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Treadwell Uneasy on Arctic-Wide Oil Policy

By | April 17, 2013 - 5:25 pm

Deputy Secretary of the Interior David Hayes told an Arctic energy conference the federal government has been explicit in its demands of companies planning to drill in the Arctic Ocean.

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He said every company will need a capping stack and containment system in case of a spill.

“There really is not much of a question about what our expectations are folks drilling in the Arctic. We’ve laid it out with Shell. We’ve told the rest of the industry these are our expectations,” he said Wednesday at the Brookings Institution  “They’re common sense expectations. Number two, we learned last summer, it’s hard to pull this off in the Arctic.”

Secretary Hayes was referencing Shell’s bungled summer. The company hoped to drill to oil producing depths, but repeated errors, and government punishments, prevented that from happening.

Instead, Shell drilled two pilot wells, then grounded its drilling rig Kulluk on the way home to Seattle.The Department of Interior followed with a report mapping guidelines for all future Arctic drilling. Companies must now oversee subcontractors and every aspect of the drilling operation, from marine transit, to drilling, to closing the well down for the season.

Secretary Hayes made clear to the international audience that the United States should lead in sensible standards on Arctic operators.

“We are setting together a menu of expectations that can provide the blueprint for what other companies should do, or what other countries should expect their companies to do throughout the Arctic,” he said.

Lieutenant Governor Mead Treadwell disagreed with Hayes’s assessment, saying every plan is unique.

“There are big prospects in the Arctic, and there are small prospects in the Arctic,” he said.

Treadwell said he met with Conoco executives who say the federal government’s rules are too unclear to decipher.

He’s advocating for a case-by-case set of regulations for each operator not an Arctic wide policy.

“If two companies can’t say ‘hey we’re going to go about this in a different way’ you’ve got a problem,” he complained.

Treadwell says he’s worried undue federal regulations will force oil companies out of Alaska, leaving the Trans Alaska Pipeline in peril. To Treadwell, that’s just one reason the recently passed tax cuts make the state more enticing.

Treadwell said Governor Sean Parnell will soon sign the bill into law; welcome news to Secretary Hayes.

“That’d be great. That in the near term is the way to continue that pipeline,” Hayes said.

For the foreseeable future, the oil filling that pipeline will come from land, not the Arctic Ocean.

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