Sunday, February 10, 2019

AK CAN's written testimony to oil and gas commission, Dec 18, 2018

Alaska Oil & Gas Conservation Commission
December 18, 2018 Hearing
Written comments submitted to: Samantha.Carlisle@alaska.gov 

Comments submitted by Ceal Smith
Alaska Climate Action Network
Eagle River, AK

·       I’m speaking today on behalf of the Alaska Climate Action Network, a statewide grassroots network of scientists, policy and renewable energy experts, partner groups and Alaskans from all walks of life who are worried about the increasingly dangerous and costly impacts of climate change, especially in rural Alaska.  

·       I would also like to thank the Commissioners French, Foerster and Seamount for granting this hearing in response to Kate Troll’s request and the 48 Alaskan’s who signed the petition at our Climate, Jobs & Justice rally in Anchorage on Sept 8th 

·       Since then, nearly 300 more Alaskan’s have joined in our appeal to the AOGCC Commission to do everything in your power to reduce Alaska’s GHG emissions (petition attached). 

·       I won’t repeat what others have already spoken to, but I would like to address Kate Troll’s question: “What is the track record for full compliance?” 

·       On November 18th Kristen Nelson reported in the Petroleum News[1] that:
1.     The commission revised its flaring regulations effective Jan. 1, 1995. “The goal of the flaring oversight program is the elimination of unnecessary flaring whenever possible, and 

2.     The commission’s current regulations allow no gas release except for up to an hour for emergencies or operational upsets or for planned lease operations authorized for safety; to purge or test a safety flare system; and de minimus venting incidental to normal operations. The regulations also say the commission can authorize flaring for more than an hour under specific circumstances.”

·       We looked at the data, and here is what we found (disclaimer: we are not OG experts):  
o   First, according to the 2018 Alaska Greenhouse Gas Emissions Inventory Report[2] that “describes and quantifies human-caused sources of greenhouse gas (GHG) emissions occurring between 1990 and 2015 from Alaska operations and facilities” the oil and gas industry contributed an average of 52% of Alaska’s total GHG emissions equal to 44.5 million metric tons of carbon dioxide equivalents (MMT CO2e)/per year or a cumulative total of 552 million metric tons of carbon dioxide equivalents.

o   Based on these figures, between 1990 and 2015, average annual emissions from the oil and gas sector was 23.22 million metric tons of carbon dioxide equivalents (MMT CO2e) (range: 20.26/2010 – 27.02/2005).  That’s equivalent to[3]:
o   5 million passenger cars/year 
o   53.5 million barrels of oil/year, or 17% of California’s total annual (320 MBO/year)
o   3 million average U.S. household electricity use

·       Then we looked at data obtained directly from AOGCC.   Between January 2012 and Feb, 2017 industry:
·       Flared or vented  = 17,374,472 thousand cubic feet (Mcf) of gas equal to 17.4 billion cubic feet or roughly 3.5 billion cubic feet (3,474,894 Mcf)/year, including:
·       1,468 releases greater than 1 hour
·       Range: 
§  747,534 Mcf in Pt. Thomson Exp on Apr 16, 2016 to 
§  1 Mcf at Ninilchik Falls Creek on July 1st, 2017. 
·       34 releases exceeding 100,000 Mcf* including:
§  3 from Pt. Thompson including the release just mentioned, 
§  9 from Prudhoe Bay Gathering Center 1 
§  3 from PBU GC2 
§  8 from PBU CGF B, and 
§  9 from Northstar. and 
§  1 from PBU GC3 (see Table 1 below).

*NOTE:  100K Mcf of gas = 5,509 metric tons of C02 or roughly the equivalent of adding 13.5 million cars/yr. to our highways.


Table 1: Releases >100,000 Mcf of flared or vented gas, Jan 1, 2012 - Feb 1, 2017, from AOGCC data.

