Revised Outer Continental Shelf Lease Exploration Plan Chukchi Sea, Alaska

Shell Gulf of Mexico Inc. May 2011 

## Revised Chukchi Sea Exploration Plan Errata

(In response to a request for addi tional information from the Bureau of Ocean Energy Man agement dated October 28, 2011.)Revised Outer Continental Shelf Lease Exploration Plan Chukchi Sea, Alaska

Shell Gulf of Mexico Inc. May 2011 

## THIS PAGE INTENTIONALLY LEFT BLANK

### Shell Exploration & Production

November 9 , 2011

U.S Department of the Interior Shell Bureau of Ocean Energy Management 3601 C Street, Suite 1000 Alaska Outer Continental Shelf Region Anchorage, AK 99503 Attn: David Johnston Tel. (907) 646

- 7112 3801 Centerpoint Drive, Suite 500 Email susan.childs@shell.com Anchorage, AK, 99503

- 5820 Internet http://www.shell.com



### RE: 2 nd 

### Set of Responses to R equests for A dditional I nformation, dated October 28, 2011, for the revised Chukchi Sea E xploration P lan

Dear Mr. Johnston :

On October 28, 2011 Shell Gulf of Mexico Inc. (Shell) received a second request for additional information (RFAI) from the Bureau of Ocean Ener gy Management (BOEM) containing 17 RFAIs regarding the revised Chukchi Sea E xploration P lan (EP)

. On November 4, 2011, Shell provided responses to 15 of 17 RFAIs. This letter responds to the remaining two RFAIs (#1 and #3) , plus responds to BOEM’s clarification request of these RFAIs also dated November 4, 2011.

In BOEM’s clarification request of November 4, 2011, BOEM suggests that , in the context of communications between the agency and Shell, Shell and Air Sciences agreed to conduct air emission dispersion analysis modeling, and then submit same to BOEM. Shell apologizes if there was some confusion on this issue

. Based on the assumptions below, t he total non

- OCS source emissions from the mar ine vessels are significantly less than the permitted OCS source emission s , and those emissions will be dispersed at lower concentrations over a wider area than the emissions evaluated for the permitted OCS source

. Therefore, it is Shell ’s view that such modeling is not necessary to assess the impacts of any of the additional, de minim i s air emissions from those sources that are the subject of this RFAI, nor does Shell believe that such analysis would add materially to the existing data set related to proj ect air emissions or would alter the conclusion in the Environmental Impact Assessment (EIA) for the r evised Chukchi Sea EP that there will be no significant environmental impacts resulting from project related air emissions.

Shell’s response to BOEM RF AIs, #1 and #3 from October 28 th 

### follows the assumptions below. Our response should be used for the purpose of assessing air emissions beyond those specifically evaluated in the context of the permit review for the OCS source ( e.g., EPA air permit review ) and in the Chukchi EIA , and is based on the following assumptions:

Vessels

 Figure 2.3

- 1 of the revised Chukchi Sea Environmental Impact Analysis (EIA; or Figure 13.e

- 1 of the revised Chukchi Sea EP) shows the approximate marine vessel route proposed for mobilization and demobilization to the Burger Prospect.BOEM

November 9, 2011 

### Page 2

 M arine vessels (see Table 2.2

- 4 of the revised Chukchi Sea EIA) , other than the offshore supply vessels (OSVs) , the oil spill response tanker (OST), and the shallow landing water craft, would complete only one round

- trip traverse (approximately 300 miles per round

trip) of t he marine vessel route shown in Figure 2.3

- 1 , and remain stationary for the remainder of the drilling season

.

 OSVs (there are two proposed; see Table 2.2

- 4 of the revised Chukchi Sea EIA) would conduct 17 round

- trips, divided equally between the two OSVs

.

 The OST will co mplete one round trip of the marine vessel route shown in the revised Chukchi Sea EIA (Figure 2.3

- 1)

, and in addition will transit beyond the Burger Prospect to a location more central between Shell’s proposed Camden Bay and Chukchi Sea expl oration drilling programs, outside of the Chukchi Sea Program area where it will remain for the exploration drilling season.

