BP now says it likely won't start initial drilling at its much-anticipated Liberty project just off Alaska's northern coast until next year.
That word late last week from BP's Alaska spokesman Steve Rinehart comes as one congressman and a handful of environmental groups are urging the federal government to deny permits BP still needs before drilling can begin.
Perhaps more importantly, the Alaska Oil and Gas Conservation Commission recently gave notice that it intends to seek comment and perhaps reconsider state regulations governing "drilling, rig workover and well control in offshore and ultra-extended reach wells" in Alaska.
Liberty is the ultimate in ultra-extended reach drilling, and BP has touted the engineering advances that will allow its drill bits to churn down into the federal seabed as far as eight miles out from a gravel island that sits in state territory.
"Liberty wells will push new boundaries for drilling ultra-long deviated wells," a company article on the project says, "making it possible to dramatically reduce environmental impacts from development." This because many wells can be drilled from one spot, reducing the need for a bunch of gravel islands, drill sites, roads, pipelines and other things cluttering up the habitat. Liberty also anticipates using the world's largest land-based rig, put in place this spring on the Endicott island, from which Liberty will be drilled.
The $1 billion project is aiming for what's estimated now to be a 100 million barrel reservoir. BP anticipates 40,000 barrels a day of production when it's fully operational in 2013.
Rinehart says the new timeline is not caving in to pressure from critics but just a matter of being careful. Renewed scrutiny on just about everything BP is up to these days is ongoing as oil from the Deepwater Horizon disaster continues to foul Gulf of Mexico beaches and BP's reputation.
"With government's interest and our own desire to ensure the project moves safely ahead, the schedule for drilling is a moving target," Rinehart wrote in an e-mail last week. "We had hoped to begin drilling the first oil well by the end of this year, but it will very likely be next year before we are ready to start."
During an earlier interview, Rinehart had explained that BP and other companies typically wait to apply for the last drilling permits until pretty close to the time they want to drill. There could be changes in the plan, for instance, or other procedural considerations, he said.
The company had hoped to submit those permit applications and get to drilling by late fall, certainly by the end of the year, he said over coffee at Café del Mundo.
But then, in the later e-mail, he noted things may have changed. "We need to take our time, work safely and make sure questions are addressed. It's not yet certain, for example, how deep, how long or in what way a federal review may occur. We don't want a firm or announced drilling schedule to impede a full process."
For its part, the federal officials aren't saying much more than that they'll take a look at critics' requests to stop the project. An Interior Department spokesperson said Friday via e-mail that if drilling permit applications are received the agency will "review them at the appropriate time and determine, based on safety and other considerations, whether the project should move forward with drilling under federal waters."
The state conservation commission is taking a more definitive approach and on June 24 published its "notice of inquiry," specifying more than a dozen items relating to drilling and extended-reach wells it will take a closer look at. Those include blowout prevention equipment including possibly requiring producers to drill a secondary -- and expensive -- relief well simultaneously, just in case. It's taken BP more than three months to drill the relief well to the Maconda project in the Gulf, slowing its ability to stop the free flow of oil there.
AOGCC is seeking public comment on the existing regulations and possible changes and says it will also hold a special public hearing that links what has happened in the Gulf to what could happen in Alaska. The hearing will be set for 30 days after the National Commission on the Deepwater Horizon disaster -- that's the panel UAA Chancellor Fran Ulmer is on -- comes out with its report. No definite time frame has been given.
That will give a lot of people, including environmental activists, the chance for a do-over of sorts when it comes to the Liberty project.
Last week, six national environmental organizations urged U.S. Interior Secretary Ken Salazar to deny BP's drilling application, deferring any future approval until the feds can ensure BP has adequate resources to deal with an Arctic spill. The groups are worried that BP is "overwhelmed" in the Gulf of Mexico and, given that Liberty drilling could start up while the company is focused down south, want the government to slow it down.
"It defies common sense to think they should start a whole new project in the Arctic when they haven't even dealt with the Gulf," says Rebecca Noblin, the Alaska director for the powerhouse Center for Biological Diversity, a group accustomed to filing lawsuits if necessary to get its point across.
"The Liberty project is really untested cutting edge technology," she noted. "This is at the frontiers of their technology and we think we really need to take a closer look to make sure all the environmental reviews done."
Noblin concedes her group and others weren't exactly scrambling to put Liberty under the environmental microscope a couple of years ago when the project went through the initial review process. Back then, it seemed like the impacts were less dramatic than they're now being touted because the project was considered more of a known entity, kind of an extension of the existing Endicott field, she says.
For now, until they can really conduct their own scrutiny, the environmental groups, as well as U.S. Sen. Frank Lautenberg, are relying on information in a June 23
that relied in part on unnamed federal officials to suggest that the now-disgraced Minerals Management Service let BP write its own environmental review.
MMS, now called the Bureau of Ocean Energy Management, isn't responding to the criticism. But Rinehart, the BP spokesman, says it's common for his company or any company to submit their own environmental assessment. That's in accordance with federal law, and what MMS or any other agency does with it is MMS's business, he notes.
Lautenberg and others also picked up on the Times' assessment that Liberty is really an offshore operation being disguised as an onshore project. That's because the Endicott gravel drilling island is about five miles out into the Beaufort Sea.
Still, offshore operations are more commonly associated with floating drilling rigs that are basically large ships that sail out and are anchored in place. Access is by boat or helicopter and can be sketchy in bad weather, especially if there's a problem. Drilling is usually deep and straight down.
Rinehart points out the obvious differences with Liberty -- it's a land-based rig on a land-based island that is connected to shore by a causeway. You can drive to it in a few minutes. The island is more than 30 acres -- about 23 football fields in size. There is a very large gravel berm around the island so any oil spilling from the drill site would ostensibly be captured and contained.
"No piece of construction is exposed to the sea," Rinehart said. "No pipes, well, drill rig is exposed to the sea."
That didn't stop New Jersey senator Lautenberg from imploring the new director of the newly revamped federal drilling regulatory agency to "take immediate action to prevent BP from moving forward" with Liberty.
The project should not be allowed until the Gulf situation is resolved, a new analysis of Liberty is done and new rules and regulations governing oil drilling are in place, he said in a June 24 letter.
That prompted a swift smackdown from Alaska Sen. Mark Begich, who wrote his own letter to Lautenberg, telling him he was basically uninformed and shouldn't rely on the New York Times to do his homework for him. In the letter, Begich calls the Times article "incomplete at best and seriously exaggerated at worst."
At a meeting with reporters last week, Begich described a personal conversation he had with Lautenberg. "If you touch Alaska, you're getting a letter from me," Begich said. "Hopefully next time this issue comes up he'll be more careful with his words -- and so will the New York Times."
Whether political chest-thumping from Alaska's junior senator can derail what appears to be a renewed federal scrutiny on Liberty remains to be seen. Begich said while he doesn't get the sense the Obama administration will block the project, he also doesn't think they will let it slide.
"They're not going to take a chance," he said. "They're going to be aggressive about it."
Contact Patti Epler at patti(at)alaskadispatch.com.