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The US proposes the first Arctic-specific federal regulations for oil and gas drilling

The US proposes the first Arctic-specific federal regulations for oil and gas drilling


The regulations would require companies to fortify their contingency plans in case of spills

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The Obama administration yesterday proposed the first-ever federal regulations for oil and gas drilling in the Arctic Ocean, The Wall Street Journal reports. The rules would require companies to create contingency plans in the event of a spill or rig malfunction.

The Interior Department's proposals, which would only apply to exploratory wells, stem from its 2014 discussions with Royal Dutch Shell to fortify the company's safety plan in the Arctic. That plan included new tugboats, an extra helicopter, and an additional oil rig capable of drilling a relief well if the first rig loses control. The administration's proposed regulations would require companies to have an additional rig at drilling sites and to construct and test an oil containment dome before drilling.

Companies would need a back-up rig at drilling sites

As WSJ points out, similar regulations are already in place for drilling in the Gulf of Mexico, but because of the high concentration of drilling there, rig operators often share their resources. The Arctic's remote location will mean companies will likely spend more money drilling in that region. In the past eight years, Shell has spent an estimated $6 billion on exploratory drilling off the shore of Alaska, and plans to spend $1 billion more this year.

Brian Salerno, head of the Bureau of Safety and Environmental Enforcement, told Reuters that the regulations are "designed to ensure safe energy exploration in unforgiving Arctic conditions."

Because of harsh weather in the region, energy companies can only drill safely from July to October. But, due to rapid climate change, all the ice in the Arctic is likely to melt by 2050, paving the way for an Arctic drilling boom. Opponents of offshore drilling have long clung to the hope that technical and regulatory challenges would slow down oil farming in the Arctic. Unsurprisingly, backlash to the administration's proposals has been swift. The American Petroleum Institute has called some of the requirements "unnecessarily burdensome."

Shell was criticized for a series of offshore drilling accidents in 2012 when its oil containment system was easily crushed in a test, and its rig, the Noble Discoverer, caught fire. The missteps prompted the Interior Department to investigate Shell's operations.

No energy company is currently drilling in the Arctic, but, after years of logistical setbacks, Shell plans to begin its largest Arctic exploration project to date in the Chukchi and Beaufort seas this summer. ConocoPhillips and Statoil also have leases in the ocean.

The public will have 60 days to comment on the proposals, and it is unclear when the regulations would be finalized, though Reuters reports it will not be before this summer's drilling season.