As described in Shell’s Chukchi Sea EIA (Section 4.1.1

– Direct and Indirect Impacts, Air Quality) the emissions from the project OCS source (see Section 7; revised Chukchi Sea EP, and Section 2.8; Chukchi Sea EIA) will have a negligible effect on air quality due to the low quantity of emissions and the distance over which dispersion will occur

. With regard to impacts to North Slope villages, any additional emissions from non

- OCS sources, spread over a much greater area (over 300 miles of round

- trip travel distances versus the OCS source diameter of 5 0 miles) will add a trivial impact to the OCS source impacts and the combined impact s will also be negligible.

Shell’s response to the remainder of BOEM’s clarification request letter on November 4 th


### follows.

Aircraft

 Offshore H elicopter T ransport

o Assume use of the Sikorsky S

- 92 aircraft or Eurocopter EC

- 225 helicopter , as described in Table 13.a

- 3 of the revised Chukchi Sea EP and Table 2.2

- 4 of the Chukchi Sea EIA.

o Assume taxi out time of 10 minutes, taxi in time of 7 minutes with no auxiliary power unit (APU)

. o Assume use of a gasoline fuel truck (10 minutes) only. The service truc k will be the van assumed under Surface Vehicles.

o Number of landing and take offs (LT Os) assumed is sufficient for estimating
purposes.

o Anticipated number of search and rescue training flights is 3

- 4 per week, with an estimated duration of 2.5 hours per flight.

 Fixed

- Wing Aircraft

o Assume taxi out time of 10 minutes, taxi in time of 7 minutes with no APU.

o Assume use of a gasoline fuel truck (10 minutes) only. The service truck will be the van ass umed under Surface Vehicles.

o There are no aircraft flights associated with sound source surveys.

o There are no “marine mammal strike prevention” flights. Marine mammal observer (MMO) flights are planned daily in a de Havilland Twin Otter (DHC

- 6) aircraft d aily along a saw

- tooth pattern along the Chukchi Sea coastline. However, none of these flights will reach the boundary of the Chukchi SeaBOEM

November 9, 2011 

### Page 3

Program area shown in Figure 1, Volume I of the 2011 Final Supplemental

Environmental Impact Statement for the Chukchi Sea Lease Sale 193 Planning Area.

o None of the US Coast Guard (USCG) flights referenced in the section entitled Aircraft on page 3

- 173 of the EIA would be conducted in support of Shell’s proposed activities. Available information on the USCG flights was provided in the subject section of the EIA to give the reader an idea of other uses of the Chukchi Sea as is routine done in NEPA style documents. Based on BOEM’s clarification letter (e.g., boundary of Chukchi Sea Program area)

, Shell assumes that emissi ons from these fixed

- wing flights are not required

.

Surface Vehicles

 Assumptions in BOEM’s clarification letter on equipment, frequency and distance of vehicle trips are sufficient for estimating purposes ; however, considering safety of road conditions and the brevity of trips, Shell driving policies will not allow for a vehicle speed as rapid as 35 miles per hour as estimated in BOEM’s letter

. If there are any questions or comments, p lease contact me at (907) 646

- 7112 or at Susan.Childs@shell.com or Pauline Ruddy at (907) 771

- 7243 or e

- mail Pauline.Ruddy@shell.com

.

Sincerely,



### Susan Childs AK Venture Support Integrator, Manager

### Shell Exploration & Production

November 14 , 2011

U.S Department of the Interior Shell Bureau of Ocean Energy Management 3601 C Street, Suite 1000 Alaska Continental Shelf Region Anchorage, AK 99503 Attn: David Johnston , Regional Supervisor for Leasing and Plans Tel. (907) 646

- 7112 3801 Centerpoint Drive, Suite 500 Email susan.childs@shell.com Anchorage, AK, 99503

- 5820 Internet http://www.shell.com



### RE: 3 rd 

### Set of Responses to R equests for A dditional I nformation, dated October 28, 2011, for the revised Chukchi Sea E xploration P lan

Dear Mr. Johnston :

On October 28, 2011 Shell Gulf of Mexico Inc. (Shell) received a second request for additional information (RFAI) from the Bureau of Ocean Energy Management (BOEM) containing 17 RFAIs regarding the revised Chukchi Sea E xploration P lan (EP)

. On November 4, 2011, Shell provided responses to 15 of 17 RFAIs . Also on November 4 th 

### , Shell received from BOEM a clarif ication request o n the content of our pending responses to the remaining two RFAIs (#1 and #3). O n November 9, 2011 Shell r esponded to RFAI’s #1 and #3, plus responded to BOEM’s November 4 th 

### clarification request. Shell received a second request for clar ification on November 10, 2011 regarding the same RFAIs ( #1 and #3 )

, for which we have prepared the following response ( i.e. , 3 rd 

### set of responses to October 28 th 

### RFAIs).

Economy. Please see Attachment 1 to this letter, in which Shell addresses the content of the expansion of this RFAI as described in BOEM’s November 10 th 

### letter. Shell’s response fully addresses the content of the expanded RFAI . However, as noted in attached, Shell will not provide estimated annual income ranges for the positions t hat will be filled as a part of its exploration program, as that information is confidential

.

