Antitrust Review • The Sherman Act and the Clayton Act are federal statutes which make
certain agreements in trade restraint illegal. Violators can be subject to criminal penalties and large monetary damages.
• The purpose of antitrust policies is to restrict communications concerning cost, production or other trade sensitive information which could be the foundation for such illegal agreements
• So we should always: – Avoid discussing cost, production, market analysis or other competitive
trade sensitive data – Have an agenda reviewed by own legal counsel – Report to our own counsel any concerns that we have of variation from
the agenda – Keep minutes for a record of our discussions
3
Did you ever find the quickest way onto the roof so you could fix the one strand of bubbles that’s been giving you problems
since you installed them?
Have you ever been to the hardware store and just couldn’t wait for the clerk to get the
ladder to get that item off the top shelf?
None of us text and drive.
When is the last time you checked your email or looked up a location on your maps application?
All of us have been safety trained.
All of us know the common sense of being safe.
We just need to be good patients and practice what we preach.
Current Activities
• Final Well Control Rule published and effective • BSEE held a workshop in August in Houston • Established BSEE policies would be in writing
on their Q&A website – not verbal • Committee held teleconferences to discuss
issues and potential further interaction with BSEE
Looking Forward
• Doug Morris agreed to meet if specific questions are given to him ahead of time
• Potential to form subgroups for: – BOP flowing conditions – Lift boats – Conditions of approval – Inspection Results – Interventions and Coil Tubing – Accumulator Bottles
Issues – Work in Progress Royalty Reporting Work Group (Greg Necaise – Shell / Stella Alvarado - Anadarko) • Recommended Practice for Development of a Data Integrity Management
Program for Gulf of Mexico Operations is currently at about 80% complete – Held follow-up review with Kimbra from ONRR in early November – Possible presentation to GAO in Q1 2017
Measurement Work Group (Chad Simonton – Shell) • New Best Practice for Measurement Sealing (Site Security) - OOC website • New Surface Commingling Permit Application guidance – 90% complete – Reviewed draft with BSEE’s Measurement Approval & Enforcement Section 11/15/16
• Next Steps – Understand expectations of API Standards incorporated by reference on compliance
– Consider BLM Onshore Orders for measurement to understand impact if adopted by BSEE
Subpart H – Production Safety Rule (Bill Terrebonne – Shell / David Dykes – Chevron) • FR Publication Sept 7, 2016 with effective date of Nov 7, 2016 • Met w/BSEE GOM Region - Nov 7
– PSVs new test requirements – Annual Inspection/Testing Requirements – when due? – Fired components inspection and flame arrestors – Facility drawings – Certifications (SPPE, Drawings, company certifications) – Atmospheric Vessels
• Next steps – 12/14 workgroup mtg – PSV new test requirements – Next year: Failure reporting discussions to be held w/BSEE HQ - further defining of
failure for reporting purposes (future)
Issues – Work in Progress
Subpart H: BSEE GOM Region Feedback
• BSEE acknowledges unanticipated implementation problems with the rule • They are willing to work with operators to grant more time. • The mechanism will be departure and/or alternate compliance requests
from each operator. • BSEE is unwilling to grant “across the board” extensions – they want to
address problems on a case-by-case basis. • Operators should file letters seeking extensions / departures at the Region.
Issues – Work in Progress
Safe Lift (Sandi Fury – Chevron) • Continue to press for a solution to the complex heavy lift issue recognizing
the lack of US Coastwise capability and maintaining critical best practices that deliver safe operations
• Critical to construction operations on the OCS
Well Intervention Workgroup (Evan Zimmerman, Greg Southworth – OOC) • Well intervention activities defined • Bow-ties developed for each case (70) • Work to be recognized in NOSAC report
Hydraulic Stimulation (Sarah Tsoflias – Chevron) • Continue technical work to support Industry engagement with the Agencies on
fracking / well stimulation and completion practices in support of permit renewals, to address operational questions and support robust NEPA reviews
Issues – Work in Progress
BSEE Cost Recovery Fee (NPR) • FR publication November 17, 2016
- Comments on rule due January 17, 2017 - Comments on information collection due December 19, 2016
• Revises recovery fees for 31 different services. Most noticeable changes: - DWOP – Complex (New Technology) - $70,333(+ $66734) - DWOP – Simple - $14,290 (+ $10691) - APD - $10,420 (+ $8377) - Downhole commingling - $14064 (+ $8285) - Voluntary Unitization - $27288 (+ $14669)
• Letter being drafted seeking an extension of 30 days to address due to holidays
• Working on potential information collection burden response
Issues – Work in Progress
Financial Assurance • Jt Trade Workshop with NOIA/LMOGA held Nov 17 which documented
concerns with current Agency direction – Over 100 participants – Diverse participation including BOEM, Surety Providers
• Jt trade letter sent to Dir Hopper on 12/2 articulating concerns based upon key messaging derived from workshop
• Next Steps – Continued dialogue with BOEM to address issues and seek stay of
program until remedied
Issues – Work in Progress
Issues – For Consideration 2017 • Orderly decommissioning of deepwater infrastructure
– Changes in BOEM policy are evolving that will impact deepwater infrastructure abandonment activities
– Consider development of Best Practices Document to address orderly and safe dismantling of deepwater infrastructure
• OOC RTM Workgroup – Identify opportunities to achieve safety enhancements potentially
derived from remote RTM as a requirement of operations – Distinguish value of immediate from delayed data delivery and RTM
from remote RTM – Delineate Condition Based Monitoring (CBM) opportunities from
safety critical information
Contact Information
For Questions or Information… • Sandi Fury, Chevron
• Bill Terrebonne, Shell
Current Activities
• API RP 2L – Currently at an impasse
– HSAC committee members will not compromise on required helideck size for minimal structures
– Proposed 2L helideck size requirements will eliminate the installation of helidecks on freestanding caissons and some braced caisson structures
– Path forward and timing is unknown
Current Activities
• API RP 2CCU • 2CCU seeks to standardize and provide recommended
practice for the design, construction, marking, testing and repair and maintenance of cargo containers used in a marine environment.
