EPA Hearing News and Commentary
Dave Harbour, NGP Publisher
At what point does Shell Oil decide that its $2.3 + billion investment in Alaska's OCS is a lost cause? Hopefully, Shell's dedication, patience and risk will pay off for its shareholders, for Alaska and for America's national security. Shell's OCS success is critical, because as we have said here consistently, OCS (with federal-state revenue sharing) is vital to the economic survival of Alaska. And an EPA Clean Air Act permit is critical to Shell's OCS investment moving forward in 2010. Having a big turnout last Friday was, therefore, important to the EPA process and, ultimately, to Alaska's future. Readers who did not go can still comment to EPA by following these instructions before the October 5 deadline (later extended to 10-20, contrary to the counsel given in my testimony below).
On Friday I joined a good crowd at Anchorage's Loussac Library where representatives ofthe Environmental Protection Agency heard testimony from about 20 local citizens ALL supporting the EPA's approval of a Clean Air Act Permit for Shell Oil's 2010 Chukchi See exploration program. Here is our Friday story. Here are KTUU's story and several critiques, including mine. Here is a partial list of those who testified, including Paul Laird (testimony) of the Alaska Support Industry Alliance, Carl Portman of the Resource Development Council for Alaska, Marilyn Crockett of the Alaska Oil and Gas Association, Edison Chouest's Michael Terminel, Keith Silver (testimony) of NANA Management Services, Mary Shields of Northwest Technical Services, Brian Benson of Air Liquide, Peter Macksey of STEELFAB (NGP Photo-r), Roger Steen of Air Sciences, Jim Gilbert (NGP Photo) Udelhoven Oilfield Systems Service, Susan Childs of Shell Oil, Brian Tomlinson, Carlile Transportation's Linda Leary, Reed Christensen of Dowland-Bach and a few others. Below is the testimony I offered:
Air Quality Permit Proposed for Shell Gulf of Mexico Inc. to Operate the Frontier Discoverer Drillship in the Chukchi Sea, Alaska Testimony: September 25, 2009
Dave Harbour, Retired Commissioner, Regulatory Commission of Alaska
Good morning, Mr. Rockwell and Mr. Albright, and welcome to America’s largest state, ground zero for America’s most important storehouse of natural resource wealth.
I am Dave Harbour, a retired Alaska regulatory commissioner. I publish an energy website and serve as a volunteer member of the Consumer Energy Alliance Board of Advisors. I am a grandfather who will walk through fire to protect my children’s and their children’s futures. I urge you to help protect the economic and environmental wellbeing of our children by expeditiously approving Shell’s request for a Clean Air Act permit, allowing the company to operate the Frontier Discoverer drillship and its fleet for a multi-year exploratory oil and gas drilling program in areas where it has obtained and paid the Federal government for leases.
In beginning I wanted to express appreciation for the logical and fair course Mr. Albright set when, in answer to my question a few moments ago, he said that, “Just because we make changes in the permit requirements based on information gained during this comment period doesn’t mean we will have another comment period.”
As a former regulator, I sympathize with your desire to make sure the public interest is served and believe that extending this comment period or creating a new one would raise serious ‘due process’ questions. We all had the same opportunity to comment. At some point, for all potential commenters the deadline comes and goes and we either have or have not responsibly responded. It would be unfair to those who timely responded to learn that we might have had more time to prepare our testimony.
But moving to the substance of my comment to you I would offer several ways I perceive that you are or could serve the public interest with respect to this docket.
One way to serve the public interest is to properly implement regulations in accordance with prevailing law. Another way to serve the public interest is to reasonably and timely interpret regulation requirements and permit application information. A third way to serve the public interest is to be mindful throughout the process that consumers end up paying many fold for regulations: 1) through taxes funding your operations; 2) through the price of products reflecting cost of the regulatory processes; 3) through lost state and federal revenues that may result from stalled projects; 4) through tens and perhaps hundreds of thousands of American jobs and employment taxation and economic strength that stalled projects could produce; 5) through the increased dependence on foreign energy imports that stalled projects produce, along with 6) associated, harmful impacts on our balance of trade deficit and weakened state of national security.
So, you see, you have a very great responsibility. In fact, your decisions, combined with decisions of sister agencies could well affect the prosperity if not the survival of the United States of America.
I have read virtually all of the documents in your file, including Shell’s exhaustive filings and your repeated rejections. I would like to have you look at your rejections with me through the eye glasses of a grand dad consumer. You rejected the permit application last January 16 in part:
- …because Shell didn’t provide you with the duration, frequency, hourly emission rates, and potential air quality impacts of an emergency generator on board, “FD-8”. 
