OCS EIS/EA BOEM 2014-1004

Proposed Rule for Oil and Gas Exploration Drilling Activities on the Arctic Outer Continental Shelf for 30 CFR Parts 250, 254, and 550

Draft Environmental Assessment

U.S. Department of the Interior Bureau of Ocean Energy Management Bureau of Safety and Environmental Enforcement Herndon, VA

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OCS EIS/EA BOEM 2014-1004

Proposed Rule for Oil and Gas Exploration Drilling Activities on the Arctic Outer Continental Shelf for 30 CFR Parts 250, 254, and 550

Draft Environmental Assessment

Author

Bureau of Ocean Energy Management Division of Environmental Assessment

Published by

U.S. Department of the Interior Bureau of Ocean Energy Management Division of Environmental Assessment February 2015

Contents Contents ____________________________________________________________ i List of Figures _______________________________________________________ ii List of Tables ________________________________________________________ ii Acronyms and Abbreviations __________________________________________ iii 1.0 Introduction ____________________________________________________ 1 1.1 Background and Overview ____________________________________________ 1 1.2 Purpose and Need ___________________________________________________ 2 2.0 Proposed Action and Alternatives __________________________________ 2 2.1 Alternative A – Proposed Action Alternative (PAA) ________________________ 2 2.2 Alternative B – Proposed Rulemaking Excluding the Requirement for More Frequent Blowout Preventer Testing __________________________________________ 3 2.3 Alternative C – No Action Alternative (NAA) ______________________________ 3 2.4 Alternative Considered But Not Analyzed ________________________________ 3 3.0 Geographic Areas _______________________________________________ 3 4.0 Affected Environment ____________________________________________ 4 4.1 Air Quality __________________________________________________________ 5 4.2 Water Quality _______________________________________________________ 5 4.3 Marine Benthic and Pelagic Habitats ____________________________________ 6 4.4 Invertebrates and Lower Trophic Levels _________________________________ 7 4.5 Essential Fish Habitat (EFH) and Fish ___________________________________ 7 4.6 Marine and Coastal Birds _____________________________________________ 8 4.7 Marine Mammals ____________________________________________________ 9 4.8 Subsistence _______________________________________________________ 13 4.9 Sociocultural Resources _____________________________________________ 14 4.10 Health Status of Alaska Natives in the North Slope Borough _______________ 15 4.11 Environmental Justice _______________________________________________ 15 5.0 Environmental Consequences ____________________________________ 15 5.1 Alternative A – Proposed Action Alternative (PAA) _______________________ 15 5.1.1 Provisions That Would Not Cause Environmental Impacts ________________________ 16 5.1.2 Operational Provisions Analyzed ____________________________________________ 17 5.1.3 Environmental Analysis of Operational Provisions _______________________________ 18 5.1.4 Effects Summary _________________________________________________________ 35 5.2 Alternative B – Proposed Rulemaking Excluding the Requirement for More

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Frequent Blowout Preventer Testing _________________________________________ 35 5.3 Alternative C – No Action Alternative (NAA) _____________________________ 35 6.0 Literature Cited ________________________________________________ 37 7.0 Preparers _____________________________________________________ 38 Appendix A. Regulatory Provisions of the Proposed Rule (Version 2.9.15) ____ 39 Appendix B. Level of Effect Definitions __________________________________ 64 Air Quality _____________________________________________________________________ 64 Water Quality __________________________________________________________________ 64 Coastal, Benthic, and Pelagic Habitats ______________________________________________ 65 Lower Trophics _________________________________________________________________ 66 Fish and EFH __________________________________________________________________ 66 Marine and Coastal Birds _________________________________________________________ 66 Marine Mammals _______________________________________________________________ 67 Sociocultural Systems ___________________________________________________________ 68 Subsistence ___________________________________________________________________ 69

List of Figures Figure 1. Alaska OCS Planning Areas ............................................................................ 4

List of Tables Table 1. Arctic Marine Mammals ..................................................................................... 9

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Acronyms and Abbreviations AAQS Ambient Air Quality Standards APD Application for Permit to Drill APM Application for Permit to Modify bbl barrel(s) BOEM Bureau of Ocean Energy Management BOP Blowout Preventer BSEE Bureau of Safety and Environmental Enforcement CFR Code of Federal Regulations EA Environmental Assessment EFH Essential Fish Habitat EP Exploration Plan ESA Endangered Species Act of 1973 IOP Integrated Operations Plan km kilometer(s) mi mile(s) NAA No Action Alternative NAAQS National Ambient Air Quality Standards NEPA National Environmental Policy Act of 1969 NMFS National Marine Fisheries Service NOX nitrogen oxides NPDES National Pollutant Discharge Elimination System MODU Mobile Offshore Drilling Unit OCS Outer Continental Shelf PAA Proposed Action Alternative PEIS Programmatic Environmental Impact Statement SCCE Source Control and Containment Equipment Secretary Secretary of the United States Department of the Interior SEMS Safety and Environmental Management System USDOI United States Department of the Interior USCG United States Coast Guard USEPA United States Environmental Protection Agency VOCs Volatile Organic Compounds

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1.0 Introduction Pursuant to the National Environmental Policy Act of 1969 (NEPA), this environmental assessment (EA) was prepared to determine if the proposed promulgation of a rule for oil and gas exploration drilling activities on the Arctic Outer Continental Shelf (OCS) would have a significant effect on the human environment.