• Current draft document was draft balloted, comments addressed, re-drafted and put on official ballot with deadline of December 16, 2016.
• After balloting and comment resolution the new API RP will be rolled out with a tentative release by mid 2017.
• BSEE will now move to the review and potential incorporation by reference of this document.
Current Activities
• NPRM, “Pipeline Safety: Safety of Hazardous Liquid Pipelines” OOC Comments Filed Final Rule expected publication 1Q17 Potentially significant impact
• USACOE Galveston District, BSEE and Industry • Consistent framework for pipeline abandonment in place
vs. removal Monitoring Corps developments
Current Activities
• Engagement with BOEM, BSEE and LACZM • Focused on OCS sediment resource area designations
requiring pipeline removals Initial OOC engagement discuss concerns apparent inconsistencies to policy and possible
solutions for a path forward
Looking Forward
• Continued engagement with BSEE, BOEM, LACZM on sediment resource areas – develop a mutually agreeable solutions – Explore possible development of industry and
regulator sand sediment forum • Potential engagement with BSEE
– develop guidance for proper procedures and expectations for submittal for various permit requests. (e.g., Possible Guidance Document)
– potential safety and environmental inspection of Pipeline ROW Platforms.
Sand Sediment Working Group Meeting
• Hosted by BOEM’s Marine Minerals Program and GOMA
• Thursday, December 15, 2016 from 9:00 a.m. – 4:00 p.m.
• Location: Hilton Riverside Hotel, New Orleans, St. James Ballroom of the Hilton Riverside
OOC General Meeting
BSEE Key Issues Lars Herbst, PE
Regional Director Gulf of Mexico Region
December 7, 2016
“To promote safety, protect the environment and conserve
resources offshore through vigorous regulatory oversight and
enforcement.”
• Well Control Rule/Production Safety System Rule • Decommissioning cost • BSEE prospective on bankruptcies • Ide Iron • Deep water decommissioning • Risk Based Inspections • Maintenance and staffing in the low oil price
environment
Topic Agenda
Current Activities
• BOEM – ePlans – Follow up ePlan Workshop held at BOEM’s
Regional Office in September 2016 • OOC continues to have great participation in these
workshops, and we continue moving forward with BOEM to resolve questions, comments and suggestions.
• Anticipate rollout Summer/Fall 2017 (not factoring in proposed air emissions)
43
Current Activities
• BSEE – eOSRP • eOSRP module is scheduled to be released internally
December 2016 which will allow data from their old system to be migrated into the new system
• BSEE anticipates going live to the external companies 1st Quarter 2017
• Training is planned for both Houston and New Orleans with dates to follow
Current Activities
• BSEE – eFacility Safety System (FSS) • Module still in a voluntary utilization mode post the issuance
of NTL 2015-N05 “Electronic Submittal of Production Facility Safety System Applications”
• Updated system to ensure email notifications include project area (Area/Block, Rig/Platform name) with the identification number
• Current utilization rate is at 73% • BSEE anticipates a new NTL will be issued changing to
mandatory when they reach +80% • BSEE is also reviewing required drawings list to ensure all are
listed per the recently updated Subpart H
Current Activities
• BSEE – eIncidents of Noncompliance – Updated system to ensure email notifications include
project area (Area/Block, Rig/Platform name) with the identification number
– Resolved issue on providing operator representative with electronic version by downloading to a thumb drive
– BSEE is finalizing an internal policy document which should be signed by BSEE Headquarters soon.
