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Home My WebLink AboutO 048 e e Image Project Order File Cover Page XHVZE This page identifies those items that were not scanned during the initial production scanning phase. They are available in the original file, may be scanned during a special rescan activity or are viewable by direct inspection of the file. o 0 4- ~ Order File Identifier Organizing (done) o Two-sided 1IIIIII111111111111 o Rescan Needed 1111111111111111111 RES CAN DIGITAL DATA OVERSIZED (Scannable) o Maps: o Other Items Scannable by a Large Scanner D Color Items: o Greyscale Items: D Diskettes, No. D Other, NolType: o Poor Quality Originals: OVERSIZED (Non-Scannable) D Other: D Logs of various kinds: Dale 7/3)°7 D Other:: NOTES: BY: ~ 151 VVlf Project Proofing 11111111111111 "III mP BY: ~ Date7/3J07 151 = TOTAL PAGESì1LL (Count does not include cover sheet) P 151 Scanning Preparation BY: x 30 = + Date: 1111111111111111111 Production Scanning Stage 1 Page Count from Scanned File: J 3:t. (Count does include cover sheet) Page Count Matches Number in Scanning Preparation: L YES ~ Date:7/3J07 If NO in stage 1, page(s} discrepancies were found: YES NO Stage 1 BY: IS/tv1 P NO BY: Maria Date: /5/ 11111111111I111111I Scanning is complete at this point unless rescanning is required. ReScanned 11111111111111 "III BY: Maria Date: /5/ Comments about this file: Quality Checked 11111111111I111111I 10/6/2005 Orders File Cover Page.doc . . . Index Other 48 Regulation Package Blowout Prevention Testing 1. February 28, 2007 2. March 2, 2007 3. March 5, 2007 4. March 12, 2007 5. April 10, 2007 6. April 25, 2007 7. June 8, 2007 8. 9. June 20, 2007 Public Meeting Minutes File Opening Request Notice of hearing, affidavit of publication, bulk mailing AGO confirmation file opening Transcript AOGCC re: submission of regulation package to the Governor's office for signature AGO's Itr and attachments confirming submittal to the Lt. Governor Post Notice and Final, Final regulation Lt. Governor Order certifying changes to regulations Other 48 Register _, '0 MISCELLANEOUS.ARDS 20 AAC 25.035(e)(10) is amended to read: (10) the BOPE must be tested as follows: (A) when installed, repaired, or changed on a development or service well and at time intervals not to exceed each 14 days thereafter, BOPE, including kelly valves, emergency valves, and choke manifolds, must be function pressure-tested to the required working pressure specified in the approved Permit to Drill, using a non-compressible fluid, except that an annular type preventer need not be tested to more than 50 percent of its rated working pressure; however, the commission will require that the BOPE be function pressure-tested weekly, if the commission determines that a weekly BOPE pressure test interval is indicated by a particular drilling rig's BOPE performance; (B) when installed, repaired, or changed on an exploratory or stratigraphic test well and at least once a week thereafter, BOPE, including kelly valves, emergency valves, and choke manifolds, must be function pressure-tested to the required working pressure specified in the approved Permit to Drill, using a non-compressible fluid, except that an annular type preventer need not be tested to more than 50 percent of its rated working pressure; (C) if any BOP equipment components have been used for well control or other equivalent purpose, or when routine use ofthe equipment may have compromised its effectiveness, the components used must be function pressure-tested, before the next wellbore entry, to the required working pressure specified in the approved Permit to Drill, using a non-compressible fluid, except that an annular type preventer need not be tested to more than 50 percent of its rated working pressure; Register _, '0 MISCELLANEOUS.ARDS (D) BOP ram and annular components except blind rams must be function-tested weekly, and all BOP ram and annular components must be function-tested after an action that disconnects the hydraulic system lines from the BOPE, except that if the workstring is continuously in the well, function-testing of blind rams must be performed as soon as possible after the workstring is pulled out of the well and the BHA clears the BOP; (E) for each BOPE test during drilling and completion operations, variable bore rams must be function pressure-tested to the required pressure on the smallest outside diameter (OD) and largest outside diameter (OD) tubulars that may be used during that test cycle, except that variable bore rams need not be tested on BHAs and drill collars; (F) after they are installed [INSTALLING CASING RAMS] in the BOP stack, the rams for casin2 or liner [RAM BONNETS] must be function pressure- tested [TESTED] to the required pressure before running casing; (G) BOPE test results must be recorded as part of the daily record required by 20 AAC 25.070(1), and must be provided to the commission, in a format approved by the commission, within five days after completing the test; (H) at least 24 hours notice of each BOPE function pressure test must be provided to the commission so that a commission representative can witness the test; (Eff. 4/13/80, Register 74; am 2/22/81, Register 77; am 4/2/86, Register 97; am 1117/99, Register 152; am 10/24/2004, Register 172; am12/2812006, Register 180; am~_/_, Register ~ Authority: AS 31.05.030 Register _, '0 MISCELLANEOUS.ARDS 20 AAC 25.285(1)(5) is amended to read: (5) after they are installed [INSTALLING CASING RAMS] in the BOP stack, the rams for casin2: or liner [RAM BONNETS] must be function pressure-tested [TESTED] to the required pressure before running casing or liner; (Eff. 4/2/86, Register 97; am 11/7/99, Register 152; ami 2/28/2006, Register 180; am~~_, Register ~ Authority: AS 31.05.030 Amended BOPE Regulation (effective Date 7-12-07) . . Subject: Amended BOPE Regulation (effective Date 7-12-07) From: Jody Colombie <jody _ colombie@admin.state.ak.us> Date: Wed, 20 Jun 200709:39:35 -0800 To: UI1disClosed-l'~cipiel1ts:; BCC:Chrristíne HåIisen.<c.hansen@iogcc.state;.øk/qs>, Terrie Bû:bble<hubbletl@bp;corrt:>,Sondra Stewman <StewmaSD@Bp.coi'n>,stanekj <stanekj@unocal.com>,trnijrl <trmjrl@aøl.com>, jdarlirtgton <jdarlington@forestoil.com>, nelson <knelson@petroleu~ews;.c?Il1>' Mark Dalton <mark.dalton@hdrinc.com>, Shannon Donnelly <shannon.donnelly@conocopnillips.com>, "Mark P. Worcester" <ITlal'k.p.worcester@cønoc?phillips.com>, Bob <bob@in.letkeeper.org>, Dave Roby <dave.:..roby@?acJ,ITlí~.state.ak. us>; bbritc~.<b?ritch@alaska.net>, mjnelson <mjnelson@purvingertz.~om>, Charles O'D~nryRll <charles. 0' donn~~l@veco .com>, "Randy L. Skillern" <SkilleRL@BP.com>, "Debora.~J. J?nes" <JonesD6@B~'.9?Il1>' "Steve~~.Rossberg" <RossbeRS@BP.com>, Lois <:lois@inletkeeper.org>, Dan Bross <kuacn~:ws@kuac.org>-, Gordon POSþisil<PØspisG@B!>.com>,"Franêis S. SOmmel"'. <SommêtlB'~~ßP . com>, Mike.lSchultz <Mikel.Scnultz@BP.com>,U]Nick W. Glover" <GloverNW@BP;c~m:>;"Daryl J. ~l~ppin" <KleppiD~.@?ß~.com?-, "J~et D.~latt" -<PlattJD@BP.com:>,"~osanI'l~M. J aqpR~711¡' <JacobsRM@BP.com>, ddonkel,,%ddonkel@cfl.rr.coll1l:>,mckay <mc.l{a.y@gci.net> ,B~bara F Fullmer <barbara.f.fulhner~conocophillips.cøIl1>' . doug_ schultze <:doug_ schu1tze~xtoenergy . com> ,. Hank Alford.<hank.alford@exxonmobil.coIl1:>,Mark Kovac <ye~~91@gci.netJ,~spfoff <gspf~ff@aurorapower.com>, GreggNady <gregg.nady@s~ell.com>, F7~d Steece <fred.steece@state.sd.us>, rcrotty <rcrotty@ch2m.com>, jejones <jejon~s@aurorapower.com>, dapa <dapa@alaska.net>, eYaÏlcy <eyancy@seal-tite.net>, "JamesM.Ruud" <james;l11.ruud@conocoþhillips.com>, Brit Lively <bl@mapalaska.coIIlS>, jah <jah@dnr.state.ak.us>, buonoje <buonoje@bp.com>, . Mark Hanley <mark_ hanley@anadarko.êom:>, Julie HOllie <julie _ houle@dnr.state.ak.us>, John W Katz <jwkatz@alaskadc.org>,~ablerk<tabler~@unoca1.com>, Brady <bra.dY~a.oga.org>, Brian l-Iavelock <beh@dnr.state.ak.us>, JimWhíte¿Jimwhíte@satx.rr.com>, "John S. Ha'N?tt~" ¿J~hn.s.hawortn@exxonmobi1.com>, marty <marty@rkindu~trial.com:>,gharnmons <ghammons;@}a?l.coITl>' rmcleanFrmclean@pobox.alaska.net>,mkm7200..<mi<l117200@aol:com>, Brian Gilles~iRFif'bIl1g@uaa.alaska.edu>, David L Boelens <dboelens@aurorapower.com>, Todd Durkee <todd:dUl'kee@anadarko.com>, Gary Schultz <gary _schultz@dnr.state:ak.us:>,.Wayne Rancier <RANCIER@petro"êanada.ca>, Brandon Gagnon <bgagnon@brenalaw.col11:>,Paul Winslow <pmwinslow@f07estoil.col11> ,§harmaineCo~eland <copelasv@bp.c?1;n>;. Kristin Dirks <kristin_ dirks@dp,r.state.ak. us>,KaY~Rll Zeman<kjzeman@marathonoiLcom>, John Tower <John.or?wer@eia.doe.gov>, Bill FowlerF~ill__ F owler@aIladarko.S()M:;"')~9gtt Cranswick <scott.cranswick@mms.gov> , Bl'ad 11cKill1l¡<:ITltkimbs@B~,com>,~~es SCÌ)'.err <james.scherr@mms.gov>, Tim Lawlo~<:Tim_Lawlor@ak.blIIl,gov>,Lynryda Kahn <L ynnda_ Kahn@fws.gov> , Jerry. Dethle.fs<Jerry. C.Detl1lefs@conocophil~~l's.com>,crockett@?aoga.org, Tamera Sheffield<sheffield@aoga.org:;,., Jon Goltz <Jon.Goltz@conocophillips.com>, Roger Belman <roger.belman@conocophillips.com>,MindyLewis <mlewís@brenalaw.com>, KariMoriarty <moriarty@aoga.org>, Patty Alfaro <palfaro@yahoo.com>, Gary ~ogers <gary _rogers@revenue.state.ak;us>, Arthur Copoulos <Arthur__Copoulos@dnr.state.ak.us>, Ken <klyons@otsintl.com>, Steve Lambert <salambert@unocal.com>, Joe Nicks <news@radiokenai.com>, Jerry McCutcheon <susítnahydron~w@yahoo.com>, BillWalker<bill..wwa@ak.net>, Paul Decker <paul_deêkê~@}dnr.state.ak.us>, ~leutians East Boroµgh <admin@ale~tiansea~t.org>, Marquerite kremer <marguRrite _kremer@dnr:state'ak'us>, Mike Mason <mike@?~bbi.orgJ' Garland Ro?inson <gbrobinson@ma:~thonoil.com>, C~Il1Y Taylor <carnmy__taylor@dnr·state.ak.us>, Thomas;E Maundcr <tom_ma.under@admin.state.ak.usJ,)Stephenp·Davies <ste~e_daviR~@admin.state.ak;us>, Keith Wiles <kwiles@marathonoil.com>;Deanna Gamble <dgamble@kakívik.com>, JamesB Regg lof2 6/20/2007 9:39 AM Amended BOPE Regulation (effective Date 7-12-07) . . <jim_regg@admin.state.ak.us>, Catherine P Foerster <cathy_foerster@admin.state.ak.us>, gregory micallef <micallef@cle ·re.net>, Laura Silliphant <laura_silliphant@dnr.state.ak.us>, David Steingreaber <david.e.st greaber@exxonmobil.com>, akpratts@acsalaska.net, Robert Campbell <Robert.Campbell@reuters.com>, Steve Moothart <steve_moothart@dnr.state.ak.us>, Anna Raff <anna.raff@dowjones.com>, Cliff Posey <cliff@posey.org>, Meghan Powell <Meghan.Powell@asrcenergy.com>, Temple Davidson <temple_davidson@dnr.state.ak.us>, Walter Featherly <WFeatherly@PattonBoggs.com>, Tricia Waggoner <twaggoner@nrginc.com>, John Spain <jps@stateside.com>, Cody Rice <Cody_Rice@legis.state.ak.us>, John Garing <garingJD@bp.com>, Harry Engel <engelhr@bp.com>, Jim Winegarner <jimwinegarner@brooksrangepetro.com>, Matt Rader <matt_rader@dnr.state.ak.us>, carol smyth <carol.smyth@shell.com>, Arthur C Saltmarsh <art_saltmarsh@admin.state.ak.us>, Chris Gay <cdgay@marathonoil.com>, foms@mtaonline.net, Rudy Brueggeman <rudy.brueggemann@international.gc.ca>, Cary Carrigan <cary@kfqd.com>, Sonja Frankllin <sfranklin6@bloomberg.net>, Mike Bill <Michael.Bill@bp.com>, Walter Quay <WQuay@chevron.com>, "Alan Birnbaum <\"\"Alan J Birnbaum \">" <alan _ birnbaum \"@law.state.ak.us>, Randall Kanady <Randall.B.Kanady@conocophillips.com>, MJ Loveland <N1878@conocophillips.com>, Christian Gou-Leonhardt <Christian _ Gou- Leonhardt@legis.state.ak.us>, Cynthia B Mciver <bren _ mciver@admin.state.ak.us> Jody Colombie <jody colombie(G),admin.state.ak.us> Special Staff Assistant Alaska Oil and Gas Conservation Commission Department of Administration Content-Type: application/msword post _ hearing_ notice.doc Content-Encoding: base64 Content-Type: application/msword Final Regulation.doc Content-Encoding: base64 20f2 6/20/20079:39 AM Mary Jones XTO Energy, Inc. Cartography 810 Houston Street, Ste 2000 Ft. Worth, TX 76102-6298 George Vaught, Jr. PO Box 13557 Denver, CO 80201-3557 John Levorsen 200 North 3rd Street, #1202 Boise, 10 83702 Baker Oil Tools 4730 Business Park Blvd., #44 Anchorage, AK 99503 Ivan Gillian 9649 Musket Bell Cr.#5 Anchorage, AK 99507 Jack Hakkila PO Box 190083 Anchorage, AK 99519 Kenai National Wildlife Refuge Refuge Manager PO Box 2139 Soldotna, AK 99669-2139 Cliff Burglin PO Box 70131 Fairbanks, AK 99707 Williams Thomas Arctic Slope Regional Corporation Land Department PO Box 129 Barrow, AK 99723 . . David McCaleb IHS Energy Group GEPS 5333 Westheimer, Ste 100 Houston, TX 77056 Jerry Hodgden Hodgden Oil Company 408 18th Street Golden, CO 80401-2433 Michael Parks Marple's Business Newsletter 117 West Mercer St, Ste 200 Seattle, WA 98119-3960 Schlumberger Drilling and Measurements 2525 Gambell Street #400 Anchorage, AK 99503 Jill Schneider US Geological Survey 4200 University Dr. Anchorage, AK 99508 Darwin Waldsmith PO Box 39309 Ninilchick, AK 99639 Penny Vadla 399 West Riverview Avenue Soldotna, AK 99669-7714 Bernie Karl K&K Recycling Inc. PO Box 58055 Fairbanks, AK 99711 Mona Dickens Tesoro Refining and Marketing Co. Supply & Distribution 300 Concord Plaza Drive San Antonio, TX 78216 Richard Neahring NRG Associates President PO Box 1655 Colorado Springs, CO 80901 Mark Wedman Halliburton 6900 Arctic Blvd. Anchorage, AK 99502 Ciri Land Department PO Box 93330 Anchorage, AK 99503 Gordon Severson 3201 Westmar Cr. Anchorage, AK 99508-4336 James Gibbs PO Box 1597 Soldotna, AK 99669 Richard Wagner PO Box 60868 Fairbanks, AK 99706 North Slope Borough PO Box 69 Barrow, AK 99723 \Ñ\~ \~of[ F \\L '(-0\ . . Page 1 of 1 Colombie, Jody J (DOA) From: Bailey, Frank T (OOA) Sent: Wednesday, July 18, 2007 4:23 PM To: Colombie, Jody J (OOA) Subject: FW: The status of Bill SB 109 has changed Woo hoo! It's a done deal. F From: BTMF@legis.state.ak.us [mailto:BTMF@legis.state.ak.us] Sent: Wednesday, July 18, 2007 4: 12 PM To: Bailey, Frank T (ODA) Subject: The status of Bill 5B 109 has changed The status of Bill SB 109: Oil & Gas Conservation Commission has changed from TRANSM TO GOVERNOR to status CHAPTER 54 SLA 07 To see the bill go to SBJü9 if your browser does not support htmllinks cut and paste the following URL Address http://www.legis.state.ak.us/basis/get_ bill.asp?session=25&bill=SB+ 1 09 7/20/2007 -:%Þ9 ·. . SEAN PARNELL LIEUTENANT GOVERNOR WWWLTGOV.STATE.AK.US PO Box 110015 Juneau, Alaska 99811-0015 907.465.3520 FAX 907.465.5400 Fax LT _ GOVERNOR@GOV.STATE.AK.US STATE OF ALASKA OFFICE OF THE LIEUTENANT GOVERNOR JUNEAU MEMORANDUM To: Kevin Brooks, AAC Contact Department of Administration Jason Hooley X ~ Special Assistant l) Filed Regulations: Alaska Oil & Gas Conservation Commission Date: June 20, 2007 From: Telephone: (907) 465-4082 Re: 20 AAC 25: Blowout Prevention Equipment Testing ,;)- ~' " .'th! .." Attorney General File: 993-07-0118 Regulation Filed: 6.12.2007 Effective Date: 7.12.2007 Print: 183, October cc with enclosures: Linda Miller, Department of Law Eugene Harnett, Administrative Regulation Review Committee ,)Æichele Skarvelis, LexisNexis V John Nonnan, AOGCC R~gister ID-, Ovh ~O ì MISCELLANEOU.ARDS 20 AAC 25.035(e)(1O) is amended to read: (10) the BOPE must be tested as follows: (A) when installed, repaired, or changed on a development or service well and at time intervals not to exceed each 14 days thereafter, BOPE, including kelly valves, emergency valves, and choke manifolds, must be function pressure-tested to the required working pressure specified in the approved Permit to Drill, using a non-compressible fluid, except that an annular type preventer need not be tested to more than 50 percent of its rated working pressure; however, the commission will require that the BOPE be function pressure-tested weekly, if the commission determines that a wèekly BOPE pressure test interval is indicated by a particular drilling rig's BOPE performance; (B) when installed, repaired, or changed on an exploratory8i- stratigraphic ,"",-, -t'~t' test well and at least once a week thereafter, BOPE, including kelly valves,éìnergency valves, and choke manifolds, must be function pressure-tested to the required working pressure specified in the approved Permit to Drill, using a non-compressible fluid, except that an annular type preventer need not be tested to more than 50 percent of its rated working pressure; (C) if any BOP equipment components have ~een used for well control or other equivalent purpose, or when routine use of the equipment may have compromised its effectiveness, the components used must be function pressure-tested, before the next wellbore entry, to the required working pressure specified in the approved Perinit to Drill, using a non-compressible fluid, except that an annular type preventer need not be tested to more than 50 percent of its rated working pressure; R~gister ,g 3, O{.4Ð \.~O ì MISCELLANEOU.ARDS (D) BOP ram and annular components except blind rams must be function-tested weekly, and all BOP ram and annular components must be function-tested after an action that disconnects the hydraulic system lines from the BOPE, except that if the workstring is continuously in the well, function-testing of blind rams must be performed as· soon as possible after the workstring is pulled out of the well and the BRA clears the BOP; (E) for each BOPE test during drilling and completion operations, variable bore rams must be function pressure-tested to the required pressure on the smallest outside diameter (OD) and largest outside diameter (OD) tubulars that may be used during that test cycle, except that variable bore rams need not be tested on BRAs and drill collars; -;) ~: ~H~ (F) after they are installed [INSTALLING CASING RAMŠ] in the BOP stack, the rams for casiw!: or liner [RAM BONNETS] must be function pressure- ~ [TESTED] to the required pressure before running casing; (G) BOPE test results must be recorded as part of the daily record required by 20 AAC 25.070(1), and must be provided to the commission, in a format approved by the commission, within five days after completing the test; (H) at least 24 hours notice of each BOPE function pressure test must be provided to the commission so that a commission representative can witness the test; ~ff. 4/13/80, Register 74; am 2/22/81, Register 77; am 4/2/86, Register 97; am 11/7/99, Register 152; am 10/24/2004, Register 172; amI2/28/2006, Register 180; am Î / ,£.. /'2-00 ~ Register ~ Authority: AS 31.05.030 ~egister ~, , ° "4c'.00 ~ MISCELLANEO.OARDS 20 AAC 25.285(t)(5) is amended to read: (5) after they are installed [INSTALLING CASING RAMS] in the BOP stack, the rams for casinl! or liner [RAM BONNETS] must be function Dressure-tested [TESTED] to the required pressure before running casing or liner; ~i~tn~Eff. 4/2/86, Register 97; am 11/7/99, Register 152; am12/28/2006, Register 180; am -.:LJ «"1.. 1 ').007, Register ~ Authority: AS 31.05.030 ~~~> ~, ~. e ORDERCERTŒY1NG THE CHANGES TO REGULATIONS OF ALASKA OIL AND GAS CONSERVATION COMMISSION The attached 3 pages of regulations, dealing with blowout prevention equipment testing under 20 AAC 25, are hereby certified to be a correct copy of the regulation changes that the Alaska Oil and Gas Conservation Commission adopted at its April 25, 2007 meeting, under the authority of AS 31.05.030 and 31.05.040 and after compliance with the Administrative Procedure Act (AS 44.62), specifically including notice under AS 44.62.190 and 44.62.200 and opportunity for public comment under AS 44.62.210. This action is not expected to require an increased appropriation. On the record,. in considering public comments, the Alaska Oil and Gas Conservation Commission paid special attention to the cost to private persons of the regulatory action being taken. The regulation changes described in this order take effect on the 30th day after they have been filed by the lieutenant governor, as provided in AS 44.62.180. .,. , .~,- DATE: April 25. 2007 Anchorage ,~ :¡;;{MV" E. MertiVl€Ai j¡-. I, Sean Parnell, Lieutenant Governor for the State of Alaska, certify that on ^ . , ~ Lùt\ t?- \ 2- ' 2007 at Lf:52 f .m., I filed the attached regulations according to the provisions of AS 44.62.040 - 44.62.120. FILING CERTŒICATION j;;. .øtnteJJ Effective: ::r"J \'Z.-/ )..007. I (,, D~-I-ow . Register: ~. e FOR DELEGATION OF LIEUTENANT GOVERNOR'S AUTHORITY I, SEAN PARNELL, LIEUTENANT GOVERNOR OF THE STATE OF ALASKA, as authorized by AS 44.19.026, designate the following State official to serve as temporary custodian of the State seal and as the officer to perform the Administrative Procedures Act filing functions and the authenticating functions of the Lieutenant Governor during such time as I act as Governor, am absent from the State, or am otherwise unavailable to perform these functions: ,~> ,~'--, Jim Merriner, Chief of Staff, Office of the'Lieutenant Governor IN TESTIMONY WHEREOF, I have signed and affixed the Seal of the State of Alaska, at Anchorage; on January 10, 2007. ....