1.1 Background and Overview

The Outer Continental Shelf Lands Act (OCSLA) directs the Secretary of the U.S. Department of the Interior (Secretary, USDOI) to manage the orderly leasing, exploration, development, and production of mineral resources on the OCS. The Secretary has delegated to the Bureau of Ocean Energy Management (BOEM) the responsibility for overseeing certain aspects of the OCS oil and gas program, including, among other things, management of the leasing program, administration of exploration and development plans, environmental studies and analyses under NEPA, resource evaluation, and economic analyses. The Secretary has delegated to the Bureau of Safety and Environmental Enforcement (BSEE) the responsibility for the development, oversight, and enforcement of safety and environmental standards for offshore energy and mineral operations. BSEE’s activities include issuance and monitoring of permits related to drilling, well workover activities, production, development and measurement operations, pipelines, the inspection of offshore structures and facilities, monitoring of environmental hazards, and the mitigation of safety and environmental risks. BOEM and BSEE discharge their responsibilities within the context of several relevant statutory and regulatory regimes, as well as executive orders and other policy guidance. Of particular note here, BOEM and BSEE have promulgated extensive regulations governing oil and gas exploration activities on the OCS at Title 30 Code of Federal Regulations (CFR) Parts 250, 254, and 550.

The proposed rule is informed by the measures required by BOEM and BSEE of Royal Dutch Shell [Shell] during exploration drilling of the Burger and Sivulliq/Torpedo prospects in the Chukchi and Beaufort Seas in 2012, USDOI’s subsequent review of Shell’s 2012 operations (USDOI, BOEM, and BSEE, 2013), engagement with Arctic partners and stakeholders, and consideration of the development of potential domestic energy resources from the Arctic OCS.

The proposed rule is designed to enhance BSEE’s and BOEM’s abilities to fulfill their regulatory responsibility on the Arctic OCS, consistent with the added challenges associated with exploratory drilling activities in that environment. The proposed rule would amend and add new provisions for exploratory drilling on the Arctic OCS designed to: (a) prevent pollution; (b) reduce the chance of oil spills occurring; (c) reduce the size and duration of any spills that do occur; (d) enhance the effectiveness of spill response; (e) improve operational planning; and, (f) enhance overall operational safety. In addition, this proposed rule would also help protect the Arctic ecosystems as well as the subsistence needs, culture and traditions of Alaska Native communities, while achieving the National Arctic Strategy goal of reducing reliance on imported

oil and strengthening National energy security.

1.2 Purpose and Need The purpose of this proposed action is to improve safety, operator performance, environmental safeguards, and protection of Alaska Native subsistence activities, cultural traditions, and the Arctic ecosystem during exploratory drilling operations on the Arctic OCS (e.g., the Beaufort Sea and Chukchi Sea Planning Areas).

The proposed action is needed to address the operational challenges, safety concerns, and environmental and sociocultural risks unique to Arctic OCS exploration drilling, ecosystem, and subsistence practices. The Arctic OCS is known for its challenging environmental conditions, geographic remoteness, and relative lack of existing infrastructure. BOEM and BSEE have undertaken an extensive environmental and safety review of potential oil and gas operations in the Arctic region (USDOI, BOEM, and BSEE, 2013). Arctic OCS operations can be complex, and there are substantial challenges and operational risks throughout every phase of an exploratory drilling program. Accordingly, BOEM and BSEE have concluded that new and enhanced regulations, providing greater clarity and specificity, are necessary and appropriate for Arctic OCS operators who propose to conduct exploratory drilling activities in this unique environment.

2.0 Proposed Action and Alternatives

This section presents and compares alternatives analyzed and also provides the rationale for why another alternative was considered, but not analyzed by BOEM and BSEE.