– Inspectors have been advised to issue INC’s electronically and the company representative to sign on the Toughbook
Current Activities
• BSEE – eIncidents of Noncompliance • Shut in (facility & component) INC’s can be issued each
day during inspection • Warning INC’s are generally issued on the last day of
inspection. • Company representatives are to provide BSEE with at
least one email address to forward eINC to company representative
Current Activities
• BSEE – eIncidents of Noncompliance • During November 2016, BSEE issued 94 electronic
INC’s; of which 39 were downloaded onto thumb drives at the request of the company representative
• Approximately 74% of all INC responses are submitted via this system
• BSEE requesting that any open paper INC’s be closed out within the system by uploading a copy of the actual submittal
Current Activities
• BSEE – eInspections • This module is being expanded to allow the BSEE
Inspectors to email inspection reports and receipts • Anticipate implementation early 2017
Current Activities
• BSEE – ePerformance Measures – Project placed on hold by Headquarters – Jason Matthews will be the assigned SME – System will be designed to
• Obtain statistical data as we normally receive from BSEE for Annual Performance Review Meetings
• Submit Annual Performances Measures Data
Looking Forward
• BSEE/BOEM – ePermits – 2017/2018
• ePipelines – Bimal Shrestha will be SME – Module design to start this year with a target completion date
of June 2017 – Design will include all applications/submittals currently
reviewed by the BSEE Pipeline Section. – Uncertain if rollout will be by phase or until design and testing
completed for all applications
51
Looking Forward
• BSEE/BOEM – ePermits – 2017/2018
• BSEE SEMS – Module elevated by BSEE Headquarters – Target design completion date late 2017
• BSEE Technical Assessment Section – DWOP’s/CID’s – Target design completion date late 2017
52
Looking Forward
• BSEE/BOEM – ePermits – 2017/2018
• BSEE eWell – All existing well permits in the stand-along system – Convert existing system to incorporate under the TIMS System – Target design completion date is late 2017
• BSEE Production & Development – All existing lease and well permit applications submitted to
this section – Target design completion date is late 2017
53
Looking Forward
• BSEE/BOEM – ePermits – 2017/2018
• BSEE OSTS Section – All existing structural applications submitted to this Section – Target design completion date is mid 2018
• BSEE Decommissioning Costs • BSEE Idle Iron Plans • Financial Risk Management
54
Looking Forward
• OOC eGov Subcommittee – Appears 2017 has potential to be more active on
the upcoming modules kicking off development – Proposing to draft letter from OOC to BOEM/BSEE
on our continued participation and possibly at an earlier stage
– Schedule meeting post submittal of letter to define 2017 priorities
55
eGov Subcommitte Contact Information
• Connie Goers - Arena – 281.210.3123 – [email protected]
• Eva Gravouilla - Stone – 337.521.2169 – [email protected]
Restricted Areas - Fisheries Subcommittee
Chair: Sarah Tsoflias, Chevron Co-Chair: Nick Owens, Anadarko
57
Activities • Draft Environmental Impact Statement (EIS) for
Flower Garden Banks National Marine Sanctuary (FGBNMS) Expansion
• Draft Programmatic EIS for GoM Geological & Geophysical Activities
• Explosive Removal of Offshore Structures (EROS) Rulemaking
• Deep-water Corals • LA Special Artificial Reef Sites (SARS)
58
Draft EIS for FGBNMS Expansion • 7 June 2016: DEIS released for public review &
comment – NOAA’s preferred Alternative 3 includes several
additional areas (greater than SAC/BEWG recommendation)
• 19 August 2016: OOC joined with other trades (API, IADC, IAGC, IPAA, NOIA) in submitting comments – expressed support for Alternative 1 – No Action – NOAA has not provided adequate analysis to
justify an expansion beyond the SAC recommendation
– proposed expansion areas do not meet NMSA requirements that sanctuary areas be “of special national significance” or “unique”
• Next Step: Final EIS published – timing – June 2017
59
Draft PEIS GoM G&G Activities • 30 Sept 2016: DPEIS released for public
review & comment • 29 Nov 2016: OOC joined with other trades
(API, IAGC, & NOIA) in submitting extensive comments – expressed support for Alternative A – the other alternatives include overly
restrictive mitigation measures which do not demonstrate meaningful reduction of impact to marine mammals
– DPEIS relies on “worst case” analysis and a series of conservatively biased assumptions, resulting in grossly overestimated impacts
• Next Steps: Final PEIS published – timing – September 2017
61
Status of EROS Rulemaking
63
• Oct 2016: Center for Independent Experts (CIE) review of the Underwater Calculator (UWC) completed – 3 reports; 1 report from each external reviewer – BSEE reviewing reports; determining next steps
• DOI Solicitor’s Office has determined an EIS will be required as the NEPA document to support new MMPA ITA for use of explosives for GoM OCS decommissioning activities - BOEM responsible for preparing EIS; no substantial progress
• Next Steps: prepare Draft EIS; prepare & submit MMPA ITA application – Timing??
Deep-water Corals • Oct 2016: Gulf of Mexico Fishery Management Council
Meeting – Joint Coral / Habitat Committee reviewed a scoping
document, “Recommended coral areas identified as priority habitats for management consideration in the Gulf of Mexico” (refer to next slides for priority areas)
– Reef Fish AP recommended all proposed HAPCs in GoM OCS have no fishing regulations