·       As quoted in Petroleum News above and according to rule 20 AAC 25.235: 
·       Section(d): Gas released, burned, or permitted to escape into the air constitutes waste, except that (1) flaring or venting gas for a period not exceeding one hour as the result of an emergency or operational upset is authorized for safety;

·       We haven’t yet received all the documents requested in our Public Information Request, so we were unable to compare the gas disposition report form’s 10-422 (FACILITY REPORT OF PRODUCED GAS DISPOSITION) against the Xcel spread sheet data to determine if these were authorized releases Even if we had as a small nonprofit, dependent on volunteers, we don’t have the expertise or capacity to do the analysis (and we might well be off in the above calculation!).  So in the end, we are left with more questions than answers, including:  
·       Do these SUBSTANTIAL emissions fall under authorized emergency and normal operations and maintenance, or is something else going on?  
·       In addition to the 1400+ releases greater than hour, we did not see where industry reports vented gas (i.e. methane).  The state GHG report (page 21) notes that: 
§  In 2015, the industrial sector produced over half of Alaska’s GHG emissions. Fugitive methane contributed over 19% of the CO2e emitted by this sector in 2015. Most of the fugitive methane comes from oil production; a small portion comes from natural gas production. 
·       Thus, how does the AOGCC track the more powerful methane GHG? 
·       Additionally, we’d like to know how AOGCC data feeds into the state calculations of total GHG emissions, as required by the Federal Greenhouse Gas Reporting Rule?  (we’re essentially trying to relate the GHG report to industry disposition data), 
We would very much appreciate answers to these questions! 

It’s important to note that these GHG emissions carry with them a whole suite of hazardous pollutants, including volatile organic compounds that have serious direct and indirect community and environmental health impacts[4], including cancer, neurological, developmental and reproductive effects and the capacity to disrupt critical endocrine hormones.  

In closing, as Bjorn Olsen with Alaskans Know Climate Change and I wrote in a recent OpEd[5] (and it deserves repeating):  “our civilization has little more than a decade to rein in greenhouse gas emissions or face a series of cascading ecosystem and economic collapses”.  We urge you, as our duly appointed and trusted AOGCC commissioners, to do absolutely everything in your power to reduce waste, in the form of dangerous greenhouse gas emissions. 

We are the front lines of climate change; let’s get on the front lines of being the solution to climate change. 

Thank you,    

Ceal Smith




References


The biggest emitters are the Prudhoe Bay Unit Gathering and Flow Stations, but Cook Inlet is also a significant contributor.

Precedence/Case history (from the 50-report):  

“In 1970 alone, nine billion cubic feet of gas were flared from just one Cook Inlet oilfield, Granite Point,” “It was a huge amount of energy just going up in smoke,” recalls Norman, who is currently a Commissioner of the AOGCC. 

The public [then, as now] was solidly on the side of the Commission. The gas flares could be seen from Anchorage on a clear night, and they became symbols of what the public considered to be wasteful practices. 

In 1971, following extensive hearings, the Commission ordered an end to the wasteful flaring of gas produced along with oil from Cook Inlet platforms, except for what was needed for safety flares on the platforms.  The Alaska Superior Court upheld the authority of the AOGCC in its action to prevent waste[7] and (according to the 50-year “Our resources Our past Our future” report[8]). The Commission's ban on gas flaring was extended to Prudhoe Bay when this giant North Slope field began production in 1977. 

Any gas flared after the order, except for the safety flare, was determined to constitute “waste” of the natural gas resource and was prohibited. 

“The companies didn’t want to stop flaring. They claimed there was no market for the gas and that it had no value.” But when forced to do so, the producers did find ways to use the gas beneficially.