Sound. Shell provide s the outstanding references/reports plus appendices on the enclosed CD

. Shell has responded fully to this request, and notes that agency representatives with the former M inerals M anagement S ervice /BOEM ha ve been contributing review participant s of the Joint Monitoring Program Draft/ Final Comprehensive Report s since Shell began contributing its activities to these reports in 2006. La st, the 2006

- 2007 Joint Monitoring Program Final Comprehensive Report is available on the National Marine Fisheries Service, Office of Protected Services website http://www.n mfs.noaa.gov/pr/pdfs/permits/arctic_seismic_report.pdf

. Air Quality

. Please see Attachment 2 to this letter for the Chukchi Sea non

- OCS vessel emissions inventory calculations. Th is attachment should be used for the purpose of assessing air emissions beyond those specifically evaluated in the context of the permit review for the OCS source ( e.g ., EPA air permit review) and in the Chukchi E nvironmental I mpact A nalysis. The assumptions used for vessel emissions are the same as those in Shell’s previous correspondence with BOEM on November 9 th



### . When utilizing the emissions data provid ed in Attachment 2 , it isBOEM

November 14, 2011 

### Page 2

important to note that the emissions from vessels operating more than 25 miles from the Discoverer during drilling operations will be dispersed ove r a large area because the vessels are expected to be moving during the activities in question, with the result that the impact of these emissions at any one location would be negligible. To the extent that any of the vessels would be stationary for any e xtended period of time outside the 25 mile area, they would be anchored and not using their propulsion engines, minimizing e missions and emissions impacts

. Based on conversations with BOEM following receipt of its November 10 th 

### letter, Shell will be finished shortly with print ing final copies of the revised Chukchi Sea EP and is prepared to deliver to BOEM

. If there are any questions or comments, p lease contact me at (907) 646

- 7112 or at Susan.Childs@shell.com or Pauline Ruddy at (907) 771

- 7243 or e

- mail Pauline.Ruddy@shell.com

.

Sincerely,



### Susan Childs AK Venture Support Integrator, Manager

Attachments/Enclosure Attachment 1

– Shell Economy Response Attachment 2

– Chukchi Sea Non

- OCS Vessel Emissions Enclosure

– Chukchi Sea RFAI References CDAttachment 1

Shell Response

The model developed by Northern Economics (2009) for its analysis of the economic impacts of future oil and gas exploration and development activities in the Chukchi Sea indicates an estimated 1,355 total new direct full

- time and seasonal jobs in Alaska will be created in the first season of exploration drilling operations (2011) with approximately $54 million in new payroll , and an estimated 1,307 total new direct full

- time and seasonal jobs in Alaska will be created in a second season of exploration operations (2012) with approximately $52 million in new payroll

. A copy of the spreadsheet resulting from the model , and indicating how these estimates were derived, is attached (Attachment 1a)

. These estimates are based on the same kinds of exploration activities as proposed in the r evised Chukchi Sea Exploration Plan and can be considered a representative esti mation of anticipated impacts from the activities in the plan. These estimates of the number of jobs that might be created include only direct jobs, not indirect or induced jobs. The estimated new revenues for the North Slope Borough from these expl oration drilling scenarios for the Chukchi Sea are approximately $1.7 million in the first year and $1.6 million in the second year (Attachment 1 a ).

Although Shell’s proposed exploration drilling program has potential benefits to the greater U.S.
economy, the Study Area for the Environmental Impact Analysis was established in Chapter 3 as the Chukchi Sea Lease Sale 193 Area and adjacent Alaska coastal waters and coastline, with particular focus on the Chukchi Sea villages of Barrow, Wainwright, Point Lay, and Point Hope. Socioeconomic resources and conditions were described in detail only for these four villages and to a lesser degree for the North Slope Borough and for the Northwest Arctic Borough. Therefore

, analysis of potential project eff ects on socioeconomics is restricted to these areas. Estimates of the amount of direct employment that might occur on the North Slope as a result of Shell’s exploration drilling program are prov ided below in Table 1. These opportunities for employment can be compared to employment rates provided in Section 3.11.3 of Shell’s EIA.