• At request of Council, revised scoping document to be presented at January 2017 Council meeting
64
LA Special Artificial Reef Sites • LA Dept. of Wildlife & Fisheries proposal to lift 8-year
moratorium on creating new SARS – 11 Oct 2016: OOC met w/ LDWF via WebEx to discuss
proposal – 20 Oct 2016: OOC and LMOGA submitted a joint letter to
LDWF in support of lifting the moratorium on new SARS • develop a consistent, documented definition of “trawlable
bottom” to eliminate uncertainty • develop a consistent process for determining areas for removal
from the existing reef planning areas
• Next Steps: LDWF plans to present proposal to Artificial Reef Council (ARC) by year end
68
Subcommittee Chair Name Company
Steve Bodden – Executive Subcommittee Chair Stone Energy
Elizabeth Komiskey – Executive Subcommittee Vice Chair BP
Eva Gravouilla – Executive Subcommittee Secretary / Treasurer Stone Energy
*Steve Hamm – Water Quality / Environmental Waste Latitudes Environmental
Marsha Dupont – Water Quality / Environmental Waste Environmental Enterprise
*Scherie Douglas – Drilling Subcommittee Douglas Regulatory Solutions
Bill Dehart – Drilling Subcommittee Stone Energy
*Joe Smith – Environmental Sciences Subcommittee ExxonMobil (retired)
*Richard Krebs – Pipeline Subcommittee Shell Pipeline
Michael Butler – Pipeline Subcommittee ExxonMobil
Chris Woodle – Marine Safety & Security Chevron
Steve Velzis – Marine Safety & Security BP
Craig Mullet – Platform Subcommittee LLOG
Steve Frantz – Platform Subcommittee Talos
David Helminiak – SEMS Subcommittee EnVen
Jason Sullivan – SEMS Subcommittee Stone Energy
Sandi Fury – Technical / Deepwater Chevron
Bill Terrebonne – Technical / Deepwater Shell
Marla Begnaud – Air Quality Subcommittee Fieldwood
Sara Carlson – Air Quality Subcommittee Anadarko
John Cyr – Legal Subcommittee BP
J.T. Nesser – Legal Subcommittee Shell
Sarah Tsoflias – Restricted Areas / Fisheries Chevron
Nick Owens – Restricted Areas / Fisheries Anadarko
Metering & Measurement Workshop Planning Team
Name Company
Chad Simonton Shell
Bill Terrebonne Shell
Douglas Guay Shell
Wally Boudreaux Shell
Joby Lacombe Fieldwood
Lennie Zeringue Fieldwood
Jacob Woodard SGS
LJ Tabor Chevron
Shane Futch Shell
David Duplantis Williams
SEMS Forum Planning Group Name Company
Ernie Thibodeaux Ankor
Tim Westerman Ankor
Laurie Knape Apache
Wade Broussard Arena
Charlie Duhon Arena
John Cannon Chevron
Nolan Weaver Chevron
David Dykes Chevron
Troy Roberie EnVen
David Helminiak EnVen
Tery Trahan Fieldwood
Katherine Gamble Renaissance
Patrick Eiland Stone
Jason Sullivan Stone
Steve Frantz Talos
Bryan Mack Wood Group
John Cothern Wood Group
BOEM Proposed Air Rule Comment Group
Name Company
Meghan Gallinaro Chevron
Mandie Bosch Chevron
Sarah Tsoflias Chevron
Connie Goers Arena
Foster Wade Statoil
Joshua O'Brien Individual Member
Donna Giles BP
Jim Nolan BP
Sara Carlson Anadarko
Jeff McMenis Shell
Kenyatta Miles Shell
Brian Boyer BT Gap
Marla Begnaud Fieldwood
Valerie Greeve W&T Offshore
Poh Boon Ung BP
Rahul Pendse Trinity Consultants
David Broussard Fieldwood
Amber Tierce Chevron
Shallow Water Source Control Working Group
Name Company
Dan Lauer Apache
Steve Daigle Apache
Connie Goers Arena
Mike McCauley Arena
Kalil Ackal Arena
Jack Shelledy Fieldwood
John Garber Freeport-McMoran
Dan Eby Sierra Hamilton
Craig Brazan Stone
Ralph Moras Stone
Will Pecue Taylor Energy
Ray Smith Walter Oil
Joseph Savoy Wild Well Control
Chuck Ware Talos
Steve Heitzman Talos
Mike Partin Talos
Jon Garrett EnVen
Steve Goff Ankor
Maxwell Grove Apache
EPA Region 4 NPDES Permit Comments
Name Company
Rob Kuehn Shell (retired)
Mandie Bosch Chevron
Jim Floyd Chevron
Shelby Pennington ExxonMobil
Marsha Dupont Environmental Enterprises
Marsha Lutz JCC
Travis Etheredge Murphy
Sofia Lamon Anadarko
Joe Smith ExxonMobil (retired)
Joanna Spires Individual Member
Offshore Lifting Data Analysis Team
Name Company
Allen Verret OOC (retired)
JR Guidry Sparrows
Bob Watson ABCrane Safety
David Landry Fieldwood
Fred Klein Seatrax
Production Data Integrity Management Working Group
Name Company
Stella Alvarado Anadarko
Tad Little Fieldwood
Williamson Turner BP
Lennie Zeringue Fieldwood
Larry LaPoint Anadarko
Joby Lacombe Fieldwood
Greg Necaise Shell
Delia Molina Anadarko
Charles Marth BP
Chad Simonton Shell
Carl Carline W&T Offshore
Brandon Buquet FMI
Amy Gilman Fieldwood
Dave Curtis Anadarko
Continued Service Forum Planning Committee
Name Company
Greg Kusinski Chevron
Miland Prabhu Chevron
Jim Stear Chevron
Craig Mullett LLOG
Satish Balasubramanian ExxonMobil
Jack Kenney Shell
Stephen Hodges Shell
Financial Assurance Forum Planning Group
Name Company
Susan Hathcock Anadarko Connie Goers Arena Keith Godwin Arena David Peterson BP Janet Aceves BP Sandi Fury Chevron Lynne L. Hackedorn Cobalt International Andy Harmon ConocoPhillips Benda Montalvo Eni Bryan Chapman ExxonMobil Kevin Bruce Fieldwood James Bassi LLOG Wendy Kirchoff Noble Energy Aubin Buquet PetroQuest Christie Webb Repsol Foster Wade Statoil Pransanth Chilukuri Talos Joseph Savoy Wild Well Control Brandon Towle Williams Shane Meyer Murphy Kim Kaal Shell James M. Auslander Beveridge & Diamond PC Jonathan K. Waldron Blank Rome LLP Bob Thibault Haynes and Boone LLP Robert M. Clemons Seacor Marine Larry Pechacek Vinson and Elkins Keith Couvillion Chevron
National Academies of Science Safety Culture Panel
Name Company
Charles Dudek Murphy
Patrick Eiland Stone
Katherine Gamble Renaissance
Steve Frantz Talos
Jason Sullivan Stone
Registration Assistance
• Ann Drewry, EnVen • LSU Society of Petroleum Engineers