Applicable Statutes and Rules

§AS 31.05.027 gives AOGCC authority over all land in the state of Alaska lawfully subject to its police powers, including Federal lands,

§AS 31.05.095 clearly states, “the waste of oil and gas in the state is prohibited”,

§AS 31.05.170(15) defines “waste” in addition to its ordinary meaning, “physical waste” and includes the inefficient, excessive, or improper use of, or unnecessary dissipation of, reservoir energy; and the locating, spacing, drilling, equipping, operating or producing of any oil or gas well in a manner which results or tends to result in reducing the quantity of oil or gas to be recovered from a pool in this state under operations conducted in accordance with good oil field engineering practices; the inefficient above-ground storage of oil; and the locating, spacing, drilling, equipping, operating or producing of an oil or gas well in a manner causing, or tending to cause, unnecessary or excessive surface loss or destruction of oil or gas; and other producing oil or gas in a manner causing unnecessary water channeling or coning; the operation of an oil well with an inefficient gas-oil ratio; the drowning with water of a pool or part of a pool capable of producing oil or gas; underground waste; the creation of unnecessary fire hazards; the release, burning, or escape into the open air of gas, from a well producing oil or gas; the use of gas for the manufacture of carbon black; and the drilling of wells unnecessary to carry out the purpose or intent of this chapter; and

20 ACC 25.235. Gas disposition. (a) For each production facility the operator shall compile and report monthly gas disposition and acquisition on the Facility Report of Produced Gas Disposition (Form 10-422). If a facility's production comes from multiple pools, the operator shall allocate production between each producing pool as a percentage of the total volume of gas that the facility handled for the month. The operator shall report gas acquisition or disposition by category, as follows: 
(1) gas sold; 
(2) gas reinjected;
(3) gas flared or vented* (form does not require separate flaring and venting disclosure); 
(4) gas used for lease operations other than flaring or venting; 
(5) natural gas liquids (NGLs) produced; 
(6) gas purchased; 
(7) gas transferred; 
(8) other.

(b) Any release, burning, or escape into the air of gas other than incidental de minimis venting as authorized under (d)(4) of this section must be reported as flared or vented on the Facility Report of Produced Gas Disposition (Form 10-422). The operator shall submit a written supplement for any flaring or venting incident exceeding one hour. The supplement must describe why the gas was flared or vented, list the beginning and ending time of the flaring or venting, report the volume of gas flared or vented, and describe actions taken to comply with (c) of this section. 
(c) The operator shall take action in accordance with good oil field engineering practices and conservation purposes to minimize the volume of gas released, burned, or permitted to escape into the air. 
(d) Gas released, burned, or permitted to escape into the air constitutes waste, except that 
(1) flaring or venting gas for a period not exceeding one hour as the result of an emergency or operational upset is authorized for safety; 
(2) flaring or venting gas for a period not exceeding one hour as the result of a planned lease operation is authorized for safety; 
(3) flaring pilot or purge gas to test or fuel the safety flare system is authorized for safety; 
(4) de minimis* venting of gas incidental to normal oil field operations is authorized; 
(5) within 90 days after receipt of the report required under (b) of this section, the commission will, in its discretion, authorize the flaring or venting of gas for a period exceeding one hour 
(A) if the flaring or venting is necessary for facility operations, repairs, upgrades, or testing procedures; 
(B) if an emergency that threatens life or property requires the flaring or venting, unless failure to operate in a safe and skillful manner causes the emergency; or 
(C) if the flaring or venting is necessary to prevent loss of ultimate recovery; 
(6) upon application, the commission will, in its discretion, authorize the flaring or venting of gas for purposes of testing a well before regular production. 
(e) Notwithstanding an authorization under 
(d) of this section, the commission will, in its discretion, review flaring or venting of gas and classify as waste any volume of gas flared or vented in violation of 
(c) of this section. 
(f) Notwithstanding conservation orders that the commission issued before 1/1/95, this section applies to flaring or venting of gas that occurs on or after 1/1/95.

Friday, February 8, 2019

Alaska heats up as regulators fail to watchdog oil and gas industry

“I think this is happening because I have been firmly standing up for the public interest in oil and gas conservation”     

                                       Hollis French, Alaska Oil and Gas Conservation Commission Chair (former)


According to University of Fairbanks climate scientist Rick Thoman, in February 2019 the average temperature in Alaska's most northern reaches rose 2.8 degrees Celsius over the 50 year norm, more than three times higher than the national average.