~~...... SEAN PARNELL LIEUTENANT GOVERNOR [Fwd: FILED REGULATION NOTIFICA TIOIEMO] . Subject: [Fwd: FILED REGULATION NOTIFICATION MEMO] From: John Norman <john_norman@admin.state.ak.us> Date: Tue, 12 Jun 2007 17: 11 :26 -0800 To: Jody J Colombie <jody_colombie@admin.state.ak.u CC: Dan T Seamount <dan_seamount@admin.state.ak. thy P <cathy_foerster@admin.state.ak.us>, James B Regg <jim_regg@admin.state.ak.us> -------- Original Message -------- Subject:FILED REGULATION NOTIFICATION MEMO Date:Tue, 12 Jun 2007 16:44:26 -0800 From:Merriner, James E (GOV) <iim.melTiner(a}alaska.gov> To:Norman, John K (DOA) <john.norman(a}alaska.gov>, Behr, Deborah E (LAW) <deborah.behr(a}alaska.gov>, Miller, Linda J (LAW) <linda.miller(a}alaska.gov>, Weaver, Steven C (LAW) <steve.weaver(a}alaska.gov>, Messing, Kevin J (LAW) <kevin.messing(~alaska.gov>, Harnett, Eugene P (LAA) <eugene harnett(a}legis.state.ak.us> CC:Hooley, Jason M (GOV) <iason.hooley(a}alaska.gov> FILED REGULATION NOTIFICATION EMAIL To: john norman@administration.state.ak.us deborah behr@law.state.ak.us linda miller@law.state.ak.us steve weaver@law.state.ak.us kevin messing@law.state.ak.us eugene hamett@legis.state.ak.us CC: jason hooley@gov.state.ak.us Subject: Filed Regulations: 993-07-0118 On June 12,2007 Lieutenant Governor Sean Parnell filed regulations from the Alaska Oil and Gas Conservation Commission re: Blowout Prevention Equipment Testing (20 AAC 25); AG File 993-07-0118. John K. Norman <John Norman(a}admin.state.us> Chairman Alaska Oil & Gas Conservation Commission 1 of 1 6/18/20073:38 PM #8 . . Amended Regulations Dealing with Blowout Prevention Equipment The Alaska Oil and Gas Conservation Commission has amended its regulations dealing with blowout prevention equipment testing requirements in 20 AAC 25.035(e)(10) and 20 AAC 25.285(f)(5). The amendment changes the type of test performed after installation of casing rams in the blowout preventer stack. A function-pressure test of the casing rams is now required before running casing or liner. It replaces the requirement to test only the ram bonnets. The Lieutenant Governor signed and filed the regulation changes on June 12,2007, with an effective date of July 12,2007. For further information or to obtain a copy of the amended regulations, contact Jody Colombie at (907) 793-1221, fax (907) 276-7542, or e-mail Jody Colombie(cV,admin.state.ak.us. #7 . . . MEMORANDUM State of Alaska Department of Law To: John K. Norman, Chair Alaska Oil and Gas Conservation Commission Dept. of Administration Date: June 8, 2007 File No.: 993-07-0118 ~~// From: Deborah E. Be~ Chief Assistant Attorney General and Regulations Attorney Legislation and Regulations Section Tel. No.: 465-3600 Re: AOGCC Regulations re: Blowout Prevention Equipment Testing (20 AAC 25) Under AS 44.62.060, we have reviewed the Alaska Oil and Gas Conservation Commission's amendment of these regulations and approve the changes for filing by the lieutenant governor. A duplicate original of this memorandum is being furnished the lieutenant governor, along with the 3 pages of regulations and the related documents. You might wish to contact the lieutenant governor's office to confirm the filing date and effective date of the attached regulation changes. The March 2,2007 public notice and the April 25, 2007 certification order both state that this action is not expected to require an increased appropriation. Therefore, a fiscal note under AS 44.62.195 is not required. In accordance with AS 44.62.l25(b)(6), some corrections have been made III the regulations, as shown on the attached copy. DEB:pvp cc w/enc.: Kevin Brooks, Regulations Contact Dept. of Administration Jody Colombie Alaska Oil and Gas Conservation Commission Dept. of Administration Alan Birnbaum, Assistant Attorney General Anchorage . '" J, .00 MISCELLANEOutlOARDS Register -' 20 AAC 25.035(e)(1O) is amended to read: (10) the BOPE must be tested as follows: (A) when installed, repaired, or changed on a development or service well and at time intervals not to exceed each 14 days thereafter, BOPE, including kelly valves, emergency valves, and choke manifolds, must be function pressure-tested to the required working pressure specified in the approved Permit to Drill, using a non-compressible fluid, except that an annular type preventer need not be tested to more than 50 percent of its rated working pressure; however, the commission will require that the BOPE be function pressure-tested weekly, if the commission determines that a weekly BOPE pressure test interval is indicated by a particular drilling rig's BOPE performance; (B) when installed, repaired, or changed on an exploratory or stratigraphic test well and at least once a week thereafter, BOPE, including kelly valves, emergency valves, and choke manifolds, must be function pressure-tested to the required working pressure specified in the approved Permit to Drill, using a non-compressible fluid, except that an annular type preventer need not be tested to more than 50 percent of its rated working pressure; (C) if any BOP equipment components have been used for well control or other equivalent purpose, or when routine use of the equipment may have compromised its effectiveness, the components used must be function pressure-tested, before the next wellbore entry, to the required working pressure specified in the approved Permit to Drill, using a non-compressible fluid, except that an annular type preventer need not be tested to more than 50 percent of its rated working pressure; Register -' ttoo MISCELLANEOulOARDS (D) BOP ram and annular components except blind rams must be function-tested weekly, and all BOP ram and annular components must be function-tested after an action that disconnects the hydraulic system lines from the BOPE, except that if the workstring is continuously in the well, function-testing of blind rams must be performed as soon as possible after the workstring is pulled out of the well and the BHA clears the BOP; (E) for each BOPE test during drilling and completion operations, variable bore rams must be function pressure-tested to the required pressure on the smallest outside diameter (OD) and largest outside diameter (OD) tubulars that may be used during that test cycle, except that variable bore rams need not be tested on BHAs and drill collars; (F) after they are installed [INSTALLING CASING RAMS] in the BOP stack, the rams for coine: or liner [RAM BONNETS] must be function pressure- tested [TESTED] to the required pressure before running casing; (G) BOPE test results must be recorded as part of the daily record required by 20 AAC 25.070(1), and must be provided to the commission, in a format approved by the commission, within five days after completing the test; (H) at least 24 hours notice of each BOPE function pressure test must be provided to the commission so that a commission representative can witness the test; ~ff. 4/13/80, Register 74; am 2/22/81, Register 77; am 4/2/86, Register 97; am 11/7/99, Register 152; am 10/24/2004, Register 172; amI2/28/2006, Register 180; am~~_, Register ~ Authority: AS 31.05.030 Register _, ~OO MISCELLANEO~OARDS , 20 AAC 25.285(f)(5) is amended to read: (5) after they are installed [INSTALLING CASING RAMS] in the BOP stack, the rams for casine: or liner [RAM BONNETS] must be function Dressure-tested [TESTED] to the required pressure before running casing or liner; ~ . . Eff. 4/2/86, Register 97; am 1117/99, Register 152; amI2/28/2006, Register 180; am~ ~ _, Register --.J Authority: AS 31.05.030 . ~ @~ U~r:JJA . DEPARTMENT OF LAW SARAH PALIN, GOVERNOR P,O. Box 110300 Juneau, Alaska 99811.0300 Phone: (907) 465-3600 Fax: (907)465-2075 May 11,2007 The Honorable SarabPalin Governor State of Alaska P.O. Box 110001 Juneau, Alaska 99811-0001 Re: CSSB l09(RES) -- containing amendments to the Alaska Oil and Gas Conservation Act, AS31.05, relating to the following: the Alaska Oil and Gas Commission's authority to regulate to protect health and safety; the regulation of . oil and gas drilling; the regulation of the underground injection of gas; information filed with the commission; water testing in connection with wells drilled for coal bed methane production testing; applications and fees ·fot drilling permits; penalties for AOGCA-related violations; the reconsideration and appeal of commission actions; and the recovery of costs for investigations and hearings Our file; 883..07-0027 Dear Governor Palin, We have reviewed CSSB 109(RES), which contains amendments to the Alaska Oil and Gas Conservation Act (AOGCA), AS 31.05. AOGCA is the governing statute of the Alaska Oil and Gas Conservation Commission (commission). The bill contains the foUowing AOGCA provisions: th¢ commission's authority to regulate· to protect public health and safety; the regulation of oil and gas drilling; the regulation oftheunderground injection of gas; information filed with the commission; water testing in · connection with wells· drilled· for coal bed methane production testing; applications and fees for drilling permits; penalties for AOGCA-related violations; reconsideration and appeal of commission decisions; and the recovery of costs for investigations and hearings. . . Hon. Sarah PaHn,· Governor Our file: 883-07-0027 May 11,2007 Page 2 Sectìon 1 of the bill would amend tbe AOGCA statement of intent. Consistent with sees. 10 and 15, sec. 1 confinns that AS 22.10.020(d) and court rules have superseded ineon.sistent AOGCA appeal provisions in AS 31.05.080. Also, consistent witb sec. 14, sec. 1 would confirm tbat tbe commission may administratively assess civil penalties, and,. ifnotpaid, the penalties are judicially recoverable. Section 2 of the bill would repeal and reenact AS3L05.030(d)(2) to clarify that the commission may require the making and· fiHngofcertain reports, logs, and surveys and the identification and <filing of "0.11 other subsurface information"on any well under the commission's authority. While the reqlJired reports must still be filed within 30 days, the other tequired documents and information mustbe filed withìn90 days, unless the commission grants an extension. Also, sec. 2 would substitute the commission for an outdated reference (ìn AS 31.05 .030(d)(7» to the Department of Natural Resou:rœs. Section 3 of the bill, consistent with sec. 1, would amend AS 31.05.030(e)to clarify that, in addition to regulating for conservation purposes, the commission may regulate oil and gas operations for public health and safety purposes (e.g., to prevent blowouts). Section 3 also provides, however, that, with respect to such matters, the commission may not adopt regulations that conflict with regulations ofthe Departmentof Labor and Workforce Development or the Department of Environmental Conservation. Section 3 would make the following additional changes to. AS 31.05.030(e): (1) substitute more precise language for the term "shootinglt in AS 31.05.030(e)(1)(B); (2) add AS 31.05.030( e)(1)(G) to. clarify that the commission may regulate the underground injection of gas for purposes of storage; and (3) clarify that, under AS 31.05.030(e)(2), the commission may regulate the disposal of certain wastes in the annular space of any well under its authority. Section 4 of the bUlwould amend AS 3 L05.030(f}to update the classifications of wells regulated by the commission. It also amends AS 31.05.030(f) to make clear that the commission may classify an entire well or a specific portion ofa well as an exploratory, development, service, or stratigraphic test well. Section 5 of the bill would amend AS 31.05.030(j), relating to coal bed methane operations. AS 31.05..030(j)(2)(D) now requires a "water wen testing program" whenever a well is drilled for production or production testing of coal bed methane. Production testing, a short-tenn activity that may occur during the exploration. phase, presents minimal risk to the environment. Accordingly, requiring a water well testing program for production testing may discourage exploration, but provide no environmental or public health benefit. Section 5 would amend AS 3 L05.030G)(2)(D) to require a water well testing program only in connection with the regular production of coal bed methane. · e Hon. Sarah Palin, Governor Our file: 883-07..0027 May 11, 2007 Page .3 Section 6 of the hill would amend AS 31.05.035(a)(I) -- just as sec. 2 of the bill repeals and reenacts AS 3.1.05.030(d)(2) -- to clarify that the commission is authorized to require the making and filing of certain reports, logs, and surveys and the. identification and filing of "an other subsurface infonnation" on any wen under the commission's authority. Section 1 ofthe..bill would amend AS 31.05.035(c} tønarrow the range of data the commission must keep confidential for 24 months following the .30-dayfilingperiod specified in AS .31.05.035(b). Section 7 would require the commission to keep confidential only commission-required data that relate to exploratory and stratigraphic test wens, and any portions of an application for a permit to drill such a wen that the commission determines contain proprietary engineering or geotechnical information. This change is consistent with the practice in most other oil·and gas producing states.not to grant confidentiality to well data in established oil and gas fields. Section 7, however, would protect data derived from wells drilled within the boundaries of an existing oil or gas field where the wens were drilled to delineate a pool or near a lease boundary. Section 7 also would amend AS 31.05.035(c) to clarify that the following infonnationis public: infonnation regarding well surface and bottom hole locations, well depth, wen status, production data, and production reports. Section 8 of the bill would amend AS.3L05.035 to add a new provision: subsec. (t). AS 31.0S.035(d) provides that information voluntarily filed with the. commission shan be kept confidential on request. Section 8 would clarify that AS 31.05..035(d) does not apply to infonnation submitted in connection . with a petition for a commission order or a hearing before the commission: i.e., such infonnation would not be kept confidential solely because it was voluntarily provided to the commission. Section. 8 is consistent with the co.mmission's practice of requiring applicants to show that infonnation is entided to confidentiality under another legal provision -- e.g.~ because it is proprietary. Section 9 of the bìU would amend AS 31.05.080(a), concerningapp1ications for reco.nsideration and appeals of commission decisions, merely by replacing the term ttrehearing" with the tenn "reconsiderationlland replacing the tenn "setting forth" with "setting out. tt Section 10 ofthebi11 would repeal and reenact AS 31.05.080(b), which is essentially unchanged ftom.a 1955 territo.rial enactment, by eliminatìng obsolete appeal provision.s, thereby clarifying that appeals from commission decisions are governed by the procedures of the AS 22.1 0.020( d), the judiciary statute, and court rules. Thus, sec. to incorporates the Alaska Supreme Court's holding in Allen v. Alaska. Oil and Gas Conservation Commin, 147 P.3d 664, 668 (Alaska 2006), that AS 22.1O.020(d) impliedly . . Hon. Sarah Palin, Governor Our file: 883-07-0027 May 11,2007 Page 4 repealed AS 31.05.080(b), Section 10 would retain the following provisions of AS 31.050.080(b): (1) only persons dissatisfied witb the outcome of their reconsideration applications may appeal to superior court; and (2) only questions presented by reconsideration applîcations may be appealed. Section 11 .of thebiU would amend AS 31.05.085(a) by adding a new provision, subsection (a)(3), authorizing the commission to recover the costs of the time of commission staff spent on investigations and hearings relating to violations of any AOGCA-related requirement: i.e., any requirement of AS31.05, a commission regulation, or a.c.ommission-issuedorder, stipulations, or permit. Sucb c.osts are allocated am.ong the parties fI as is just under the . circumstances." Section 12 of the bill would repeal and reenact AS 31.05.090 to clarify that a permit must be received before drilling any of the following types of wells: (1) wells in search of gas or oil; (2) wells in support of the recovery or production øfoi) or gas; (3) gas storage underground injection wells; or (4) underground injection. wells for wbich the state has acquired primary enforcement responsibility und¢r AS 31.05.030(h). Section 12 would c1arify the following: (1) a separate permit application must be submitted for each wen; (2) the commission must promptly approve or deny each application; and (3) in doing so, the commission shall consider whether tbe proposed well is contrary to law and whether, and if so to what extent, tbe applicant is in violation of an AOGCA-related requirement. Also, sec. 12 would delete the $1 00 per well permit. fee: for several yeal'$, the commission has been. fully funded by a regulatory cost .charge; CQsts relating tQ processing permit applications can be efficiently collected as part oftbat charge. Section 13 of the bill would amend AS 31.05.093(c) by deleting from the regulatory cost charge formula the reference to the $100 fee for a permit to drill. Section 14 of the bill would. repeal and reenact AS 31.05.150, relating to penalties, by increasing the potential penaltyamount'$ ~nd adding a list of criteria for the commission to consider in determining the amount of a civil penalty under AS 31.05.150(a). Section 14(a) would clarify that, in addition to the penalties in the other subsections of AS 31.05.150, the commission may, under AS 31.05.150(a), impose a civil penalty. Section 1.4(a) authorizes the commission to impose a civil penalty of not more than $100,000 for an initial violation and not mote tban $10,000 for each day thereafter on which the violation continues. Sections 14(b) and 14(c) would reword AS 31.05.150(b) and AS 31.05.150(c) to clarify that the term nviolationn includes a violation of any AOOCA-related requirement. Section 14(d) would c1arify that, in addition to the penalties in the other subsections of AS 31.05.150, the commission may, under AS 31.05.150(e), impose a civil penalty for each 1,000 cubic feet of wasted natural gas. Section 14(d) doubles the potential amount ofthepenalty: i.e., from the fair market . ¡ . . Hon.. Samb P~lin, Governor Our file: 883-07-0027 May 11,2007 Page 5 value of the natural gas attbepointof waste to twice the fair market value. Accordingly, Section 14(d) essentially would shift from the Department of Revenue to the commission tbe penalty for wasted gas: prior to the cbanges to the oil and gas tax., the Department of Revenue also imposed a penalty equal to the fair market value of tbewasted gas, Section 14(e) would increase tbeamount of the fine for knowing violations from $5,000 a day for each day of violation to $10,000 a day and adopts theunifonndefinition of "violation." Section.l4(f) would amend AS 31.05.0150(d) to clarify that the civil penalties may be assessed by the commission. Section 14(g) would add a new subsection that lists the criteria the commission sball consider in detennining the amount. ofa civil penalty assessed under AS 31.05.150(80). Section 15 of tbe bill, consistent with sec. 10, would repeal AS31.05.080(c), relating to stays of commission actions pending appeal, and repeals AS 31,05.080(d), relating to tbe operation of court rules in proceedings challenging commission actions. Like AS 31.05.080(b), AS 31.05.080(c) and AS 31.05.080(d) were enacted before statehood. Section 16 of the bill, consistent with sec. 9, merely would. add a revisor's instruction to change the heading of AS 31.05.080 from IIRehearlngsand appeals" to "Reconsiderationsand appeals. II Section 17 would make tbe amendments to the AOGCA effective immediately under AS OLlO.070(c). We see no constitutional or other legal problems with this bill. Sincerely, ~4L ~. Talis J. Colberg Attorney General TJC:AB:pvp #6 . . MEMORANDUM STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION TO: Regulations Attorney Legislation/Regulation Section Department of Law DATE: April 25, 2007 FROM: SUBJECT: Request for Legal Review of Regulations Project on Blowout Prevention Equipment Testing Requirements 993-07-0118 20 AAC 25.035(e) 20 AAC 25.285(t)(5) We are requesting review and approval of the attached fmal regulations on changes to the method of determining blowout prevention equipment testing, which were adopted by Alaska Oil and Gas Conservation Commission. Enclosed are the following documents: 1. Original and one copy of the fmal regulations for the Department of Law's use; 2. original signed and dated certification order; 3. original public notice; 4. original additional regulations notice information form distributed with the notice; 5. original publisher's affidavit of publication; 6. original affidavit of notice; 7. affidavit of oral hearing; 8. affidavit of commission action; 9. excerpt ITom unapproved minutes ITom the April 25, 2007 meeting; 10. affidavit of notice of proposed adoption and furnishing of additional information. We have worked with Assistànt Attorney General Alan Birnbaum on this project. Upon completion of your review, please forward the regulations to the lieutenant governor for filing. In accordance with AS 44.62.180, the regulation changes would take affect on the 30th day after they ~ave been filed. Register _, ~oo MISCELLANEOulOARDS 20 AAC 25.035(e)(10) is amended to read: (10) the BOPE must be tested as follows: (A) when installed, repaired, or changed on a development or service well and at time intervals not to exceed each 14 days thereafter, BOPE, including kelly valves, emergency valves, and choke manifolds, must be function pressure-tested to the required working pressure specified in the approved Permit to Drill, using a non-compressible fluid~ except that an annular type preventer need not be tested to more than 50 percent of its rated working pressure; however, the commission will require that the BOPE be function pressure-tested weekly, if the commission determines that a weekly BOPE pressure test interval is indicated by a particular drilling rig's BOPE performance; (B) when installed, repaired, or changed on an exploratory or stratigraphic test well and at least once a week thereafter, BOPE, including kelly valves, emergency valves, and choke manifolds, must be function pressure-tested to the required working pressure specified in the approved Pennit to Drill, using a non-compressible fluid, except that an annular type preventer need not be tested to more than 50 percent of its rated working pressure; (C) if any BOP equipment components have been used for well control or other equivalent purpose, or when routine use of the equipment may have compromised its effectiveness, the components used must be function pressure-tested, before the next wellbore entry, to the required working pressure specified in the approved Permit to Drill, using a non-compressible fluid, except that an annular type preventer need not be tested to more than 50 percent of its rated working pressure; Register _, .00 MISCELLANEO~OARDS (D) BOP ram and annular components except blind rams must be function-tested weekly, and all BOP ram and annular components must be function-tested after an action that disconnects the hydraulic system lines from the BOPE, except that if the workstring is continuously in the well, function-testing of blind rams must be performed as soon as possible after the workstring is pulled out of the well and the BHA clears the BOP; (E) for each BOPE test during drilling and completion operations, variable bore rams must be function pressure-tested to the required pressure on the smallest outside diameter (OD) and largest outside diameter (OD) tubulars that may be used during that test cycle, except that variable bore rams need not be tested on BHAs and drill collars; (F) after