– John Nunn – Ahmed Abedali
OOC Bank Accounts
Reporting Period from January 1, 2016 – December 5, 2016 Operating Account: Total Balance on January 1, 2016: $869,294.75 Total Balance on December 5, 2016: $709,001.72 Savings Account (Rainy day funds):
Total Balance on January 1, 2016: $291,759.20 Total Balance on November 1, 2016: $291,786.29
85
OOC Bank Accounts
Reporting Period from January 1, 2016 – December 5, 2016 CWIS Account: Total Balance on January 1, 2016: $95,917.54 Total Balance on December 5, 2016: $95,917.54 NPDES Account: Total Balance on January 1, 2016: $185,125.98 Total Balance on December 5, 2016: $121, 509.33
86
2016 Major Milestones OOC & NOIA MOU
OOC & Deepstar Partnership
Shallow Water Source Control Resources Database
HAZID Tool & Training Module
Completed Cooling Water Impact Study JIP
Significant Activity 2016
OOC Subcommittee Issue/Project J F M A M J J A S O N D
Executive Shallow Water SC
Financial Assurance
Technical Well Control Rule
Subpart H
Royalty Reporting
Metering/Measurement
Surface Commingling
Cyber Security
Decommissioning
Safe Lifting
Hyd Stimulation/P-DPEA
Significant Activity 2016
OOC Subcommittee Issue/Project J F M A M J J A S O N D
Platform API 2L-2
Pipeline Sand/Sediment Resources
P/L Abandonment
BSEE P/L Decom Rule
Marine Safety Well Intervention Risk
USCG Risk Based Inspect
D8 Lifeboat Policy
eGov eGov Workshops
SEMS HAZID Tool & Training
Significant Activity 2016
OOC Subcommittee Issue/Project J F M A M J J A S O N D
Air Quality BOEM Air Rule
Water & Waste EPA Region 4 NPDES Permit
EPA Region 6 NPDES Permit
Potable H2O Position Paper
Marine Trash/Debris Video
Restricted Areas FGBNMS DEIS
BOEM G&G DPEIS
LDWF SARS
Feedback From Members
75% of respondents said they get Significant or Good Value from OOC
Forums, Workshops, General Meetings, Communications considered effective
OOC should strive to be coordinating force for industry-agency-academic coordination
Keep Moving Forward in 2017
• Maintain strong, active subcommittees
• Continue effective General Meetings, Industry Days & Agency engagements
Continue Effective Activities
• Help OOC rapidly respond with input on strategy
• OOC Member companies can nominate board members
• Members have full P&L responsibility for GoM
Executive Leadership Board
• SEMS • 2 Environmental
Forums: • Air • NPDES
2017 Forums
• General regulatory update
• Held after quarterly BSEE, BOEM, USCG engagements
• Review “Issue Spot” items from the OOC website
• Webinar format
Quarterly Town Halls
Issue Spot Form
• Anonymous way to raise issues/problems.
• What do you need help with? • Where can OOC help?
www.theooc.us Click “News” Click “Issue Spot Form”
Preparing for Our 70th
• 2018 will mark the 70th Anniversary of the OOC
• We Need Your Help with Putting Together Our History…
Bureau of Ocean Energy Management
Mike Celata Regional Director
Gulf of Mexico Region
December 7, 2016
Offshore Energy and Marine Minerals Gulf of Mexico
112
Topics
• OCS Lands Act • Gulf as Petroleum Basin • Air Quality Regulation • NTL 2016-N01 • Wind Energy Potential
113
Outer Continental Shelf Lands Act
“(T)he outer Continental Shelf is a vital national resource reserve held by the Federal Government for the public, which should be made available for expeditious and orderly development, subject to environmental safeguards, in a manner which is consistent with the maintenance of competition and other national needs”
Outer Continental Shelf Lands Act Sec 3(3)
114
The Gulf of Mexico is a proven petroleum basin that still offers significant opportunities
for exploration and development.
Conventional Energy
115
0
200
400
600
800
1,000
1,200
1,400
1950
1952
1954
1956
1958
1960
1962
1964
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
Thou
sand
Bar
rels
of O
il pe
r Day
Year
Shallow Water
Deepwater
0
2
4
6
8
10
12
14
16
1950
1952
1954
1956
1958
1960
1962
1964
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
Billi
on C
ubic
Feet
of G
as p
er D
ayYear
Shallow Water
Deepwater
OIL GAS deep surpassed shallow
Comparison of Annual Production Volumes from
Deep and Shallow Water
116
Gulf of Mexico Highlights
Source: U.S. Energy Information Administration, Short-Term Energy Outlook, February 2016
117
Perdido
Lucius Jack
St. Malo
Cascade Chinook
Independence Hub
Platform and Pipeline Infrastructure
119
Of this Gulf production, wells in deepwater produced 82 percent of the oil and 54 percent of the natural gas.
Of both onshore and offshore domestic production in 2014, the Gulf supplied the Nation with 16 percent of the total oil and 4.5 percent
of the total gas.
It is the primary offshore source of hydrocarbons for the United States, generating approximately 97 percent of all offshore oil and
natural gas production.
The Gulf of Mexico is one of the world’s prolific hydrocarbon basins, with a production history of more than 100 years.
The United States Depends on the Gulf of Mexico
120
• Background – – Current 30 CFR Part 550, Subparts B and C were written by
USGS in the early 1980s – Changing technology and improved understanding of air quality
warrant updated guidance for reporting emissions • Purpose – To revise 30 CFR part 550 subparts B and C
– To create regulations applicable to all areas under BOEM’s jurisdiction, including the Chukchi and Beaufort Seas in Alaska
– To update terminology, standards, and sources – Important Changes to Emission Exemption Thresholds (EETs)
• EETs to be evaluated using distance to State Seaward Boundary • New EETs will consider shorter pollutant averaging periods
• Status – − Publish December 2016; Effective March 2017.
