The legal and regulatory regime for offshore hydrocarbon resources in the U.S. Arctic

This article discusses how federal laws and regulations govern offshore oil and gas activity in the U.S. Arctic. It examines three broad regulatory components: leasing (licensing), operating practices, and – more briefly – revenue collection. The background and introductory topics include the potential for and challenges to developing hydrocarbon resources in the region; and an overview of historic and current oil and gas production in the U.S. Arctic. The discussion of the legal and regulatory regime begins with identifying the jurisdictional and geographic boundaries in which it operates. The leasing (licensing) component is described through the four-step process set forth by the Outer Continental Shelf Lands Act (OCSLA). Under operating practices, five areas are covered: waste management, chemical use, and discharge; emissions to air; oil spill prevention and liability; protection of living marine resources; equipment design and performance standards; and health, safety, and environmental (HSE) concerns. The article analyzes the laws and regulations from functional, temporal, and sectoral perspectives rather than providing detailed descriptions of each rule in this complex regulatory area. It identifies key regulatory actors and demonstrates their roles in implementing the primary statutory and regulatory provisions. Regulatory changes implemented since the 2010 Macondo/Deepwater Horizon accident in the Gulf of Mexico are analyzed for their relevance to offshore activity in the Arctic. The 2012 exploratory drilling season of Royal Dutch Shell in the Beaufort and Chukchi seas is used to provide the majority of examples of how the laws and regulations discussed apply to offshore oil and gas activities in the U.S. Arctic.