Offshore Seismic and the Regulatory Tidal Wave Shawn

Offshore Seismic and the Regulatory Tidal Wave Shawn L. Rice Board of Directors, IAGC NOIA Annual Meeting April 20, 2016 shawn. rice@iongeo. com

5 Year Lease Plan March 15 th, 5 -Year Plan Released (2017 – 2022) – – Excludes Leasing Offshore Atlantic Limited Leasing Offshore Alaska (3 Potential Sales) Western/Central Gulf of Mexico (10 Potential Sales) BOEM is Holding Public Hearings & Accepting Comments Geophysical Industry Pursuing Atlantic Permits – 4 Member Companies have Permits Pending – 2 Years and Waiting • Statue Requires a 45 Day Timeline Once Applications are Received 2

Atlantic IHAs NOIA Joined IAGC & API in Sending a Letter and Meeting with NOAA/BOEM – Concerns Over Delays and Potential Precedent for GOM – Use of Non-publically Available Data NMFS Continues Delays – – Duke University Density Models Exclusion Zones Seasonal Restrictions Ongoing Requests from NMFS to Applicants 3

Examples of Excluded Areas Expanding Ideas of “Critical Habitat” – To include current and “potential” habitat – To anticipate climate change Essential Fish Habitats – Originally designed as a protection against fishing Marine Sanctuaries – Protections expanded to include sound – Commercial fish species – Increased focus on marine invertebrates 4

Regulatory Trends The Challenges: • Increasing the number of species of concern • Expanding protected areas on land sea • Increasing focus on other effects; masking, stress • Additional mitigation requirements (e. g. PAM, certification) • Possibly restriction on “duplicative surveys” • Sound source verification measurements • Caps on anthropogenic sound More Burdensome Compliance The Advancements: • Funding of national data and research needs • Alternative sound source technologies (e. g. marine vibrators, passive seismic) • Quieting technologies (e. g. bubble curtains) 5

Additional On-board Mitigations • PSO and PAM mitigation are not “ 100% effective”. – Industry is actively involved in efforts to improve PSO and PAM training, technology standards and operator certification. • The industry is also sponsoring research to explore additional mitigation tools like infrared cameras, active sonar, unmanned vehicles – These technologies, if found to have added benefit, also represent added cost and added demands on vessel ops. • Good News: due to industry investment, PAM monitoring has increased regulator comfort with night operations. 6

Caps on Manmade Sound • As the public and regulators become more aware of the expanding production of sound from human marine activities, emphasis is shifting from managing single types of sound (sonar, seismic, shipping) • Concepts of acoustic ecology and sound zoning from urban and recreational land areas are being transferred to thinking about marine noise management, with or without legal basis. » EU “Good Environmental Status” guidelines from the marine environment include noise measurements and metrics (Descriptor 11) » NOAA NMFS maintains a Cetaceans and Sound website where marine acoustic data are archived and mapped. There are no laws for managing sound as a totality, but regulators are increasingly invoking cumulative effects arguments. http: //cetsound. noaa. gov/sound_data 7

Research and Data Funding Attempts to regulate seismic have revealed shortfalls in the regulator’s marine environmental data – E. g. , knowledge of abundance and distribution of non-commercial species is typically insufficient to assess potential risk from allowing activities The actual effects of noise (versus speculated effects) remain uncertain – Regulators may attempt to fill those gaps by encouraging directed research by industry applicants: recent examples include Brazil and US Gulf of Mexico. Regulators may also seek to have the E&P industry fund their general needs – E. g. , stranding programs, acoustic data libraries, and monitoring data services. Challenges – The desire to obtain permits by making concessions, – Other relevant stakeholders (fisheries, shipping, renewable energy) may not be assessed equitably with E&P industry, – Control of quality & independence of the work. 8