Table 1. Estimated number of North Slope jobs that may be created annua lly by Shell’s exploration drilling program,

and the number of jobs that may be filled by North Slope residents.

Job Type Total Number of Jobs Job s Filled by NSB Residents Employment

Percent of Total Jobs Number

of Jobs MMO 140 40 56 full time / seasonal Subsistence Advisor 10 100 10 full time / seasonal Community Liaison 6 100 4 part time / year

- round Communication and Call Centers 20 100 20 full time / seasonal Village OSR Responders 30 100 30 full time / seasonal Contingency Responders 17 0 30 51 full time / seasonal Shorebase Staff 3 0 75 23 full time / seasonal All 486

-- 196

--



### Note: A nnual income ranges for the individual positions identified in Table 1 will not be provided, as that information is confidential

.

Literature Cited

Northern Economics. 2009. Economic analysis of future offshore oil and gas development: Beaufort Sea, Chukchi Sea, and North Aleutian Basin. Report prepared by Northern Economics,Anchorage, AK in association with t he Institute of Social and Economic Research, University of

Alaska, Anchorage, for Shell Exploration and Production, Anchorage, AK. 136 pp.

Attachment 1 a Northern Economics Exploration Data v1Attachment 1a Northern Economics Exploration Data v1 - Through 2014 Page 1

Direct Impacts of Exploration Activities

Area/Item Chukchi Sea 2008 2009 2010 2011 2012 2013 2014 Total Full-time and Seasonal Jobs in Alaska 243 231 233 1,355 1,307 1,259 1,259 Total Annual Average Employment in Alaska 95 95 112 580 561 543 543

Property Tax Revenues Local (NSB)

- $

-

$ 1,850,000

$ 1,726,667

$ 1,603,333

$ 1,480,000

$ 1,356,667

$
State

- $

-

$ 150,000

$ 140,000

$ 130,000

$ 120,000

$ 110,000

$

Beaufort Sea 2008 2009 2010 2011 2012 2013 2014 Total Full-time and Seasonal Jobs in Alaska 65 2,219 1,155 2,022 1,823 2,784 2,011 Total Annual Average Employment in Alaska 18 650 340 572 530 773 566

Property Tax Revenues Local (NSB)

- $ 1,850,000

$ 1,726,667

$ 1,603,333

$ 1,480,000

$ 1,356,667

$ 1,233,333

$
State

- $ 150,000

$ 140,000

$ 130,000

$ 120,000

$ 110,000

$ 100,000

$

ADOLWD Wages and Salaries in 2007: Oil and Gas Extraction and Mining Support Activities 93,180 $ Estimated Wages and Salaries 2008 2009 2010 2011 2012 2013 2014 Chukchi Sea 8,827,894 $ 8,827,894

$ 10,426,018

$ 54,002,974

$ 52,279,231

$ 50,555,488

$ 50,555,488

$ Beaufort Sea 1,709,909 $ 60,539,850

$ 31,687,737

$ 53,278,541

$ 49,393,200

$ 72,019,012

$ 52,754,894

$Attachment 1a Northern Economics Exploraiton Data v1 - through 2014 Page 2 - Metadata

1 Numbers cited in the paragraph write-up come from columns E and F (2011 and 2012), which are the first two years of exploratory drilling in the NE scenarios. Rows are 5, 6, 9 and 24.

2 The attached data describe exploration activity results from the 2009 study of statewide impacts (NEI, 2009). In this report, the exploration activities for the Beaufort Sea scenario are shown on page 15 and on page 27 for the Chukchi Sea
scenario.

3 Labor income was not reported in that study. The attached data provides an estimate of annual wages and salaries associated with the direct jobs only. We simply took the average annual wage and salary for the oil and gas extraction sector and the oilfield support services sector from the AK Department of Labor data for 2007 and multiplied this wage rate by the annual average employment.

4 The attached data gives the estimated property tax revenues (local and state government) associated with the on-shore exploration shorebase which was in the scenario for both the Beaufort and Chukchi.

5 There are other government revenues from 2009 to 2019 (before production) but these are the lease revenues - rental payments for the 8(g) acreage. These are not necessarily tied to exploration activities and so are not included in the attached data.