As an oil state, it's not surprising that industry is responsible for the lions share of the state's greenhouse gas (GHG) emissions.  Alaska's Department of Environmental Conservation reported last year that industry emits a whopping 53% of the state's total GHG emissions, although recent evidence suggests the numbers could be as much as 60% higher.

On Dec 18, 2018 citizens urged the Alaska Oil and Gas Conservation Commission (AOGCC) to step up enforcement of waste rules to reduce industry's carbon and methane greenhouse gas emissions.  Kate Troll, Lois Epstein with the Anchorage Wilderness Society (TWS) and Ceal Smith, with the Alaska Climate Action Network (AK CAN) delivered petitions, collectively signed by more than 400 Alaskans, and gave public testimony outlining the reasons why this action was important. 

Ceal Smith with AK CAN presented data obtained from AOGCC that showed more than 1,400 gas flare and venting events in excess of one hour occurred between Jan 1, 2012 and Feb 1, 2017; nearly one event every day for the past five years.   According to agency rules, any release in excess of one hour is unauthorized waste that must be justified or a fine levied if found to be without cause or due to negligence. Thirty-four of the venting/flaring incidences released more than 100,000 thousand cubic feet (Mcf)*of greenhouse gas, as shown in Table 1 below.


TABLE 1: Gas flaring or venting events greater than 100,000 Mcf that occurred between Jan 1, 2012 and Feb 1, 2017, as reported by industry to the AOGCC.

In subsequent follow-up, the Commissioners were unable to provide evidence of a single enforcement action relating to the 1,400 flare/venting events.  They offered information on four unrelated violations instead, two more than 10 years old.

Given the alarming lack of oversight revealed in our filing, the official agency response from Commissioners Foerster and Seamount, Jr., (posted below) is disturbing.   They misrepresented the facts in several important ways.

First, the Commissioner's assertion that "all witnesses were open about their root concern, the reason the hearing was requested, which is climate change" is incorrect. Troll, Epstein and Smith all stated clearly that, while escalating climate change was driving citizen concerns, the petitions and subsequent testimony was about enforcing existing waste statutes (as point #3 in their response letter posted below confirms).

The Commissioners "findings" are of even greater concern.  The assertion that "no specific example or claim of waste was raised during the hearing" defies the evidence.  In testimony, Kate Troll asked about compliance and (as noted above) Ceal Smith reiterated the question in relation to the >1,400 releases greater than 1 hour drawing specific attention to the 34 releases in excess of 100,000 Mcf (shown in Table 1 above) in her testimony.

The Commissioners response, and their assertion that "both testimony and the questions raised...appear to stem from a general lack of familiarity with how the AOGCC addresses issues related to venting and flaring" appears to be an attempt to side-step public concerns.


We received a separate response from Commissioner and Chair, Hollis French.  French's response (posted below) addressed our concerns, and the specifics of our testimony, more thoroughly.  



Shortly after we received the AOGCC's response, on Feb 28th, Governor Dunleavy fired Commissioner French (also reported by ADN).   

In statements made to the media, French responded:

“I think this is happening because I have been firmly standing up for the public interest in oil and gas conservation”


“It’s about what we do as a watchdog agency,” “My view is a watchdog has to roam the whole property. And their view is, ‘no, we’re going to put the watchdog on a short chain.’ And I just disagreed with that.”​

But that's not all.  

In a dangerous irony, there are signs that emissions from Alaska's North Slope oil and gas industrial zone could be on the rise due to thawing permafrost, itself a result of climate change induced by the burning of fossil fuels.  

A 2014 study, Landscape and Permafrost Changes in the Prudhoe Bay Oil Field, from the Geobotany Center at University of Fairbanks, documented numerous changes in the permafrost and surrounding landscape and warned that it could have significant implications for infrastructure, including oil and gas well integrity.  

