Hawaii & Alaska
Hilcorp Energy

Officials look at oil spill response plan for Alaskan Beufort Sea offshore project

An old bugaboo for oil developers in Arctic offshore waters has returned. If an oilwell blowout happens, and oil is spilled, can it be effectively contained and cleaned up in broken ice, or from underneath the ice if in winter?

Many regulators and coastal community residents are not convinced it can be.

Federal agencies are in the final stages of regulatory approvals for Liberty, an Alaskan Beaufort Sea offshore project planned by Hilcorp Energy, a Houston-based independent company.

But a wrinkle has developed for the oil spill contingency plan for the project, U.S. Interior Department officials say.

Liberty is about five miles offshore and about 20 miles east of the large Prudhoe Bay field on the North Slope, which is onshore. Hilcorp plans to build an artificial gravel island and produce about 70,000 barrels per day of light oil through a subsea pipeline built to shore to a connection with onshore pipelines.

For its spill plan, Hilcorp’s proposal, according to Interior Department officials, is to ignite spilled oil to remove it quickly from the ocean surface, but current federal regulations require mechanical cleanup, with skimmers, as the primary response.

“The oil spill response plan is the last piece needed (in approvals for Hilcorp) and some aspects of the plan are requiring a hard look,” Interior Assistant Secretary Joe Balash told the Alaska Oil and Gas Association at its annual meeting in Anchorage.

The option for ignition as primary response, the company’s apparent preference, is currently not allowed in the Arctic area Outer Continental Shelf management plan, Balash said in a follow-up email.

“We are working with them to make improvements in the plan,” he said. The company has been asked to do further risk-analysis, said another Interior officials, who asked to speak on background.

How to best contain and clean up an offshore Arctic oil spill is a problem that has confronted federal regulator and industry for years. Containment and oil recovery is problematic at best even in open ocean like the U.S. Gulf of Mexico, as the 2010 BP Macondo blowout demonstrated, but problems are compounded in the Arctic by the presence of ocean ice during much of the year. Ice presents operational challenged for oil-skimmer vessels and deployment of conventional containment booms, which are the accepted industry practices.

Companies have long argued that the most effective way of removing spilled oil on water is to burn it. Once ignited, the burning oil can be contained in fire-proof booms. The efficiency of this has been demonstrated in demonstration burns in Canada’s far north and in Norway.

However, the ignition must be done fairly quickly while the oil contains enough flammable volatiles to catch fire, and before it emulsifies and disperses in currents and winds. This essentially means companies must have pre-approvals from federal and state agencies to use the technique, because even if it is an accepted alternative to conventional mechanical recovery the time needed to get the approvals from regulators may delay the ignition to the point it is ineffective.

Precisely this happened in the big 1989 Prince William Sound oil spill when regulators waited until it was too late for ignition and weather intervened to disperse the oil slick.

There has also been public pushback from the public, however, including from coastal Arctic communities where residents worry about air pollution from smoke and other hazards. This has caused agencies to hesitate to allow burning as a first option.

These problems proved to be regulatory headaches for Shell’s 2013 exploration in the Chukchi Sea, which resulted in the company building a specialized oil spill recovery barge. Regulatory headaches and added costs due to oil spill contingency requirement laid on Shell were a major factor in the company’s decision to abandon its Chukchi Sea exploration.

Balash said Hilcorp may also have to mobilize additional spill response equipment for Liberty if the issues with ignition can’t be resolved soon enough.

Ironically, Liberty is almost a twin to an existing Beaufort Sea producing project, Northstar, also Hilcorp-operated, which is west of Liberty and similarly six miles offshore with a sub-sea pipeline.

Northstar is exposed to more difficult ocean ice than Liberty would be and has been producing since 2001 without an operational incident, but the 2010 Macondo spill changed the federal regulatory environment for offshore projects.

Liberty is estimated to hold about 150 million barrels of recoverable oil, according to U.S. Bureau of Offshore Energy Management, or BOEM, which administers federal Outer Continental Shelf leases where the project is located.

See the Mat-Su Valley Frontiersman article . . .