EPA Drafts New Air Quality Rules Regarding Ice-Breaking Vessel in Alaska

Do folks remember this story? At the time I found the whole story incredible. The EPA was going to shut down an operation in which billions had been spent in the understanding that the oil industry was meeting all requirements, but then, out of nowhere, it seemed the EPA had established new standards.

Now, out of the blue, it appears EPA is about to reverse its decision.

Shell previously received permits from EPA in March and April of 2010, but environmental and other organizations appealed the decision to the agency’s independent Environmental Appeals Board, which overturned them in December.

The permits are required under the Clean Air Act because the Discoverer drillship and supporting vessels are expected to emit more than 250 tons/year of pollutants, which would be limited under the permits, EPA said.

It noted that EPA’s Region 10 office revised the draft permits to address issues raised in the appeal. These include reductions by more than 50% of most key pollutants from levels allowed in the 2010 permits, largely due to a new nitrogen dioxide standard which went into effect after EPA issued the original permits.

“Many years of work have gone into achieving these permits, and the support from Alaska to Washington, DC, has been tremendous,” the Shell spokesman said. “We believe the work we have done to further modify and reduce our air emissions to meet new standards meets the goal of having no impact on the environment or coastal villages.”

Even a positive ruling from the EPA will not be the end of the story. 

The EPA permits assure compliance with air quality regulations, but do not in and of themselves authorize drilling, the air quality regulator emphasized. That decision must come from the US Department of the Interior’s Bureau of Ocean Energy Management, Regulation, and Enforcement.

The permitorium continues. Be sure to read the story linked at the beginning of this post to get the full story. An ice-breaking vessel was at the center of the storm; given enough global warming and delay by the EPA, the ice-breaking vessel may not be needed.

Ice-Breaking Vessel in the Arctic Shelves Shell's Oil Drilling Plans Off Alaska: EPA Ruling. Footnote: the Polar Bear!

This should be the top story on CNBC and MSNBC but I doubt we will see it.

If anyone needs more evidence that the EPA is out of control, one does not need to read much more than this report. The EPA has stopped Shell Oil from drilling in the Arctic because of exhaust from an ice-breaking vessel.

Data points regarding Shell Oil's prospects:

• 27 billion barrels of oil (USGS, which is generally conservative in its estimates)
• This represents 2.5 times the total amount of oil that the Trans Alaska pipeline has carried in 30-year history
• The Trans Alaska pipeline will shut down if flow gets much lower
• Current Trans Alaska pipeline flow: 600,000 bopd; one-third of its capacity
• Production on the North Slope of Alaska is declining at a rate of 7 percent/year

Shell Oil's investment to date:

• Five years of exploration
• $4 billion invested
• Beaufort and Chukchi Seas
• Leases alone cost $2 billion

Reason for EPA's ruling:

• Air quality
• "The EPA's appeals board ruled that Shell had not taken into consideration emissions from an ice-breaking vessel when calculating overall greenhouse gas emissions from the project. What the modeling showed was in communities like Kaktovik [population: 245], Shell's drilling would increase air pollution levels close to air quality standards."

Close, not exceed.

Meanwhile, the President has established a task force to see why oil prices are so high. His attorney general is looking into fraud on the part of speculators and traders.

I can't make this stuff up.


What Shell needs to do is ask the EPA if they can put up some wind turbines outside Kaktovik to blow the exhaust from the ice-breaking vessel.

Oh, one more thing, and perhaps this was the tipping point in the environmentalists' argument: it's all about the polar bear.

But environmental groups were ecstatic [over the ruling], saying more study needs to be done before allowing drilling in polar bear habitat.

By the way, the Obama administration agrees with the Bush administration: the polar bear is not an endangered species and remains off the endangered species list.

Meanwhile, WTI oil hit $113/bbl earlier today, but has since backed off a bit. Gasoline is now solidly above $4.00/gallon across much of the US.

Ayn Rand, Atlas Shrugged

• This was all predicted in Ms Rand's book, published in 1957. Absolutely prescient.