• Coordination – USEPA, FWS, BSEE
121
Air Quality Rule Update
• NTL Issue Date & General Notification Letter – July 2016 • NTL Effective Date - September 2016 • Self-Insurance Letter due September 2016 • Proposal Letter due October 2016 • Order Letter due November 2016 - Within 10 calendar days of the
order, written notification needs to be provided to BOEM if a company wishes to submit a tailored plan
• Within 60 calendar days of the order additional security must be provided for Sole Liability
• Within 120 calendar days of the order, additional security must be provided for the remaining properties and/or submit a tailored financial plan.
• Tailored Plan Approval or Denial, September 2017
https://www.boem.gov/Financial-Discussion/
122
NTL 2016-N01 Implementation Timeline
Self Insurance • Sixty-six Evaluations were performed • Letters were mailed in September and November 2016 • Self Insurance was granted to 20 lessees that totaled
$5.197B which can be used to cover liabilities • Self insurance ranged from 1-9% • Received 43 self insurance inquiries with 36 resolved
– Requests included clarification of ratio calculations, credit ratings and compliance criteria
• Nine out of the 20 have provided their self insurance allocations
• Meetings have been held with 9 companies
123
Self Insurance to Date
• 232 Letters were mailed in October 2016 • Received 35 disputes – 3 have been resolved
and we are actively working on the remainder. – Disputes include BSEE assessments, ownership,
ROW/ RUE and sole liability classification
124
Proposal Letter
• Order letters to be sent in November 2016 based on original timeline
• Industry has requested to delay implementation • Order for sole liabilities will be sent soon • Delay order for non-sole properties
– 3rd Party Guarantee Criteria final approval – Decisions on 3rd Party Guarantee
125
Order Letters
• Credit for a Decommissioning Trust Agreement (DTA) with a strong predecessor – The DTA is designed to address the decommissioning liabilities
for these properties – Specific properties to be decommissioned are identified and
scheduled as a requirement of the DTA – Access to funds by predecessor is provided if those funds are
needed to undertake decommissioning activities in the event of lessee default
• The DTA provides protective measures such as an advanced notice of default to predecessor
• Letter of Credit serves as liquid security to fund decommissioning costs
126
Proposed Solutions Under Consideration
• Credit for 3rd Party Securities (bonds) with predecessor – BOEM will verify that the securities are dedicated to cover decommissioning
costs in a default situation – The 3rd parties are jointly and severability liable for decommissioning of the
properties in associated with the bonds
• Deferral of financial assurance on producing properties based on their decline curve analysis and projected end of life
• Deferral of financial assurance on properties where actual decommissioning operations have commenced
• Funding for financial assurance over time based on BOEM’s risk categorization in the Risk Matrix
127
Proposed Solutions Under Consideration
Years of Production
Co-
Less
ee a
nd P
rede
cess
or S
treng
th p
er N
TL 5
Crit
eria
128
Co-Lessee and Co-Lessee and
Predecessor Co-Lessee and
Predecessor Co-Lessee and
Predecessor Co-Lessee and
Predecessor Predecessor Limited/No Reserves < 5 years Reserves 6-10 years Reserves > 10 years Reserves
Exp, Term, Relinq
Co-Lessee Only Co-Lessee Only Co-Lessee Only Co-Lessee Only Co-Lessee Exp, Term, Relinq Limited/No Reserves < 5 years Reserves 6-10 years Reserves > 10 years Reserves
Predecessor Only Predecessor Only Predecessor Only Predecessor Only Predecessor Only Exp, Term, Relinq Limited/No Reserves < 5years Reserves 6-10 years Reserves > 10 years Reserves
High Risk Co-Lessee or Predecessor
High Risk Co-Lessee or Predecessor
High Risk Co-Lessee or Predecessor
Co-Lessee or Predecessor
Co-Lessee or Predecessor
Exp, Term, Relinq Limited/No Reserves < 5 years Reserves 6-10 years Reserves > 10 years Reserves
Risk Matrix
Deepwater Report http://www.boem.gov/Deepwater-Report-2014/
Thank You
Questions?
• Termination of the Period of Liability ends the period during
which the obligations continue to accrue but does not relieve the Surety of obligations during the period of liability.
• Cancellation terminates the Period of Liability and relieves the
Surety of all obligations
OLP has significantly reduced the time it takes to process termination/cancellation requests. 30 CFR § 556.906 provides
BOEM 90 days to process a termination request, but we are now striving to complete the process within 37 days. In order to
meet this timeline, BOEM will need you to provide the appropriate information upfront.
131
Bond Release Processes
132
• Concurrence is requested within 30 days from the “committee” comprised of representatives from: – BSEE Decommissioning – ONRR – BSEE Civil Penalty Case Manager – BSEE Pipelines for ROWs – BOEM Plans for RUEs
If there are open issues with any party above, BOEM/BSEE/ONRR will deny your termination/cancellation request and OLP will notify you that your bond cannot be cancelled until the issues are resolved.
Why does it take so long?
• Once your request clears the committee or 30 days has passed, the Program Specialist mails a prepared letter to the principal and surety granting your termination/cancellation.
• Your termination/cancellation is updated in our system. • We have streamlined this process and working to
provide you better customer service. These improvements can continue if you ensure that complete, accurate information is provided with your requests.
133
What happens after committee clearance?
Common errors which delay your request or cause it to be returned to you by OLP: • If you know you owe back royalties or civil penalties or your
cancellation will leave an uncovered decommissioning balance, save us the time and please do not request the cancellation until you resolve the outstanding items.
