OCS EIS/EA BOEM 2015-043

Final Rule for Oil and Gas and Sulfur Operations in the Arctic Outer Continental Shelf for 30 CFR Parts 250, 254, and 550

Final Environmental Assessment

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

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OCS EIS/EA BOEM 2015-043

Final Rule for Oil and Gas and Sulfur Operations in the Arctic Outer Continental Shelf for 30 CFR Parts 250, 254, and 550

Final 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 Bureau of Safety and Environmental Enforcement June 2016

Contents

Chapter 1 Introduction _______________________________________________________ 1 1.1 Background and Overview _____________________________________________________ 1 1.2 Purpose and Need ___________________________________________________________ 2 Chapter 2 Proposed Action and Alternatives ______________________________________ 3 2.1 Alternative A – Proposed Action Alternative (PAA) _________________________________ 3 2.2 Alternative B – Include 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 Chapter 3 Geographic Areas ___________________________________________________ 5 Chapter 4 Affected Environment _______________________________________________ 6 4.1 Air Quality _________________________________________________________________ 6 4.2 Water Quality ______________________________________________________________ 6 4.3 Marine Benthic and Pelagic Habitats ____________________________________________ 7 4.4 Invertebrates and Lower Trophic Levels __________________________________________ 8 4.5 Essential Fish Habitat (EFH) and Fish _____________________________________________ 8 4.6 Marine and Coastal Birds______________________________________________________ 9 4.7 Marine Mammals __________________________________________________________ 10 4.8 Subsistence _______________________________________________________________ 14 4.9 Sociocultural Resources______________________________________________________ 15 4.10 Health Status of Alaska Natives in the North Slope Borough _________________________ 15 4.11 Environmental Justice _______________________________________________________ 15 Chapter 5 Environmental Consequences ________________________________________ 16 5.1 Alternative A – Proposed Action Alternative (PAA) ________________________________ 16 5.1.1 Provisions that would not cause Environmental Impacts __________________________________ 17 5.1.2 Operational Provisions Analyzed _____________________________________________________ 18 5.1.3 Environmental Analysis of Operational Provisions _______________________________________ 19 5.2 Alternative B – Include a Requirement for More Frequent Blowout Preventer Testing ____ 31 5.3 Alternative C – No Action Alternative (NAA) ______________________________________ 32 Chapter 6 Public Comment ___________________________________________________ 33 Chapter 7 Literature Cited ____________________________________________________ 33 Chapter 8 Preparers ________________________________________________________ 34 Appendix A. Regulatory Provisions of the Final Rule ________________________________ 35 Appendix B. Level of Effect Definitions ___________________________________________ 52

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List of Figures and Tables

Figure 1. Alaska OCS Planning Areas ......................................................................................................... 5 Table 1. Arctic Marine Mammals .............................................................................................................. 11 Table 2. Adverse Effects Potentially Avoided (or Reduced) from Decreasing the Likelihood of an Oil Spill Occurring ............................................................................................................................. 25

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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 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 mi mile 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 VOC volatile organic compound

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Chapter 1 Introduction

Pursuant to the National Environmental Policy Act of 1969 (NEPA), this environmental assessment (EA) was prepared to determine if the promulgation of a final rule for oil and gas exploration drilling on the U.S. 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 (USDOI) to manage the orderly leasing, exploration, development, and production of energy and 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 OCS 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 fulfill their responsibilities within the context of several relevant statutory and regulatory regimes, as well as executive orders and other policy guidance. BOEM and BSEE have promulgated extensive regulations governing oil and gas exploration drilling on the OCS at Title 30 Code of Federal Regulations (CFR) Parts 250, 254, and 550, which are being amended by the present rule making. The final rule is informed by the measures required by BOEM and BSEE during exploration drilling of the Burger and Sivulliq/Torpedo prospects in the Chukchi and Beaufort Seas in 2012 and 2015; USDOI’s review of 2012 operations (USDOI, BOEM, and BSEE, 2013); engagement with Arctic partners and stakeholders, such as the Arctic Council; consideration of the development of potential domestic energy resources from the Arctic OCS; and comments received during the comment period on the proposed rulemaking. The final rule is designed to enhance BSEE’s and BOEM’s abilities to fulfill their regulatory responsibilities on the Arctic OCS, consistent with the added challenges associated with exploratory drilling activities in that environment. The final 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 final 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 Strategy for the Arctic Region (President of the United States, 2013) goal of reducing reliance on imported oil and strengthening national energy

security.

