component of an operator's overall program is accounting for adverse weather and ice conditions and developing a plan to respond to those conditions. Consequently, this provision would require operators to describe their weather and ice forecasting capabilities for all phases of the exploration program, including a description of how they would respond to and manage ice hazards and weather events. The challenges presented by Arctic OCS Conditions are not limited to the period of active drilling operations, but would create difficulties throughout all phases of an exploratory drilling program, including mobilization and demobilization. Accordingly, it is important for DOI and other relevant agencies to understand the operator's plans for implementing ice and weather forecasting and management systems that would be operational around the clock from start to finish. Paragraph (f), Contractors This provision would require operators to provide in their IOP a description of work to be performed by contractors supporting their exploratory drilling program (including mobilization and demobilization), how such work would be designed or modified to account for Arctic OCS Conditions, and operators' strategy for contractor management, oversight, and risk management. This information is designed to help DOI and other relevant agencies understand the operator's strategies for developing, early in the planning process, a rigorous and effective operational management and oversight system for its contractors that is specifically tailored for operations on the Arctic OCS. Information regarding the nature and timeline of operational elements for which the operator would rely on contractors would aid in a full understanding of the various inputs and contingencies that might affect the planned execution of the proposed operations. The IOP would need to describe, for example, what types of operations the operator would contract out and how the operator would oversee the contractor to ensure the contractor's work product would be suitable for Arctic OCS operations. At the IOP stage, the specific names of contractors would not be necessary but could be provided, if known. The focus of this proposed requirement is to facilitate DOI's and other relevant agencies' understanding of how the operator plans to rely on contractors and how it plans to manage its contractor relationships in order to ensure safe and responsible drilling operations. Paragraph (g), Safety BOEM proposes to require that operators include in their IOP a description of how they “will ensure operational safety while working in Arctic OCS Conditions,” including but not limited to, the safety principles applicable to operators and their contractors, the accountability structure within operators' organizations for implementing these principles, how operators would communicate these principles to their employees and contractors, and how operators would determine successful implementation of these principles. The OCSLA provides that all operations taking place on the OCS “should be conducted in a safe manner by well-trained personnel using technology, precautions, and techniques sufficient to prevent or minimize the likelihood of blowouts, loss of well control, fires, spillages, physical obstruction to other users of the waters or subsoil and seabed, or other occurrences which may cause damage to the environment or to property, or endanger life or health” (43 U.S.C. 1332(6)). Also, operators are required to demonstrate through their EPs and APDs that they have planned and are prepared to conduct activities in a manner that conforms to the OCSLA and applicable implementing regulations, and that their activities will be conducted safely ( see 43 U.S.C. 1340(c)(1); 30 CFR 250.106, 250.107, 550.202 paragraphs (a) and (b)). The proposed safety information requirement would help DOI and other relevant agencies ( e.g., USCG) familiarize themselves with the operator's early consideration of how its proposed exploratory drilling program would proceed in a safe manner with appropriate caution and respect for the extreme and unpredictable conditions found offshore in the Arctic and would be consistent with DOI's and other relevant agencies' safety requirements. This proposed safety information element is also intended to complement BSEE's SEMS program by requiring operators to identify and assess, early in the planning stages of their proposed exploratory drilling program, their guiding principles for safe Arctic OCS operations, and optimal strategies for implementing those principles throughout their workforce. Proposed 30 CFR 550.204(g) would not require an operator to provide the same level of detail, if not available, concerning safety of operations as would be available at the time of the EP and APD, or to duplicate the detail provided in its USCG Safety Management System program or its BSEE SEMS program. Instead, the IOP would need to provide a general understanding of the principles that operators would follow to manage risks to ensure safety of all exploratory drilling activities and personnel vis-à-vis the conditions likely to be encountered on the Arctic OCS. For example, it is reasonably expected that operators would experience freezing spray, extended periods of low light, strong winds, and dense fog during operations. Operators would need to provide a general description of how they would account for these conditions, and any guiding principles they would follow to minimize risk to operations, personnel, vessels, and other equipment. Paragraph (h), Staging of Oil Spill Response Assets BOEM proposes to require that operators include in their IOP information regarding their “preparations and plans for staging of oil spill response assets.” This provision would facilitate DOI's, and other relevant agencies' ( e.g., USCG), early