DRILLBITS – September 2019
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Advocacy
EPA Proposes Updates to Air Regulations for Oil and Gas
On 29 August, the US Environmental Protection Agency (EPA), proposed updates to the national standards for the oil and gas industry. The proposal would remove regulatory duplication and save the industry millions of dollars in compliance costs each year, while maintaining health and environmental regulations on oil and gas sources that the agency considers appropriate.
The proposal is the result of EPA’s review of the 2016 New Source Performance Standards (NSPS) for the oil and gas industry. EPA’s regulatory impact analysis estimates that the proposed amendments would save the oil and natural gas industry $17-$19 million per year, for a total of $97-$123 million from 2019 through 2025.
The agency is co-proposing two actions, both of which would remove unnecessary regulatory duplication in the 2016 rule. In its primary proposal, the agency would remove sources in the transmission and storage segment of the oil and gas industry from regulation. These sources include transmission compressor stations, pneumatic controllers and underground storage vessels.
The proposal would also rescind emissions limits for methane, from the production and processing segments of the industry, but would keep emissions limits for ozone-forming volatile organic compounds (VOCs). These sources include well completions, pneumatic pumps, pneumatic controllers, gathering and boosting compressors, natural gas processing plants and storage tanks. The controls to reduce VOCs emissions also reduce methane at the same time, so separate methane limitations for that segment of the industry are redundant.
In an alternative proposal, EPA would rescind the methane emissions limitations without removing from regulation any sources from the transmission and storage segment of the industry.
EPA is taking comment on the proposal, and will hold a public meeting.
More information about the proposal can be found at EPA’s website.
Colorado County Enacts Rules for Oil and Gas Drilling; Imposes Tougher Regulations than State Requirements
Adam’s County in Colorado, which encompasses the suburbs of Denver recently enacted its own rules for oil and gas drilling, taking advantage of a new law that allows local governments to impose tougher regulations than the state.
The Adams County commissioners unanimously approved a requirements that new wells be at least 1,000 feet from homes, twice the distance required by Colorado rules. It encourages oil and gas operators to use cleaner, quieter electric drilling rigs and requires them to offer multiple locations for a proposed well so the county can evaluate the impacts on public health and safety.
More information about the specifics contained in the new requirements can be found at the Adams County website.
Results of DRILLERSPAC Campaign
IADC’s DRILLERSPAC ran a fundraising campaign from May 20-June 20 with a goal to raise $50,000. To date, $36,000 has been received from 70 individuals and 12 companies! Thank you for those contributions. In addition, Latshaw Drilling had 43 employees who committed to supporting the PAC. Thank you Trent and Latshaw Drilling!
In the 2018 midterm elections, the IADC DRILLERSPAC supported 14 candidates in Senate and Congressional races, with 13 of those winning their races, a 93% success rate. The next election cycle includes key races in Texas, Louisiana, Oklahoma, Colorado, Wyoming, Mississippi and Alaska, among others, and IADC will again be supporting candidates who have demonstrated a commitment to supporting energy and the drilling industry.
The DRILLERSPAC was sanctioned by IADC’s Board of Directors to further IADC’s goal of advocacy engagement with federally elected Members of Congress. DRILLERSPAC is not affiliated with any political party. It is organized and conducted on a voluntary, non-partisan basis. DRILLERSPAC is overseen by the PAC Board of Trustees, which is comprised of 10 members – three from offshore companies, three from onshore companies, two from drilling services companies and two IADC employees.
Washington D.C. Updates
House:
The House spent August in recess, with lawmakers and staff returning to work in-district and take vacation ahead of what will be a busy September. Having sent 10 of 12 spending bills to the Senate, House lawmakers still need to pass two appropriations bills in time for the Senate to pass them and work out a broader agreement with the House by October 1st. House Majority Leader Steny Hoyer (D-MD) recently told reporters that while a continuing resolution could be inevitable, it would be “short-term” and “no more than 60 days,” possibly setting up another funding fight in early December. On September 10th, the Natural Resources committee will hold what is expected be to be a contentious hearing to examine the proposed relocation and reorganization of BLM. Additionally, two anti drilling bills H.R. 1146 (ANWR coastal plain drilling ban) and H.R. 1941 (Atlantic and Pacific drilling ban) will be voted on in the coming weeks on the House floor. From a broader standpoint, the House will also move to examine legislation for several bubbling issues like the USMCA trade deal, FISA surveillance reauthorizations, gun control, and continued oversight of the administration via the Judiciary Committee as we move into the Fall. With 2020 elections about a year away, lawmakers from across the political spectrum will be looking to solidify their legislative accomplishments in time to message them out to voters around the nation.