they are installed [INSTALLING CASING RAMS] in the BOP stack, the rams for casin2 or liner [RAM BONNETS] must be function pressure- tested [TESTED] to the required pressure before running casing; (G) BOPE test results must be recorded as part of the daily record required by 20 AAC 25.070(1), and must be provided to the commission, in a fonnat approved by the commission, within five days after completing the test; (H) at least 24 hours notice of each BOPE function pressure test must be provided to the commission so that a commission representative can witness the test; History: Eff. 4/13/80, Register 74; am 2/22/81, Register 77; am 4/2/86, Register 97; am 11/7/99, Register 152; am 10/24/2004, Register 172; am12/28/2006, Register 180; am~~-, Register ---.J Authority: AS 31.05.030 Register _, ~OO MISCELLANEOulOARDS 20 AAC 25.285(f)(5) is amended to read: (5) after thev are installed [INSTALLING CASING RAMS] in the BOP stack, the rams for casine: or liner [RAM BONNETS] must be function pressure-tested [TESTED] to the required pressure before running casing or liner; History: Eff. 4/2/86, Register 97; am 11/7/99, Register 152; am12/28/2006, Register 180; am~~_, Register ~ Authority: AS 31.05.030 Register _, ·200 MISCELLANEO'BOARDS 20 AAC 25.035(e)(IO) is amended to read: (10) the BOPE must be tested as follows: (A) when installed, repaired, or changed on a development or service well and at time intervals not to exceed each 14 days thereafter, BOPE, including kelly valves, emergency valves, and choke manifolds, must be function pressure-tested to the required working pressure specified in the approved Permit to Drill, using a non-compressible fluid, except that an annular type preventer need not be tested to more than 50 percent of its rated working pressure; however, the commission will require that the BOPE be function pressure-tested weekly, if the commission determines that a weekly BOPE pressure test interval is indicated by a particular drilling rig's BOPE performance; (B) when installed, repaired, or changed on an exploratory or stratigraphic test well and at least once a week thereafter, BOPE, including kelly valves, emergency valves, and choke manifolds, must be function pressure-tested to the required working pressure specified in the approved Permit to Drill, using a non-compressible fluid, except that an annular type preventer need not be tested to more than 50 percent of its rated working pressure; (C) if any BOP equipment components have been used for well control or other equivalent purpose, or when routine use of the equipment may have compromised its effectiveness, the components used must be function pressure-tested, before the next wellbore entry, to the required working pressure specified in the approved Permit to Drill, using a non-compressible fluid, except that an annular type preventer need not be tested to more than 50 percent of its rated working pressure; Register _, .00 MISCELLANEO~OARDS (D) BOP ram and annular components except blind rams must be function-tested weekly, and all BOP ram and annular components must be function-tested after an action that disconnects the hydraulic system lines from the BOPE, except that if the workstring is continuously in the well, function-testing of blind rams must be performed as soon as possible after the workstring is pulled out of the well and the BRA clears the BOP; (E) for each BOPE test during drilling and completion operations, variable bore rams must be function pressure-tested to the required pressure on the smallest outside diameter (OD) and largest outside diameter (OD) tubulars that may be used during that test cycle, except that variable bore rams need not be tested on BRAs and drill collars; (F) after they are installed [INSTALLING CASING RAMS] in the BOP stack, the rams for casin2 or liner [RAM BONNETS] must be function oressure- ~ [TESTED] to the required pressure before running casing; (G) BOPE test results must be recorded as part of the daily record required by 20 AAC 25.070(1), and must be provided to the commission, in a format approved by the commission, within five days after completing the test; (H) at least 24 hours notice of each BOPE function pressure test must be provided to the commission so that a commission representative can witness the test; History: Eff. 4/13/80, Register 74; am 2/22/81, Register 77; am 4/2/86, Register 97; am 11/7/99, Register 152; am 10/24/2004, Register 172; amI2/28/2006, Register 180; am-.-!-.-!_, Register ~ Authority: AS 31.05.030 Register _, ~oo MISCELLANEoutOARDS 20 AAC 25.285(f)(5) is amended to read: (5) after they are installed [INSTALLING CASING RAMS] in the BOP stack, the rams for casine: or liner [RAM BONNETS] must be function Dressure-tested [TESTED] to the required pressure before running casing or liner; History: Eff. 4/2/86, Register 97; am 11/7/99, Register 152; am12/28/2006, Register 180; am~~_, Register ~ Authority: AS 31.05.030 . . ORDER CERTIFYING THE CHANGES TO REGULATIONS OF ALASKA OIL AND GAS CONSERVATION COMMISSION The attached 3 pages of regulations, dealing with blowout prevention equipment testing under 20 AAC 25, are hereby certified to be a correct copy of the regulation changes that the Alaska Oil and Gas Conservation Commission adopted at its April 25, 2007 meeting, under the authority of AS 31.05.030 and 31.05.040 and after compliance with the Administrative Procedure Act (AS 44.62), specifically including notice under AS 44.62.190 and 44.62.200 and opportunity for public comment under AS 44.62.210. This action is not expected to require an increased appropriation. On the record, in considering public comments, the Alaska Oil and Gas Conservation Commission paid special attention to the cost to private persons of the regulatory action being taken. The regulation changes described in this order take effect on the 30th day after they have been filed by the lieutenant governor, as provided in AS 44.62.180. DATE: April 25. 2007 Anchorage FILING CERTIFICATION I, Sean Parnell, Lieutenant Governor for the State of Alaska, certify that on , 2007 at .m., I filed the attached regulations according to the provisions of AS 44.62.040 - 44.62.120. Lieutenant Governor Effective: Register: . . STATE OF ALASKA NOTICE OF PROPOSED CHANGES IN THE REGULATIONS OF THE ALASKA OIL AND GAS CONSERVATION COMMISSION The Alaska Oil and Gas Conservation Commission ("AOGCC") proposes to adopt changes to Title 20, Chapter 25, of the Alaska Administrative Code, dealing with blowout prevention equipment testing requirements including the following: Blowout prevention equipment testing requirements in 20 AAC 25.035(e)(1O) and 20 AAC 25.285(f)(5) are clarified. For a copy of the proposed regulation changes, contact lody Colombie at AOGCC, 333 W. 7th Avenue, Suite 100, Anchorage, Alaska 99501, or by telephoning the AOGCC at 907-793-1221, or on the AOGCC website at: http://www .aogcc.alaska.gov. You may comment on the proposed regulation changes, including the potential costs to private persons of complying with the proposed changes, by submitting written comment to AOGCC, 333 W. 7th Avenue, Suite 100, Anchorage, AK 99501. The comments must be received no later than 4:30 p.m. on April 6, 2007. Oral or written comments may also be submitted at a hearing to be held on April 10, 2007 at 333 W. 7th Avenue, Suite 100, Anchorage, AK 99501. The hearing will begin at 9:00 a.m. and might be extended to accommodate those present before 9:30 a.m. who did not have an opportunity to comment. If you are a person with a disability who may need a special accommodation in order to participate in the process, please contact lody Colombie at 793-1221 by 12:00 p.m., April 9, 2007 to ensure that any necessary accommodations can be provided. After the public comment period ends, the AOGCC will either adopt this or another proposal dealing with the same subject, without further notice, or decide to take no action on it. The language of the fmal regulations may be different from that of the proposed regulations. YOU SHOULD COMMENT DURING THE TIME ALLOWED IF YOUR INTEREST COULD BE AFFECTED. Written comments received are public records and are subject to public inspection. Statutory Authority: AS 31.05.030. Statutes Being Implemented, Interpreted, or Made S Fiscal Information: The proposed regulation chan appropriation. ecific: AS 31.05.030. not expected to require an increased Date: March 2. 2007 mmission Published: March 5, 2007 AO-02414047 . . ADDITIONAL REGULATIONS NOTICE INFORMATION (AS 44.62.l90(d)) 1. Adopting agency: Alaska Oil and Gas Conservation Commission. 2. General subject of regulations: blowout prevention equipment testing requirements. 3. Citation of regulations: 20 AAC 25.035(e)(1O), 20 AAC 25.285(£)(5) 4. Reason for the proposed action: clarification of the subject regulatory requirements. 5. Program category and BRU affected: Alaska Oil and Gas Conservation Commission. 6. Cost of implementation to the state agency: zero. 7. The name of the contact person for the regulations: Name: John K. Norman Title: Chairman Address: 333 W. 7th. Avenue, Suite 100, Anchorage, AK 99501 Telephone: (907) 793-1221 E-mail: jody_colombie@admin.state.ak.us 8. The origin of the proposed action: agency staff. 9. Date: March 2, 2007 10. Prepared by: ~kJJ. ~ c.o..OO'\.....t-- Jo~C~l~bie c.J Alaska Oil and Gas Conservation Commission (907) 793-1221 . Anchorage Daily News Affidavit of Publication 100! Northway Drive. Anchorage. AK 99508 . PRICE OTHER OTHER OTHER OTHER OTHER GRAND AD# DATE PO ACCOUNT PER DAY CHARGES CHARGES #2 CHARGES #3 CHARGES #4 CHARGES #5 TOTAL 14990ì æ/05!200ì 02ì14021 STOF0330 $235]2 5235]2 SO.OO $0.00 SO.OO SO.OO SO.OO $235.ì2 STATE OF ALASKA THIRD JUDICIAL DISTRICT Christine Clark, being first duly sworn on oath deposes and says that she is an advertising representative of the Anchorage Daily News, a daily newspaper. That said newspaper has been approved by the Tlùrd Judicial Court Anchorage, Alaska, and it now and has been published in the English language continually as a daily newspaper in Anchora~e, Alaska, and it is now and durin~ all said time was printed in an office maintained at the aforesaid place of publication of said newspaper. That the annexed is a copy of an advertisement as it was published in regular issues (and not in supplemental form) of said newspaper on the above dates and that such newspaper was regularly distributed to its subscribers during all of said period. That the full amount of the fee charged for the foregoing publication is not in excess of the rate charged private individuals. Si Subscribed and sworn to me before this date: mCfAI~ g JW7 , . I Notary Public in and for the State of Alaska. Third Division. Anchorage, Alaska l\{({({{fff¡; \'\ \ ~~':-':' :4. t"v" .. -'~""'.'-"~'~ :~OTAIt;::~.L~ __z: .o;~\C ~ ê ~~"'~ ....... ,3: ~~ "'" ,"'17, ~-.. /iil_..... ~, , ...~.' I Q; ...~, ..' {\t':'\' ~ . . . , .~ -1\' ·:.-.#...../¡}/~{1W"" STATE OF ALASKA NOTICE OF PROPOSENDSCoHt~~iS IN tHE REGULATIO ALASK¡l.QIL AND GAS ' CONSERVATION COMMISSION , , at'on commission The Alaska Oil and Gas Conserv I es to Title 20, ( "AOGCC") pr~poÃrs ~~ c:..~~~ñ~~t~~f¡veCod~,deal. , Chapter 2S, of teas ntion equipmènt testing re- ing with blowout preve , . ' quirements including the following: , Ì1lÌquipment testin9 20 AAc25.035(eH1Q) , (f)(5) are clarofled. sed ~egUlation èhanges, con- For à AOGCC, 333 W. 7th ,Avenue, toct J Alaska"99S01.. or by telephon- suite 100,' Anc 7-793:1221, ,or on the AOGCC ing theAOG ,_ ' websiteat:':,.' - ..,' http·://wWw.DOg If YOU' spëèiàJ. proces 12;'00 P '_ sary (I,: ' " .'.. ... ::.:. "'nf¡èi'iOd~ëlÍds;th~MGCC" After the 'publlc cOr1)me anather proposal.dealing will either SJdoPtb!hl~ ~ithout further notice, or d~- with the same su '!'c, ·t The language of the-fl- cide to act,,?n ~~ ~liffèfeÍ1t from -thõt of the nol re s r1)aY YOU SI¡OUl.D COMMENT propos latlon~. LLð';"lËb ] F YO,\J RI;N- DURI .E TIME A FECTED.'Written c.C?m- TEREST c;:.o}:JLD BE ~F-c réèõfds and are sublect ments received .are pu 1 to publiC inspection. ~ AS 31 OS 030' AS3J.05.040. . Statutory A!'thOflty: -<- tècI ·ìlìtá,p,.etecí, elr Millie stotutes BeIR9 I mpll!men . '- ---' _ __ -- ' Spec ,~3<Q: - d;cr'egulõtiôn Fis ot.on:,·T óÍ1'ôhcreòsed cM ' t expecte , approp~\a!!.on. Date: March 2, 2007 ; n Is!: ~1~~:a'6\f:,g'!;~~:;n~rvation Commission AO# 02714021 PUbl,ish: March S, 2007 :;.--'--'-- ----_.~"~"- . . ST ATE OF ALASKA ) ) ss. ) TillRD JUDICIAL DISTRICT AFFIDAVIT OF NOTICE OF PROPOSED ADOPTION OF REGULATIONS AND FURNISHING OF ADDITIONAL INFORMATION I, Jody J. Colombie, Special Assistant to the Alaska Oil and Gas Conservation Commission, being sworn, state the following: As required by AS 44.62.190, notice of the proposed adoption of changes to 20 AAC 25.03 5( e) and 20 AAC 25.285(t)(5), dealing with blowout prevention equipment testing, has been given by being (I) published in a newspaper or trade publication; (2) furnished to interested persons as shown on the attached list; (3) furnished to appropriate state officials; (4) furnished to the Department of Law, along with a copy of the proposed regulations; (5) electronically transmitted to incumbent State of Alaska legislators; (6) furnished to the Legislative Affairs Agency, Legislative Library; (7) posted on the Alaska Online Public Notice System as required by AS 44.62.1 75(a)(l) and (b) and 44.62.190(a)(I); (8) furnished electronically, along with a copy of the proposed regulations, to the Legislative Affairs Agency, the chairs of the Senate Resources Committee and House Special Committee of Oil and Gas, the Adminis1rative Regulation Review Committee, and the Legislative Council. As required by AS 44.62.190(d), additional regulations notice information regarding the proposed adoption of the regulation changes described above has been furnished to interested persons as shown on the attached list and those in (5) and (6) of the list above. The additional regulations notice information also has been posted on the Alaska Online Public Notice System. DATE: April 25. 2007 Anchorage ~~L J J.C Special Assistant to the Commission SUBSCRIBED AND SWORN TO before me this 25th day of April, 2007. - ___u - -- - -~o-.--.------ . . Subject: BOPE Amended Regulations From: Jody Colombie <jody _ colombie@adrnin.state.ak.us> Date: Fri, 02 Mar 2007 14:51:13 -0900 To: undisclosed-recipients:; BCC: Cynthia B Mciver <bren _ mciver@admin.state.ak.us>, Christine Hansen <c.hansen@iogcc.state.ok.us>, Terrie Hubble <hubbletl@bp.com>, Sondra Stewman <StewmaSD@BP.com>, stanekj <stanekj@unocal.com>, ecolaw <ecolaw@trustees.org>, trmjr 1 <trmjr l@ao1.com>, jdarlington <jdarlington@forestoi1.com>, nelson <knelson@petroleumnews.com>, cboddy <cboddy@usibelli.com>, Mark Dalton <markdalton@hdrinc.com>, Shannon Donnelly <shannon.donnelly@conocophillips.com>, "Mark P . Worcester" <markp.worcester@conocophillips.com>, Bob <bob@inletkeeper.org>, wdv <wdv@dnr.state.ak.us>, tjr <tjr@dnr.state.ak.us>, bbritch <bbritch@alaska.net>, mjnelson <mjnelson@purvingertz.com>, Charles O'Donnell <charles.o'donnell@veco.com>, "Randy L. Skillern" <SkilleRL@BP.com>, "Deborah J. Jones" <JonesD6@BP.com>, "Steven R. Rossberg" <RossbeRS@BP.com>, Lois <lois@inletkeeper.org>, Dan Bross <kuacnews@kuac.org>, Gordon Pospisil <PospisG@BP.com>, "Francis S. Sommer" <SommerFS@BP.com>,Mikel Schultz <Mike1.Schultz@BP.com>, "Nick W. Glover" <GloverNW@BP.com>, "Daryl J. Kleppin" <KleppiDE@BP.com>, "Janet D. Platt" <PlattJD@BP.com>, "Rosanne M. Jacobsen" <JacobsRM@BP.com>, ddonkel <ddonkel@ctl.rr.com>, mckay <mckay@gci.net>, Barbara F Fullmer <barbara.f.fullmer@conocophillips.com>, Charles Barker <barker@usgs.gov>, doug_schultze <doug_schultze@xtoenergy.com>, Hank Alford <hank.alford@exxonmobil.com>, Mark Kovac <yesnol@gci.net>, gspfoff <gspfoff@aurorapower.com>, Gregg Nady <gregg.nady@shell.com>, Fred Steece <fred.steece@state.sd.us>, rcrotty <rcrotty@ch2m.com>, jejones <jejones@aurorapower.com>, dapa <dapa@alaska.net>, jroderick <jroderick@gci.net>, eyancy <eyancy@seal-tite.net>, "James M. Ruud" <james.m.ruud@conocophillips.com>, Brit Lively <mapalaska@ak.net>, jab. <jah@dnr.state.ak.us>, buonoje <buonoje@bp.com>, Mark Hanley <mark_hanley@anadarko.com>, Julie Houle <julie_houle@dnr.state.ak.us>, John W Katz <jwkatz@alaskadc.org>, tablerk <tablerk@unoca1.com>, Brady <brady@aoga.org>, Brian Havelock <beh@dnr.state.ak.us>, bpopp <bpopp@borough.kenai.ak.us>, Jim White <jimwhite@satx.rr.com>, "John S. Haworth" <john.s.haworth@exxonmobi1.com>, marty <marty@rkindustrial.com>, gharnmons <gharnmons@aol.com>,rmclean <rmclean@pobox.alaska.net>,mkm7200<mkm7200@ao1.com>,Brian Gillespie <ifbmg@uaa.alaska.edu>, David L Boelens <dboelens@aurorapower.com>, Todd Durkee <TDURKEE@KMG.com>, Gary Schultz <gary_schultz@dnr.state.ak.us>, Wayne Rancier <RANCIER@petro-canada.ca>, Brandon Gagnon <bgagnon@brenalaw.com>, Paul Winslow <pmwinslow@forestoil.com>, Shannaine Copeland <copelasv@bp.com>, Kristin Dirks <kristin_dirks@dnr.state.ak..us>, Kaynell Zeman <kjzeman@marathonoi1.com>, John Tower <John.Tower@eia.doe.gov>, Bill Fowler <Bill_Fowler@anadarko.COM>, Scott Cranswick <scott.cranswick@mms.gov>, Brad McKim <mckimbs@BP.com>,jacknewell <jacknewell@acsalaska.net>, James Scherr <james.scherr@mms.gov>, n16l7@conocophillips.com, Tim Lawlor <Tim_Lawlor@ak.blm.gov>, Lynnda Kahn <Lynnda_Kahn@fws.gov>, Jerry Dethlefs <Jerry. C.Dethlefs@conocophillips.com>, crockett@aoga.org, T amera Sheffield <sheffield@aoga.org>, Jon Goltz <Jon.Goltz@conocophillips.com>, Roger Belman <roger.belman@conocophillips.com>, Mindy Lewis <m.1ewis@brenalaw.com>, Kari Moriarty <moriarty@aoga.org>, Patty Alfaro <palfaro@yahoo.com>, Jeff <smetankaj@unocal.com>, Gary Rogers <gary_ rogers@revenue.state.ak.us>, Arthur Copoulos <Arthur __Copoulos@dnr.state.ak.us>, Ken <klyons@otsintl.com>, Steve Lambert <salambert@unocal.com>, Joe Nicks <news@radiokenai.com>, Jerry McCutcheon <susitnahydronow@yahoo.com>, Bill Walker <bill-wwa@ak.net>, Iris Matthews <lris_Matthews@legis.state.ak.us>, Paul Decker <paul_decker@dnr.state.ak.us>, Aleutians East Borough of2 3/2/2007 2:52 PM --0.---------- . . <admin@aleutianseast.org>, Marquerite kremer <marguerite_kremer@dnr.state.ak.us>, Mike Mason <mike@kbbi.org>, Garland Robinson <gbrobinson@marathonoil.com>, Cammy Taylor <Carnille_Taylor@law.state.ak.us>, Thomas E Maunder <tom_maunder@admin.state.ak.us>, Stephen F Davies <steve_davies@admin.state.ak.us>, Keith Wiles <kwiles@marathonoil.com>, Deanna Gamble <dgamble@kakivik.com>, James B Regg <jimJegg@admin.state.ak.us>, Catherine P Foerster <cathy _ foerster@admin.state.ak.us>, Bob <Bob@fairweather.com>, gregory micallef <micallef@cIearwire.net>, Laura Silliphant <laura_silliphant@dnr.state.ak.us>, David Steingreaber <david.e.steingreaber@exxonmobi1.com>, akpratts@acsalaska.net, Robert Campbell <Robert.Campbell@reuters.com>, Steve Moothart <steve_moothart@dnr.state.ak.us>, Anna Raff <anna.raff@dowjones.com>, Cliff Posey <cliff@posey.org>, Paul Bloom <paul_bloom@ml.com>, Meghan Powell <Meghan.Powell@asrcenergy.com>, Temple Davidson <temple _ davidson@dnr.state.ak.us>, Walter Featherly <WF eatherly@PattonBoggs.com>, Tricia Waggoner <twaggoner@nrginc.com>, Mike Stockinger <Mike.Stockinger@anadarko.com>, John Spain <jps@stateside.com>, Cody Rice <Cody _ Rice@legis.state.ak.us>, John Garing <garingJD@bp.com>, Harry Engel <engelhr@bp.com>, Jim Winegarner <jimwinegarner@brooksrangepetro.com>, Matt Rader <matt_rader@dnr.state.ak.us>, carol smyth <caro1.smyth@shell.com>, Arthur C Saltmarsh <art_saltmarsh@admin.state.ak.us>, Chris Gay <cdgay@marathonoi1.com>, foms@mtaonline.net, Rudy Brueggeman <rudy.brueggemann@intemational.gc.ca>, Cary Carrigan <cary@kfqd.com>, Sonja Frankllin <sfranklin6@bloomberg.net> Jody Colombie <iody colombie(å!admin.state.ak.us> Special Staff Assistant Alaska Oil and Gas Conservation Commission Department of Administration Content-Type: application/pdf BOPE Notice, Additional Info, Regulations.pdf Content-Encoding: base64 of2 3/2/2007 2:52 PM ... ~.....~...__, ... ..__........"'.............. ............'"'...................."'...., .....,..""'0.................'.."'.......... ........'