2.1 Alternative A – Proposed Action Alternative (PAA)

The Proposed Action Alternative (PAA) is to promulgate new regulations applicable to exploration drilling activities on the Arctic OCS. BOEM and BSEE are proposing a rule that revises and creates additional regulatory provisions, specifically tailored to exploratory drilling under Arctic OCS conditions. These new regulations are intended to enhance safety and to reduce the environmental and sociocultural impacts of these activities. Under this alternative, the provisions outlined in the proposed rule (Appendix A) would be promulgated in a final rule. The proposed rule would modify the regulations under 30 CFR Parts 250, 254, and 550, to include new and revised sections that clarify existing requirements and incorporate new and improved planning, drilling, and safety requirements. Section 5.1 and Appendix A provide more detailed descriptions of the proposed rule. The proposed rule would apply only to exploratory drilling activities on the Arctic OCS.

2.2 Alternative B – Proposed Rulemaking Excluding the Requirement for More Frequent Blowout Preventer Testing Alternative B is the same as the PAA, except that it would only require a Blowout Preventer (BOP) pressure test for exploratory drilling operations every 14 days, as currently required by the existing regulations (30 CFR 250.447), rather than every 7 days as proposed under the PAA. All other provisions of the PAA would be proposed under Alternative B.

2.3 Alternative C – No Action Alternative (NAA)

Under the No Action Alternative (NAA), the proposed rule would not be implemented. The existing rules at 30 CFR Parts 250, 254, and 550 would remain in place, unaltered.

2.4 Alternative Considered But Not Analyzed

BOEM and BSEE also considered another alternative that would eliminate the following provisions of the proposed rulemaking.

§ 250.300 Pollution prevention. § 250.471 What are the requirements for Arctic OCS source control and containment? § 250.472 What are the relief rig requirements for the Arctic OCS?

Exclusion of those provisions would avoid the possible modest environmental impacts from the additional vessels and equipment that would be required for compliance with the proposed provisions. Exclusion of those provisions also would result in potential cost savings for OCS operators compared to the cost of compliance with the same provisions. However, such an alternative would fall far short of meeting the purpose and need of the proposed rule. Absent the precautionary provisions to reduce pollution potential, reacquire control of and contain a loss of well control, and reduce the time necessary to mobilize and drill a relief well, the proposed rule would not yield the targeted degree of enhancements compared to the NAA. Therefore, BOEM and BSEE did not undertake a more detailed analysis of this alternative.

3.0 Geographic Areas

The proposed rule applies to exploration drilling activities in the Chukchi Sea and Beaufort Sea Planning Areas of the Arctic OCS (see Figure 1). Before an OCS operator may propose exploratory drilling, an operator first needs a valid lease or leases. Thereafter, exploration drilling may occur only under an approved exploration plan (EP) and application for permit to drill (APD). As of December 2014, there were 607 active leases in the Chukchi Sea and Beaufort Sea Planning Areas.

Figure 1. Alaska OCS Planning Areas

Every five years, BOEM releases a schedule of oil and gas lease sales indicating the size, timing, and location of proposed leasing activity that the Secretary determines will best meet national energy needs for the five-year period following its approval. Only the Chukchi Sea, Beaufort Sea, and Cook Inlet Planning Areas are included in the 2012-2017 Outer Continental Shelf Oil & Gas Leasing Program (Five Year Program). Currently, there are no active Alaska OCS leases outside of the Beaufort Sea and Chukchi Sea Planning Areas.

The current Five Year Program does have a lease sale scheduled for the Cook Inlet Planning Area. The proposed rule, however, does not apply to activities in the Cook Inlet Planning Area, because the Cook Inlet OCS typically does not have the same degree of harsh, cold, frozen, and ice conditions as the Arctic OCS. These conditions in the Arctic make exploration operations more difficult and prone to certain types of accidents, which the proposed rule is specifically designed to prevent or minimize. Furthermore, the Arctic OCS is more remote from infrastructure, ports, and facilities needed in case of emergencies, and these factors necessitate the stringent requirements in the proposed rule.

4.0 Affected Environment

The environmental and sociocultural resources present in the Beaufort Sea and Chukchi Sea Planning Areas are briefly described below. This EA incorporates by reference and summarizes relevant information from the Outer Continental Shelf Oil & Gas Leasing Program: 2012-2017, Final Programmatic Environmental Impact Statement [Five Year PEIS] (USDOI, BOEM, 2012). Page numbers from this principal reference are provided in parentheses.

4.1 Air Quality

There are few industrial emission sources in Alaska, and (outside of Anchorage and Fairbanks) no sizable population centers. Barrow – with a year 2010 population of about 4,200 – is the largest community in North Slope Borough, which borders the Beaufort Sea and Chukchi Sea Planning Areas. The existing air quality in Alaska is considered to be relatively pristine, with pollutant concentrations in most areas well within the National Ambient Air Quality Standards (NAAQS). The primary industrial emissions in Alaska are associated with oil and gas production, power generation, small refineries, paper mills, and mining.