Senate:
The Senate also spent August in recess. On one of the last working days before leaving town, the Senate Finance Committee held a hearing on the USMCA trade deal in which lawmakers generally expressed interest in a speedy approval of the deal this fall. On the appropriations front, the Senate didn’t pass any of the 10 funding bills passed by the House prior to recess, opting instead to wait for congressional leaders and President Trump to strike a two-year budget deal, which was secured on August 2nd. Absent the passage of the 12 spending bills or another temporary continuing resolution (a.k.a. CR), the government will shut down at midnight on October 1st.
White House:
The Administration continued to advance the President’s various agendas throughout August. Following two days of trade talks with the Chinese early in the month, negotiations again stuttered and President Trump announced a 10% tariff on over $300 billion in Chinese goods. In response, Chinese officials announced they would halt the purchase of American agricultural products. After an agreement was reached to delay the new round of tariffs, the Administration reiterated that tariffs are to be raised from 25% to 30% on the existing $250 billion worth of Chinese goods beginning on October 1st, and from 10% to 15% on the remaining $300 billion worth of goods beginning on December 15th. On the national security front, the Administration spent August continuing to deal with the situation in Iran, additional missile testing issues with North Korea, and diplomatic tensions with E.U. leaders. On the regulatory front, the Administration faced significant public backlash over its proposed rollback of EPA’s 2016 methane regulations concerning oil and gas production. Additionally, the Administration also spent the month dealing with significant pushback from large automakers over the President’s decision to rollback 2012 vehicle pollution standards put in place by former President Obama. At the agency level, BOEM held its fifth offshore lease sale under the 2017-2022 OCS Leasing Program on August 22nd. It was this year’s second U.S. Gulf auction and received 165 bids on 151 blocks from 27 companies, with high bids totaling $159.4 million. Those totals were mostly down from the last two gulf lease sales: Lease Sale 252 in March and Lease Sale 251 in August 2018. Analysts reported that over 25% of bids were for acreage in the Mississippi Canyon area.
INDUSTRY NEWS
August GOM Lease Sale Yields More than $159 Million in Bids
The US Department of Interior’s region-wide Gulf of Mexico (GOM) Lease Sale 253, held on 21 August, generated bids in excess of $159 million for 151 tracts covering 835,006 acres in federal waters of the GOM. A total of 27 companies participated in the lease sale, submitting $174,922,200 in all bids.
Lease Sale 253 included 14,585 unleased blocks, located from three to 231 miles offshore, in the Gulf’s Western, Central and Eastern Planning Areas in water depths ranging from nine to more than 11,115 feet. Lease Sale 253 was the fifth offshore sale held under the 2017-2022 National Outer Continental Shelf Oil and Gas Leasing Program.
More information about the sale, can be found at the Bureau of Ocean Energy Management’s website.
Texas A&M IADC Student Chapter Members Attend Independence Contract Drilling Rig Visit
The Texas A&M IADC Student Chapter was invited to visit an Independence Contract Drilling (ICD) rig in Giddings, Texas in mid-August. 30 students from Texas A&M and Ole Miss, along with 3 professors from the Texas A&M Mays School of Business attended the visit. Participating students are majoring in Business, Finance, Petroleum Engineering and Agriculture Science. The students were treated to a tour of the rig, currently working for IronRoc Energy Partners, by ICD Senior Management, along with a lunch graciously cooked by Cameron.
US Department of Transportation Publishes Hours of Service Proposal
The US Department of Transportation’s Federal Motor Carrier Safety Administration (FMCSA) recently published a notice of proposed rulemaking on changes to hours of service rules to increase roadway safety by updating existing regulations for commercial vehicle drivers.
The proposal would impact rig moving operations. The proposed rule on hours of services offers five key revisions to the existing rules, which include:
- The Agency proposes to increase safety and flexibility for the 30 minute break rule by tying the break requirement to eight hours of driving time without an interruption for at least 30 minutes, and allowing the break to be satisfied by a driver using on duty, not driving status, rather than off duty.