• Make sure the person requesting the cancellation is an authorized officer listed on your company qualification card and signs exactly as listed.
• Make sure the collateral numbers and Lease/ROW/RUE
numbers are included and correct.
134
How can you help the process?
Current Activities • Opportunities to provide input to CG:
– Risk-Based Inspection Scheduling – Lifesaving Inspection and Emergency Evacuation
Drill policy letter (signed Oct 31st) • Industry Day (Nov 1st) • CG released update of Marine Safety Manual,
Volume II (July). New/established guidance for “Quarters Habitable” and “Buy-Back Gas” processes
Other Activities
• Continue to work with team on Well Intervention Risk Framework
• National Offshore Safety Advisory Committee – Issued final report for the Task Statement
on Well Intervention Activities (Nov 2nd) • Common Marine Guidelines: should be
available on the OOC website by the New Year
Future CG rulemaking • CG Headquarters anticipates the Final Rule for
Marine Casualty Reporting on the OCS (USCG-2013-1057) may publish 1Q 2017. In summary, this aligns marine casualty reporting for everyone on the OCS with the 46 CFR Part 4 requirements.
• Nothing to report on Subchapter N…
SEMS Tool Box
• HAZID Tool • HAZID Training • 2016 Forum Guidance Documents
– A & D – Liftboat / MODU – Decom – Loop / Unmanned Operations
HAZID Training Utilization
0
50
100
150
200
250
Feb Mar Apr May Jun Jul Aug Sept Oct Nov
Roll Out
SEMS Forum
EnVen Contractors
COS Forum
Committee Focus for 2017 • HAZID Tool Level II Training
– JSA / Workplan • Bridging Road Map • Audit Preparation (Effectiveness rather than compliance)
– In coordination with COS activities • Process Safety Review (BSEE report) • Safety Culture
– Documentation of challenges – Options to address challenges – Assessment
• OOC Offshore Personnel Engagement – HAZID Level II (Input to plan) – Feedback to Safety Culture
• 4Q SEMS Forum
2016 Safety Stats
• Anonymous collection by OOC (TRIR, lost time)
• You submit, you get stats • Annual program
2017 HAZID Video Contest
• $500 prizes (5) • iPhone 90 – 120 seconds • Submissions Feb-April - Publish May
Current Activities
• BOEM’s Proposed Air Quality Control, Reporting, and Compliance Rule – June 20: Joint Trades (OOC, API, NOIA, IPAA, IADC, OMSA) comments were
issued to BOEM. – Joint Trades met with BOEM in Washington DC twice. – Rule has not been sent to OMB yet. BOEM hopes to publish final rule on
12/31/16 with effective date of March 2017.
Looking Forward
• GOADS 2017 – NTL No. 2016-N03 was issued on 11/1/16. – Very similar to GOADS 2014. Same emission sources. – Data collection begins 1/1/17 through 12/31/17. – Activity data submittal due to BOEM by 4/17/18.
• Air Studies – Initial phase of information from BOEM’s Air Modeling Study should
be available in January 2017. – Fugitive Emissions Study
Current Activities
• Region 4 NPDES Permit Renewal – Submitted comments on draft permit – Waiting for EPA Response to Comments &
Publication of Final Permit – being delayed by challenges from environmental groups
– Most likely will not be reissued until March 2017
156
Current Activities
– Region 6 NPDES Permit Renewal • Met with R6 to discuss OOC’s comments on
EPA’s proposed changes • EPA requested written comments to R6 in 2
weeks • EPA determined to publish Draft Permit by
January
157
Current Activities
– Possible Region 6 NPDES Permit Changes • More frequent PW Toxicity testing • Removal of exemption for USCG approved MSDs • Toxicity testing on all Well Fluids (possible Industry
Wide Study) • Increased visual observation requirements • EPA working on a way to transfer coverage to re-
issued permit so we don’t have to re-file all NOIs.