The Arctic region experiences air pollution problems due to long-range transport of air pollutants from industrial northern Eurasia and North America, including Arctic haze followed by acidic depositions, tropospheric ozone, and buildup of toxic substances such as mercury or persistent organic compounds. Local shipping emissions and summertime boreal forest fires also may be important pollution sources in the Arctic. In addition, large haze events in the Arctic can be caused by Asian dust originating from the Gobi and Taklamakan Deserts in Mongolia and northern China in springtime (pp. 3-66, 3-67, and 3-388).

Over most of the onshore areas bordering the Chukchi Sea and Beaufort Sea Planning Areas, there are only a few small, widely scattered emission sources. The only major local sources of industrial emissions are in the Prudhoe Bay-Kuparuk-Endicott-Alpine oil production complex. With few industrial emission sources, the region is well within the NAAQS and State of Alaska Ambient Air Quality Standards (AAQS). This demonstrates ambient pollution concentrations are within both national and State standards, including areas subject to relatively higher emissions.

4.2 Water Quality

In Alaska there are several seasonal or occasional natural events that contribute to water quality and to which natural systems are adapted. Examples of these events include hydrocarbons from natural oil seeps, sediment from natural coastal erosion, sediment derived from glacial-fed rivers, natural levels of nutrients from river flooding, metals from river sediments, volcanic eruptions, and rock erosion (p. 3-42).

Water quality on the Alaska OCS has received relatively little contribution from the more common land-based and marine anthropogenic pollution found in the lower 48 States. The rivers that originate in Alaska and flow into coastal marine waters remain fairly unpolluted by human activities. Industrial and shipping impacts on water quality have been and are relatively low at this time, with some notable exceptions such as the Exxon Valdez oil spill in 1989. There are, however, several sources of anthropogenic contaminants in the Alaska marine environment. They enter the Arctic marine ecosystem through atmospheric deposition, discharges to the sea, drifting sea ice, or directly from accidental or intentional dumping of pollutants (p. 3-42).

In both the Chukchi and Beaufort Seas, water quality is relatively pristine. One of the contributing factors is the limited municipal and industrial activity proximate to these seas.

Degradation of water quality, where it occurs in the Arctic, is related largely to aerosol deposition and localized anthropogenic pollution from, for example, mining facilities and former military facilities (p. 3-45).

Background hydrocarbon concentrations in Beaufort Sea waters appear to be biogenic and on the order of less than 1 part per billion. No seafloor oil seeps have been identified in the Beaufort Sea; however, naturally occurring oil seeps have been identified onshore above the low-tide line along the coast of the Beaufort Sea. Recent studies of sediments in Beaufort Lagoon, located in the eastern portion of the Arctic coast, have indicated that no anthropogenic hydrocarbon or metals contamination exists. These sediment data will serve as a baseline against which to evaluate impacts to nearshore sediments from anthropogenic activities. Hydrocarbon concentrations in sediments of the Beaufort Sea are relatively high compared with other nonpolluted marine areas; however, examination of sediment cores gives little indication that oil and gas activities in the area have measurably contaminated the sediments (pp. 3-47 and 3-48).

Considering the limited sources of anthropogenic input to the area, concentrations of hydrocarbons in the Chukchi Sea are expected to be at background levels. As with the Beaufort Sea, no seafloor oil seeps have been identified in the Chukchi Sea (pp. 3-47 and 3-48).

4.3 Marine Benthic and Pelagic Habitats

Most of the seafloor of the Beaufort Sea and the Chukchi Sea shelves consists of a soft-bottom plain composed of silt, clay, and sand. Deposits of flocculated particles from plankton blooms, epontic organisms, and ice algae from ice retreat all contribute to the bottom sediments in these regions. Disturbance from sea-ice scour is a dominant process affecting the seafloor of the Beaufort Sea and the Chukchi Sea shelves. Deep keels of icebergs moving across the shelf scour sediments, causing chronic disturbance to benthic communities. Strudel (drainage of large volumes of freshwater through the ice at holes and cracks) scours the seafloor and occurs near the mouths of rivers during spring flood periods. Few species inhabit the seafloor in waters shallower than 2 meters (6.6 feet) deep because of the bottom-fast ice, which prohibits overwintering of most organisms.

This nearshore benthic area is recolonized each summer, mainly by mobile, opportunistic, epifaunal crustaceans (e.g., amphipods, mysids, cumaceans, and isopods), which are fed on primarily by waterfowl and fishes. In slightly deeper water, the gouging of the seafloor by ice keels creates a habitat for opportunistic infauna (e.g., small clams and other invertebrates), which are fed on by seabirds, fishes, and walrus. Surveys on the Chukchi Shelf revealed that tunicates, echinoderms, jellies, crabs, polychaetes, and sponges make up most of the benthic biomass. Common fish on soft sediments included Arctic cod (Boreogadus saida), Pacific herring (Clupea pallasii), sculpins,