In April 2017 a BP well failed and leaked oil and gas for days before it could be controlled. According to the AOGCC emergency order, the root cause of the incident was a combination of the well construction geometry the outer casing shoe set in the permafrost and thawing permafrost and subsidence.  As reported by Inside Climate News, a second well failed for similar reasons in Dec 2018.  The AOGCC called for another inquiry and scheduled an emergency hearing in February 2019. 

Following the February 13the hearing the Commission concluded that BP’s assessment of the April 2017 well failure was inadequate, and that the oil company BP, “has no evidence that permafrost subsidence will not result in sudden catastrophic failure” at wells with two-casing-string designs, referring to a common design among the 1,700 wells at Prudhoe Bay" (read the full order here).

The order concluded that BP’s assessment of the April 2017 well failure was inadequate, and that the oil company BP, “has no evidence that permafrost subsidence will not result in sudden catastrophic failure” at wells with two-casing-string designs, referring to a common design among the 1,700 wells at Prudhoe Bay" and ordered PB to provide more information. 

On his way out the door on Friday, Feb 28th, Hollis French filed the following two requests for a hearing. 



 

The first (left) is in relation to the massive Hilcorp gas leak that occurred in the winter and spring of 2017.  As described in Wikipedia:

In December 2016,[1] a natural gas pipeline running beneath Turnagain Arm in Cook Inlet, near Nikiski, Alaska, southwest of Anchorage ruptured, leaking large quantities of natural gas into the water. The escaped gas rises, and is released into Earths atmosphere after clearing the surface. It is estimated that between 6 - 8.8 million litres (210,000 - 310,000 cubic feet) of natural gas is being released from the damaged pipe per day. The pipeline operator, Hilcorp Energy, has said that there is presently too much sea ice to safely launch a repair mission. They added that shutting off the flow of natural gas through the pipeline would compound the problem, because the pipe had previously been used to transport crude oil and the residual crude in the pipe would then be exposed to the sea water once the pipeline was depressurized. 

The leak was first reported in February 2017, but an investigation by the Pipeline and Hazardous Materials Safety Administration states that the leak may have begun in December 2016.[1]  The leak was reported to be dry natural gas being sent to the platforms as fuel, which consists of 99% methane. Divers reported that the leak was caused by the pipeline being laid across a rock on the ocean floor, resulting in a small hole. [2][3]  Non-profit organizations representing the environment have either sued or expressed interest in suing Hilcorp Energy, claiming that the ongoing situation is a danger to beluga whales and other marine life.[4][5]  The leak was repaired April 13, 2017 when divers were able to install a clamp on the leaking pipe. [2][6]

The second hearing request was for the BP well that spewed methane for several days before workers were able to get the well under control in April 2017.  This was the first of two recently failed wells, referenced above, associated with subsidence caused by permafrost thaw.

As Bill Wielechowski noted in a recent Anchorage Press report on the firing of Hollis French:'

“I don’t think the average Alaskan knows how influential the oil industry is in Juneau.  I don’t think that it was a coincidence that he was suspended on administrative leave the day that the AOGCC started one of the biggest hearings in recent history on a BP well issue.”  

When asked what would he like to see get accomplished from this dispute, French replied:

“I feel like the Commission needs a course correction; that’s what I said to the Governor.  We just need to remember who we serve, that the laws apply statewide, and don’t give away anything.  Don’t just say that we are powerless. That is a surrender of sovereignty. Let the watchdog roam the whole property.”

We couldn't agree more. 

####

Research on these issues is on-going, check back for updates.  

Links to media and reports related to this post:

Oil and gas commission expands investigation into why 2 wells failed at Prudhoe Bay.  
KTUU, March 7, 2017
Pipeline and Hazardous Materials Safety Administration (PHMAS) reports.

__________________

* 100K Mcf of gas = 5,509 metric tons of C02 or roughly the equivalent of adding 13.5 million cars/yr. to our highways.

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