understanding of the potential effects on local communities from staging spill response assets near coastal communities, the safety and environmental implications of plans for mobilization and demobilization of related vessels and equipment, the potential environmental impacts of the vessels staged in the area for response, and anticipated response times based on where the equipment will be located. This information would be especially relevant to the USCG, which is the Federal On Scene Coordinator responsible for developing the North Slope Sub-Area Contingency Plan for Oil and Hazardous Substances Discharges/Releases. The USCG and all appropriate governmental entities at the State and local levels would have an early understanding of the proposed activities. Paragraph (i), Impact of Exploratory Drilling on Local Community Infrastructure BOEM proposes to require that operators include in their IOP, a description of their “efforts to minimize impacts of [their] exploratory drilling operations on local community infrastructure, including but not limited to housing, energy supplies, and services.” This provision would facilitate DOI's and other relevant agencies' early understanding of the potential socioeconomic implications of the proposed exploratory drilling program, including the extent to which the proposed activities might strain the limited infrastructure of coastal communities in the Arctic, or reduce the availability of housing, energy, food, and health care to local communities through increased demand and higher costs caused by the presence of persons supporting the exploratory drilling program. Paragraph (j), Local Community Workforce and Response Capacity BOEM proposes to require that operators include in their IOP “[a] description of whether and to what extent your project will rely on local community workforce and spill cleanup response capacity.” This provision would encourage operators to engage in early planning toward providing local communities, which would incur the greatest risk of offshore exploration activities, with the capacity—both in terms of training and resources—to protect their communities and important subsistence use areas. It is intended to provide DOI and other relevant agencies with early insight into whether the proposed operations are being planned safely, with appropriate environmental safeguards and respect for the other users of area resources. This provision would also allow DOI to develop an early understanding of industry's efforts to promote local communities' ability to participate in and obtain benefit from future Arctic OCS oil and gas development. How do I submit the IOP, EP, DPP, or DOCD? (§ 550.206) DOI recognizes that operators may consider some of the information required by proposed § 550.204 to be proprietary or commercial in nature. Pursuant to the proposed revisions to § 550.206, operators would be able to request the nondisclosure of this information using established DOI processes. As is currently the case with EPs, Development and Production Plans (DPPs), and Development Operations Coordination Documents (DOCDs), operators requesting the nondisclosure of portions of an IOP should provide BOEM with two separate versions of the IOP; a public version from which potentially exempt information is redacted, and a BOEM version with such information present, but clearly marked as proprietary. If I propose activities in the Alaska OCS Region, what planning information must accompany the EP? (§ 550.220) As described previously, drilling operations, especially on the Arctic OCS, can be complex, and operators may face substantial environmental challenges and operational risks throughout every phase of the endeavor. One of the main goals of this rulemaking is to ensure, through thorough advanced planning, that operators are capable of operating safely in the extreme and challenging Arctic OCS Conditions. BOEM first proposes to amend the existing “Emergency Plans” provision at § 550.220(a) to add fire, explosion, and personnel evacuation to the events for which emergency plans are required, and to replace the terms “blowout” with “loss of well control” and “craft” with “vessel, offshore vehicle, or aircraft” for clarification purposes. BOEM next proposes to create a new § 550.220(c), which would set forth additional information requirements for EPs that are proposing exploration activities on the Arctic OCS. BOEM proposes to add a new performance-based provision at § 550.220(c)(1) that would require an operator to describe how its proposed activities would be designed and conducted in a manner suitable for Arctic OCS Conditions and how these activities would be managed and overseen as an integrated endeavor. This description may be summarized from the operator's IOP or, if appropriate, updated with any information not available at the time of the IOP. BOEM also proposes to add § 550.220(c)(2), which would require operators to include, as part of their EP submissions, more detailed and updated information concerning their weather and ice forecasting and management plans for all phases of their exploratory drilling activities, including: a description of how they would respond to and manage ice hazards and weather events; their ice and weather alert procedures; their procedures and thresholds for activating their ice and weather management systems; and confirmation that their ice and weather management and alert systems would be operated continuously throughout the planned operations. As described previously, DOI needs to be certain that adequate forecasting equipment and procedures are in place to predict and follow developing weather and ice conditions that might pose a risk to operations. Also, it is essential that operators develop and describe their pre-established thresholds for triggering varying levels of