- The Agency proposes to modify the sleeper-berth exception to allow drivers to split their required 10 hours off duty into two periods: one period of at least seven consecutive hours in the sleeper berth and the other period of not less than two consecutive hours, either off duty or in the sleeper berth. Neither period would count against the driver’s 14‑hour driving window.
- The Agency proposes to allow one off-duty break of at least 30 minutes, but not more than three hours, that would pause a truck driver’s 14-hour driving window, provided the driver takes 10 consecutive hours off-duty at the end of the work shift.
- The Agency proposes to modify the adverse driving conditions exception by extending by two hours the maximum window during which driving is permitted.
- The Agency proposes a change to the short-haul exception available to certain commercial drivers by lengthening the drivers’ maximum on‑duty period from 12 to 14 hours and extending the distance limit within which the driver may operate from 100 air miles to 150 air miles.
The proposed rule would not increase driving time and would continue to prevent CMV operators from driving for more than eight consecutive hours without at least a 30-minute change in duty status.
The Federal Register notice can be found here.
UK Oil & Gas Authority Launches 32nd Offshore Licensing Round
The UK’s Oil and Gas Authority is offering 768 blocks or part-blocks across the main producing areas of the UK Continental Shelf (UKCS) as part of its 32nd Offshore Licensing Round. The blocks include acreage in the central, northern and southern North Sea as well as West of Shetlands. The application closing date for the licensing round is November 12, and decisions are expected to be made in the second quarter of 2020.
More details can be found on the Oil & Gas Authority’s website.
IOGP-IPIECA Report 520: Oil Spill Preparedness and Response: An Introduction, Now Available
IOGP and IPIECA recently issued a new report, Report 520: Oil Spill Preparedness and Response: An Introduction, which provides a framework for effective oil spill preparedness, response and restoration. It describes the key elements used by the industry to underpin this framework and references the good practice guides on oil spill preparedness and response.
The IPIECA-IOGP series of good practice guides on oil spill preparedness and response summarizes consensus views on good practice for a range of oil spill preparedness and response topics. The series aims to help align industry practices and activities, inform stakeholders and serve as a communication tool to promote awareness and education. This report, originally published in 2015, has been update to incorporate guidance on subsea well intervention and Arctic response.
The report is available to download from the IOGP Bookstore.
US Chemical Safety Board Issues New Safety Digest
On 4 September, the US Chemical Safety Board (CSB) issued a new safety digest on the value of worker participation to prevent chemical incidents. The digest notes that lack of worker participation was a factor in several major incidents investigated by the CSB because workers and their representatives were not engaged to help identify hazards and reduce risks.
The digest discusses four incidents that led to a total of 13 employee deaths, many injuries, and in one case, 15,000 residents living near a facility seeking medical attention. The incidents took place at an explosives manufacturing site, a chemical production facility and two oil refineries. They occurred in Nevada, Washington, California and Louisiana. Each of these CSB investigations found that worker participation programs were inadequate, despite the existence of federal regulations and industry standards.
The safety digest can be found on CSB’s website.
Brazil’s National Petroleum Agency Projects 250 Development Wells by 2020
According to projections by the National Petroleum Agency (ANP) of Brazil, operators are expected to drill approximately 250 development wells by 2020, a quarter of which (65) are in the Santos Basin. Brazil currently has a total of 303 producing fields and 323 exploratory blocks contracted to 47 domestic and 50 foreign groups. Exploration well drilling commitments in 2020 must be presented by the oil companies to ANP by 30 October.
US House Passes Coast Guard Reauthorization Bill
On 24 July, the US House of Representatives approved the Coast Guard Reauthorization Bill with a rider requiring the agency to assess its risk from climate change. Identified as H.R. 3409, the bill authorizes more than $8 billion annually for the Coat Guard for fiscal 2020 and 2021. Sections 305 and 306 are of particular interest to the U.S. Offshore industry as they address offshore installation vessels related to the Jones Act, and refinement of position descriptions that comprise the National Offshore Safety Advisory Committee (NOSAC), respectively.
The summary of the bill can be found here.
IOGCC Passes Resolution Urging Federal Government to Oppose Green New Deal
The Interstate Oil and Gas Compact Commission (IOGCC) recently passed a resolution urging the Federal Government to oppose the Green New Deal in the spirit of cooperative federalism. Proposed by Railroad Commission of Texas Chairman Wayne Christian, the action plan will be sent to the President, Vice President, key administration officials, and Congressional leaders to encourage them to oppose the Green New Deal and any substantially similar legislation.
