U.S.: BOEM faces industry criticism over offshore emissions rules

The U.S. Department of the Interior’s Bureau of Ocean Energy Management (BOEM) has announced proposed updated air quality regulations that will, according to the bureau, more accurately account for emissions from offshore oil and gas activity. 

The bureau’s proposal encountered resistance and criticism from the industry claiming that new rules will threaten energy production, but it was welcomed with open arms by conservation groups.

Janice Schneider, Assistant Secretary, Land and Minerals Management and Abigail Ross Hopper, Director of BOEM, announced these regulations on Thursday saying that accounting for emissions will ensure that those activities “do not significantly harm the air quality of any state”.

“These proposed improvements will minimize harm to human health and the environment from oil and gas activities.”

The proposal updates 36-year-old regulations and incorporates BOEM’s recent Arctic Outer Continental Shelf (OCS) jurisdiction over air quality. Together, the proposed changes will reduce emissions of Volatile Organic Compounds (VOCs), Nitrogen Oxide (NOx), Sulfur Oxide (SOx), Carbon Monoxide (CO), and Particulate Matter (PM), the bureau said.

“This proposal takes a balanced approach to modernize BOEM’s regulations and ensure compliance with today’s air quality standards,” said Assistant Secretary Janice Schneider. “These proposed improvements will minimize harm to human health and the environment from oil and gas activities.”

BOEM regulates air quality emissions from oil and gas activity on areas of the OCS as a part of its review of exploration and development plans, and right-of-use and right-of-way applications in federal waters of the Western and Central Gulf of Mexico and the Arctic. Congress recently added the latter to BOEM’s jurisdiction. The U.S. Environmental Protection Agency (EPA) regulates air emissions on the remaining OCS as part of its permitting process under the Clean Air Act.

According to the bureau, the proposed rule would modernize and strengthen requirements for identifying, modeling, measuring and tracking the emissions of air pollutants, while retaining key aspects of the current plan approval process for offshore oil and gas exploration and development activity. The improvements will better ensure BOEM approves plans that do not significantly affect the air quality of any state, giving coastal communities and stakeholders greater confidence regarding expected air quality impacts from OCS activity. These changes will also give the Bureau of Safety and Environmental Enforcement better tools to assess air quality compliance for OCS operations, BOEM said.

“Informed by our longstanding relationship with operators, this proposal incorporates key aspects of today’s practices into our regulations, while also bringing our regulations up to speed with the best available science,” Director Hopper said. “We will review public comments and conduct rigorous stakeholder engagement before finalizing the regulations.”

The bureau said that proposed modernizations include addressing all relevant criteria and major precursor air pollutants and cross-referencing the standards for those pollutants to those of the EPA to ensure that operators use the most current standards in submitting plans for BOEM’s review of the potential air quality impacts of offshore exploration and development plans.

Another important improvement, the bureau added, would better identify the state boundary for the purposes of determining potential air quality impacts. The air quality program would measure these impacts landward from the state-seaward boundary, usually three nautical miles offshore, as opposed to only at the coastline. This proposed change would more accurately reflect impacts to the states by including impacts to all lands, including submerged lands, under state jurisdiction, the bureau noted.

BOEM explained that the proposed rule formalizes requirements for the consolidation of emissions from multiple facilities that are wholly or partially owned or controlled by the same operator and intended to be part of one unit or project. Specifically, the proposed rule would require a lessee or operator to add together emissions generated by proximate activities within one nautical mile from multiple facilities, whether or not they are described in a single plan. The aggregated emissions from those facilities would then be combined for analysis.

Accurate calculations of emissions from support vessels

Further, the bureau said, the proposed rule would result in more accurate calculations of emissions from support vessels, because their use has greatly increased as activities move further offshore. Rather than limiting consideration of emissions from supply vessels to within 25 miles of a facility, as BOEM’s current regulations do, the proposed rule recognizes the long distance covered by such vessels as development is extended in deepwater areas and the Arctic and appropriately accounts for emissions during the vessels’ entire transit. Additionally, improvements since 1980 facilitate more accurate modeling of ship emissions where they actually occur. These improvements have been incorporated into the proposal, said the bureau.

Importantly, the bureau noted, the proposed rule also sets up a schedule for ensuring that plans, including previously approved plans, will be compliant with these updated regulations. With the proposed changes to the regulations, BOEM will have one set of requirements, appropriate to both regions where BOEM has authority, which will be more effective and increase predictability. The proposed regulatory changes will also provide BOEM and affected states improved information on the expected onshore air quality impacts of OCS exploration and development.

BOEM said that, together, the proposed changes will result in reduction of Volatile Organic Compounds (VOCs), Nitrogen Oxide (NOx), Sulfur Oxide (SOx), Carbon Monoxide (CO), and Particulate Matter (PM) emissions.

Murkowski slams BOEM’s proposal

U.S. Sen. Lisa Murkowski, R-Alaska, criticized the announcement by the Department of the Interior’s Bureau of Ocean Energy Management that it will seek to impose additional retroactive requirements that will further restrict domestic offshore oil and natural gas production in Alaska and the Gulf of Mexico.

“These regulations will impose additional costs in return for dubious benefits at a time when domestic operators are locked in ferocious competition with the likes of Iran and Russia,” Murkowski said. “The administration is trying to earn plaudits for including the Arctic offshore in its proposed leasing plan, but at the same time is proposing regulations that would make Arctic development all the more difficult. This smoke-and-mirrors approach jeopardizes the energy security of our nation.”

Earlier this week, Interior unveiled the latest step in its development of a Five-Year Program for OCS development for 2017-2022. Murkowski, chairman of the Senate Energy and Natural Resources Committee, called the reversal of planned drilling in the Atlantic OCS an ominous warning for Alaska.

‘Regulation for regulation’s sake’

Erik Milito, Group Director of Upstream and Industry Operations at API, the national trade association representing the oil and natural gas industry, said that BOEM’s proposal to regulate air quality in the Outer Continental Shelf (OCS) is the latest example of an agency advancing regulation outside of its authority. The agency’s own conclusions contradict the proposal, showing that offshore operations don’t significantly impact onshore air quality, the agency said.

“This is yet another agency piling on new regulations that could hinder domestic energy production and add untold costs to industry operations.”

“BOEM air modeling studies are not expected to be completed until 2017 and were commissioned to inform the rule. The agency should not get ahead of the science and proceed with a rule proposal without the necessary data to justify costly regulatory changes.

“The agency is mandated to regulate OCS emissions only if the activities have significant effects on onshore air quality. Based on the agency’s own studies, that simply isn’t the case. This is regulation for regulation’s sake.

“The suggested regulatory changes could significantly affect operations, and a robust cost impact analysis is necessary. This is yet another agency piling on new regulations that could hinder domestic energy production and add untold costs to industry operations.”

In a February 10 letter to Director Hopper, API called on BOEM to not fundamentally alter the current Air Quality Regulatory Program. The agency and neighboring states have repeatedly concluded that offshore emission sources do not contribute significantly to onshore air quality, API concluded.

New rules strengthen climate and environment protections

In response to BOEM’s proposal, Director of Sierra Club’s Lands Protection Program, Athan Manuel, said: “We applaud BOEM for updating air quality rules, enacting stronger safeguards for our climate, communities, and environment.

“While offshore drilling can never be made safe, we look forward to seeing these new standards.”