http://www.canadianbusiness.com/article/56593–china-says-probe-finds-conocophillips-oil-spills-caused-by-negligence

By Gillian Wong, The Associated Press | November 11, 2011

BEIJING, China – Chinese authorities said Friday that negligence by a ConocoPhillips subsidiary caused recent oil spills in Bohai Bay that have drawn intense criticism from marine authorities and environmentalists.

The State Oceanic Administration said in a statement on its website that an investigation found there were shortcomings in ConocoPhillips China’s systems and management and that the company failed to take necessary preventive measures after signs of a problem emerged. The oil spills began in June in Penglai 19-3, China’s largest oil field.

These factors led “to a major oceanic oil spill pollution accident occurring due to negligence,” the statement said.

ConocoPhillips China operates the Penglai 19-3 oil field with state-owned partner China National Offshore Oil Corp. Houston-based ConocoPhillips did not immediately respond to an emailed request for comment.

ConocoPhillips had said in September that it would set up two funds to pay compensation and address environmental problems resulting from the spills.

The government has already ordered the company to stop all production pending a full cleanup and review to ensure no more oil seeps into the sea.

The administration said Friday that the oil spill covered 2,400 square miles (6200 sq. kilometres) of water surface. It said that the company violated requirements that had been laid out in an environmental impact assessment report reducing the ability to respond to emergencies, causing oil spill from one side.

It was not immediately clear what measures the government would take, or the response it expected from ConocoPhillips, but the Oceanic Administration has said it plans to pursue legal action over the spills, including losses to regional fisheries.

China’s maritime authorities contend that ConocoPhillips failed to meet an Aug. 31 deadline for permanently staunching and cleaning up the spills. The company says it met the deadline and has contended that any oil still seeping from the wells, which have been sealed, is residual from the earlier spills, which released about 700 barrels of oil and 2,500 barrels of mineral oil-based drilling mud – used as a lubricant for drilling.

Environmental experts say measures to cut back on effluent from factories and mining and to expand sewage treatment have failed to keep pace with the fast expansion of industries and oil drilling in the Bohai Bay, leading to the decimation of seafood and fish stocks and frequent red tides.

Special thanks to Richard Charter

Phil Taylor, E&E reporter
Published: Thursday, November 10, 2011

The Interior Department today spelled out the final terms for its first lease sale in the Gulf of Mexico since the BP PLC Deepwater Horizon oil spill began a year and a half ago. As previously announced, the sale will nearly triple the minimum bids allowed for blocks in water depths of at least 1,300 feet. The move aims to discourage companies from purchasing leases they don’t intend to develop and to ensure taxpayers receive a fair return on public minerals, Interior said.

The Dec. 14 sale in New Orleans will offer every unleased block in the western planning area, including 21 million acres stretching as far as 250 miles from the Texas shore. Interior’s Bureau of Ocean Energy Management estimated the sale could
result in the production of up to 423 million barrels of oil and 2.65 trillion cubic feet of natural gas.

“This sale is an important step toward a secure energy future that includes safe, environmentally-sound development of our domestic energy resources that will continue to reduce our dependence on foreign oil and create jobs here at home,” Interior Secretary Ken Salazar said in a statement. “Since the Deepwater Horizon spill, we have strengthened oversight at every stage of the oil and gas development process, including deepwater drilling safety, subsea blowout containment, and spill response capability.”

The sale will increase the minimum bid amount for blocks in water depths of 1,312 feet and greater from $37.50 to $100 per acre. The National Ocean Industries Association praised the sale, but said it was unsure what impact the higher minimum bidding rules would have on industry. “It remains to be seen whether the increased costs of minimum bids will have an effect on the bidding,” NOIA President Randall Luthi said in a statement. “Companies could forego bidding on lesser known tracts and thus the federal government will receive nothing, not bonus bids or rental fees, for tracts that might have generated interest in earlier sales.” He added that while Interior has accelerated its approval of certain exploration permits, he was still concerned over how long it has taken to approve exploration plans. “This sale will help gauge industry’s confidence in whether the current permitting process will allow buyers to actually develop the leases they purchase,” he said.

Environmental stipulations will require operators to protect biologically sensitive features, as well as marine mammals and sea
turtles, Interior said.

