U.S. may push for regional oil development standards in artic

By Jennifer A. Dlouhy – Houston Chronicle

PowerSource

WASHINGTON — The United States may use its role heading the Arctic Council to push for standards governing oil drilling and development throughout the region, the Obama administration’s top Arctic envoy said Tuesday.

Retired Adm. Robert Papp Jr., who became the first U.S. special representative for the Arctic in July, said forthcoming Interior Department regulations governing Arctic drilling could be a model for other nations seeking to tap the region’s potential oil and gas riches.

“Clearly, we need to get our act in order” before seeking a multilateral agreement or a “voluntary adaption of standards,” Papp told reporters on the sidelines of a Center for Strategic and International Studies event examining Arctic issues. But, he said, regulators at the Interior Department have developed “a sound proposal” to govern Arctic oil exploration.

That draft measure is now in the midst of an interagency review at the Office of Information and Regulatory Affairs. While major details are under wraps, the proposal is expected to require oil companies working in the Arctic to have immediate access to emergency equipment, including devices that can rein in runaway wells and drilling rigs that can bore relief wells.

Melting sea ice at the top of the globe has given energy companies new access to once-impassable Arctic waters and the potential 412 billion barrels of oil equivalent estimated to be lurking in the region.

“We all recognize the Arctic is changing from a solid expanse of inaccessible ice fields into a growing, navigable sea, attracting increased human activity,” Papp said at the CSIS forum. “The economic promise of oil and gas in the Arctic is increasingly attractive as retreating sea ice and improvements in drilling technology make offshore exploration and production more economically feasible than before.”

But it is not without risk, as illustrated by a series of mishaps during Shell’s 2012 Arctic drilling operations. Most of the headline-grabbing incidents — including a drillship that dragged its anchor and the grounding of Shell’s floating Kulluk drilling unit — happened far from the Chukchi and Beaufort seas where the company was searching for oil.

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