Geoscience Policy Monthly Review
december 2017
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energy
December 22, 2017
On December 22, the U.S. Geological Survey (USGS) released a new assessment of undiscovered oil and gas resources in the National Petroleum Reserve in Alaska (NPR-A), pursuant to a secretarial order issued in May of this year to jump-start energy production and update resource assessments for Alaska’s North Slope. In 2010, the USGS estimated that 8.96 billion barrels of oil and 53 trillion cubic feet of gas remained undiscovered in the NPR-A. The 2010 report also concluded that, of these estimated volumes of undiscovered resources, only about 1.6 billion barrels of oil and 2.2 trillion cubic feet of gas may be technically recoverable. The updated 2017 assessment, however, estimates that undiscovered, technically recoverable resources in and near the NPR-A include 8.7 billion barrels of oil and 25 trillion cubic feet of gas – acknowledging these estimates are associated with large ranges of uncertainty.
Just weeks before release of the USGS report, the Bureau of Land Management (BLM) held its annual oil and gas lease sale for all available tracts in the NPR-A on December 6. The 2017 lease sale included 900 tracts, covering approximately 10.3 million acres of petroleum reserve land, which is the most territory ever offered for leasing in the NPR-A. Energy companies, however, showed little interest in the record sale. The sale lasted less than 10 minutes and received only 7 bids, all of which were placed jointly by ConocoPhillips and Anadarko, for less than 1 percent of the land offered. The sum of all seven bids was approximately $1.16 million – a modest result compared to the $18.8 million in revenue generated from the 2016 NPR-A sale.
Sources: Bureau of Land Management, U.S. Department of the Interior, U.S. Geological Survey
Trump administration moves to revise Obama-era energy regulations through rulemaking process
December 29, 2017
Following several executive orders issued by President Donald Trump earlier this year to suspend, revise, or rescind regulations or actions that unnecessarily burden the development of domestic energy resources, the Department of the Interior (DOI) and the Environmental Protection Agency (EPA) announced rulemaking revisions to offshore drilling protections, fracking regulations, and the Clean Power Plan (CPP) in the final days of 2017.
On December 29, the Bureau of Safety and Environmental Enforcement (BSEE) published a proposed rule (82 FR 61703) to amend certain regulations for oil and natural gas production and safety standards that were previously instituted under the Obama administration. This rule would update the 30 CFR part 250, subpart H, Oil and Gas Production Safety Systems regulations, which were substantially revised by a final rule (81 FR 61834) that BSEE published on September 7, 2016, addressing issues such as production safety systems, subsurface safety devices, and safety device testing in an effort to better protect workers and the environment. The new regulatory proposal from BSEE states that these new amendments would reduce unnecessary burdens imposed on operators under the current regulations, while providing the same level of safety and protection of the environment. In an Initial Regulatory Impact Analysis, BSEE estimates that the proposed rule would reduce industry compliance burdens by $33 million annually. The public comment period for the proposed changes is open until January 29, 2018.
Similarly, the Bureau of Land Management (BLM) published a final rule (82 FR 61924) to rescind a 2015 rule on hydraulic fracturing (80 FR 16128) that never took effect due to pending litigation. The rule was intended to ensure that wells are properly constructed to protect water supplies, make certain that the fluids that flow back to the surface as a result of hydraulic fracturing operations are managed in an environmentally responsible way, and provide public disclosure of the chemicals used in hydraulic fracturing fluids. The BLM now justifies rescinding the rule due to unreasonable administrative burdens and compliance costs.
A day prior, the EPA moved forward in rewriting the CPP, promulgated under Section 111 of the Clean Air Act (42 U.S.C. 7411), by asking for public comments on a replacement rule by February 26, 2018 (82 FR 61507). Key to former President Barack Obama’s climate mitigation plan, the CPP was challenged by 27 states and a number of other parties, and the Supreme Court issued a stay on implementation of the CPP on February 9, 2016. Following President Trump’s executive order (13783) on energy independence, the EPA conducted a review of the CPP, concluding that "suspension, revision, or rescission of [the CPP] may be appropriate" based on the agency's reinterpretation of the statutory provisions underlying the CPP, and then published a Federal Register notice proposing to repeal the CPP on October 10, 2017. The December 28 advanced notice of proposed rulemaking solicits information on systems of emission reduction for the agency to consider in developing a future rule intended to reduce carbon dioxide emissions from existing fossil-fueled electric utility generating units.
Sources: Bureau of Land Management, Bureau of Safety and Environmental Enforcement, Environmental Protection Agency, Office of the Federal Register, The White House