Special thanks to Richard Charter

Mike Soraghan, E&E reporter
Published: Thursday, November 10, 2011

Federal offshore drilling regulators today formally recommended that drillers should heed the mistakes federal investigators found when investigating the April 2010 Deepwater Horizon explosion.

The newly created Bureau of Safety and Environmental Enforcement (BSEE) today issued a “safety alert” to leaseholders and contractors working in the Gulf of Mexico. The alert summarizes the findings of the investigation by the Coast Guard and the Interior Department and makes recommendations the drillers can incorporate into their work.

“We must ensure that the lessons learned from the investigation of the Deepwater Horizon explosion and oil spill are widely disseminated and used to enhance the safety practices used by offshore oil and gas operators and contractors in their day-to-day activities,” said BSEE Director Michael Bromwich. “Issuing this Safety Alert to all oil and gas leaseholders and contractors is another method for BSEE to ensure that offshore operations are conducted in the most safe and environmentally- responsible manner.”

The explosion led to an oil spill from BP PLC’s Macondo well that lasted for months before it could be capped. Interior’s offshore drilling regulators use safety alerts to inform the offshore drilling industry about the circumstances surrounding an
incident or a near miss, and usually offer recommendations on how to avoid a repeat occurrence. The department’s recommendations cover operational issues such as negative pressure testing procedures, location of equipment on the rig, and the configuration and alignment of blowout preventer stacks.

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Special thanks to Richard Charter

http://fuelfix.com/blog/2011/11/08/obama-administration-to-unveil-5-year-offshore-drilling-plan/

Posted on November 8, 2011 at 9:43 am by Jennifer A. Dlouhy

The Obama administration is set today to unveil a plan for selling offshore drilling leases over the next five years that focuses on exploration in the Gulf of Mexico.

Interior Secretary Ken Salazar said the Gulf of Mexico is an attractive target for oil and gas development because it has the support of bordering states and the infrastructure to support that exploration.

The region also has equipment readily available to respond to oil spills and blown-out wells, including containment systems developed after the 2010 Deepwater Horizon disaster, Salazar noted.

“We see robust oil and gas development in the Gulf of Mexico,” Salazar told a meeting of the government’s Ocean Energy Safety Advisory Committee. “There are a number of reasons to move forward.”

Today’s move likely will come in the form of a proposed offshore lease program and a draft environmental impact statement – which would put the Interior Department on course to have a new plan in place when the current one expires on June 30, 2011.

President Barack Obama already offered the broad outlines of the five-year lease schedule last December, when he reversed plans to expand drilling in the Atlantic Ocean and the eastern Gulf of Mexico in response to the 2010 spill. Previously, in March 2010 – just weeks before BP’s Macondo well blew out in the Gulf – Obama had said he would consider allowing drilling at least 125 miles off the Florida Gulf Coast and would launch studies that could pave the way for exploration in the mid- and south-Atlantic.

It was unclear what lease sales – if any – the administration would plan for Arctic waters near Alaska. Federal regulators are currently reviewing plans by Shell Oil Co., to drill in the Beaufort and Chukchi seas, under leases purchased years ago.

Salazar noted that beyond the Gulf, “there are other areas in the (outer continental shelf) that are important,” but “they’re difficult” and require the government “to develop additional science (and) additional geophysical information,” as well as spill response technology.

Michael Bromwich, the head of the Bureau of Safety and Environmental Enforcement, noted the “special challenges that are presented by potential development” in the Arctic.

“The Arctic is special, it is different and it is an area that has so far been largely unexplored,” he added. “We know far less about the Arctic than we do about, for example, the Gulf of Mexico. We know there are lots of challenges we face there that we are struggling to figure out.”

Special thanks to Richard Charter

Here’s the OCS fact sheet from DOI Followed by the press statement (per Richard Charter)

The Proposed Outer Continental Shelf (OCS) Oil and Gas Leasing Program for 2012-2017 (Proposed Program) will advance safe and responsible domestic energy exploration and production by offering substantial acreage for lease in regions with known potential for oil and gas development. The Proposed Program is consistent with the Obama Administration’s Blueprint for a Secure Energy Future, which aims to promote domestic energy security and reduce oil imports by a third by 2025 through a comprehensive national energy policy.