-"'.... .L.I . . Subject: Notice, Additional Information, Regulations BOPE From: Jody Colombie <jody_colombie@admin.state.ak.us> Date: Mon, 05 Mar 2007 09:22: 14 -0900 To: Con Bunde <senator_con_bunde@legis.state.ak.us>, John Cowdery <senator john _ cowdery@legis.state.ak.us>, Bettye J Davis <senator _ bettye _ davis@legis.state.ak.us>, Johnny Ellis JR <senatorjohnny_ellis@legis.state.ak.us>, Kim S Elton <senator _ kim _ elton@legis.state.ak.us>, Hollis French <senator _ hollis _ french@legis.state.ak.us>, Lyda N Green <senator _lyda ~een@legis.state.ak.us>, Lyman F Hoffman <senator _lyman _ hoffìnan@legis.state.ak.us>, senator _gary_stevens <senator _gary ~ stevens@legis.state.ak.us>, senator _gene_ therriault <senator_gene _ therriault@legis.state.ak.us>, senator _ thomas_wagoner <senator _ thomas _ wagoner@legis.state.ak.us>, senator _gary_wilken <senator_gary _ wilken@legis.state.ak.us>, mike chenault <representative_ mike_ chenault@legis.state.ak.us>, sharon cissna <representative_sharon _ cissna@legis.state.ak.us>, John Coghill <representative john_ coghill@legis.state.ak.us>, harry crawford <representative_harry _ crawford@legis.state.ak.us>, nancy dahlstrom <representative _ nancy _dahlstrom@legis.state.ak.us>, richard foster <representative _ richard _ foster@legis.state.ak.us>, les gara <representative_Ies ~ara@legis.state.ak. us>, Carl Gatto <representative_carl ~atto@legis.state.ak.us>, max gruenberg <representative _max _gruenberg@legis.state.ak.us>, david guttenberg <representative _ david ~ttenberg@legis.state.ak.us>, John Harris <representative john_harris@legis.state.ak.us>, mike hawker <representative_mike _ hawker@legis.state.ak.us>, reggie joule <representative _ reggiejoule@legis,state.ak.us>, Beth Kerttula <representative _beth_kerttula@legis.state.ak.us>, vic kohring <representative_vic_kobring@legis.state.ak.us>, Bob Lynn <representative_bob_lynn@legis.state.ak.us>, kevin meyer <representativeJœvin _meyer@legis.state.ak.us>, ralph samuels <representative_ralph _ samuels@legis.state.ak.us>, paul seaton <representative-pauLseaton@legis.state.ak.us>,Bill Stoltze <representative_biILstoltze@legis.state.ak.us>, Fred Dyson <senator_fred_dyson@legis.state.ak.us>, Bert K Stedman <senator _bert.stedman@legis.state.ak.us>, senatocalbert_kookesh@legis.state.ak.us, representative_berta~ardner@legis.state~ak. US,. representative_mike_kelly@legis.state.ak.us, representative_mark _neuman@legis.state.ak.us, representative _ kurt _ olson@legis.state.ak.us, representativejay _ramras@legis.state.ak.us, representative_woodie _ salmon@legis.state.ak.us, senator_lesil_mcguire@legis.state.ak.us, senatorjoe _thomas@legis.state.aIc.us, Senator_ bill_ wielechoweski@legis.state.ak.us, representative _ bob_buch@legis.state.aIc.us, representative _andrea_ doll@legis.state.ak.us, representative_mike _ doogan@legis.state.ak.us, representative _byrce _edgmon@legis.state.ak.us, representative _ anna__fairclough@legis.state.ak.us, representative _lindsey _ holmes@legis.state.ak.us, representative_kyle johansen@legis.state.ak.us, representative_craigjohnson@legis.state.ak.us, representative _ scott_ kawasaki@legis.state.ak.us, representative ~abrielle _ledoux@legis.state.ak.us, representative_ mary__nelson@legis.state.ak.us, representative _ bobJoses@legis.state.ak.us, representative _bilLthomas@legis.state.ak.us, representative -peggy_ wilson@legis.state.ak.us Jody Colombie <iody colombie(â}admin.state.ak.us> .of2 3/5/2007 9:25 AM . . Special Staff Assistant Alaska Oil and Gas Conservation Commission Department of Administration Content-Type: application/pdf BOPE Notice, Additional Info, Regulations.pdf C E . b 64 ontent- ncodmg: ase of2 3/5/2007 9:25 AM . . Subject: BOPE Notice, Additional Information and Regulations From: Jody Colombie <jody _ colombie@admin.state.ak.us> Date: Mon, 05 Mar 200709:45:23 -0900 To: Bryce E Edgmon <representative_bryce_edgmon@legis.state.ak.us>, Bill Wielechowski <senator _ bill_ wielechowski@legis.state.ak.us> Jody Colombie <iody colombie~admin.state.ak.us> Special Staff Assistant Alaska Oil and Gas Conservation Commission Department of Administration . Content-Type: application/pdf BOPE Notice, Additional Info, Regulations.pdf . b 64 Content-Encodmg: ase ofl 3/5/2007 9:45 AM . Mary Jones XTO Energy, Inc. Cartography 810 Houston Street, Ste 2000 Ft. Worth, TX 76102-6298 George Vaught, Jr. PO Box 13557 Denver, CO 80201-3557 John Levorsen 200 North 3rd Street, #1202 Boise,ID 83702 Mark Wedman Halliburton 6900 Arctic Blvd. Anchorage, AK 99502 Ciri Land Department PO Box 93330 Anchorage, AK 99503 Gordon Severson 3201 Westmar Cr. Anchorage, AK 99508-4336 James Gibbs PO Box 1597 Soldotna, AK 99669 Richard Wagner PO Box 60868 Fairbanks, AK 99706 North Slope Borough PO Box 69 Barrow, AK 99723 David McCaleb IHS Energy Group GEPS 5333 Westheimer, Ste 100 Houston, TX 77056 Jerry Hodgden Hodgden Oil Company 408 18th Street Golden, CO 80401-2433 Kay Munger Munger Oil Information Service, Inc PO Box 45738 Los Angeles, CA 90045-0738 Schlumberger Drilling and Measurements 2525 Gambell Street #400 Anchorage, AK 99503 Ivan Gillian 9649 Musket Bell Cr.#5 Anchorage, AK 99507 Jack Hakkila PO Box 190083 Anchorage, AK 99519 Kenai National Wildlife Refuge Refuge Manager PO Box 2139 Soldotna, AK 99669-2139 Cliff Burglin PO Box 70131 Fairbanks, AK 99707 Williams Thomas Arctic Slope Regional Corporation Land Department PO Box 129 Barrow, AK 99723 . Mona Dickens Tesoro Refining and Marketing Co. Supply & Distribution 300 Concord Plaza Drive San Antonio, TX 78216 Richard Neahring NRG Associates President PO Box 1655 Colorado Springs, CO 80901 Michael Parks Marple's Business Newsletter 117 West Mercer St, Ste 200 Seattle, WA 98119-3960 Baker Oil Tools 4730 Business Park Blvd., #44 Anchorage, AK 99503 Jill Schneider US Geological Survey 4200 University Dr. Anchorage, AK 99508 Darwin Waldsmith PO Box 39309 Ninilchick, AK 99639 Penny Vadla 399 West Riverview Avenue Soldotna, AK 99669-7714 Bernie Karl K&K Recycling Inc. PO Box 58055 Fairbanks, AK 99711 . \&cY'1 ~~ \ '. ,U ~ \)' t9 . . Copy of Notice and Additional Regulations Notice Information was mailed to the following on March 5,2007. Annette Kreitzer Commissioner Department of Administration PO Box 110200 Juneau, AK 99811 Legislative Reference Library Legislative Affairs Agency State Capitol Juneau,AK 99801 Mail Stop: 3101 Senator Charles Huggins, Chair Senate Resources State Capitol Juneau, Alaska 99801 Rep Vic Kohring, Chair House Special Committee on Oil and Gas State Capitol Juneau, Alaska 99801 Senator Lesil McGuire, Chair Administrative Regulation Review State Capitol Juneau, Alaska 99801 Senator John Cowdery, Chair Legislative Council State Capitol Juneau, Alaska 99801 File Opening Memo, Copy of Notice, Additional Regulations Notice Information, draft regulation was mailed to the following on March 2, 2007. Debra Behr Assistant Attorney General Department of Law PO Box 11 0300 Juneau,AK 99811 . . STATE OF ALASKA ) ) ss. ) THIRD JUDICIAL DISTRICT AFFIDAVIT OF ORAL HEARING I, Jody J. Colombie, Special Assistant to the Alaska Oil and Gas Conservation Commission, being sworn, state the following: On April 10, 2007, at 9:00 a.m., 333 West 7th Avenue, Suite 100, Anchorage, Alaska 99501, a public hearing presided over by John K. Norman, Chairman, was held in accordance with AS 44.62.210 for the purpose of taking testimony in connection with the adoption of changes to 20 AAC 25.0035(eXlO) and 20 AAC 25.285(f)(5), dealing with blowout prevention equipment testing. DATE: April 25. 2007 Anchorage ~r~~ J J. 01 bi Special ASSIstant to the Commission SUBSCRIBED AND SWORN TO before me this 25th day of April, 2007. ~~ _' I I '.~~; N tmy Publi~~ or 1be State of Alaska My commission expires: 11/11/2010 . . STATE OF ALASKA ) ) ss. ) THIRD JUDICIAL DISTRICT AFFIDAVIT OF COMMISSION ACTION I, Jody J. Colombie, Special Assistant to the Alaska Oil and Gas Conservation Commission, being duly sworn, state the following: The attached motion, dealing with blowout prevention equipment testing regulation changes was passed by the Alaska Oil and Gas Conservation Commission during its April 25, 2007 meeting. Date: April 25. 2007 Anchorage SUBSCRIBED AND SWORN TO before me this 25th day of April 2007. ~ .') çb //..- ~ .:>?J~k~ ~ Public in~ for the State of Alaska My commission expires: 11/11/2010 . . ALASKA OIL AND GAS CONSERVATION COMMISSION MEETING April 25, 2007 Excerpt From Unapproved Minutes Commissioner Cathy P. Foerster moved and Commissioner Daniel T. Seamount, Jr. seconded the following motion: "I move to adopt the amendments, specifically to 20 AAC 25.035(e)(1O) and 20 AAC 25.285(t)(5), all of which pertain generally to the same subject as written in the April 25, 2007 draft of regulations." The motion carried unanimously. #5 · · · 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 . . 1 ALASKA OIL AND GAS CONSERVATION COMMISSION 2 Before Commissioners: John K. Norman, Chairman Daniel T. Seamount Cathy Foerster 3 4 RECE1VED APR 1 2 2007 .$b Oil. & Gas Cons. Commission AncþaraQa ALASKA OIL and GAS CONSERVATION COMMISSION Anchorage, Alaska 5 In the Matter of the Blowout Prevention Equipment Testing Requirements pursuant to Sections 20 MC 25.035 (e) (10) and 2 0 MC 25. 2 85 (f) (5) 6 7 8 9 April 10, 2007 9:00 o'clock a.m. VOLUME I PUBLIC HEARING BEFORE: John K. Norman, Chairman Daniel T. Seamount, Commissioner R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 . "- . . 10 11 12 13 14 15 16 17 18 20 21 22 23 . . 1 TABLE OF CONTENTS 2 Opening remarks by Chairman Norman Testimony by Harry Engel 03 12 3 4 5 6 7 8 9 19 24 25 R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 · · · . . 1 PRO C E E DIN G S 2 Tape 1 3 0050 4 (On record - 9:00 a.m.) 5 CHAIRMAN NORMAN: Good morning. This is a hearing before 6 the Alaska Oil and Gas Conservation Commission being held at 7 9:00 o'clock a.m. on the morning of Tuesday, April 10th, 2007. 8 The location is the Commission's offices at 333 West Seventh 10 Present to my right, your left, is Commissioner Dan 9 Avenue, Suite 100, Anchorage, Alaska. 11 Seamount. I am John Norman. Two out of the three 12 Commissioners being present a quorum is constituted for the 13 conduct of legal business and we will proceed with the meeting. 14 15 The Commission complies to the fullest extent possible 16 If there are any persons present with a disability who may with all requirements of the Americans with Disabilities Act. 17 require a special accommodation, please see the Commission's 18 special assistant, Ms. Jody Colombie and we will do our utmost 19 to accommodate you and allow you to participate in this 20 meeting. 21 These proceedings are being recorded. Following this 22 hearing any persons desiring a transcript of the proceeding may 23 obtain one by contacting R & R Court Reporting or contact the 24 Commission special assistant and she can facilitate your 25 getting a copy. R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 3 · · · . . 1 We will be receiving testimony this morning and I would 2 remind those that do wish to testify to speak into both of the 3 microphones in front of you. The reason being that one is for 4 purposes of talking into the transcript that will be used for purposes of preparing the hearing record and the other is for purposes of amplification of your testimony. 5 6 7 The regulation proposed to be amended is found in Title 8 20, Chapter 25 of the Alaska Administrative Code which deals 9 with blowout prevention equipment requirements, specifically in 10 20 MC 25. 035 (e) (10) and 20 MC 25.285 (f) (5) . 11 The record reflects that notice of this hearing was duly 12 published on March 5th, 2007 in the Anchorage Daily News. 13 The regulations proposed for review will be more fully 14 15 discussed and these proceedings are being held in accordance with the general provisions of 20 MC 25.540 and the Alaska 16 Administrative Code pertaining to hearings before 17 administrative bodies. 18 We will first hear briefly from the Commission Staff 19 concerning the proposed amendment and then following that other 20 witnesses and then any general comments from the public. 21 Mr. Regg, are you prepared to testify? May I ask you 23 22 please for the record to identify yourself. MR. REGG: Good morning. My name is James Regg. Ilm a 24 staff petroleum engineer here with the Alaska Oil & Gas 25 Conservation Commission. I'd like to just discuss with you R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 4 · · · . . 1 this morning briefly the casing ram testing requirements that 2 we've proposed and the Staff's position on the recommendation. 3 Before I move on in my presentation I would like to just 4 put some terminology on the board here. We use a lot of these 5 terms interchangeably. BOPE, blowout prevention equipment, 6 BOP, BOPE, BOP equipment, BOP stack, they're all used 7 interchangeably so if you hear me use one of those terms I'm 8 normally intending the same equipment. 9 The Ram is a closing and sealing component of BOP. It's 10 designed to close on the pipe or even to shear pipe. 11 I have a schematic here that is simplified just to get 12 your minds on the equipment that we're talking about. This is 13 the BOP stack just from your wellhead and then these devices 14 15 right here are representative of the rams within that stack. I 16 refer to a ram it'll be one of these types of components and don't want to go into the actual configurations, just when I 17 you can see where it's arranged within -- on the well and, of 18 course, your drilling rig above that. 19 20 Prior to December 26th, 2006 the Commission had 21 at 25.035 for primary drilling completions and 25.285 for requirements for the testing of rams. In fact, the regulations 22 tubing workovers essentially were worded the same. You 23 function pressure test BOPE when installed, repaired or changed 24 and at specified intervals. 25 Subsequent to installation for development wells it was 14 R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 5 · · · . . 1 days, for exploratory wells it was seven days and then for 2 workovers it was also seven days. 3 If the equipment was used you must function pressure test 4 before the next wellbore entry. 5 Effective December 26, 2006 casing ram requirements were 6 included in the regulations at 20 AAC 25.035 (e) (10) (F) and 7 25.285(f) (5). The requirements required the testing of bonnet 8 ram seals -- I'm sorry, the ram bonnet seals after installing 9 casing rams. 10 The proposed language was introduced during testimony on 11 August 31st, 2006 and BP, ConocoPhillips and AOGA provided 12 testimony in favor of including that language. 14 13 What we've proposed is to revise -- go back and revise the casing ram test requirements specified in those stated 15 regulations. And our recommendation reads as follows; after 16 they are installed in the BOP stack, the rams for casing or 17 liner must be function pressure tested to the required test 18 pressure before running casing or liner. 19 What effectively we've done is we would be replacing the 20 -- a body test or the bonnet seal test with a function pressure 21 test of the mechanical component, the actual ram itself. The 22 way the regulations was readed befo- -- reads before we would 23 not be testing the mechanical operation of that device. 24 We want to demonstrate the functionality of the equipment, 25 that's our main purpose. Debris, foreign materials or articles R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 6 · · · . . 1 in the BOP stack, the installation of improperly sized rams, 2 unmatched sized rams, damaged seals, sealing surfaces, these 3 are all things that can occur during handling. 4 The rams might be put in a stack and left in a stack from 5 a previous well and people may forget so without testing we 6 don't believe that without functionally testing that device you 7 actually know if it's going to work properly. We don't believe 8 that a bonnet test will validate the proper installation and 9 operation of casing rams. 10 Qualitatively from an impact standpoint what I can tell 11 you is that some operators test them and some operators do not. 12 It's up to the operator policy. There is some additional time 13 14 15 16 17 associated with testing casing rams. I would say it's probably on the order of 30 minutes for the for a casing ram test. The cost, of course, would be tied to the test joints that would need to be developed. It's our understanding that most of the rigs have access to the test joints. In fact, it's our 18 understanding that in years past that many of the operators 19 have done casing ram function pressure tests so these test 20 joints would have to be in existence. 21 There is some time, as I mentioned, associated with that 22 and, of course, there's cost associated with that with rig 23 time. 24 From a safety standpoint, perhaps, the industry can speak 25 I believe with proper procedures in place that the to that. R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 7 · · · 10 11 . . 1 testing can be done safely. 2 Just in closing I would leave you with this question, can 3 we be assured of the casing ram integrity without function 4 pressure testing the component? 5 The Commission engineering staff and the inspection staff 6 agree that casing rams must be function pressure tested. 7 I'd be happy to answer any questions that you have. 8 CHAIRMAN NORMAN: Thank you, Mr. Regg. Commissioner 9 Seamount? COMMISSIONER SEAMOUNT: I have no questions at this time. 12 schematic of the -- the diagram of the BOPE stack and sometimes CHAIRMAN NORMAN: Mr. Regg, could you go back to the first 13 I think I understand something, but I want to go back over it 14 15 and make sure that I'm clear. 16 the places at which under our current regulations the test Now, can you indicate to me right now with your pointer 17 would occur on the ram bonnet and then what is tested and 18 activated when we say you'll test rams for casing liner, 19 they'll be pressure tested as opposed to the bonnet seal test? 20 MR. REGG: If you look at -- and this is -- again, this is 21 a simplified schematic, but if you were to look at the actual 22 design of this you have a cavity where these rams will actually 23 fit in and there's a door that will open that allows you to 24 change those rams out. 25 Right now the way the regulation reads is you'd open that R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 8 · · · . . 1 door, you would change the ram to put the properly sized ram in there for casing or liner. You could close that door and you would just do a pressure test on that to make sure that that 2 3 4 seal which you -- that one seal that you've broken is holding 5 pressure. 6 Okay, so there would not be any functioning of this ram 7 that actually close on your pipe. 8 CHAIRMAN NORMAN: Okay, I understand that. And a second 9 thing that is a pretty basic question, but when you test these 10 how do you perform the test to the point though that you don't 12 mechanism that -- am I making myself clear? 11 actually activate them, but you test them? What's the 13 In other words, when you test the ram how do you avoid 14 15 fully activating it and clamp or shutting down on the pipe? MR. REGG: The intention is to actually close on the pipe. 17 16 And then..... 18 19 20 21 22 23 24 25 CHAIRMAN NORMAN: Close on the pipe? MR. REGG: .... .to pressure to make sure that it -- not only does it seal, but it holds pressure. It's . . . . . CHAIRMAN NORMAN: So it is fully activated just..... MR. REGG: .... .that's a function pressure test. CHAIRMAN NORMAN: Okay, all right. MR. REGG: A function test would be where you'd, maybe, close it and just make sure that it's functioning, but you wouldn't then pressure up on it. You would just close it, make R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 9 ~. . . . . 1 sure that it's actuated and then reopen it, that's why we 2 specified function pressure test. 3 CHAIRMAN NORMAN: All right. Mr. Regg, I would ask that 4 you remain so that if we need to recall you for questions. 5 Thank you very much. 6 Are there any other persons present who would wish to 7 offer testimony? Ms. Moriarty. 8 I do note, while Ms. Moriarty is coming forward, that 10 Alaska Oil and Gas Association. 9 written testimony has been provided to the Commissioners by the 11 Ms. Moriarty, would you please put yourself on the record, 12 identifying your full name, spelling and your title and 13 affiliation? 14 15 MS. MORIARTY: Thank you. Good morning. My name is Kara Moriarty. It's K-a-r-a, last name is M-o-r-i-a-r-t-y. And I'm 16 the external affairs manager for the Alaska Oil and Gas 17 Association or AOGA. We appreciate the opportunity to provide 18 comments, both written and oral testimony today on the proposed 19 changes to the blowout prevention equipment testing 20 requirement. 21 As you know AOGA is a private, non-profit, trade 22 association whose member companies represent the majority of 23 oil and gas exploration, production, transportation, refining 24 and marketing activities here in Alaska. 25 Just last August, as Mr. Regg mentioned, AOGA provided R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 10 · · · . . 1 comments of support for the revisions to Title 20, Chapter 25 2 of the Alaska Administrative code related to BOPE. The purpose 3 of these revisions was to reduce regulatory ambiguity and 4 variations in interpretation, reduce instances of regulatory 5 noncompliance and reduce the numbers of regulatory waivers and 6 variances. 7 Today, however, we are opposing the additional revisions 8 to this section. We have provided copies of our full comments 10 Harry Engel from BP will walk through the reasons why AOGA 9 and related attachments. The Chairman of our AOGCC task group, 11 opposes these revisions and why we hope you consider returning 12 to the language that was adopted last fall. 13 So I appreciate the opportunity to be here to represent 14 15 16 17 18 AOGA. Harry is here to provide the more detailed and technical comments today. CHAIRMAN NORMAN: Mr. Engel, do you wish to come forward? MR. ENGEL: Good morning, Commissioners. 19 well, first of all, if you're intending to testify as an expert CHAIRMAN NORMAN: Good morning, Mr. Engel. Would you -- 20 as to specific things then we'll want to qualify you. If you 21 are simply articulating a general position that's a consensus 22 on the part of the committee, we -- that won't be necessary, 23 but I'd ask you to indicate. Are you speaking of your own 24 personal knowledge as an expert? 25 Yes, sir. MR. ENGEL: R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 11 . -. . . . 1 CHAIRMAN NORMAN: All right. Then, In fact, let me place 2 you under Oath if you would. Would you raise your right hand, 3 please? 4 (Oath Administered) 5 MR. ENGEL: Yes, I do. 6 CHAIRMAN NORMAN: Okay. And then if you would please 7 state your name, your credentials, your experience and your 8 affiliation? 9 MR. ENGEL: Yes, sir. Good morning, Commissioner Seamount 10 and Norman. My mane is Harry Engel. The last name is spelled 11 E-n-g-e-l. I am currently the Engineering Team Leader 12 responsible for Integrity Management in BP's Alaska Drilling 13 and Wells organization. My responsibilities span all of BP's 14 15 drilling and wells operations in Alaska. 16 Environmental Engineering and have over 26 years experience in I hold an undergraduate degrees in Civil Engineering and 17 the oil and gas industry, primarily associated with drilling 18 and wells activities. 19 My assignments have included drilling engineering, well 20 site leader roles and various health, safety and environmental 21 management positions. The majority of my experience has been 22 in most of the operating areas in Alaska, yet I have worked in 23 the Rocky Mountains, China and Indonesia. This morning I am 24 representing the Alaska Oil and Gas Association as Chairman of 25 the AOGCC (sic) Task Group. R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 12 · · · . . 1 CHAIRMAN NORMAN: Thank you, please proceed. 2 MR. ENGEL: As was mentioned earlier this morning, AOGA 3 provided written comments on August 30th, 2006 and BP and 4 ConocoPhillips representatives provided oral comments at a 5 Public Meeting on August 31, 2006 regarding this subject. The 6 regulations were modified and became effective in December, 7 2006. 