158
Current Activities
• Drinking Water White Paper – Draft reviewed by the Technical Subcommittee
and the Executive Subcommittees & sent to EPA – Steve Hamm is working with David Gillepsie at EPA
to set up a meeting to discuss
159
Looking Forward
• Continue to work with EPA Region 6 on the upcoming GMG290000 permit renewal
• Wait for Region 4 to issue the Final Eastern GOM GEG460000 general permit
• Meet with EPA to discuss the Drinking Water white paper
160
A View From Washington 2017 – A Year of Change noia.org
A View From Washington: 2017 – A Year of Change
Randall Luthi President,
National Ocean Industries Association
A View From Washington 2017 – A Year of Change noia.org
US Energy Self Sufficiency
0.00%
20.00%
40.00%
60.00%
80.00%
100.00%
120.00%
1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
Perc
ent
Ratio of Domestic Energy Production to Consumption 1949-2015
A View From Washington 2017 – A Year of Change noia.org
Offshore Is a Vital Part of The Energy Puzzle Picture
A View From Washington 2017 – A Year of Change noia.org
Offshore Regulations
• Financial Assurance and Bonding NTL
• Air Quality Rule • Well Control Rule • Arctic Drilling Rule
A View From Washington 2017 – A Year of Change noia.org
Congressional Options
• What legislative options are there to rollback the Regulatory Fiat? • Appropriations
Legislation • Congressional Review
Act; and • Budget Reconciliation
A View From Washington 2017 – A Year of Change noia.org
Thank You!! @oceanindustries
National Ocean Industries Association
National Ocean Industries Association
DeepStar ® - Global Offshore Technology Development Consortium - © 2016 Chevron
DeepStar ® Global Offshore Technology Development Consortium
Greg Kusinski – DeepStar Director
DeepStar ® Global Offshore Technology Development Consortium
DeepStar® Update Operators’ Driven Program OOC General Meeting December 7th, 2016
182
DeepStar ® - Global Offshore Technology Development Consortium - © 2016 Chevron
THINKING ABOUT THE FUTURE
Vision and Focus to Achieve Success via Collaboration Fact: What is “normal today” was “impossible 10 years ago”
Belief: What is “impossible today” with be normal 10 years from now”
Vision and commitment to develop technology TODAY are essential to achieve success in the FUTURE
DeepStar Mission Improve profitability, execution, operability, flexibility, reliability and safety of deepwater production systems
• Early Technology Development
• Foster Collaborations
• Gain Acceptance
• Strive for new breakthroughs
183
DeepStar ® - Global Offshore Technology Development Consortium - © 2016 Chevron
DeepStar® Project Portfolio - 2016 20
,000
psi
12202 Gas hydrate formation under extreme conditions of high pressure and high salinity 12302 20Ksi Systems 12403 Ultra Deepwater 20 KSI Composite Tubular 12407 Testing of High Strength Connected Steel Riser 12501 20 Ksi Well Drilling System MODU Upgrade 12502 20 ksi HPHT Completion Design Considerations and Well Intervention Systems 12503 Standardized Materials Selection Basis of Design and Equipment Testing Criteria 12504 Real Time Monitoring for Critical Barriers 12505 Analysis of Current Technology and Capabilities for Shearing
LDTB
12201 Asphaltene Deposition and Fouling in Reservoirs 12204 Guidelines/Benchmarks for LDHI/AA Standardized Testing Protocols 12301 Pipeline Integrity Management Initiative 12902 SS Electrical Power Strategies and Roadmap 12903 Long Distance Subsea Tieback Configuration Study
Con
tinue
d Se
rvic
e 12401 Continuing Service Guidance for Ageing Floating Infrastructure
12402-A Integrity Management of Mooring Systems Against Corrosion
Big
Gas
12203 Wet gas multiphase flows,
sand-fines transport / erosion tests in 16" & 4" facility
EOR
12702 Catalytic In-situ CO2 Generation
12901 Subsea Systems for EOR
water injection - Phase 2 of DS 11901
12904 Environmental Strategy for Enabling Subsea Discharge
Expl
orat
ion,
ap
prai
sal
12001 Large hydrophone array for efficient deep water 3D VSP acquisition 12701-A Appraisal look-back; focused data mining 12801 Estimating Marine Growth in Deepwater 12802 Extra-Tropical/Winter Storm Design Wind Relationships 12803 Extended Deepwater Ocean Current Hindcast 12804 Improved Boundary Conditions for Deepwater Ocean Current Hindcast
Floa
ting
Syst
ems
Tech
.
12404 New generation approach for flexible riser modeling
12405 Steel lazy wave riser for harsh environment and high vessel
motion
• 20,000 psi • Long Distance Tie Backs • Continued Service • Exploration, Appraisal • Floating Systems Technology • Enhanced Oil Recovery
184
DeepStar ® - Global Offshore Technology Development Consortium - © 2016 Chevron
DeepStar ® 2017 Global Offshore Technology Development Consortium
DeepStar Current Model
29 DeepStar projects totaling $10,000,00
DeepStar OOC CORE + Satellite
CORE Membership Focus on collaborative project development and
immediate industry needs
Satellite Projects $500,000 to +$5M Interested parties equally contribute
185
DeepStar ® - Global Offshore Technology Development Consortium - © 2016 Chevron
OOC Strategic Plan
OOC Administration
Structure
Executive Subcommittee
12 OOC Technical
Subcommittees
OOC DeepStar Operations
Advisory Board
OOC DeepStar Regulatory &
Policy Advisory Board
DeepStar Governing
Board
Core Projects Satellite Projects
OOC DeepStar Engineering &
Sciences Advisory Board
SCIENTIFIC PROCESS, NO
ADVOCACY WITH
REGULATORS
TECHNICAL BASED
ADVOCACY & SUB-
COMMITTEE FOCUS
NOIA MOU:
Advocacy Partner
186
DeepStar ® - Global Offshore Technology Development Consortium - © 2016 Chevron
DeepStar® 2017 mission and goals
Improve profitability, execution, capability, operability, flexibility, reliability and safety of deepwater production systems to:
– Shorten the cycle form concept to technology/ solution deployment into major capital projects and operations
– Assure lower Development Cost – Enable and assure cost effective Continued Service of producing assets – Ensure correct technology availability at a correct business INTERCEPT time
Mission accomplished by: • Providing a forum and process for discussion, guidance and feedback • Examining capabilities of existing, but not used / deployed technologies • Enhancing existing offshore technologies • Investigating and framing the use of new technologies • Stimulating market place to deliver improvement to meet near term needs • Developing new enabling offshore technologies • Gain acceptance of technologies by regulators and industry
near
longer
DeepStar ® - Global Offshore Technology Development Consortium - © 2016 Chevron
Floating Systems MetOcean
SubSea
Drilling & Completions
Flow Assurance
DeepStar® 2017
DeepStar® Management Committee is supported by 4 Technical Committees
• Drilling, Completion and Intervention • Flow Assurance • Facilities -
• Subsea • Floating Systems + Met-Ocean
Supporting Committees: Operations Regulatory & Policy Subsurface (Geosciences + Reservoir) Engineering & Sciences