The Proposed Program is informed by lessons learned from the Deepwater Horizon tragedy and reforms that have been implemented to make offshore drilling safer and more environmentally responsible, and to ensure that we are better prepared in case a blowout or oil spill occurs. More information on the department’s ongoing offshore reforms can be found at: http://www.boem.gov/About-BOEM/Reforms/Reforms.aspx.

MAKING MORE THAN 75% OF UNDISCOVERED RESOURCES AVAILABLE
The Proposed Program includes 15 lease sales in six offshore areas where there are currently active leases and exploration and where there is known or anticipated hydrocarbon potential. This strategy makes more than 75% of the undiscovered technically recoverable oil and gas resources estimated on the OCS available for development.

The following sales are included in the Proposed Program:

Western Gulf of Mexico: Five annual areawide lease sales beginning in the fall of 2012 that make available all unleased acreage.

Central Gulf of Mexico: Five annual areawide lease sales beginning in the spring of 2013 that make available all unleased acreage.

Eastern Gulf of Mexico: Two sales, in 2014 and 2016, in areas of the Eastern Gulf that are not currently under congressional moratorium.

Beaufort Sea: One sale in 2015 with time to learn from any interim exploration and further analyze environmental issues, subsistence use needs, and infrastructure capabilities – so that the lease sale can be tailored to balance these issues.

Chukchi Sea: One sale in 2016, with time to learn from any interim exploration and further analyze environmental issues, subsistence use needs, and infrastructure capabilities – so that the lease sale can be tailored to balance these issues.

Cook Inlet: One special interest sale including the entire planning area, which is initially scheduled for 2013, but may be moved to later in the program depending on industry interest in the sale.

ADOPTING A TARGETED, REGION-SPECIFIC APPROACH
The Proposed Program is tailored to specific regional considerations like resource potential, adequacy of infrastructure including oil spill response capabilities, state interests and concerns, and the need for a balanced approach to our use of natural resources. By focusing on six offshore regions, the Proposed Program advances a strategy that Secretary of the Interior Ken Salazar announced on December 1, 2010.

Gulf of Mexico: The Gulf of Mexico (GOM) currently supplies more than a quarter of the nation’s oil production, and the Central and Western GOM remain the two offshore areas of highest resource potential and industry interest. The infrastructure supporting the oil and gas industry, including subsea containment and oil spill response resources, is the most mature and well developed in these regions. Therefore, the Proposed Program schedules annual, areawide lease sales in both the Western and Central GOM throughout the five-year leasing program. The program also includes lease sales gauged to accommodate anticipated industry interest in the portion of the Eastern GOM that is not currently subject to congressional moratorium. Other areas in the Eastern Gulf of Mexico – including the Straits of Florida – are not included in this Proposed Program because they are under a congressionally-mandated leasing moratorium until June 30, 2022. (bold added)

Alaska: The Proposed Program represents a balanced and careful approach to offshore development in the Arctic that accounts for resource potential; environmental needs; and the social, cultural, and subsistence needs of Native Alaskan communities. Single sales in each of the Beaufort and Chukchi Sea planning areas are placed late in the schedule to account for the significant inventory of yet-undeveloped leases in these frontier areas and to:

1) facilitate the development, synthesis, and consideration of further scientific study relevant to oil and gas exploration and development in the Arctic;

2) allow time for the analysis and evaluation of data collected from any exploration activity under current leases in the Beaufort and Chukchi Sea planning areas;

3) enable further long-term planning and development of spill response preparedness and infrastructure, building on current plans that could support limited activity in the near-term; and

4) support a leasing strategy that is tailored to both the specific resource opportunities and the special environmental and subsistence concerns presented in these regions.

Atlantic: This Proposed Program does not include lease sales in the Atlantic region. While an OCS development strategy announced in 2009 included the Mid- and South- Atlantic planning areas under consideration for potential inclusion in the Proposed Program, a number of specific considerations supported the Secretary’s decision not to include these areas, including the current lack of infrastructure to support oil and gas exploration and development, as well as spill preparedness and response. Additionally, there remain complex issues relating to potentially conflicting uses, including those of the Department of Defense. As the oil and gas resource potential in the Mid- and South Atlantic planning areas is not well understood, the Bureau of Ocean Energy Management is moving forward to expeditiously to facilitate resource evaluation in these areas, including conducting a programmatic Environmental Impact Statement relating to seismic surveys in the Atlantic.