responsive actions in the face of weather and ice threats, as well as the procedures and equipment necessary to respond to these hazards. Furthermore, operators need to demonstrate that they would be capable of responding to and managing these conditions to prevent or minimize the risks associated with ice and adverse weather. BOEM next proposes to require preliminary information concerning SCCE capabilities, deployment of a relief well rig, and sharing of SCCE and spill response and cleanup assets. The proposed informational requirements concerning SCCE and relief well rigs relate to the operator's preliminary plans for complying with BSEE's proposed regulations at 30 CFR 250.471 and 250.472, which will be described later. Requiring information about how an operator intends to satisfy the proposed BSEE regulations at proposed 30 CFR 250.471 and 250.472 would allow consideration of these issues at an early planning stage, and would further inform BOEM's review of proposed EPs under § 550.202, and other applicable laws. It would likewise reduce the risk of discrepancy between reviews and approvals conducted at the EP stage and an operator's later-submitted APD. While BOEM anticipates that elements of the SCCE description required by proposed § 550.220(c)(3) and the relief well rig description required by proposed § 550.220(c)(4) may be general at the EP stage, they must be detailed enough for BOEM to confirm that the operator would have plans in place for how it would conduct its operations safely, in conformance with applicable regulations. The description would also need to be detailed enough to enable BOEM to evaluate the potential environmental implications of proposed SCCE and relief well rig staging and operations. Proposed § 550.220(c)(4) would set forth some of the information expected to be available about the relief well rig when the EP is submitted. The proposed § 550.220(c)(5) provision would add an informational requirement concerning any agreements the operator might have with third parties for the sharing of assets ( e.g., SCCE, relief rigs, and oil spill response resources) and/or any agreements to assist each other in response and cleanup efforts in the event of a loss of well control or other emergency. A cooperative, consortium-based model should offer: 1. Logistical, operational, and commercial efficiencies; 2. Less duplication of personnel and equipment; 3. Reduced monetary cost of exploration; 4. Reduced environmental footprint; 5. Reduced social costs and interference with other users of the OCS; and 6. A coordinated response and cleanup effort in the event of a loss of well control. BOEM's environmental impact analyses have repeatedly shown that the presence of vessels, aircraft, and other equipment within the Arctic region could result in adverse impacts to subsistence activities and to environmental resources ( e.g., noise impacts on marine mammals, increased risk of bird or marine mammal collisions, increased risk of fuel spills, and increased air emissions). The potential effects would be compounded if multiple operators—each fielding its own fleet of drilling, resupply, and emergency response vessels—were to engage in activities simultaneously. Avoiding duplication of relief well rigs, oil spill response assets, and other emergency response vessels and equipment would be an effective means to minimize environmental and social impacts. BOEM and BSEE strongly encourage operators proposing exploratory drilling activities on the Arctic OCS to enter into mutual aid agreements for the sharing of vessels, relief well rigs, and other assets or services associated with responding to an oil spill or other emergency. Notice of these arrangements would inform BOEM's and BSEE's safety and environmental review of proposed activities to ensure operators are fully prepared to respond to a loss of well control. Also, BOEM and BSEE expect that operators, when planning a response to a loss of well control, would ensure that an effective and immediate removal, mitigation, or prevention of a discharge could be achieved, to the greatest extent practicable, using private sector capability. Finally, proposed § 550.220(c)(6) would add an informational requirement concerning the conclusion of on-site operations at the end of the season. An operator would include a projected date, and information used to determine the date, when on-site operations would be completed based on ice conditions that will likely exist in the relevant operational area (using current Federal ice and weather forecasts or other reliable forecasting systems). An operator would also provide a projected date, and supporting information, on when the operator would stop drilling operations into zones capable of flowing liquid hydrocarbons to the surface. That date would need to be consistent with the relief rig planning requirements under proposed 30 CFR 250.472 and with the estimated timeframe for deployment of a relief rig under proposed § 550.220(c)(4). There is no single, definitive “end of drilling season” in the Arctic OCS. The projected end-of-season dates in any specific EP should be based on a variety of factors, including the operator's equipment, procedures, and capability to effective ly manage and mitigate risk that are reasonably likely to occur. Other factors include, but are not limited to, the prevailing meteorologic and oceanic conditions, which vary from year to year, and the location of proposed drilling. For example, in a year when the encroachment of sea ice is projected to occur later, an operator may be able to justify a later end of season and avoid the need to cease drilling operations earlier than necessary. By contrast, in a year when the onset of sea ice is projected to occur earlier, the operator would need to plan to conclude on-site operations earlier. In projecting