8 In written and oral comments to the Commission, prior to 10 representatives suggested language modifications to the 9 the adoption of the regulation changes, AOGA and BPX 11 regulations. The modifications recommended BOPE ram bonnet 12 testing only after installation of casing rams before casing 13 was run in the well. The foundation for the proposed language 14 15 was consistency with the U.S. Minerals Management Service 16 proposed language and current regulations reflect this regulations and industry practice. The AOGCC accepted the 17 consistency. 18 Upon further review of this subject several factors 19 support the current AOGCC language related to testing ram 20 bonnets only after installing casing rams before running 21 casing. These factors include the following, safety concerns 22 associated with the proper test mandrel design, sizing, 23 handling and potential pump-out forces especially associated 24 with large diameter casing. 25 Consistency with MMS and Railroad Commission of Texas R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 13 · · · . . 1 regulations. Alignment with API, the American Petroleum 2 Institute and United Kingdom Chapter of the International Well 3 Control Federation known as IWCF. And also the International 4 Association of Drilling Contractors generally follows the MMS 5 regulations in this regard. 6 The pressure testing of casing rams creates incremental 7 risk associated with the handling, proper design and anchoring 8 to prevent the test mandrel from being violently ejected from 9 the wellbore in certain conditions. Current MMS regulations at 10 30 CFR Part 250, require testing the ram bonnets before running 11 casing. 12 The Railroad Commission of Texas regulations for onshore 13 and offshore operations take a performance based approach. The 14 15 regulations require blowout preventers to keep the well under control at all times. They do not specify what method an 16 operator must employ to keep the well under control at all 17 times. Copies of the MMS and Railroad Commission regulations 18 have been provided to the Commission for your review. 19 The American Petroleum Institute Recommended Practice or 20 API RP 53 in Section 17, Table 2 does not specify a pressure 21 test of casing rams prior to running casing. The pressure test 22 is listed as optional. I've also provided a copy for your 23 review as well. 24 The United Kingdom Chapter of the International Well 25 Control Forum or the IWCF committee was consulted on this R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 14 -. . . . . 1 matter. The overwhelming response was that it is not common 2 practice to test casing prior to running casing due to concerns 3 related to the test mandrel sizing, installation and safety 4 concerns. 5 During the period leading up to the adoption of the latest 6 revision of the AOGCC BOP regulations and after the regulations 7 were adopted, there was confusion in some BP operations in 8 Alaska with respect to casing ram testing requirements. 9 Since that time we have informed all of our well site 10 leaders and drilling contractors that only ram bonnets will be 11 tested after installing casing rams, before running casing. 12 This is consistent with BPXA internal guidelines, U. S. 13 Minerals Management and Railroad Commission of Texas 14 15 regulations, general industry practice and current Commission regulations. 16 A common technique employed in the event of a well control 17 situation during casing running operations is to close the 18 annular preventer. And going back to Mr. Regg's picture, that 19 was the top component in the schematic. Then strip the casing 20 in the well and immediately cross over from casing to drill 21 pipe. This allows for subsequent stripping in the well with 22 drill pipe across the BOP equipment. This technique 23 facilitates an effective well kill operation. This practice 24 creates debate among the well control community related to the 25 need to install casing rams at all because if used they may R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 15 · · · . . 1 inhibit the ability to effectively strip into a well. 2 A specific justification for the proposed regulation 3 changes expressed by some AOGCC inspectors is that a casing ram 4 pressure test is an effective way to ensure that properly sized 5 casing rams are correctly installed prior to running casing. 6 Several layers of safeguards are currently in place to 7 verify that correct casing rams are utilized when appropriate. 8 Local drilling contractors follow written procedures to ensure 10 on site personnel provide verification that the proper 9 proper installation and operation of casing rams. Additionally 11 equipment has been installed. 12 The proposed regulation have the potential to burden 13 operators with additional time to handle test mandrels, 14 15 potential incremental safety risks and costs associated with 16 Considering the items I've mentioned above we recommend equipment wear and replacement. 17 that the current language as adopted in December, 2006 remain 18 in place. The current regulations provide clear guidance that 19 is consistent with other regulatory agencies and several 20 international industry organizations and ensure safe 21 operations. In addition, the current regulations allow 22 operators the flexibility to employ situation specific pressure 23 test techniques if desired. 24 Thank you for the ability to provide these comments and I 25 will answer any questions you may have at this time. R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 16 · · · . . 1 CHAIRMAN NORMAN: Thank you, Mr. Engel. Commissioner 2 Seamount. 3 COMMISSIONER SEAMOUNT: Yes. Mr. Engel, how much extra 4 time will be involved in these test since the regulation was 5 adopted, the change? 6 MR. ENGEL: Per test, Commissioner Seamount, I would 7 estimate between 30 minutes and one hour generally. 8 COMMISSIONER SEAMOUNT: Okay. And could you list the 10 this again? 9 incremental safety risks that you believe would result from 11 12 is a procedure that requires thoughtful consideration to MR. ENGEL: Yes, Commissioner. The testing of casing rams 13 design, installation and method of testing. When you're 14 15 applying pressure to a piece of casing you must ensure that the piece of pipe you have in the hole is going to withstand the 16 forces that are being imposed on that piece of equipment. 17 And then also the other consideration would be the 18 potential to force that piece of pipe out of the hole if the 19 test joint (ph) was not anchored properly or designed properly. 20 You can create upward force that may generate a safety concern 21 and launch the test joint from the well potentially if the test 22 joint was not designed and installed properly. 23 24 COMMISSIONER SEAMOUNT: How often does that happen? MR. ENGEL: I'm unaware of a situation in Alaska that has 25 happened to my knowledge. R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 17 · · · . . 1 COMMISSIONER SEAMOUNT: So theoretically it could happen? 2 MR. ENGEL: Potentially it could. 3 COMMISSIONER SEAMOUNT: Are you able to quantify the times 4 when the pressure test has been performed that has actually 5 failed? 6 MR. ENGEL: You're referring to tests on casing rams? 7 CHAIRMAN NORMAN: Right. 8 MR. ENGEL: I don't have any data in front of me, 10 do not have that with me. 9 Commissioner, but Mr. Regg may have that information handy. I 11 12 into further. I guess that's all the questions I have of Mr. CHAIRMAN NORMAN: Okay. It's something I'd like to look 13 Engel. I do have a question of MS. Moriarty whenever we get 14 15 around to it. 16 then do it. CHAIRMAN NORMAN: Sure. We'll finished with Mr. Engel and 17 I'd like to go back also to Commissioner Seamount, and I 18 should qualify this. I'm the public member so I'm the least 19 experienced, but I wanted to get to this risk of violent 20 ejection. If you have them closing this way, what you're 21 saying is it could force the pipe upward, kind of, in the way 22 that we have frost heaving, for example, where it exerts 23 pressure on something? How would that force a violent 24 ejection? I suppose I guess if it's compressed it's got to go 25 somewhere, is that -- can you explain that in a little more R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 18 · · · . . 1 detail? 2 MR. ENGEL: I will try to, Commissioner. The casing ram 3 closes around the piece of pipe and you've got a cross 4 sectional area between the outside of the pipe and the ram body 5 so you've got this area the pressure is acting upon from below. 6 And also the test joint should be anchored below that so it 7 will not be moved. You want the force to be -- not to create 8 upward force to allow that to move. 9 And what I was referring to is if it is not anchored 11 that cross sectional area could create a force that could move 10 properly the force of the -- say a 3,000 pound test acting on 12 that pipe upward rapidly if not installed properly. 13 14 CHAIRMAN NORMAN: Okay. So at first has -- if it's 15 it's..... installed properly than you don't have the risk, but -- so 16 17 MR. ENGEL: That's correct. CHAIRMAN NORMAN: .... .a, kind of, double event then if 19 18 you have a..... MR. ENGEL: That's correct. 20 21 CHAIRMAN NORMAN: Okay. I..... MR. ENGEL: There have been -- there have been casing ram 23 22 tests that have done safely (ph). CHAIRMAN NORMAN: Do you know -- if you do know, what the 24 prevailing practice among all of the various operators on the 25 North Slope is in this regard, just the companies own R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 19 · · · . . 1 practices? 2 MR. ENGEL: Yes, Commissioner, I do have knowledge of 3 several companies. 4 CHAIRMAN NORMAN: Could you speak to that, please? 5 MR. ENGEL: Yes, BP, for example, our preference is not to 6 test casing rams. Exxon Mobil does not test casing rams. 7 ConocoPhillips to my knowledge do test casing rams, that's 8 their company policy. 9 CHAIRMAN NORMAN: And any others? I know the numbers of 10 operations trail off, but what about some other companies 11 there, newer operators, what generally has been the practice on 12 some of the other wells that we see drilled there? 13 14 15 MR. ENGEL: On the North Slope, Commissioner. I have not checked with other operators than those I did express. I did 16 the Gulf of Mexico operators do not test casing rams. They talk with operators on the Gulf Coast and North America and 1n 17 follow the MMS regulations. You may find a company that 18 occasionally will test on a case by case basis depending upon 19 the certain well they're drilling. 20 Also in North America I've checked with various colleagues 21 down in the Lower 48, in our operations the practice generally 22 1S not to test casing rams. 23 I also called my colleagues 1n the United Kingdom and in 24 that part of the world casing rams are not installed. If they 25 are installed they are not tested. It's more of an adoption of R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 20 · · · . . 1 the API recommendation not to. The API recommends an optional 2 test. 3 It's not specified in the table I provided for you this 4 morning where other rams do specify a testing pressure where 5 the casing rams are not listed as such. It's an optional test 6 for reasons related to the proper design and safety concern. 7 CHAIRMAN NORMAN: And a final question then which is more 8 just a summary of my understanding of your testimony is that 10 all, it will take additional time, 30 minutes to an hour which 9 the objection to what is proposed is premised upon, first of 11 is both time and that can translate into expense. And secondly 12 that there are safety risks, so it's time and safety..... 13 14 15 16 MR. ENGEL: Yes, sir. CHAIRMAN NORMAN: Anything else .... . under those two? that causes you to object to this? MR. ENGEL: Well, in addition to those two items, 17 Commissioner, it's also consistency with other regulatory 18 agencies and recognized industry organizations. 19 20 21 CHAIRMAN NORMAN: Anything else? MR. ENGEL: That captures it, Commissioner. CHAIRMAN NORMAN: Okay. Thank you very much, Mr. Engel. 22 And we would appreciate it if you would remain. 23 And, Ms. Moriarty, we'll recall you. Commissioner 24 Seamount, I believe, has questions. 25 COMMISSIONER SEAMOUNT: I just have a simple question. R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 21 · · · 10 . . 1 MS. MORIARTY: Good, I'm glad it's simple. 2 3 COMMISSIONER SEAMOUNT: I don't know if it is answerable 4 or not or if you want to answer it. Is this objection 5 unanimous among all your members? 6 MS. MORIARTY: We..... 7 COMMISSIONER SEAMOUNT: I know that one of your members 8 does test, but I'm wondering if that member would prefer to 9 keep it optional or if you don't know, that's fine. 11 ConocoPhillips is not a member of AOGA at this time. MS. MORIARTY: Well, technically, Commissioner Seamount, 12 13 14 15 16 17 18 19 20 COMMISSIONER SEAMOUNT: That's true, okay. MS. MORIARTY: So our group, when we sent our comments out and when we had a meeting, we did not hear back of any objection to our position to oppose from any of our other companies other member companies. COMMISSIONER SEAMOUNT: Okay, thank you. CHAIRMAN NORMAN: Anything else, Commissioner Seamount? COMMISSIONER SEAMOUNT: No (ph). 21 excused. And I'll ask if there are any other persons present CHAIRMAN NORMAN: Let me -- Mr. Engel, you're then 22 23 24 right now that wish to offer any testimony to the Commission? What I - - the Chair would like to then do is take a five minute recess and I want to go back over my notes and collect 25 them and see if there are any final questions before we excuse R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 22 · · · . . 1 the witnesses and conclude the hearing. So we'll go off record 2 on a five minute recess. 3 (Off record - 9:36 a.m.) 4 (On record - 10:08 a.m.) 5 CHAIRMAN NORMAN: We're back on record after taking a 6 recess and I apologize, we ran a little longer than I had 7 announced. We try not to do that and our experience though has 8 shown if we can, kind of, collect questions it saves 10 I would like to recall Mr. Regg and have him comment on 9 duplication of effort. 11 offer any final comments that he wishes into the record and 12 then, Ms. Moriarty and Mr. Engel, you'll have a similar 13 opportunity and then I think we're close to wrapping up. 14 15 Mr. Regg, you're recalled, please. MR. REGG: During the testimony we heard a lot of reasons 17 casing rams. A couple questions I think stated slightly 16 for not testing the casing rams -- offered for not testing the 18 different than what I left as a final question though. How do 19 you know if a proper ram is installed? 20 How do you confirm that it will function if it is 21 required, you know, it may be your secondary or your backup for 22 your well operation, but if you have to push the button to rely 23 on the functioning of that casing ram, how do you know it's 24 going to function if needed? 25 And then how can you confirm damage to the sealing surface R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 23 . . -. . . 1 on your casing ram particularly if the ram was left in your 2 casing -- in your BOP stack and possibly done during a move and 3 hasn't been taken out? You know, those are some things that I 4 can't find -- or I can't drag myself back to from -- when I 5 look at relying on policies and procedures to assure that you 6 have proper functioning casing rams. 7 A comment, but maybe a question and, perhaps, the 8 operators would want to comment to that. 9 CHAIRMAN NORMAN: Okay. Thank you, Mr. Regg. 10 Commissioner Seamount, anything? 11 12 COMMISSIONER SEAMOUNT: I have no further questions. 13 remain. And we'll ask -- and you need not offer anything more, CHAIRMAN NORMAN: Okay. Mr. Regg, we would ask you to 14 15 but if you would choose to do so I think Mr. Regg posed a general question, Mr. Engel, would you please put yourself on 16 the record again, please? 17 MR. ENGEL: Yes, Commissioner. My name is Harry Engel. 18 And I'd like to respond to Mr. Regg's concerns and questions 19 regarding the verification that the proper rams have been 20 installed and they're fit for purpose. And I would respond 21 that the controls in place are administrative approaches. What 22 I mean by that is that the operators and the contractors have 23 written procedures they follow to verify that, one, the ram is 24 the right size for the application. 25 And even before that, the rams are stored in place and R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 24 · · · . . 1 location that they're maintained properly, so when they're 2 picked up and installed they follow a procedure. And then once 3 they're installed they are functioned -- the ram is actually 4 functioned. It's not applied -- a pressure around a pipe. It 5 would be functioned so they know that it would, in fact, 6 actually close. 7 So I would summarize the response in that there are 8 procedures in place, safeguards in place to ensure that, one, 9 the right ram type is installed and is able to function inside 10 the ram body. 11 12 13 14 15 CHAIRMAN NORMAN: Commissioner Seamount. COMMISSIONER SEAMOUNT: No questions. CHAIRMAN NORMAN: Anything more, Mr. Engel? MR. ENGEL: No, I would just summarize again, Commissioner, that we feel that the current regulations do 16 provide the regulatory boundary for providing a safe work place 17 in Alaska. 18 19 follow up clarification. CHAIRMAN NORMAN: Okay, good. Well, thank you for that 20 I will ask now for the record if anyone else present would 21 like to be recognized and testify? For the record the Chair 22 sees no one asking to be recognized to testify and, therefore, 23 this hearing will conclude at the hour of approximately 10:15 24 a.m. 25 (Recessed - 10:13 a.m.) R & R C 0 U R T R E P 0 R T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 25 · · · . . 1 C E R T I F I CAT E 2 UNITED STATES OF AMERICA ) )ss. STATE OF ALASKA ) 3 4 I, Suzan Kay Olson, Notary Public in and for the State of Alaska, residing at Anchorage, Alaska, and Reporter for R & R 5 Court Reporters, Inc., do hereby certify: 6 THAT the annexed and foregoing Public Hearing In the Matter of the Rules Governing Safety Valve System Requirements 7 pursuant to 20 AAC 25.265 pertaining to the Badami Field on the North Slope of Alaska, was taken by Suzan Olson on the 22nd day 8 of February, 2007, commencing at the hour of 9:00 a.m., at the Alaska Oil and Gas Conservation Commission, Anchorage, Alaska; 9 THAT this Hearing Transcript, as heretofore annexed, is a 10 true and correct transcription of the proceedings taken and transcribed by Suzan Olson; 11 IN WITNESS WHEREOF, I have hereunto set my hand and 12 affixed my seal this 11th day of April, 2007. 13 14 15 16 17 18 19 20 21 22 23 24 25 Notary l'c My Commission R & R C 0 U R T R E paR T E R S 811 G STREET (907)277-0572/Fax 274-8982 ANCHORAGE, ALASKA 99501 . . STATE OF ALASKA OIL AND GAS CONSERVATION COMMISSION Public Hearing Blowout Prevention Equipment Testing April! 0, 2007 at 9:00 am NAME - AFFILIATION ADDRESSIPHONE NUMBER TESTIFY (Yes or No) (pLEASE PRINT) ~Qt1~ ~ Aœdt ~~~,;;~~ ~..-L ~~à. j þ()v(.~ . Ol'~ ~ / 0 c;.('(. ~'7~ -/1Ð/ .2'f~- :J.13~ 5t?cj -1/ '1y ~,~-\~SÙ ¡Cia \ ~t 'ú~ no ýES ~ 00 . . Alaska Oil and Gas Association A0GI 121 W. Fireweed Lane, Suite 207 Anchorage, Alaska 99503-2035 Phone: (907)272-1481 Fax: (907)279-8114 Email: brady@aoga.org Judith Brady, Executive Director April 10, 2007 Commissioner John Norman Alaska Oil and Gas Conservation Commission 333 W. ¡th Avenue, Suite 100 . Anchorage, AK 99501-3539 Re: AOGA Comments on AOGCC Blowout Prevention Equipment TestinQ Requirements in 20 AAC 25.035(e)(10) and 20 AAC 25.285(f)(5) Dear Commissioner Norman: The Alaska Oil & Gas Association (AOGA) is a private non-profit trade association. Its member companies represent the majority of oil and gas exploration, production, transportation, refining and marketing activities in Alaska. AOGA has reviewed the draft Alaska Oil and Gas Conservation Commission (AOGCC) regulation changes and appreciates the opportunity to provide comment and testimony. AOGCC recently revised Title 20, Chapter 25 of the Alaska Administration Code related to blowout prevention equipment. The purpose of the revision was to reduce regulatory ambiguity and variations in interpretation, reduce instances of regulatory noncompliance and reduce the numbers of regulatory waivers and variances. AOGA provided written comments on August 30, 2006 and BPXA and ConocoPhillips representatives provided oral comments at a public meeting on August 31,2006. The regulations were modified and became effective on December 28, 2006. In written and oral comments to the Commission, prior to the adoption of the regulation changes, AOGA and BPXA representatives suggested language modifications to 20 AAC 25.035 (e) (10) and 20 AAC 25.285(f) (5). The suggested modifications recommended testing BOPE ram bonnets only after installing casing rams before running casing. The foundation for the proposed language was consistency with U.S. Minerals Management Service (MMS) and industry practice. The AOGCC accepted the proposed language and current regulations reflect this consistency. April 5, 2007 Page 2 . . Upon further review of this subject several factors support the current AOGCC language related to testing ram bonnets only after installing casing rams before running casing. These factors include: · Safety concerns associated with proper test mandrel sizing, design, handling and pump-out forces especially associated with large diameter casing; · Consistency with MMS and Railroad Commission of Texas regulations; · Alignment with the American Petroleum Institute (API) and United Kingdom Chapter of the International Well Control Forum (IWCF); and · The International Association of Drilling Contractors (IADC) generally follows the MMS The pressure testing of casing rams creates incremental risk associated with handling, proper design and anchoring to prevent the test mandrel from being violently ejected from the blowout preventer stack. Current MMS regulations at 30 CFR Part 250, Subpart D Oil & Gas Drilling Operations, Sec. 250.451 (f) require testing the ram bonnets before running casing. The Railroad Commission of Texas regulations for onshore and offshore operations take a performance based approach. The regulations require blowout preventers to keep the well under control at all times. They do not specify what method an operator must employ to keep the well under control at all