Pacific: Areas off the Pacific coast are not included in this Proposed Program, which seeks to accommodate the recommendations of governors of coastal states and of state and local agencies – an important priority established by the OCS Lands Act. The exclusion of the Pacific Coast is consistent with state interests, as framed in an agreement that the governors of California, Washington and Oregon signed in 2006, which expressed their opposition to oil and gas development off their coasts.

PRESS RELEASE:

Date: November 8, 2011
Contact: Melissa Schwartz (202) 208-3599
*** EMBARGOED UNTIL 11:50 A.M. EST ***
Secretary Salazar Announces 2012-2017 Offshore Oil and Gas Development Program

WASHINGTON DC – Secretary of the Interior Ken Salazar today announced the Proposed Outer Continental Shelf (OCS) Oil and Gas Leasing Program for 2012-2017, which makes more than 75 percent of undiscovered technically recoverable oil and gas resources estimated in federal offshore areas available for exploration and development.

The Proposed Program, which is in line with President Obama’s direction to continue to expand safe and responsible domestic production, includes six offshore areas where there are currently active leases and exploration, and where there is known or anticipated hydrocarbon potential.

It schedules 15 potential lease sales for the 2012-2017 period – 12 in the Gulf of Mexico and three off the coast of Alaska.
“Expanding safe and responsible oil and gas production from the OCS is a key component of our comprehensive energy strategy to grow America’s energy economy, and will help us continue to reduce our dependence on foreign oil and create jobs here at home,” said Secretary Salazar. “This five-year program will make available for development more than three-quarters of undiscovered oil and gas resources estimated on the OCS, including frontier areas such as the Arctic, where we must proceed cautiously, safely and based on the best science available.”

The Proposed Program will promote safe and responsible domestic energy production by offering substantial acreage for lease in regions with known potential for oil and gas development.

“This proposal recognizes the need to proceed carefully and in a manner that protects human safety, coastal areas, and the environment,” said Bureau of Ocean Energy Management Director Tommy P. Beaudreau. “This Proposed Program both promotes responsible development and is informed by lessons learned from the Deepwater Horizon tragedy and the reforms that we have implemented to make offshore drilling safer and more environmentally responsible.”

The Proposed Program also reflects the need for a regionally tailored approach to offshore development that accounts for issues such as current knowledge of resource potential, adequacy of infrastructure including oil spill response capabilities, and the need for a balanced approach to our use of natural resources. The majority of lease sales are scheduled for areas in the Gulf of Mexico, where resource potential and interest is greatest and where infrastructure is most mature.

“A key part of safe and responsible development of our oil and gas resources is recognizing that different environments and communities require different approaches and technologies. In Alaska and off its coast, the Proposed Program recommends that the current inventory of already-leased areas in the Arctic should be expanded only after additional evaluations have been completed, and in a manner that accounts for the Arctic’s unique environmental resources and the social, cultural, and subsistence needs of Native Alaskan communities,” said Deputy Secretary David J. Hayes.

The Proposed Program includes lease sales in the Beaufort and Chukchi Seas, but the single sales are scheduled late in the 5-year period to facilitate further scientific study and data collection, and longer term planning for spill response preparedness and infrastructure. The proposal suggests that any lease sales in the Arctic be tailored to protect sensitive environmental resources, including those accessed by Native Alaskans for subsistence uses.

The Proposed Program will be open for significant public comment and consideration. Following public comment and review periods for the proposed program, as well as the accompanying Draft Environmental Impact Statement, a Proposed Final Program (PFP) and a Final EIS will be submitted to the President and Congress.

The OCS Lands Act requires that the Secretary of the Interior prepare a 5-year program that includes a schedule of oil and gas lease sales and indicates the size, timing and location of proposed leasing activity as determined by the Secretary to best meet national energy needs for the 5-year period following its approval, while addressing a range of economic, environmental and social considerations.

The Proposed Program is consistent with the Obama Administration’s Blueprint for a Secure Energy Future, which aims to promote domestic energy security and reduce oil imports by a third by 2025 through a comprehensive national energy policy.
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Special thanks to Richard Charter