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Interior Department Says Final Arctic Drilling Rule Will Boost Safety

But Republicans, oil industry concerned over harming energy production

Alaska Sen. Lisa Murkowski criticized the Obama administration for launching what she called a "regulatory onslaught" on drilling in the Arctic which would more likely harm energy production there. (Bill Clark/CQ Roll Call file photo)
Alaska Sen. Lisa Murkowski criticized the Obama administration for launching what she called a "regulatory onslaught" on drilling in the Arctic which would more likely harm energy production there. (Bill Clark/CQ Roll Call file photo)

The Interior Department on Thursday finalized a rule it says will make drilling in the Arctic safer and more environmentally sustainable by requiring oil and gas companies to set in place systems to prevent and contain oil spills in the region’s difficult weather conditions.  

The rule, first proposed in February 2015, requires drillers on the Arctic Outer Continental Shelf to have access to a separate rig ready to drill a relief well in case they lose control of an existing well.  

Interior in October canceled offshore drilling lease sales for the Chukchi and Beaufort seas in that region until 2017. That cancelation came after Royal Dutch Shell suspended its Arctic explorations, citing disappointing results, and the high cost of drilling in the Arctic with low oil and gas prices.  

While some companies own Arctic leases that have not yet expired, no drilling is taking place in the U.S. part of the Arctic. Interior said the rule will apply to current and future leases but does not necessarily mean the agency will sell Arctic leases in the five-year plan that will be announced later this year.  

Officials from Interior’s Bureau of Safety and Environmental Enforcement and Bureau of Ocean Energy Management, which issued the rule, noted in a news briefing that unlike the Gulf of Mexico, the Arctic is remote and subject to harsh weather and climate conditions that make drilling complicated and necessitates regulations to ensure drillers can prevent and control spills in those conditions.  

“The unique Arctic environment raises substantial operational challenges,” said Bureau of Ocean Energy Management Director Abigail Ross Hopper in a statement issued by the agency. “These new regulations are carefully tailored to ensure that any future exploration activities will be conducted in a way that respects and protects this incredible ecosystem and the Alaska Native subsistence activities that depend on its preservation.”  

Senate Energy and Natural Resources Chairwoman Lisa Murkowski of Alaska, an outspoken critic of the administration’s regulatory agenda in her home state, said she was still reviewing details of the final rule, but that it appeared more likely to reduce investment and harm energy production in the region.  

“This rule should be a positive sign for the administration’s willingness to offer new leases in the offshore Arctic, but instead it continues to hint toward an even more uncertain future for the regulatory regime in this region,” the Republican senator said. “I am dismayed by the regulatory onslaught the administration is launching on American energy production in its final days.”  

The rule requires drillers to develop oil spill response plans and to show they are able to “predict, track, report, and respond” to the frigid weather conditions in the Arctic, and that those capabilities be reflected in their oversight of contractors and training of workers.  

Under the rule, drillers are required to be able to quickly deploy equipment to contain spills at the source, including capping stacks and containment domes.  

“The rules help ensure that any exploratory drilling operations in this highly challenging environment will be conducted in a safe and environmentally responsible manner, while protecting the marine, coastal, and human environments, and Alaska Natives’ cultural traditions and access to subsistence resources,” assistant secretary for Land and Minerals Management, Janice Schneider, said in a statement.  

The rule is separate from Interior’s Well Control Rule issued in April to prevent a disaster similar to the April 2010 Deepwater Horizon spill that gushed 4 million barrels of crude oil into the Gulf of Mexico over 87 days. Thursday’s rule is specific to exploring and drilling in the Arctic because of its unique weather conditions and its remoteness.  

The American Petroleum Institute, which represents more than 600 oil and gas companies, said it was concerned the rule may not improve safety, but instead hinder innovation and technological advancements in the U.S. energy sector.  

“This is an unfortunate turn by this administration and will continue to stifle offshore oil and natural gas production,” API Upstream and Industry Operations Director Erik Milito said in a statement.

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