times. Copies of the MMS and Railroad Commission of Texas regulations are attached. API Recommended Practice 53 in Section 17, Table 2 does not specify a pressure test of casing rams prior to running casing. The pressure test is listed as "optional". A copy is attached. The United Kingdom Chapter of the International Well Control Forum (lWCF) Well Control committee was consulted. The overwhelming response was that it isn't common practice to test casing rams due to concerns related to test mandrel size, design and pump-out forces. During the period leading up to adoption of the latest revision to AOGCC BOPE regulations and after the regulations were adopted there was confusion in some BPXA operations with respect to casing ram testing requirements. BPXA has informed all its well site leaders and drilling contractors that only ram bonnets will be tested after installing casing rams, before running casing. This is consistent with BPXA internal guidelines, U.S. Minerals Management Service and Railroad Commission of Texas regulations, general industry practice and current AOGCC regulations. A common technique employed in the event of a well control situation during casing running operations is to close the annular preventer, strip the casing in the well and immediately cross over from casing to drill pipe. This allows for subsequent stripping in the well with drill pipe across the BOPE. This technique facilitates an effective well kill Apri/10, 2007 Page 3 . . operation. This practice creates debate among the well control community related to the need to install casing rams at all because, if used they may inhibit the ability to effectively strip in the well. A specific justification for the proposed regulation changes expressed by some AOGCC inspectors is that a casing ram pressure test is an effective way to ensure that properly sized casing rams are correctly installed prior to running casing. Several layers of safeguards are in place to verify that correct casing rams are utilized when appropriate. Local drilling contractors follow written procedures to ensure proper installation and operation of casing rams. Additionally onsite personnel provide verification that the proper equipment has been installed. The proposed regulation changes have the potential to burden operators with additional time to handle test mandrels, potential incremental safety risks and costs associated with equipment wear and replacement. Considering the items mentioned above we recommend that the current language as adopted on December 28, 2006 remain in place. The current regulations provide clear guidance that is consistent with other regulatory agencies and several international industry organizations and ensure safe operations. In addition, the current regulations allow operators the flexibility to employ situation specific pressure testing techniqùes. Thank you for the opportunity to provide comment and testimony on these proposed revisions to the Commission's regulations. rely, udith Brady Executive Director Enclosures (3) [MMS regulation, Railroad Commission of Texas regulation, API practice] . . MMS regulation referénce related to testing ram bonnets after installing casing rams. MMS Regulations 30CFR Part 250 Subpart D Oil & Gas Drilling Operations Sec. 250.451 What must I do in certain situations involving BOP equipment or systems? The table in this section describes actions that lessees must take when certain situations occur with BOP systems during drilling activities. ----------------------------------------------------------- If you encounter the following situation: Then you must... ----------------------------------------------------------- (f) Install casing rams in a BOP stack....Test the ram bonnets before running casing. oQ... . .:< . ~. .. ';. .. ..... . ·i~~-"ii i I:;",ii "--"+ ~';;"El ': m .. iL< ,. ................., -...".;, ","',,' Mm'..... "''''''''_'''' BOP.......~. .' . . ::"~~=""t¡O'Ât~' .' ",i~;~~~~<iL . "Varlar1!CBoro ..... 2ÒQ·~Qt){i.~i A~.J ~P<1) .' '. (;~!C'1hall diC",a~jltilllant¡ciPatëd$ttrf~ L . ..' ...¡~~,¡¡~~~V :;.:::il~"'iqi%%~¡~~~---~...2i ·.·..i···· ..' ·,"""'"...a.......";·X'·i i . .... .... .' ..... ...... ____...... i ii ,.-......... i . ,.""",,,,i .............. NI^ .. .. '" ....... "i..iLi" '.. ~t~¿;i;L~;&\;¡~eJ200.300{J.3~j·~m m·i'Œn)~MPa) .. ........ ..... ....... .. 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"i . .... .... .... .' .... .. . ....< :=~ "" ···i .'1-101 i:\:.""'...... i... ·i·· .:::1 i'i" ..... .. · .. J< i. ·.·;mi< ..... '. '.d..·,...· ..... '.,<... ".....:,:.. .'. ..... . '.'1 "~G·¡d=· .....---.¡ t=·L.·..·....mJi...... ... ii .' m" i............ ... ··i.. '. .' 'i' i.... 'i "i .. . .,. iii.' ..~-_.....- ~...., '~..._. '.,... '. ......... ....... .... ... '. JL. ..... '. . 'iLJi i .. ....... . ..' ... ..... m ...... ..... ..... .... .. . ... . ... .' ............ .... .... .......... .. .. ... ...... . . Casing Ram Testing Requirements April 10, 2007 Terminology · BOPE - blowout prevention equipment · "BOP"; "BOPE"; "BOP equipment" and BOP stack may be used interchangeably · Ram - closing and sealing component of BOPE; designed to close on pipe or shear pIpe Surface BOP Stack . 1 . Pre-December 26, 2006 · 20 AAC 25.035: Primary Drilling, Completion · 20 AAC 25.285 -Tubing Workovers · Function pressure test BOPE - when installed, repaired, or changed, and at specified intervals - if used, function pressure test before next wellbore entry Effective December 26, 2006 · Include separate casing ram requirement - 20 AAC 25.035(e)(lO)(F) and 25.285(1)(5) - Test ram bonnets after installing casing rams · Proposed language introduced during testimony at hearing regarding changes to BOPE regulations - August 3 I, 2006 - BP, ConocoPhiIIips, AOGA testimony Proposed · Revise casing ram test requirements ~ 20 AAC 25.035(e)(10)(F) - 20 AAC 25.285(1)(5) · Proposed change - "after they are installed in the BOP stack, the rams for casing or liner must be function pressure-tested to the required pressure before running casing or liner" - replaces test of the ram cavity door with a function pressure test of the mechanical component . 2 . Purpose · Functional safety equipment - debris; foreign material/articles in stack; improper ram size; damaged seals/sealing surface can and do occur - bonnet test does not validate proper installation and operation of casing rams Impact · Qualitative · Some test already; some do not - Operator policies · Additional time - Insignificant to overall operation · Cost? - Test joints; time · Safety? Closing Remarks · Can we be assured of the casing ram integrity without function pressure testing the component? · Commission Engineering and Inspection staff agree that casing rams must be function pressure tested . 3 Register _, .0_ MISCELLANEOU.ARDS 20 AAC 25.035(e)(l0) is amended to read: (l0) the BOPE must be tested as follows: (A) when installed, repaired, or changed on a development or service well and at time intervals not to exceed each 14 days thereafter, BOPE, including kelly valves, emergency valves, and choke manifolds, must be function pressure-tested to the required working pressure specified in the approved Permit to Drill, using a non-compressible fluid, except that an annular type preventer need not be tested to more than 50 percent of its rated working pressure; however, the commission will require that the BOPE be function pressure-tested weekly, if the commission determines that a weekly BOPE pressure test interval is indicated by a particular drilling rig's BOPE performance; (B) when installed, repaired, or changed on an exploratory or stratigraphic test well and at least once a week thereafter, BOPE, including kelly valves, emergency valves, and choke manifolds, must be function pressure-tested to the required working pressure specified in the approved Permit to Drill, using a non-compressible fluid, except that an annular type preventer need not be tested to more than 50 percent of its rated working pressure; (C) if any BOP equipment components have been used for well control or other equivalent purpose, or when routine use of the equipment may have compromised its effectiveness, the components used must be function pressure-tested, before the next wellbore entry, to the required working pressure specified in the approved Pennit to Drill, using a non-compressible fluid, except that an annular type preventer need not be tested to more than 50 percent of its rated working pressure; Register _, .0_ MISCELLANEOU.ARDS (D) BOP ram and annular components except blind rams must be function-tested weekly, and all BOP ram and annular components must be function-tested after an action that disconnects the hydraulic system lines trom the BOPE, except that if the workstring is continuously in the well, function-testing of blind rams must be performed as soon as possible after the workstring is pulled out of the well and the BHA clears the BOP; (E) for each BOPE test during drilling and completion operations, variable bore rams must be function pressure-tested to the required pressure on the smallest outside diameter (OD) and largest outside diameter (OD) tubulars that may be used during that test cycle, except that variable bore rams need not be tested on BHAs and drill collars; (F) after thev are installed [INSTALLING CASING RAMS] in the BOP stack, the rams for casine: or liner [RAM BONNETS] must be pressure-tested [TESTED] to the required pressure before running casing; (G) BOPE test results must be recorded as part of the daily record required by 20 AAC 25.070(1), and must be provided to the commission, in a format approved by the commission, within five days after completing the test; (H) at least 24 hours notice of each BOPE function pressure test must be provided to the commission so that a commission representative can witness the test; History: Eff. 4/13/80, Register 74; am 2/22/81, Register 77; am 4/2/86, Register 97; am 11/7/99, Register 152; am 10/24/2004, Register 172; ami 2/28/2006, Register 180; am ----.! ----.!_, Register ~ Authority: AS 31.05.030 Register _' .0_ MISCELLANEOU.ARDS 20 AAC 25.285(f)(5) is amended to read: (5) after they are installed [INSTALLING CASING RAMS] in the BOP stack, the rams for casin2 or liner [RAM BONNETS] must be function pressure-tested [TESTED] to the required pressure before running casing or liner; History: Eff. 4/2/86, Register 97; am 1117/99, Register 152; am12/28/2006, Register 180; am~~_, Register ~ Authority: AS 31.05.030 #4 . . MEMORANDUM State of Alaska Department of Law To: John Norman, Chair Alaska Oil and Gas Conservation Commission Dept. of Administration ,~/4øeÁ-7 &h From: ~~ E. Behr Chief Assistant Attorney General and Regulations Attorney Legislation and Regulations Section Date: March 12,2007 . . File No.: 993-07-0118 " Tel. No.: 465-3600 Re: Regulations File Opening Re: Blowout Prevention Equipment Testing Requirements (20 AAC 25.035; .285) We have received your agency's memorandum of March 2, 2007 regarding this project, along with a copy of the proposed regulations and related documents. The project has been assigned to Assistant Attorney General Alan Birnbaum, phone number 269-5100. Our department's file number for this project is 993-07-0118. This file number should be used on any further correspondence pertaining to this project. DEB:pvp cc: Kevin Brooks, Regulations Contact Dept. of Administration Jody Colombie, Project Contact Alaska Oil and Gas Conservation Commission Dept. of Administration Lauren Yocom, AAC Coordinator Lt. Governor's Office Larry Ostrovsky, Supervising Attorney Oil, Gas and Mining Section Alan Birnbaum, Assistant Attorney General Anchorage )"" ." ) #3 STATE OF ALASKA NOTICE TO PUBLISHER ADVERTISING ORDER NO. ADVERTISING INVOICE MUST BE IN TRIPLICATE SHOWING ADVERTISING ORDER NO., CERTIFIED AO-02714021 AFFIDAVIT OF PUBLICATION (PART 2 OF THIS FORM) WITH ATTACHED Copy OF ORDER ADVERTISEMENT MUST BE SUBMITTED WITH INVOICE SEE BOTTOM FOR INVOICE ADDRESS F AOGCC AGENCY CONTACT DATE OF A.O. R 333 W 7th Ave, Ste 100 Ceresa Tollev March 2. 2007 0 Anchorage, AK 99501 PHONE PCN M 907-793-1238 (Q07) 7Qi -1 ?iR DATES ADVERTISEMENT REQUIRED: T Anchorage Daily News March 5, 2007 0 PO Box 149001 Anchorage, AK 99514 THE MATERIAL BE1WEEN THE DOUBLE LINES MUST BE PRINTED IN ITS ENTIRETY ON THE DATES SHOWN. SPECIAL INSTRUCTIONS: Advertisement to be published was e-mailed Type of Advertisement legal[g 0 Display Classified DOther (Specify) SEE ATTACHED SEND INVOICE IN TRlPUCATE I AOGCC, 333 W. 7th Ave., Suite 100 PAGE 1 OF TOTAL OF ,I TO . Anchonw:e, AK 99501 2 PAGES ALL PAGES$ REF TYPE NUMBER AMOUNT DATE COMMENTS 1 VEN 2 ARD 02910 3 4 FIN AMOUNT SY CC PGM LC ACCT FY NMR ruST UQ 1 05 02140100 73451 2 3 4 REQUISITIONED BY: <:: II ('\ Jth. _____ .J IDIVISION APPROVAL: \ . . . . ST ATE OF ALASKA NOTICE OF PROPOSED CHANGES IN THE REGULATIONS OF THE ALASKA OIL AND GAS CONSERVATION COMMISSION The Alaska Oil and Gas Conservation Commission ("AOGCC") proposes to adopt changes to Title 20, Chapter 25, of the Alaska Administrative Code, dealing with blowout prevention equipment testing requirements including the following: Blowout prevention equipment testing requirements in 20AAC 25.035(e)(l0) and 20 AAC 25.285(f)(5) are clarified. For a copy of the proposed regulation changes, contact Jody Colombie at AOGCC, 333 W. 7th Avenue, Suite 100, Anchorage, Alaska 99501, or by telephoning the AOGCC at 907-793-1221, or on the AOGCC website at: http://www.aogcc.alaska.gov. You may comment on the proposed regulation changes, including the potential costs to private persons of complying with the proposed changes, by submitting written comment to AOGCC, 333 W. 7th Avenue, Suite 100, Anchorage, AK 99501. The comments must be received no later than 4:30 p.m. on April 6, 2007. Oral or written comments may also be submitted at a hearing to be held on April 10, 2007 at 333 W. 7th Avenue, Suite 100, Anchorage, AK 99501. The hearing will begin at 9:00 a.m. and might be extended to accommodate those present before 9:30 a.m. who did not have an opportunity to comment. If you are a person with a disability who may need a special accommodation in order to participate in the process, please contact Jody Colombie at 793-1221 by 12:00 p.m., April 9, 2007 to ensure that any necessary accommodations can be provided. After the public comment period ends, the AOGCC will either adopt this or another proposal dealing with the same subject, without further notice, or decide to take no action on it. The language of the fmal regulations may be different from that of the proposed regulations. YOU SHOULD COMMENT DURING THE TIME ALLOWED IF YOUR INTEREST COULD BE AFFECTED. Written comments received are public records and are subject to public inspection. Statutory Authority: AS 31.05.030. Statutes Being Implemented, Interpreted, or Made S ecific: AS 31.05.030. Fiscal Information: The proposed regulation chan a not expected to require an increased appropriation. mmission Date: March 2. 2007 Published: March 5, 2007 AO-024l4047 . . ADDITIONAL REGULATIONS NOTICE INFORMATION (AS 44.62. 1 90(d)) 1. Adopting agency: Alaska Oil and Gas Conservation Commission. 2. General subject of regulations: blowout prevention equipment testing requirements. 3. Citation of regulations: 20 AAC 25.035(e)(10), 20 AAC 25.285(f)(5) 4. Reason for the proposed action: clarification of the subject regulatory requirements. 5. Program category and BRU affected: Alaska Oil and Gas Conservation Commission. 6. Cost of implementation to the state agency: zero. 7. The name of the contact person for the regulations: Name: John K. Norman Title: Chairman Address: 333 W. ih Avenue, Suite 100, Anchorage, AK 99501 Telephone: (907) 793-1221 E-mail: jody_colombie@admin.state.ak.us 8. The origin of the proposed action: agency staff. 9. Date: March 2, 2007 10. Prepared by: ~ ~ Q do,.. t----- Jo . Col~bie Alaska Oil and Gas Conservation Commission (907) 793-1221 RE: Public Hearing Notice . . Subject: RE: Public Hearing Notice From: "Ads, Legal" <legalads@adn.com> Date: Fri, 02 Mar 200714:45:41 -0900 To: Jody Colombie <jody _ colombie@admin.state.ak.us> Hello Jody: Following is the confirmation information on your legal notice. Please review and let me know if you have any questions or need additional information. Account Number: STOF 0330 Legal Ad Number: 149907 Publication Date(s): March 5, 2007 Your Reference Number: 02714021 Total Cost of Legal Notice: $235.72 Thank You, Kim Kirby Legal Classified Representative E-mail: legalads@adn.com Phone: (907) 257-4296 Fax: (907) 279-8170 -----Original Message----- From: Jody Colombie [mailto:jody colombie@acirrÜn.state.ak.us] Sent: Friday, March 02, 2007 12:14 PM To: Ads, Legal Subject: Public Hearing Notice 10f1 3/2/20072:48 PM 02-902 (Rev. 3/94) Publisheginal Copies: Department Fiscal, Depa~eceiving AO.FRM NOTICE TO PUBLISHER ADVERTISING ORDER NO. STATE OF ALASKA ADVERTISING ORDER SEE BOTTOIUI FOR INVOICE AODRESS INVOICE MUST BE IN TRIPLICATE SHOWING ADVERTISING ORDER NO., CERTIFIED AO-02714021 AFFIDAVIT OF PUBLICATION (PART 2 OF THIS FORM) WJTI-I ATTACHED COPY OF ADVERTISEMENT MUST BE SUBMITTED WJTI-IINVOICE F AOGCC R 333 West 7th. Avenue. Suite 100 o A ncnor::lpe. A K <)<)';01 M 907-793-1238 ~ Anchorage Daily News PO Box 149001 Anchorage, AK 99514 AGENCY CONTACT DATE OF A.O. ~ ~ .. 'prp<:!'I I nllPV Il\Æ",..,..¡.,? ?007 PCN PHONE I (Q07\ 7Q~ _1 ?~R DATES ADVERTISEMENT REQUIRED: March 5, 2007 THE MATERIAL BETWEEN THE DOUBLE LINES MUST BE PRINTED IN ITS ENTIRETY ON THE DATES SHOWN. SPECIAL INSTRUCTIONS: Account # STOF0330 AFFIDAVIT OF PUBLICATION REMINDER United states of America State of ss division. Before me, the undersigned, a notary public this day personally appeared who, being first duly sworn, according to law, says that he/she is the of Published at in said division state of and that the advertisement, of which the annexed is a true copy, was published in said publication on the day of 2005, and thereafter for _ consecutive days, the last publication appearing on the _ day of . 2005, and that the rate charged thereon is not in excess of the rate charged private individuals. Subscribed and sworn to before me This _ day of 2005, Notary public for state of My commission expires 02-901 (Rev. 3/94) INVOICE MUST BE IN TRIPLICATE AND MUST REFERENCE THE ADVERTISING ORDER NUMBER. A CERTIFIED COpy OF THIS AFFIDAVIT OF PUBLICATION MUST BE SUBMITTED WITH THE INVOICE. ATTACH PROOF OF PUBUCATION HERE. and AO.FRM Register _, '0 . MISCELLANEOUS BOARDS 20 AAC 25.035(e)(10) is amended to read: (10) the BOPE must be tested as follows: (A) when installed, repaired, or changed on a development or service well and at time intervals not to exceed each 14 days thereafter, BOPE, including kelly valves, emergency valves, and choke manifolds, must be function pressure-tested to the required working pressure specified in the approved Permit to Drill, using a non-compressible fluid, except that an annular type preventer need not be tested to more than 50 percent of its rated working pressure; however, the commission will require that the BOPE be function pressure-tested weekly, if the commission determines that a weekly BOPE pressure test interval is indicated by a particular drilling rig's BOPE performance; (B) when installed, repaired, or changed on an exploratory or stratigraphic test well and at least once a week thereafter, BOPE, including kelly valves, emergency valves, and choke manifolds, must be function pressure-tested to the required working pressure specified in the approved Permit to Drill, using a non-compressible fluid, except that an annular type preventer need not be tested to more than 50 percent of its rated working pressure; (C) if any BOP equipment components have been used for well control or other equivalent purpose, or when routine use of the equipment may have compromised its effectiveness, the components used must be function pressure-tested, before the next wellbore entry, to the required working pressure specified in the approved Permit to Drill, using a non-compressible fluid, except that an annular type preventer need not be tested to more than 50 percent of its rated working pressure; Register _, '0 . MISCELLANEOUS BOARDS (D) BOP ram and annular components except blind rams must be function-tested weekly, and all BOP ram and annular components must be function-tested after an action that disconnects the hydraulic system lines from the BOPE, except that if the workstring is continuously in the well, function-testing of blind rams must be performed as soon as possible after the workstring is pulled out of the well and the BHA clears the BOP; (E) for each BOPE test during drilling and completion operations, variable bore rams must be function pressure-tested to the required pressure on the smallest outside diameter (OD) and largest outside diameter (OD) tubulars that may be used during that test cycle, except that variable bore rams need not be tested on BRAs and drill collars; (F) after thev are installed [INSTALLING CASING RAMS] in the BOP stack, the rams for casin2: or liner [RAM BONNETS] must be uressure-tested [TESTED] to the required pressure before running casing; (G) BOPE test results must be recorded as part ofthe daily record required by 20 AAC 25.070(1), and must be provided to the commission, in a format approved by the commission, within five days after completing the test; (H) at least 24 hours notice of each BOPE function pressure test must be provided to the commission so that a commission representative can witness the test; History: Eff. 4/13/80, Register 74; am 2/22/81, Register 77; am 4/2/86, Register 97; am 11/7/99, Register 152; am 10/24/2004, Register 172; am12/28/2006, Register 180; am__/..