The U.S. Department of the Interior last week proposed regulations for offshore oil and natural gas drilling in the U.S. Arctic Ocean. The regulations, which are the first of their kind, augment existing regulations that currently apply to operators in the Gulf of Mexico and target the unique conditions operators will encounter in the Arctic. The rules only apply to the exploration phase of drilling, but address all phases of the exploration process, including mobilization, drilling, maritime transport and emergency response, according to the Department of Interior’s release.
The proposed rules are an important first step in U.S. Arctic development, but could come with a high price tag. According to The Hill, the proposed rule will be the most expensive ever proposed by the Bureau of Safety and Environmental Enforcement and the Bureau of Ocean Energy Management with a price tag of $1.2 billion. Part of this high cost is attributable to the rule’s proposal to require a backup rig be available in the Arctic and capable of drilling a relief well.