- …because Shell wasn’t more specific about the number of “ice management vessels”, their direct impact on the modeling analysis, and, “because there is no guarantee by Shell that the same vessels will be used for ice management and oil spill response, what assurances are available that the vessels will have similar stack parameters and emission rates so as not to contribute or violate National Ambient Air Quality Standards (NAAQS), air quality increments, and permit conditions.”
- …because Shell Oil didn’t tell you exactly how many 37-foot long boats would be aboard a management vessel within the Spill Response (OSR) fleet, the number, duration and frequency of the water drill exercises for these boats, and quantifying the emission rates of each boat during each exercise.
There are several score if not hundreds of requirements in rejection after rejection. I submit to you that most normal Americans would read your many, many, many seemingly picky reasons for rejection and say to you in a big voice, “Can you possibly be serious?”
One asks, “Isn’t this entire process discriminating, picky, harassing and endangering our country’s national defense and economic survival?”
Today you are seeking comment on Shell’s Air Quality Permit Application for the Chukchi operations of the Frontier Discoverer and I am sure you are getting plenty of support for delay from certain anti-domestic energy advocates. But I would ask any member of the public who hears me to consider the cumulative effect of what you and your comrades in other departments are accomplishing:
- On OCS leasing. Last February, Secretary Salazar postponed the comment period on the MMS 2010-2015 draft lease sale program to last Monday, September 21. That was unnecessary delay. But get comment he did and when Governor Parnell visited him a few days ago the Secretary did not commit to timely deciding now that the comments are in. By the way, most comments favored moving ahead with leasing of OCS areas around the country. I testified at the Secretary’s hearing last April.
- On Oceans Policy. A White House Ocean Policy Task Force met here in August charged with recommending to the President an ‘Oceans Policy’ in less than a year. This presidential assignment is either simply bizarre or more suspiciously like a pre-engineered strategy. Obviously, the anti-domestic energy crowd was out in force to testify but many ordinary folks were there as well, supporting reasonable energy exploration and production. I testified again.
- OCS Permitting. Now comes the EPA to Anchorage--after forcing a company that has done more to cooperate with Alaska, Alaskans and a demanding federal permitting system than any company in my memory—to ask the ‘public’ if Shell’s vessels’ air quality permits should be approved. I am testifying again, today …
…this time ringing verbal alarm bells against the harm to America being made by the combined weight of these and other Administration initiatives.
Now, listen. We’re living in a dangerous world. I hope that you begin to combine your sense of honest obligation to your process—if that is what it is—to a realistic concern for the health of your country.
Please let me caution you that those combined actions, as harmful as they are to the country, are especially damaging to Alaska.
· In becoming a state 50 years ago, we trusted the Federal government to wisely manage its resources and share the revenue with the state, to at least allow traditional access to and through Federal lands.
· In passage of the Alaska National Interest Lands Act of 1980, the Carter Administration converted huge expanses of multiple use public lands to restricted uses which can be seen as an erosion of the Statehood Compact.
· Alaska once transported through the Trans Alaska Pipeline over 20% of domestic oil production and what was over 2 million barrels per day has now slipped by about 2/3, a trend that will continue with annual losses of throughput of about 6%. OCS and ANWR are the two major possibilities Alaska and America have for extending the life of the pipeline, maintaining Alaska’s financial independence, diminishing foreign imports and foreign exchange losses … and providing tens of thousands of jobs and billions of dollars of corporate income taxes to the federal treasury. Without OCS and ANWR, the country will send more of our precious treasury abroad to buy the energy we need from foreign producers who certainly do not live within the stern regulatory structure we witness in this proceeding.
Mr. Rockwell, I don’t mean to be harsh with you personally. You, Mr. Albright and your colleagues are very nice and dedicated people. I do want strong laws and regulations to protect our environment, like most every Alaskan. And as a former regulator I want the rules properly enforced. But I also hope that the elected and appointed officials that create and execute the rules do a better job recalling for whom they work. I adopted a slogan as a regulator which I would recommend you consider for your own use: “Regulate where you must; deregulate where you can.”
The American people are struggling because the economy is weak. Your actions look petty and dangerous: making America weaker, month by month, with every spurious, nitpicking rejection.
I urge you, in the public interest, to issue Shell’s Chukchi air quality permits without further delay. If you do not and if Shell’s multi-billion dollar investment in this state—in this country--is lost, you have not only endangered America but you have sentenced the 49th state to losing up to 35,000 jobs per year and to poverty, absent a miracle. I am sure that is not what you want.
I ask that my earlier testimony, referred to herein and attached below, be accepted with this testimony.
2440 E. Tudor Rd.
Anchorage, Ak. 99507