~_, Register ~ Authority: AS 31.05.030 Register _, ~OO . MISCELLANEOUS BOARDS 20 AAC 25.285(f)(5) is amended to read: (5) after they are installed [INSTALLING CASING RAMS] in the BOP stack, the rams for casinl! or liner [RAM BONNETS] must be function pressure-tested [TESTED] to the required pressure before running casing or liner; History: Eff. 4/2/86, Register 97; am 11/7/99, Register 152; amI2/28/2006, Register 180; am~ ~ --' Register ~ Authority: AS 31.05.030 #2 . . MEMORANDUM STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION TO: Deborah E. Behr Assistant Attorney General And Regulations Attorney Legislation and Regulations Section DATE: March 2, 2007 FROM: SUBJECT: File-opening request for Regulations Project on Blowout Prevention Equipment Testing Requirements 20 AAC 25.035(e)(10) 20 AAC 25.285(f)(5) rman Re I ions Contact Department of Administration We are requesting that you open a new file for a regulations project regarding changes in Title 20, Chapter 25, of the Alaska Administrative Code, blowout prevention equipment testing requirements for the Alaska Oil and Gas Conservation Commission. Enclosed is a copy of the public notice, Additional Regulations Notice Information, and a draft of the regulation. Please assign Assistant Attorney General Cammy Taylor to this project. Our contact person for the project is lody Colombie at 793-1221. Register _, '0 MISCELLANEOUS.ARDS 20 AAC 25.035(e)(10) is amended to read: (10) the BOPE must be tested as follows: (A) when installed, repaired, or changed on a development or service well and at time intervals not to exceed each 14 days thereafter, BOPE, including kelly valves, emergency valves, and choke manifolds, must be function pressure-tested to the required working pressure specified in the approved Permit to Drill, using a non-compressible fluid, except that an annular type preventer need not be tested to more than 50 percent of its rated working pressure; however, the commission will require that the BOPE be function pressure-tested weekly, if the commission detennines that a weekly BOPE pressure test interval is indicated by a particular drilling rig's BOPE performance; (B) when installed, repaired, or changed on an exploratory or stratigraphic test well and at least once a week thereafter, BOPE, including kelly valves, emergency valves, and choke manifolds, must be function pressure-tested to the required working pressure specified in the approved Permit to Drill, using a non-compressible fluid, except that an annular type preventer need not be tested to more than 50 percent of its rated working pressure; (C) ifany BOP equipment components have been used for well control or other equivalent purpose, or when routine use of the equipment may have compromised its effectiveness, the components used must be function pressure-tested, before the next wellbore entry, to the required working pressure specified in the approved Permit to Drill, using a non-compressible fluid, except that an annular type preventer need not be tested to more than 50 percent of its rated working pressure; Register _, . 200 . MISCELLANEOUS BOARDS (D) BOP ram and annular components except blind rams must be function-tested weekly, and all BOP ram and annular components must be function-tested after an action that disconnects the hydraulic system lines from the BOPE, except that if the workstring is continuously in the well, function-testing of blind rams must be performed as soon as possible after the workstring is pulled out of the well and the BHA clears the BOP; (E) for each BOPE test during drilling and completion operations, variable bore rams must be function pressure-tested to the required pressure on the smallest outside diameter (OD) and largest outside diameter (OD) tubulars that may be used during that test cycle, except that variable bore rams need not be tested on BHAs and drill collars; (F) after they are installed [INSTALLING CASING RAMS] in the BOP stack, the rams for casine: or liner [RAM BONNETS] must be pressure-tested [TESTED] to the required pressure before running casing; (G) BOPE test results must be recorded as part of the daily record required by 20 AAC 25.070(1), and must be provided to the commission, in a format approved by the commission, within five days after completing the test; (H) at least 24 hours notice of each BOPE function pressure test must be provided to the commission so that a commission representative can witness the test; History: Eff. 4/13/80, Register 74; am 2/22/81, Register 77; am 4/2186, Register 97; am 11/7/99, Register 152; am 10/24/2004, Register 172; am 12/28/2006, Register 180; am _I ~ _, Register ~ Authority: AS 31.05.030 Register _, to . MISCELLANEOUS BOARDS 20 AAC 25.285(£)(5) is amended to read: (5) after they are installed [INSTALLING CASING RAMS] in the BOP stack, the rams for casine: or liner [RAM BONNETS] must be function pressure-tested [TESTED] to the required pressure before running casing or liner; History: Eff. 4/2/86, Register 97; am 11/7/99, Register 152; am12/28/2006, Register 180; am~~_, Register ~ Authority: AS 31.05.030 #1 . . FEBRUARY 28, 2007 at 9:00 a.m. - PUblic Meeting ATTENDEES: John Norman Cathy Foerster Dan Seamount Jody Colombie Steve Davies Jane Williamson James Regg Cammy Taylor Kara Moriarty Jerome Eggemeyer Randy Kanady Garrett Rycliik Barbara Fullmer Kristen Nelson Randal Buckendorf David Lenig Gerry Suellentrop Rudy Brueggeman Alan Birnbaum Brian Magruder Bill Van Dyke Eric Ding Chairman Commissioner Commissioner Special Assistant Geologist Senior Reservoir Engineer Petroleum Engineer Assistant Attorney General AOGA ConocoPhillips ConocoPhillips ConocoPhillips ConocoPhillips Petroleum News BP BP NORMAN: Opens meeting. This is the regular monthly meeting of the Commission. There is a quorum present for the conduct of legal business. The notice of this meeting has been duly published in the Anchorage Daily News. Any persons desiring to see a copy of the notice should see the Special Assistant. AMERICANS WITH DISABILITIES ACT NORMAN: The Commission strives to comply with all requirements of the Act. If there are any persons requiring special accommodations and needing assistance in any form, either physical access or assistance to hear the proceedings or to provide testimony, the Commission will do its best to accommodate you. APPROVE MINUTES Approval of December 27, 2006. Unanimously approved. Approval of January 31, 2007. Unanimously approved. AOGCC - 2/28/67 - Page 1 . . TEAM ACTIVITY REPORT NORMAN: Mr. Davies will give report for both teams. DAVIES: Monthly Activity Report for February. During the past month there have been a total of 12 new drilling permits approved for operations within the state bringing the 2007 approved drilling permit total to 28 with 29 received. This is an 18 percent decrease over February, 2006, and is a result of fewer permits being received, not processing delays at the Commission. 11 permits were approved for the North Slope; 4 exploratory wells, 3 development wells and 4 service wells. 1 permit was approved for the Cook Inlet Basin; development well Ninilchik State #3. Sundry Applications: 26 notices were approved for activities across the state, bringing the total approved for the year to 77 with 72 received, which is the same as February, 2006. 2 sundry applications were approved in Cook Inlet Basin and 24 on the North Slope. The 2 Cook Inlet Basin sundry notices approved were for well repair at McArthur River. The 24 North Slope approved sundry applications were for a variety of well work. APPROVED ORDERS AND DECISIONS DAVIES: CO 443A.003, 562.001, 569.001: Authorizes 1 mcf per day gas offtake from Colville River Field to permit shipping of gas to Nuiqsut. AA 462.02: Authorizes a spacing exception for Endicott 1-39A/N-16. AA AlO 04E.017: Authorizes continued water injection into PBU 14-01A. AA AlO 18B.003: Authorizes continued water injection into CRU CD2-48. AOGCC - 2/28/07 - Page 2 . . . OTHER COMMISSION BUSINESS DAVIES: The Commission met with new EPA Region 10 Administrator, Elin Miller (ph) on February 13, 2007. Governor Palin visited the Commission on February 16, 2007, toured the office and spoke with Commissioners and staff. Chairman Norman presented an overview of the Commission budget and proposed amendments to AS 31 to AOGA representatives on February 21, 2007. A public hearing was held February 22, 2007, on safety valve system requirements for Badami Field. Commissioners met with House Majority Leader Samuels to finalize proposed amendments to AS 31. House Bills 89 and 128 and Senate Bill 80 were reviewed for possible Commission testimony. Chairman Norman appeared before the House Finance Subcommittee to review the Commission's budget and mission. Commissioner Foerster was recognized by the Alaska Chapter of the Society of Professional Engineers as a finalist for Engineer of the Year. ALASKA OIL PRODUCTION DAVIES: Alaska oil production (see attached) for January, 2007. January, 2007 production reflects a 7 percent decrease from January, 2006, and a 2 percent decrease from December, 2006. POSITION VACANCY POSTING NORMAN: Announced that the Commission is seeking a qualified person to fill a vacant petroleum engineer position. BP INVESTIGATION FINDINGS NORMAN: The investigation initiated in 2006 as a result of allegations of well integrity and well cellar violations by BP in its North Slope operations has been completed and the investigation closed. Mr. Regg led the investigation and will present the report. The report is posted on the Commission's AOGCC - 2/28/07 - Page 3 . . ~ website at www.aogcc.alaska.gov. REGG: The investigation resulted from a June 28, 2006, complaint by Mr. Charles Hamel, to the Commission and the Alaska Department of Environmental Conservation. The investigation was conducted July through October, 2006. Allegations: Mr. Hamel alleged that oil was accumulating in well cellars, contaminating tundra ponds and allowing contamination of pad gravel and fluid accumulation under well cellar liners. Further allegations included that AOGCC and ADEC were specifically complaisant in on site inspectors not reporting spills and allowing wells to operate that leaked to surface. Mr. Hamel also alleged that trash and debris covered the tundra and raised concerns that anonymity was necessary in reporting problems and that operators were forced to report outside normal chain of command. Design: Mr. Regg discussed proper well design as described in 20 AAC 25.030, possible failure mechanisms, typical North Slope well formation and controls, and unique required freeze protection including methods used and possible ramifications of freezing. Scope of the Investigation: The investigation focused on 100 wells, including production trees, well cellars, wellhouses, pads and surrounding areas, reserve pits, tundra ponds and general housekeeping. The Commission's contract inspector led the field work and prepared the report. AGOCC inspectors and ADEC field personnel were involved in the investigation and support was received from BP and its contractor. Inspection strategies involved both field inspections and interviews of key personnel. Well data, photographs and cellar fluid samples were collected for each well. Pressure information was gathered, observed conditions were noted in the wellhouse and wellhead including the presence of fluids, bubbling in the well cellar or other anomalous conditions and condition of the cellar liner. AOGCC - 2/28/07 - Page 4 . . t Pad operations personnel were surveyed as to specific concerns of the necessity of operator anonymity and the overall allegations. The data form requested information on each well as to waiver status and associated well integrity issues. Investigation Findings - Fluids in Cellars: Hydrocarbons were found in some well cellars and had flowed onto the pads. Lower conductor pipes were covered in oil. The pads show evidence of leakage from the cellars either from overflow or seepage through the cellar onto the gravel pad in the wellhouse. No evidence was found indicating well cellar fluids were coming from the subsurface. Evidence was found of minor leaks in valves and fittings on the wellhead. There were indications of water¡ snow melt¡ and freeze protection fluids in the cellars. No measurable gas was found. A slight sheen was found in a tundra pond adjacent to Prudhoe Bay well N06. Analysis of that sample was inconclusive whether it was biogenic or from natural sources. No evidence of seepage from the pad was noted, there was simply a sheen in the tundra pond. Investigation Findings - Well Cellar Liners: Approximately 96 percent of inspected well cellar liners were deficient and inadequate for containing fluids that may be released during routine operations. Temperatures fluctuate in well production, any fluids in the annulus could be released into the well cellar. Design of these wellheads include an open annulus. The hangar for the surface pipe inside the conductor actually opens so any fluids in the annulus during the heat would be allowed to rise due to expansion. Not all well cellars are lined and there is no guideline for well cellar liner design¡ installation or performance. DECfs recently published regulations require new wells after 2008 must be designed and installed to be sufficiently impermeable¡ however this leaves a gap for existing wells. Investigation Findings - Spills: Based on interviews of personnel and observations by the contractor¡ the probability was so small that it hasnft occurred; no evidence or motivation for anybody to be hiding spills was found. Inspectors do not enter pads unless accompanied by the pad operator which reduces AOGCC - 2/28/07 - Page 5 . . the opportunity for concealment. It was found through discussions with pad operators and the survey that the pad operators' main concern is of not reporting spills due to the possible serious implications for not reporting a spill. Investigation Findings - Trash: There was an increased amount of trash during spring breakup and the stick pickers arrived late. Because of this there was probably trash in evidence for a longer period of time than normal. No evidence of a serious amount of trash was found by the start of the investigation. There was a small amount of debris in some wellhouses and pads, nothing significant. Pad Operator Survey: A 12 question survey given to 200 BP pad operations personnel, including drill, pad and field operators, well tenders and anybody working on the pad. The survey was anonymous and a 50 percent response was received. The survey requested yes/no answers and an opportunity was given to provide remarks. The remarks were thoughtful and helped put things in context. A large majority of the respondents have a positive view of the work environment, most expressed confidence in the reporting processes, capabilities and opportunities. There was concern about time delays in responding to noted deficiencies. There were a few comments that Commission regulations regarding well integrity are inadequate. A summary of the survey and all remarks are included in the appendix to the report. Inspection Observations: Trash and debris was found in some wellhouses and cellars, possibly indicative of poor housekeeping. There was some graffiti on the walls. The inspectors found pressure gauges that were out of calibration and damaged drip pans. Improperly labeled wells were found, i.e, no caution tag. Some personnel safety hazards were found. platforms were not properly braced. Some work Recommendations: Reporting requirements for cellar fluids need to be clarified. There is confusion between well operators and ADEC personnel as to reporting requirements. ADEC has taken the lead on this and will be meeting with BP on resolution. AOGCC - 2/28/07 - Page 6 . . Well cellar liner requirements need to be developed to address standards as to design, installation and performance so that any fluids in the cellar are contained. Commission, ADEC and operator personnel will be engaged in this task. Sustained casing pressure rules are a combination of Commission requirements and operator policies. These were found to be adequate, they protect against well integrity failure, uncontrolled release of fluids and pressure, they prevent the threat of human environmental safety concerns or issues, they protect hydrocarbon resources and approval is not issued unless sufficient barriers are in place to prevent the flow of fluids to surface. There is no evidence to suggest that the fluids found ln some well cellars were from the reservoir. There is evidence to suggest that those are the freeze protect fluids that flow into the cellar during the well's thermal cycles of start up and shutdown. There is some concern among Commission staff about reporting HSE deficiencies that are outside of Commission jurisdiction, i.e., the improperly braced work platform. The Commission does not have jurisdiction and staff needs guidance on the proper handling of these type of items. Staff is working on developing a reporting and tracking system so those things can be routed to the proper agency. Staff will be meeting with ADEC and OSHA to address these deficiencies and make sure they are being addressed. Questions from Commissioners: In response to questions from Commissioner Seamount regarding the number of wells stated in the complaint, Mr. Regg explained that it was approximately 50. Mr. Hamel did not identify specific wells or ponds. One of the reasons given for not reporting specifics was the concern of anonymity of workers and that retaliation might result. The survey looked for evidence of retaliation or concern among pad workers about retaliation. In response to a question by Commissioner Seamount, Mr. Regg explained that Commission staff looked for wells with certain characteristics and combined this with a list maintained by ADEC and came up with 84 wells. Latitude was given to check adjacent AOGCC - 2/28/07 - Page 7 . . wellhouses if necessary. This brought the total number of wells inspected to approximately 100 and there is a high degree of confidence that Commission staff did look at the wells that were of concern to Mr. Hamel. In response to a question from Commissioner Seamount Mr. Regg explained that the contractor was hired prior to the allegations being received. The Commission spent approximately $100,000 on this investigation including contractor fees and Commission staff time. ADEC and industry cost is separate, but would not be as high. Industry paid for analysis of samples by a third party lab. Industry personnel accompanied the inspectors to ensure that conditions were safe prior to entering the wellhouse. In response to a question from Commissioner Seamount, Mr. Regg explained that there was not a specific allegation of reservoir oil in the well cellars, only an allegation that oil was accumulating in some cellars. In response to a question from Commissioner Foerster, Mr. Regg explained that Mr. Hamel was asked for more specific identification of the wells of concern which was refused. Commission staff offered to double the number of wells, spread over different pads so the study would be blind and unidentifiable, bùt this was also refused. This is seen as a lack of trust on Mr. Hamel's part. In response to a question from Commissioner Foerster, Mr. Regg explained that one AOGCC inspector was assigned to accompany the contractor on all inspections. It is estimated that 600 man hours were expended in the field looking at wells. The number of hours spent by engineering and Commission staff is unknown. In response to a question from Commissioner Foerster, Mr. Regg explained that there were a few instances where normal inspections were not done in order to focus on this investigation. The benefits gained from conducting the inspection were a better insight on industry understanding of agency reporting requirements and demonstration of field personnel's confidence in the established AOGCC - 2/28/07 - Page 8 . . structure for reporting deficiencies. Some potential gaps have been identified like cellar liners that need to be addressed. Overall well integrity has been validated in that reservoir fluids are not coming to surface. A better working relationship with ADEC has been established. Increased cost effectiveness could be obtained by Commission staff immediately calling noted deficiencies to industry attention on a continuing basis as opposed to hiring a contractor to do an independent inspection. Benefit could be obtained by offering friendly audits to industry such as OSHA does. Noted deficiencies and trends could be discussed and corrected. The items noted as poor housekeeping were generally not in violation of Commission regulation, but were trip hazards which does represent a risk. Specific housekeeping regulations would be a deviation from Commission precedent, but would probably be a useful step. In response to a question from Commissioner Foerster regarding trash, the inspectors noted no trash accumulation on the tundra at the time of the inspection and noted that this is a very clean work environment. There is usually a large accumulation of trash during the winter months which is cleaned up in the spring. DEC has been looking at this issue and is perhaps planning on spending time there during the spring to assess this. In response to a question from Commissioner Foerster regarding trends found on the survey, Mr. Regg explained that not all respondents responded to all questions. There were 104 responses received to question 6, 70 that indicated things were resolved in a timely manner, 19 said no and 15 said not applicable. Overall the responses to this question leaned toward things are not resolved in a timely manner and is something that should be looked at. Some of these types of concerns could be for the Commission to look at depending on the nature of the concern. The Commission does bring items noted during inspections to the attention of the pad operators. In response to a question by Commissioner Foerster AOGCC - 2/28/07 - Page 9 . . about whether ADEC would pursue needed clarity between itself and BP or with all operators, Mr. Regg explained that he was unable to answer the question and would follow-up. In response to a question by Chairman Norman as to why the contractor was not present at this hearing, Mr. Regg explained that he is on vacation. Chairman Norman stated that the contractor will be available to answer questions. In response to a question by Chairman Norman as to the percentage of compromised well cellar linings and why the problem exists, Mr. Regg explained he was unable to answer, however materials need to be installed and handled properly in order to create a seal. Follow-up is needed with DEC and that the process has begun. Mr. Regg will report back to the Commission on progress to address the question of liners that do not provide an impervious barrier. In response to a question by