Good News: Some Dying Myths • • Marine seismic remains a poorly understood technology and commercial enterprise. “Duplicative Surveys” – While regulators may try to limit the number of overlapping surveys (e. g. multiple 2 D surveys) there is increasing understanding that different companies provide different proprietary work products that are not “duplicative”. • Vessel Spacing – Initially applied in the Chukchi Sea as a “walrus corridor”, – BUT--Spreading multiple sources may actually increase durations of exposure, more important than additive loudness. • Least Practicable Source Level – Operators who are prepared to defend their array designs are more likely to prevail with regulators seeking a “quieter” source. INDUSTRY MUST BE PREPARED TO PUSH BACK! 10

Marine Compliance Common Mitigation & Monitoring: • • • Pre-survey planning Geographic and seasonal restrictions Visual observations Soft-start or ramp-up Shut down or delay of activation of sources for animals within exclusion zone • Requirements or restrictions during nighttime / low visibility 11

Gulf of Mexico Settlement Original Settlement (June 2013 – Dec 2015) – Plaintiffs Challenged Lack of Regulations in GOM February 10 th, Settlement Agreement Extended through September 21 st 2017 with Added Provisions: – 5 km Buffer Zone of Areas of Concern – Jan 1 through Apr 30 Seasonal Restriction – Incentivizes the use of “Noise Reduction Technology” – Extension of Permit Terms when Affected by Seasonal Restriction 12

GOM Regulation Timeline • NEPA - Environmental Impact Statement – Draft Provided for Comment in Summer 2016 (est) • MMPA - Incidental Take Regulation – BOEM will Submit to NMFS in May 2016 (est) • ESA - Consultation/Biological Opinion – IAGC Requesting Applicant Status to Review Draft Geophysical Industry Working to Ensure Nonscientific Settlement Provisions & Atlantic Delays are not Applied in GOM Regulation Note: Public comment and final EIS/ITR through record of decision due by September 2017 (based on settlement agreement) 13

Gulf of Mexico Monitoring • Incidental Take Regulation (Monitoring & Mitigation) – IAGC is Working with BOEM to Ensure Monitoring Requirements are Limited to Specific Permitted Activities – Statute Only Allows the Agency to Require Specified Activities be Mitigated – IAGC is Seeking Flexibility for Members so Advances in Technology can be Implemented for Mitigation 14

NMFS Acoustic Guidance – Current guidance (created in 1995) is out of date and has been for over a decade – NMFS has produced and failed to adopt THREE prior revisions • 2007, 2013 and July 2015 • All prior drafts were externally peer reviewed and open for public review for 30 days or longer. – Significant Revisions from Prior Drafts were issued mid-March 2016 • No external peer review • 14 Day Comment Period – Inadequate – Latest Revisions Pose Major Problems for G&G • Produces a Major Increase in the size of Exclusion Zones over July 2015 draft (A comparable increase in the Number of Level A Takes) – IAGC/NOIA/API/AOGA Has Submitted Comments Opposing the Brevity of the Comment Period and the Reliance on Non-Peer Reviewed Information – IAGC is Engaging Congress to Oppose the Revisions as Improperly Prepared and Inadequately Reviewed 15

No evidence of biological consequences from behavioral response to seismic surveys! Ø US Gulf of Mexico ü ~50 years of E&P activities ü sperm whale population stable Ø West Coast Australia ü ~35 years of E&P activities ü humpback whale population increasing Ø Chukchi Sea and Beaufort Sea ü 30 years of E&P activities ü bowhead whale population increasing 16

In Summary Continued Attention on Atlantic: • Unacceptable Delays Cannot be Duplicated in GOM • NMFS Must Make Permitting Decisions • IAGC Urges Continued Support from NOIA in Applying Pressure for G&G Permit Decisions Gulf of Mexico Regulatory Focus: • • Draft EIS, ITR, Monitoring Plan, and ESA Consultation Manage Regulatory Impacts on G&G Activities Engage Congress Throughout the Process Work with Stakeholder Industries to Support Offshore 17

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