In the first new drilling application since the BP Deepwater Horizon blowout to be considered by the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE), Shell Offshore Inc. (Shell) proposes to drill up to three exploratory wells in roughly 2,700 feet of water, approximately 137 miles off the coast of Louisiana. Shell’s estimate of the worst case blowout scenario for one of these wells is 12.3 million barrels, around 2 ½ times the size of the BP Deepwater Horizon spill. Shell estimates that it will take 109 days to drill a successful relief well, and relies on the multi-party Marine Well Control System apparatus which, as of this writing, is still in the design stage.
Several threatened and endangered species occur in the project area, including sea turtles and sperm whales, and are likely to be directly and adversely affected by drilling activities generally, and potentially catastrophically affected by a major oil spill. Additionally, there are deepwater benthic communities in the vicinity of the proposed exploratory drilling that are likely to be impacted by Shell’s proposed activities.
Shell’s application came to light soon after the recommendations recently made by the Presidential Commission on the BP Deepwater Horizon disaster. These include:
- Deepwater energy exploration and production, particularly at the frontiers of experience, involve risks for which neither industry nor government has been adequately prepared, but for which they can and must be prepared in the future.
- To assure human safety and environmental protection, regulatory oversight of leasing, energy exploration, and production require reforms even beyond those significant reforms already initiated since the Deepwater Horizon disaster. Fundamental reform will be needed in both the structure of regulatory oversight and related internal decisionmaking processes to ensure political autonomy, technical expertise, and full consideration of environmental protection concerns.
- Because regulatory oversight alone will not be sufficient to ensure adequate safety, the oil and gas industry will need to take its own, unilateral steps to increase safety throughout the industry, including self-policing mechanisms that supplement governmental enforcement.
- The technology, laws and regulations, and practices for containing, responding to, and cleaning up spills lag behind the real world risks associated with deepwater drilling into large, high-pressure reservoirs of oil and gas located far offshore and thousands of feet below the ocean’s surface. Government must close the existing gap and industry must support rather than resist that effort.
- Scientific understanding of environmental conditions in sensitive environments in deep Gulf waters, along the region’s coastal habitats, and in other areas proposed for drilling, such as the Arctic, is inadequate. The same is true of the human and natural impacts of oil spills.
The Commission also made a number of recommendations about reorganization of the former Minerals Management Service, including this one:
"The leasing and environmental science office would include two distinct divisions: a leasing and resource evaluation division and an environmental science division. To provide an important and equitable voice for environmental concerns during the five-year planning process and lease awards, the environmental science division would be structured with a separate line of reporting to the Assistant Secretary overseeing offshore drilling and the environmental science division would be led by a Chief Scientist. The Chief Scientist’s responsibilities would include, but not be limited to, conducting all NEPA reviews and coordinating other environmental reviews when appropriate and administering the Environmental Studies Program. The Chief Scientist’s expert judgment on environmental protection concerns would be accorded significant weight in the leasing decision-making process, including on questions concerning whether and where leasing should occur and what environmental protection and mitigation conditions should be placed on leases that are issued. The new organization and process would also include enhanced review of environmental decisions and enforcement by the safety authority. It should track all mitigation efforts from NEPA documents and other environmental reviews to assist the new safety authority in its environmental enforcement duties."
Neither this recommendation, nor any of the Commission’s other findings, has been adopted by the Department of the Interior or by BOEMRE. Accordingly, the fundamental reforms found necessary and the scientific oversight contemplated by the Commission have not been applied to the Shell project. Nor is there any indication that Shell or BOEMRE have consulted with NOAA or the U.S. Fish and Wildlife Service, as required under the MMPA, ESA and Magnuson-Stevens Fishery Conservation and Management Act.
The Deepwater Horizon incident shows that even a huge multi-national oil company cannot contain a major spill in the open ocean. Shell admits that it would take 109 days to mobilize assets and drill a relief well, with a wild well venting up to 143,000 barrels per day into the Gulf. In the interim, Shell is relying on the Marine Well Control System apparatus which, as of this writing, is likely to take 18 months to be operational. Until that system is tested and in place, Shell has not shown that it could perform any better than BP did following the Deepwater Horizon blowout. This failure puts the entire Gulf ecosystem and economy again at risk. Additionally, Shell’s oil spill response plan includes the use of dispersants and subsea dispersants. The environmental impacts of dispersants in the deepwater context has not been well-studied.
BOEMRE is now considering whether this project can by analyzed under the National Environmental Policy Act (NEPA) by way of an Environmental Assessment which, contrary to what its name indicates, is a cursory look at potential environmental effects of a project. In NRDC’s view (you can read our comment letter here), the Shell project needs to undergo full environmental review by the type of study called an Environmental Impact Statement under NEPA. To do otherwise would be irresponsible and an insult to the residents of the Gulf region.