For more information, please visit this link to view a video of Railroad Commission Chairman Wayne Christian discussing the resolution.
ACCREDITATION
IADC Accreditation Department Successfully Passes ISO 9001:2015 Recertification Audit
In February, IADC’s Accreditation Department successfully passed the ISO 9001:2015 recertification audit with zero findings. IADC remains the only well control accrediting body to hold ISO 9001:2015 certification, demonstrating the association’s ability to consistently provide services that meet customer requirements while keeping a focus on quality and integrity. Programs that fall under the ISO certification include RigPass, SafeLand, SafeGulf, WellSharp, WellCAP Plus, DIT, Competence Assurance, Gateway and Crane-Rigger.
The ISO 9001 QMS standard requires that a company identify and describe processes using business metrics, the purpose of which is to better manage and control business processes. The ISO 9001 family addresses various aspects of quality management and contains some of ISO’s best-known standards, which provide guidance and tools for companies and organizations that want to ensure that their products and services consistently meet customer’s requirements. ISO 9001:2015 sets out the criteria for a quality management system and is the only standard in the family that can be certified to. This standard is based on a number of quality management principles including a strong customer focus, the motivation and implication of top management, the process approach and continual improvement.
For more information, please contact Brooke Polk at Brooke.Polk@iadc.org.
IADC COMMITTEES
Ethics and Compliance Committee to Host Meeting on Workplace Violence in the Office
The IADC Ethics and Compliance Committee will host its’ next meeting on 25 September at IADC Headquarters in Houston. The meeting will feature a discussion on workplace violence in the office and will feature 3 presenters including a recognized security expert from Umbra Advisers, LLC, along with Tracy LeRoy and Rhuju Vasavada, both of Yetter Coleman.
For more information and to register, please visit the Committee’s website.
INDUSTRY RESOURCES
IADC Bookstore Enhanced and Upgraded
The IADC bookstore recently completed a thorough update and streamlining process to further advance the overall user experience. The print and electronic bookstores are now combined into one store and allow customers to quickly link to the desired choice and format of desired books, contracts, daily drilling reports, and streaming media. Top-selling items, including the 2T6 Drilling Report, the IADC Drilling Manual and the Drillers Knowledge Book, are featured.
IADC has worked with its partners, including Techstreet and Moxie Media, in making the user experience much easier while offering new products and delivery methods. The bookstore will continue adding relevant content for our users and customers over the coming weeks.
Android App for Mission Petrohouse Rolled Out
IADC’s Drilling Matters initiative to educate the public and dispel myths and misconceptions about our industry hit the ground running in 2019, with the roll out of an Android app for its popular online game Mission Petrohouse.
Mission Petrohouse players steer a retro rocket ship through a home and “zap” everyday products created from petroleum to fill the rocket’s fuel tank. The game tracks the number of items zapped, and provides helpful information about each item.
The new app can be downloaded from Google Play at https://play.google.com/store/apps/details?id=com.iadc.hydrohouse
Drilling Matters is available on line at www.DrillingMatters.org.
For more information about Drilling Matters, contact Amy Rose (amy.rose@iadc.org).
IADC Lexicon Featured Term for September 2019
The IADC Lexicon (IADCLexicon.org) is a compendium of upstream-related terms, which, unlike conventional glossaries, are official definitions drawn from legislation, regulation and regulatory guidance, standards (global, national and regional), and IADC guidelines. Terms often have multiple definitions from different sources.
This month’s Featured Term is:
“Expert Operation” ( API SPEC 17F, Specification for Subsea Production Control Systems, Second Edition, December 2006 (Reaffirmed April 2011):
Operating the IWCS with other control commands or other methods than used for normal operation. NOTE Typically used by IWCS supplier or other skilled resource to read IWCS diagnostic data and make (engineering) adjustments to IWCS equipment.
(click the link to read the full definition on the IADC Lexicon.)
Accreditation Updates
RigPass
WellSharp
Upcoming Events
Rigs Receive ISP Certificates
For certificates received since last LTI (in years):
New IADC Members
IADC welcomes 17 new members:
DRILLBITS Volume 29, Number 9
Kevin Neveu, Chairman • Jason McFarland, President • Amy Rose, Editor
All listed phone extensions are for IADC’s Houston headquarters,
+1/713-292-1945. Fax +1/713-292-1946.
Send comments/questions to Amy Rose at amy.rose@iadc.org.
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