when to conclude on-site operations, BOEM and BSEE expect operators to be flexible and fully responsive to the latest ice and weather forecasts and the best available information for ensuring optimal timing for the end of on-site operations. Of course, after an EP is approved, an operator may request approval to revise its EP if available information regarding its operations and anticipated meteorologic and oceanic conditions change. For example, BOEM's approval for Shell's 2012 Arctic operations required drilling operations in zones where measurable quantities of liquid hydrocarbons were capable of flowing into the well to be concluded 38 days prior to November 1, based on satellite imagery showing the five-year historical average of earliest sea ice encroachment over Shell's drill site and estimates of the time needed to drill a relief well. The purpose of this drilling hiatus was to reduce project risk by assuring a greater opportunity for response and cleanup in the unlikely event of a late season oil spill. BOEM and BSEE invite comments on what kinds of Arctic weather and ice forecasting options are currently (or expected to be) available for use by operators. In addition, comments may address other factors that should be considered in determining when on-site operations are expected to be completed, or when drilling into certain hydrocarbon zones should cease each year, given an operator's response and cleanup capabilities. C. Additional Regulations Proposed by BSEE Authority The authority citation for 30 CFR part 250 would be amended to add reference to 33 U.S.C. 1321(j)(1)(C). This statutory provision, in addition to section 5 of the OCSLA (43 U.S.C. 1334), provides authority to DOI for the portions of the proposed revisions to § 250.300 related to preventing discharge of petroleum-based mud and cuttings from operations that use petroleum-based mud. For further explanation of those provisions, see the discussion under that section. Definitions (§ 250.105) This section would be revised to add definitions for Arctic OCS, Arctic OCS Conditions, Cap and Flow System, Capping Stack, Containment Dome, and Source Control and Containment Equipment. For an explanation of the definitions of Arctic OCS and Arctic OCS Conditions, see the discussion of definitions at the beginning of the Section-by-Section analysis. The remaining definitions are necessary because these proposed regulations would require the defined systems and equipment under identified circumstances. In addition, the definition of District Manager would be revised for activities on the Alaska OCS such that District Manager would mean Regional Supervisor, because the Regional Supervisor in BSEE's Alaska OCS region performs the District Manager's duties. Cap and Flow System —this term would be defined to mean an integrated suite of equipment and vessels, including a capping stack and associated flow lines, that, when installed or positioned, is used to control the flow of fluids escaping from the well by conveying the fluids to the surface to a vessel or facility equipped to process the flow of oil, gas, and water. A cap and flow system is a high pressure system that includes the capping stack and piping necessary to convey the flowing fluids through the choke manifold to the surface equipment. When a responsible party has been able to successfully cap a well, but conditions will not allow the well to be shut in ( e.g., due to damage, equipment failure or pressure constraints), the cap and flow system allows the well cap to be used as a connection for the flow lines that transport well fluids to the surface for capture and disposition. In some circumstances, this can relieve the pressure on the capping device or tubulars at the well head or in the well while maintaining or reestablishing control of the produced fluids, or a portion thereof. Capping Stack —this term would be defined to mean a mechanical device that can be installed on top of a subsea or surface wellhead or BOP to stop the flow of fluids into the environment. A capping stack's primary function is to stop the uncontrolled flow of fluids from a well to the environment in the event that other intervention methods, such as a BOP, would fail. The capping stack is attached to a connector or pipe stub located on or in the well to achieve a pressure-tight seal that would either stop the flow or direct it into a conduit that would transmit the fluids to a surface facility that is able to store, process, or properly dispose of the fluids. Capping stacks may be deployed from the surface to the well head, as needed, or prepositioned below the riser system when the BOP is located on the deck of a MODU. The pre-positioned capping stack may be created by adapting an auxiliary subsea intervention device to meet the requirements of this proposed rule. Containment Dome —this term would be defined to mean a non-pressurized container that can be used to collect fluids escaping from the well or equipment below the sea surface or from seeps by suspending the device over the discharge or seep location. A containment dome, also known as a “sombrero,” “cofferdam,” or “hat,” captures fluids after they have escaped the well, subsea equipment, or a seep, but before they have reached the surface. It consists of a structure that has the ability to capture fluids rising through the water column and to convey the fluids to a surface vessel or facility for processing or disposal. If a cap and flow system is unable to stop or control the flow of fluids to the environment, or the well system is so damaged that a capping stack cannot make a successful connection, the containment dome system would be needed to capture the hydrocarbons flowing to the environment. Source Control and Containment Equipment (SCCE)—SCCE would be defined to mean the capping stack, cap and