6 All the $ values in the attached data are expressed in fixed 2007 dollars.Attachment 2

PROJECT TITLE: BY: 

## Air Sciences Inc. Shell Offshore, Inc. R. Steen

PROJECT NO: PAGE: OF: SHEET: 180-20-4 1 1 VesselEmis ENGINEERING CALCULATIONS SUBJECT: DATE: Chukchi Sea Non-OCS Vessel Emissions November 9, 2011

Total Fuel Burn Chukchi Sea

Mobilization

Vessel Name Assumed Transit Speed (knots) NM from

Program Area Boundary to Drilling Site (approximate Fuel Burn

(gallons/day) Days to Site Fuel Burn to Site (gal/season) Days Fuel Burn (gallons/day) AH/Towing

Fuel Burn (gal/season) Resupply

Trips Resupply RT

Transit Days (@ 9 knots) Fuel Burn

(gallons/day) Resupply

Fuel Burn (gal/season)

Anchor Handler 9 150 1,183 0.7 822 9 1,420 12,781 NA Ice Management Vessel 9 150 1,376 0.7 956 3 688 1,720 NA

OSV 9 150 3,936 0.7 2,733 3 4,723 11,808 8.5 1.5 3,936 50,184

OSV 9 150 3,936 0.7 2,733 3 4,723 11,808 8.5 1.5 3,936 50,184 Nanuq 9 150 5,800 0.7 4,028 NA NA Shallow Water Landing Craft 9 150 1,500 0.7 1,042 NA NA

OST 9 150 8,400 0.7 5,833 NA NA OSR Barge and Tug 9 150 3,408 0.7 2,367 NA NA Containment Barge & Tug 9 150 3,408 0.7 2,367 NA NA

Discoverer 9 150 8,400 0.7 5,833 NA NA Total 28,713 38,117 100,368

Total

Vessel Name Days Fuel Burn (gallons/day) Fuel Burn

(gal/season) Assumed

Transit Speed (knots) NM from

Drilling Site to Prog Area Boundary (approximate Fuel Burn

(gallons/day) Days to

Program Area Boundary Fuel Burn

from Site (gal/season) IM/AH

Total Fuel Burn (gal/season) Other Vessels

Total Fuel Burn (gal/season) Total Fuel

Burn (gal/season)

Anchor Handler 0 0 9 150 1,183 0.7 822 14,424 14,424 Ice Management Vessel 54 688 37,153 9 150 1,376 0.7 956 40,784 40,784

OSV 9 150 3,936 0.7 2,733 67,459 67,459

OSV 9 150 3,936 0.7 2,733 67,459 67,459 Nanuq 9 150 5,800 0.7 4,028 8,056 8,056 Shallow Water Landing Craft 9 150 1,500 0.7 1,042 2,083 2,083

OST 2 8,400 12,600 9 150 8,400 0.7 5,833 24,267 24,267 OSR Barge and Tug 100 1,704 170,400 9 150 3,408 0.7 2,367 175,133 175,133 Containment Barge & Tug 100 1,704 170,400 9 150 3,408 0.7 2,367 175,133 175,133

Discoverer 9 150 8,400 0.7 5,833 11,667 11,667 Total 390,553 28,713 55,209 531,256 586,465

Notes: Anchor Handling (AH) assumed to be within 25-mile radius for entire season Ice Management (IM) assumed to be within 25-mile radius for 46 days so 54 days remain of a 100-day season (best estimate) AH is assumed to take 3 days per well. Shallow water landing craft will most likely already be on the North Slope. The Discoverer will propel itself to the drilling location. Barge & tug combinations emissions assumed at 50% power during drilling and outside 25-mile radius OST traverses the program area twice per season (300 NM). Emission factors provided below are from the EPA permit application

Values in blue are input, values in black are calculated

Emissions Emission Factors Emissions IM/AH other vessels IM/AH other vessels Total Pollutant lb/gallon lb/gallon ton/season ton/season ton/season
NOx 0.05 0.59 1.38 156.72 158 PM 0.008 0.041 0.22 10.89 11 SO 2 0.00021 0.00021 0.01 0.06 0 CO 0.023 0.1046 0.63 27.78 28 VOC 0.004 0.0188 0.11 4.99 5 CO 2 e 22.5 22.5 621.1 5,976.63 6,598

Conversion
2000 lb/ton Anchor Handling/Towing Resupply

During Drilling-Not Resupply Demobilization