Chairman Norman as to the representativeness of the inspected well cellars to other well cellars in the same vicinity by different operators, Mr. Regg explained that Commission inspectors report they do not see fluids accumulating in cellars of other operators, although there may be some instances of stained gravel. This investigation focused solely on BP operated fields predominantly at Prudhoe Bay, but also at Northstar, Milne Point, Endicott and Point Mac. The inspectors have been instructed to check for fluids in all well cellars. In response to a question from Commissioner Foerster regarding trends from field to field, Mr. Regg explained that more than 60 percent of the wells inspected were in the western operating area and 25 percent in the eastern operating area of Prudhoe Bay, making it hard to identify trends. General housekeeping practices at Milne Point were better than Prudhoe Bay. In response to a question from Chairman Norman, Mr. Regg explained that question 1 of the survey indicated that the Commission is seen as a last resort reporting mechanism because BP has provided numerous options for reporting problems. The majority of respondents were comfortable with existing reporting opportunities. AOGCC - 2/28/07 - Page 10 EGGEMEYER: TAYLOR: . . COMMENTS BY CONOCOPHILLIPS Jerome Eggemeyer of ConocoPhillips commented to the Commission that the findings of the well cellar investigation are not indicative of all wells on the North Slope or in the state. In general the implementation of retroactive regulations is typically at a cost which is many times more than the cost of implementation on new installations due to the removal of existing equipment and re- implementation of a new solution and interruptions of production. New regulations should consider this fact and should give consideration to avoiding broad, retroactive regulation changes. ConocoPhillips would be supportive of involvement in industry studies or discussion around a solution on this. In response to a question from Chairman Norman, Mr. Eggemeyer explained that due consideration should be given to making any regulation retroactive, whether retroactive across all fields or only with regard to areas where new solutions needs to be identified. ConocoPhillips does not defend the notion that environmental contamination should be allowed to occur through liners and points out that it should not be assumed that the findings of the investigation are the same across all fields. ConocoPhillips is in favor of fixing any problems that are identified, but is not in favor of a broad regulation that addresses issues that do not exist. PROPOSED ~ENDMENTS TO TITLE 31 As a result of a meeting with AOGA, BP and counsel for ConocoPhillips, and comments submitted from DNR, Commissioners make the following proposed amendments to Title 31. AS 31.05.030(d) As a result of input from the companies the Commission is proposing to amend Subsection (2) which deals with the filing of reports of subsurface information. The proposed change will provide for the required reports to be submitted within the current standard of 30 days, but expands to 60 days the other subsurface information and logs that need to be provided to the Commission. AOGCC - 2/28/07 - Page 11 . . There are a number of areas in the Act where duties were described by listing the types of wells that the Commission handles. The sentence, for which a permit to drill has been issued by the Commission, has been substituted for the list. Subsection (7), the word Commission 1S substituted for Department of Natural Resources or its agents. The Department of Law and Department of Natural Resources confirms they do have independent authority to require the companies to keep those same records for royalty auditing purposes. AS 31.05.030(e): A provision is added to Subsection (e) that the Commission may regulate in addition to conservation purposes, for the purposes of public health and safety. The addition is in response to a recommendation by legislative audit after review of the Commission's function and as it was included in the Interstate Oil & Gas Compact Commission Model Act. The adopted language is not as broad, but with respect to the six enumerated duties underneath that. Subsection (g) has been added to make clear the Commission has authority over the underground injection of gas for the purposes of storage. AS 31.05.030(f): Subsection (f) is the only section that actually enumerates the list of wells, it previously had only the term oil and gas wells, it now makes clear that wells can be classified as exploratory, development, service or stratigraphic test wells. AS 31.05.030(j) There is a mid course correction under 030(j). In the last several years the Commission had been granted authority over a new procedure for managing coal bed methane wells and you were asked to require an operator requesting a permit to drill to establish and provide to the Commission a water well testing program with baseline data to you. The Commission is requesting that that apply only to a well that's going into regular production, not just well testing. AS 31.05.035: There is a proposed change for 035 which deals with confidential data. The Commission is proposing that traditional 24 month confidentiality granted to a permit to drill remain only for wells classified as exploratory or AOGCC - 2/28/07 - Page 12 . . stratigraphic test wells. The Commission's definition under the regulations for exploratory wells includes wells that are drilled to delineate. In response to industry concern the Commission is intending to define delineation broadly in the regulation to cover a category of wells that fall through the cracks under the current description. The Commission also clarified language with respect to information that would be made public following the completion, abandonment or suspension of a well and that would be the well surface and bottom hole locations. This is a statutory change as the regulation provides for this currently. AS 31.05.080: Subsections of 080 have been amended to bring the regulation into compliance with the judiciary statute and the Supreme Court ruling that the judiciary statue and court rules supersede Title 31 provisions. The term reconsideration has been substituted for rehearing which is consistent with how the Commission handles those items today. A new subsection has been added that deals with the Commissions ability to collect for expenses of investigations and hearings of the time devoted by Commission staff. The $100 fee for a permit to drill has been eliminated as it is the Commission's view that these costs are absorbed in the Regulatory Cost Charge. This change facilitates the move to electronic permitting. AS 31.05.150(a) Under Subsection (a) of the penalty section, a person who willfully or negligently violates a provision of the chapter, regulation or order of the Commission would be liable for civil penalties of no more than $100,000 for a single violation or in the Commission's discretion, no more than $25,000 per day for a continuing violation. The Commission has also proposed adding a list of factors to take into consideration whenever the Commission imposes a penalty. AS 31.05.035(f): A new subsection has been added to the confidentiality section. Subsection (f) is added to clarify that information voluntarily provided to the Commission, but submitted in connection with a AOGCC - 2/28/07 - Page 13 . . petition for Commission order or hearing, is not made confidential on the basis it is Drovided voluntarily This is not meant to exclude the"" opportunity for ~- trade secrets and proprietary information to continue to be held confidential after that showing is made to the Commission. NORMAN: It is anticipated that a bill will be introduced shortly. Final wording changes are now being made by Legislative Drafting. Any persons wishing to see the final draft should contact the Special Assistant. Ms. Taylor is leaving the Commission to accept other employment. The Commission expresses its appreciation for the excellent service provided by Ms. Taylor to the Commission and extends its best wishes for her future success. CASING RAM TEST REQUIREMENTS OF BOPE FOERSTER: BOPE regulations have recently been revised. An oversight occurred in making the amendments. This begins the standard public process of amending a regulation of public notice and comment and the opportunity for a hearing. Mr. Regg will describe the proposed change. REGG: Current BOPE regulations which became effective December 27, 2006, required the testing of ram bonnets (door seal) when a change is made to a casing ram. It requires no function or function pressure test of the casing ram. This is seen as an oversight and the following change is proposed. The proposed language would read: After they are installed in the BOP stack, the rams for casing or liner must be function pressure tested to the required pressure before running casing or liner. This would take effect in both 25.035 (e) (10) (f) and 2 0 AAC 25. 2 85 (f) (5) . The concern is there is no assurance that a casing ram will work as designed unless it is function pressure tested. The simple body test merely indicates the door holds pressure and not if the ram will close and seal. The time involved in this additional testing is not significant when compared to the risks of not testing. NORìvJAN: This is an intentional effort to put maximum AOGCC - 2/28/07 - Page 14 . . information out at the public meeting, but the Commission will move forward under the Administrative Procedures Act for promulgation of regulation. A notice will be published, opportunity for public comment and hearing is available. Following that the Commission will adopt regulations. Moved by Commissioner Foerster and seconded by Commissioner Seamount and without opposition the Commission will move forward to formally adopt this regulation. REVISION OF COMMISSION FORM NORMAN: Form 10-407, Well Completion or Recompletion Report and Log. Mr. Davies will describe the changes. DAVIES: This a small but important change effecting record keeping at the Commission. In an effort to ensure clear and consistent reporting of well information some minor modifications are proposed to this form. The most important changes are the specification of elevation datums for Kelly Bushing and Ground Levels, specification of coordinate systems as being the system the Commission uses, clearer specifications as to what depths are presented for subsurface safety valves and the specifics for thickness of permafrost. Check boxes have been included to make it clear as to whether there are intervals in the well that are open to production or injection, and whether conventional or sidewall cores have been acquired or the well has been tested. The second page is modified to make a requirement that the list of formations and markers encountered be more complete than in the past, firm tops and base for permafrost and the name of the formation encountered at depth. The instructions have been modified accordingly. NORMAN: Calls for a motion to approve Form 10-407 as revised. The motion was moved by Commissioner Foerster, seconded by Commissioner Seamount and approved without opposition. WHITE RIVER FIRST NATION PRESENTATION Ms. Connie Larochelle of the White River First Nation AOGCC - 2/28/07 - Page 15 . . made a presentation to the Commission. The WRFN is the home of the Upper Tanana and Northern Tutchone peoples, who were wrongly amalgamated in 1961 and separated in 1991 to the current location at Beaver Creek. WRFN is an indian band under the Indian Act of Canada. Their territory spans from the Canada/Alaska border to south of Kluane Lake covering approximately 1.3 million hectares of pristine and near pristine wilderness. WRFN has not signed a self-government agreement pursuant to the Yukon Umbrella Final Agreement and maintains aboriginal rights and title claims. 20 percent of the proposed Alaska Highway Pipeline Project runs through WRFN traditional territory. Regulatory framework in Canada requires that the local and regional interests and the interests of residents, particularly native peoples, be considered. WRFN has not signed a settlement agreement and therefore project developers are required to consult with WRFN. The courts have held that a public forum process is not a substitute for formal consultation. WRFN requires that consultation be meaningful to them, coached in lay person terminology and feels all expenses for consultation are born by the potential developer. In response to a question by Chairman Norman, Ms. Larochelle detailed the location of WRFN territory that would be effected by the AHPP. She stated that the NPA in Section 25 provides that aboriginal rights and title remain until the First Nation has settled land claims. WRFN has not settled land claims and retains all rights under the NPA. Chairman Norman explained that the AOGCC regulates oil and gas in the state of Alaska only. The Special Assistant will provide contact information for more relevant state agencies if desired. The presentation will be a part of the minutes of this public meeting. PUBLIC COMMENT NORMAN: Are there any members of the public who wish to offer comments or testimony? AOGCC - 2/28/07 - Page 16 - vJILLIAMSON: NORMAN: . . No public comment. PRUDHOE OIL POOL GAS OFFTAKE RESERVOIR STUDY The Prudhoe Oil Pool Gas Offtake Reservoir Study conducted by the Commission and Blaskovich Services, Inc. has been completed. The Commission set the maximum allowable Prudhoe Oil Pool annual gas offtake rate at 2.7 bcf per day in 1977. Due to significant activity concerning a potential major gas sale in the last five years, BPXA, Exxon-Mobil and ConocoPhillips commissioned a study to determine conceptual feasibility of a gas pipeline. The companies and the state have devoted significant resources to negotiate fiscal terms to build a pipeline, but have not made application for modification of the gas offtake rule. Several public hearings were held and the Commission published a report on December 5, 2005, concluding that there was a need to revisit the maximum allowable gas offtake rate due to several decades of reservoir development since 1977. To avoid delay in the Commission's decision process which could disrupt the timetable for a gas pipeline project, the Commission adopted a proactive approach to establish a factual basis for its decision on the offtake rate. The Prudhoe working interest owners and the Commission established a procedure wherein Commission staff had access to reservoir simulation and other relevant engineering studies and timetables for the Prudhoe Oil Pool. Ms. Williamson discussed cycling and other changes that have occurred since 1977, the model and assumptions used and problems associated with that model, benefits of increased oil capture prior to gas sale and end of field life. Calls for a motion to move into executive session to receive Mr. Blaskovich's report. Moved by Commissioner Forester, seconded by Commissioner Seamount and approved without opposition. The Commission will break for lunch from 12:00 to 1:00 and will go into executive session after lunch. It is anticipated that no decision will be made during executive session, it is simply an opportunity AOGCC - 2/28/07 - Page 17 APR-06-2007 08:31 AM . . P.01 ... to receive Mr. Blaskovich's report. ........,..... A~/~N:--)7 Persons invited to executive sessionJã'iø!;" Commissioners I Ms. Williams I Mr. Blaskovfdh'i ia.1}d representatives of the owners who have o~'e~" consent to have access to this data. All others aré '~., "j i/"'" ---"J.jj excluded. LENING: David Lening, BP Reservoir Engineer¡ stated the meeting should be open only to Commissioners and working interest owners and DNR should be excluded. Invited participants will be identified at the beginning of executive session. (Off record 12:00 p.m.) (Executive Session) (On record - 2 :35 p.m.) NORMAN: The Commission received Mr. Blaskovich's and Ms. Williamson's report in executive session. These reports were based upon confidential, proprietary information voluntarily provided to the Commission and governed by the statement of principles previously agreed to. There is consensus that it was a good working meeting and the process has been advanced. ,>-.."",..' Chairman Norman once again solicited comment from meeting attendees. No person requested recognition. FOERSTER: Motion to accept report. SEAMOUNT: Second. Without objection the motion carries. /' NORMAN: - 2:35 p.m.) AOGCC - 2/28/07 - Page 18 ,~-",. . . DRAFT 20 AAC 25.035(e)(10) is amended to read: (10) the BOPE must be tested as follows: (A) when installed, repaired, or changed on a development or service well and at time intervals not to exceed each 14 days thereafter, BOPE, including kelly valves, emergency valves, and choke manifolds, must be function pressure-tested to the required working pressure specified in the approved Permit to Drill, using a non-compressible fluid, except that an annular type preventer need not be tested to more than 50 percent of its rated working pressure; however, the commission will require that the BOPE be function pressure-tested weekly, if the commission determines that a weekly BOPE pressure test interval is indicated by a particular drilling rig's BOPE performance; (B) when installed, repaired, or changed on an exploratory or stratigraphic test well and at least once a week thereafter, BOPE, including kelly valves, emergency valves, and choke manifolds, must be function pressure-tested to the required working pressure specified in the approved Permit to Drill, using a non-compressible fluid, except that an annular type preventer need not be tested to more than 50 percent of its rated working pressure; (C) if any BOP equipment components have been used for well control or other equivalent purpose, or when routine use of the equipment may have compromised ,its effectiveness, the components used must be function pressure-tested, before the next wellbore entry, to the required working pressure specified in the approved Permit to Drill, using a non-compressible fluid, except that an annular type preventer need not be tested to more than 50 percent of its rated working pressure; (D) BOP ram and annular components except blind rams must be function-tested weekly, and all BOP ram and annular components must be function-tested after an action that disconnects the hydraulic system lines from the BOPE, except that if the workstring is continuously in the well, function- testing of blind rams must be performed as soon as possible after the workstring is pulled out of the well and the BRA clears the BOP; (E) for each BOPE test during drilling and completion operations, variable bore rams must be function pressure-tested to the required pressure on the smallest outside diameter (OD) and largest outside diameter (OD) tubulars that may be used during that test cycle, except that variable bore rams need not be tested on BRAs and drill collars; (F) after they are installed [INSTALLING CASING RAMS] in the BOP stack, the rams for casin2 or liner [RAM BONNETS] must be function pressure-tested to the required pressure before running casing or liner; (G) BOPE test results must be recorded as part of the daily record required by 20 AAC 25.070(1), and must be provided to the commission, in a format approved by the commission, within five days after completing the test; (R) at least 24 hours notice of each BOPE function pressure test must be provided to the commission so that a commission representative can witness the test; . . History: Eff. 4/13/80, Register 74; am 2/22/81, Register 77; am 4/2/86, Register 97; am 11/7/99, Register 152; am 10/24/2004, Register 172; am12/28/2006, Register 180; am~ ~ _, Register _~ Authority: AS 31.05.030 20 AAC 25.285(f)(5) is amended to read: (5) after they are installed [INSTALLING CASING RAMS] in the BOP stack, the rams for casinf! or liner [RAM BONNETS] must be function pressure-tested to the required pressure before running casing or liner; History: Eff. 4/2/86, Register 97; am 11/7/99, Register 152; am12/28/2006, Register 180; am~ ~ _, Register _~ Authority: AS 31.05.030 . . Casing Ram Testing AOGCC Proposed Regulation Change February 2007 Note: current version 2/26/2007 rcnects edits proposed byAG Office (Cammy Taylor) The current version of the BOPE regulation became effective December 27,2006. After installing casing rams in a BOP stack, these regulations require only the ram bonnets to be tested (the door seal for the ram cavity). This test in no way validates the ability ofthe ram to seal against the casing being run should that be necessary. The proposed changes will provide a function pressure-test after installation of casing rams that will validate the proper installation and operation of casing rams. Changes are annotated as follows: Deleted text with strike through (example); Added text in bold (example) 20 AAC 25.035 (e) (1 0) the BOPE must be tested as follows: (F) after installing casing rams in thc BOP stack, the ram bonnets must bc tcsted to thc rcquircd prcssurc bcforc running casing; after they are installed in the BOP sta;ck, the rams for casing or liner must be function pressure-tested to the required pressure before running casing or liner; 20 AAC 25.285 (f) The BOPE must be tested as follows: (5) after installing casing rams in the BOP stack, the ram bonncts must be tested to the rcquired pressurc before running casing; after they are installed in the BOP stack, the rams for casing or liner must be function pressure-tested to the required pressure before running casing or liner; Discussion Points Risk o No confirmation that ram will close and hold pressure o No confirmation that correct size ram installed o Time to change over to drillpipe while well is flowing is critical o Reliance on Annular; last resort is strip in well w/casing; potential for casing to lubricate out of well (unlike DP that has collars that can stop this) o Installed and not functional is worse than not having casing rams in BOP stack Some incremental time increase ( cost, convenience) o How do you put a price tag on safety? o Planning and preparation will mitigate time and cost; industry repeatedly demonstrates and ability to find efficiencies; every well requires a well plan (Public Hearing 2/28/2007)