flow system, containment dome, and/or other subsea and surface devices, equipment, and vessels whose collective purpose is to control a spill source and stop the flow of fluids into the environment or to contain fluids being discharged into the environment for proper processing or disposal. This definition is useful for referring collectively to the various independent elements of an operator's SCCE in portions of the proposed rule that would apply to any such equipment and its capabilities as a unified system, rather than a specific type of SCCE (see, e.g., proposed § 250.470(f)). The SCCE serves the purpose of stopping or minimizing the flow of hydrocarbons into the environment after a loss of well control event has occurred. The term “surface devices” within the definition of SCCE refers to equipment mounted or staged on a barge, vessel, or facility. The purpose of this equipment is to separate, treat, store and/or dispose of fluids conveyed to the surface by the cap and flow system or the containment dome. The SCCE, however, does not include a BOP or similar equipment that is used in ordinary operations and functions to maintain well control under normal operational conditions or to prevent a loss of well control. Finally, “subsea devices” includes, but is not limited to, remotely operated vehicles (ROV), anchors, buoyancy equipment, connectors, cameras, controls and other subsea equipment necessary to facilitate the deployment, operation and retrieval of the SCCE. What incidents must I report to BSEE and when must I report them? (§ 250.188) The current regulation requires operators to provide oral and written notification to the BSEE District Manager (who in the Alaska OCS region is the Regional Supervisor) of, among other things, any injuries, fatalities, losses of well control, fires and explosions, and incidents affecting operations. BSEE proposes to add a new paragraph (c) to this section that would require operators on the Arctic OCS to provide an immediate oral report to the BSEE onsite inspector, if one is present, or to the Regional Supervisor of any sea ice movement or condition that has the potential to affect operations or trigger ice management activities, as well as the start and termination of these activities, and any “kicks” or operational issues that are unexpected and could result in the loss of well control. Sea ice, if not properly managed, can have a major effect on exploratory drilling operations. Spring and summer thawing can produce large ice masses on the waters overlying the Arctic OCS, which could cause substantial damage to exploratory drilling equipment and render operations unsafe, leading to injury, loss of life, or environmental harm. For example, if the well is not properly protected, sea ice that is moving through the surrounding water could cause a loss of well control by damaging the well head and triggering the discharge of hydrocarbons into the marine environment. Ice management activities, as described in an operator's ice management plan, could include physically changing the direction of an ice floe or using ice breaking techniques in order to minimize the likelihood of damage to the exploratory drilling equipment. It is essential for operators to remain in close communication with BSEE about sea ice in the area that has the potential to affect operations. Just as the operator needs to have sufficient time to act in the event that ice poses an operational hazard, BSEE would need sufficient time to oversee the safety of an operator's reactions and prepare to respond if a response is necessary due to a safety or environmental incident resulting from an ice event. The proposed paragraph (c) would require the operator to immediately notify the BSEE inspector on location or the Regional Supervisor of any event that, pursuant to the hazard thresholds identified in its EP, would trigger a heightened observation requirement, or could potentially result in the need to physically manage ice, initiate operations to secure the well, or move the drilling rig to avoid a threat caused by floating ice. This provision would also require immediate oral notification of the commencement and completion of any ice management activities. The oral report required by this provision could be a simple direct oral notification of the basic facts surrounding the relevant circumstances, and would not need to contain all of the detail required of oral reports pursuant to § 250.189. The proposed provision would also require a follow-up written report regarding any ice management activities undertaken by the operator that must be submitted within 24 hours following completion of those activities. BSEE proposes this tighter 24-hour timeline (as opposed to, and in lieu of, the standard 15 day window under § 250.190) due to the immediacy of the threats and concerns presented by circumstances requiring ice management activities, and the need for BSEE to remain abreast of those events in its regulatory and safety oversight role. The written report may be submitted via email or other electronic means to the inspector or Regional Supervisor and must conform to the content requirements set forth in § 250.190. Finally, BSEE proposes to require that operators submit an immediate oral report of any “kicks” or operational issues that are unexpected and could result in the loss of well control. Operators on the Alaska OCS currently have to report kicks at the end of every day on the well activity report Form BSEE-0133, as required by § 250.468. However, the proposed requirements of this section mean operators would not be allowed to wait until the end of the day or some time later to fill out a form. If a kick occurred, they would have to provide an immediate oral report. The nature of Arctic OCS Conditions, as defined in this proposed rule, demonstrates that