1.2 PURPOSE OF AND NEED FOR THE PROPOSED ACTION The purpose of promulgating these final regulations 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. The U.S. Arctic region, as recognized and defined in the U.S. Arctic Research and Policy Act of 1984, encompasses an extensive marine and terrestrial area; however, this final rule focuses solely on the OCS within 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 exploration drilling, the ecosystem, and subsistence uses on the Arctic OCS. See Section 5.1 for further information about exploratory activities. 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, posing 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.

Chapter 2 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 (see Section 2.4).

2.1 ALTERNATIVE A – PROPOSED ACTION ALTERNATIVE (PAA) The Proposed Action Alternative (PAA), which is the preferred alternative, is to promulgate final regulations applicable to exploration drilling activities on the Arctic OCS. BOEM and BSEE are proposing a final rule that revises and creates additional regulatory provisions, specifically tailored to exploratory drilling under Arctic OCS conditions. The final rule would apply only to exploratory drilling activities on the Arctic OCS. 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 Appendix A would be promulgated in a final rule. The final 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 final rule. Alternative A no longer includes the requirement for blowout preventer (BOP) testing every seven days; the testing requirement was initially considered in the proposed rulemaking and in Alternative A in the Draft EA.

2.2 ALTERNATIVE B – INCLUDE THE REQUIREMENT FOR MORE FREQUENT BLOWOUT PREVENTER TESTING Alternative B is the same as the PAA, except that it would require a BOP pressure test for exploratory drilling operations every seven days rather than every 14 days, as is currently required by existing regulations (30 CFR 250.447). All other provisions of the PAA would be promulgated under Alternative B. Alternative B was revised in the Final EA to include more frequent BOP testing since Alternative A was revised to exclude the same requirement.

2.3 ALTERNATIVE C – NO ACTION ALTERNATIVE (NAA) Under the No Action Alternative (NAA), the final rule would not be promulgated. 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 final 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 these provisions would avoid modest environmental impacts associated with the use of additional vessels and equipment that would be required for compliance with these provisions. However, such an alternative would fall far short of meeting the purpose of, and need for, the final 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 final 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.

Chapter 3 Geographic Areas

The final 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 June 27, 2016, there were 63 active leases in the Chukchi Sea and Beaufort Sea Planning Areas (62 in the Beaufort Sea and 1 in the Chukchi Sea).

Figure 1. Alaska OCS Planning Areas Every five years, BOEM announces 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. In the Alaska OCS Region, 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), or proposed in the 2017-2022 OCS Oil and Gas Leasing Program (under development). In 2015, the Department of Interior cancelled lease sales in the Chukchi and Beaufort seas, previously scheduled for 2016 and 2017, respectively. Currently, there are no active Alaska OCS leases outside of the Beaufort Sea and Chukchi Sea Planning Areas. The final rule 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 final 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 final rule.

Chapter 4 Affected Environment

The environmental and sociocultural resources present in the Beaufort Sea and Chukchi Sea Planning Areas are briefly summarized 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 (herein referred to as the Five Year PEIS) (USDOI, BOEM, 2012). We use this reference document to describe the affected environment since it spans both Chukchi Sea and Beaufort Sea Planning Areas and provides a level of detail proportional to the analysis herein. Page numbers from this principal reference are provided in parentheses. Additional information about Arctic resources can also be found in the Chukchi Sea Planning Area, Sale 193 Final Second Supplemental Environmental Impact Statement (USDOI, BOEM, 2015a).

4.1 AIR QUALITY There are few industrial emissions sources in Alaska, and (outside of Anchorage and Fairbanks) no sizable population centers. Barrow — with a year 2014 population of about 4,500 — 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, pulp mills, and mining. However, the Arctic region does experience 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 could 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 emissions sources. The only major local sources of industrial emissions are in the Prudhoe Bay-Kuparuk-Endicott-Alpine oil production complex. With few industrial emissions sources, the region is well within the NAAQS and State of Alaska Ambient Air Quality Standards (AAQS).

4.2 WATER QUALITY In Alaska, there are several seasonal or occasional natural events that affect to water quality and to which natural systems are adapted. Examples of these events include release of hydrocarbons from natural oil seeps, sediment suspension and deposition from natural coastal erosion, sediment suspension and deposition derived from glacial-fed rivers and other rivers, and nutrient and metals loading from river flooding, 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 remain, 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. These sources 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. 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 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