responding to a spill in the Arctic region would be a difficult task. Reporting kicks right away is a safety measure that can improve the ability of both inspectors and operators to potentially prevent a loss of well control. Documents incorporated by reference. (§ 250.198) The proposed rule would add subsection (h)(89) to existing § 250.198 as a reference to the American Petroleum Institute (API) proposed draft Recommended Practice (RP) 2N, Recommended Practice for Planning, Designing, and Constructing Structures and Pipelines for Arctic Conditions, Third Edition. This document will be a voluntary consensus standard addressing the unique Arctic OCS Conditions that affect the planning, design, and construction of systems used in Arctic and sub-Arctic environments. This API document—which is virtually identical to a standard previously issued by the International Organization for Standardization (ISO), “Petroleum and Natural Gas Industries Arctic Offshore Structures,” First Edition (2010) (ISO 19906)—would be appropriate for certain aspects of drilling operations, such as accounting for the severe weather and thermal effects on structures, maintenance procedures, and safety. Since this proposed rule is focused on the exploratory drilling phase of operations on the Arctic OCS, certain portions of API RP 2N, Third Edition (such as those related to issues regarding structural and pipeline integrity) would not be relevant to the exploration stage. However, many elements of that document, when published, could be effectively applied to equipment used in exploratory drilling operations on the Arctic OCS. Therefore, proposed §§ 250.198(h)(89) and 250.470(g) would incorporate appropriate elements of API RP 2N, Third Edition, for purposes of APD information requirements. A voluntary consensus standard indicates acceptance and recognition across the industry that certain technology is feasible. For example, API standards are created with input from oil and gas operators, drilling contractors, service companies, consultants, and regulators. Even though the development of a consensus standard does not necessarily represent a unanimous agreement by the developing body's members, the API process provides a means for industry and regulatory bodies to provide input into the development of protocols for the highly specialized equipment and procedures used in oil and gas operations. In the National Technology Transfer and Advancement Act of 1995 (Pub. L. 104-113, 15 U.S.C. 3701 note), Congress directed Federal agencies to use technical standards that are developed or adopted by voluntary consensus standards bodies in lieu of government-unique standards, unless inconsistent with applicable law or otherwise impractical ( see OMB Circular A-119 (Revised), February 1998, available at www.standards.gov/standards_gov/nttaa.cfm ). BSEE frequently uses standards ( e.g., codes, specifications, RPs) developed through a consensus process, facilitated by standards development organizations and with input from the oil and gas industry, as a means of establishing requirements for activities on the OCS. BSEE may incorporate these standards into its final regulations without publishing the standards in their entirety in the Code of Federal Regulations, a practice known as incorporation by reference. The legal effect of incorporation by reference is that the incorporated standards become regulatory requirements. Material incorporated in a final rule, like any other properly issued regulation, has the force and effect of law, and BSEE holds operators, lessees and other regulated parties accountable for complying with the documents incorporated by reference in its final regulations. BSEE currently incorporates by reference over 100 consensus standards in its offshore regulations governing oil and gas operations ( see 30 CFR 250.198). Federal regulations at 1 CFR part 51 govern how BSEE and other Federal agencies incorporate various documents by reference. Agencies may only incorporate a document by reference in a final rule by publishing the document title, edition, date, author, publisher, identification number and other specified information in the Federal Register. The Director of the Federal Register must approve each publication incorporated by reference in a final rule. Incorporation by reference of a document or publication in a final rule is limited to the specific edition approved by the Director of the Federal Register. Availability of Incorporated Documents for Public Viewing When a copyrighted industry standard is incorporated by reference into our regulations, BSEE is obligated to observe and protect that copyright. We typically provide members of the public with Web site addresses where these standards may be accessed for viewing—sometimes for free and sometimes for a fee. The decision to charge a fee is made by each standards development organization. The API provides free online public access to at least 160 key industry standards, including a broad range of technical standards. Those standards represent almost one-third of all API standards and include all that are safety-related or are incorporated into Federal regulations. These standards are available for review, and hard copies and printable versions will continue to be available for purchase through API. BSEE proposes to incorporate, with certain exclusions discussed later in this proposed rule, draft proposed API RP 2N, Third Edition, which is available for free public viewing during the API balloting process on API's Web site at http://mycommittees.api.org/standards/ecs/sc2/default.aspx (click on the title of the document to open). When finalized by API, that standard will be available for free public viewing on API's Web site at: [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A2015-03609. Public record. Not legal advice.