BP Alaska

Environmental Site Report 2016

BP Alaska Environmental Site Report 2016

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Table of Contents

About this Report 3

BP in Alaska 4

Where We Work 5

Prudhoe Bay 6

Arctic Studies 7

How We Work 8

Management Systems 8

How we identify and manage environmental impacts 8

Environmental Performance 9

Air Emissions 9

Land Use 10

Spills 10

Waste and Pollution Prevention 11

Water 12

Wildlife 13

BP in the Community 14

STEM education growing an Alaska workforce 14

BP Energy Center 14

Information 15

Contact Us 15

BP Alaska Environmental Site Report 2016

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Lisburne facility

About this Report

This Site Report provides an overview of BP Alaska’s operations, focusing on environmental performance in recent years up to 2016. We have operated in conformance with the ISO 14001 Environmental Management System (EMS) standard since 1998, and our focus has remained on reducing our environmental impacts. Alaska is a unique place, and BP is privileged to operate here.

BP is committed to safe operations, environmental protection, and overall responsible energy development. BP Alaska operates under BP’s Code of Conduct, which outlines our commitment to safety and the environment. It is broadly communicated to employees and contractors along with the expectation that everyone working for and on behalf of BP Alaska conforms to the code.

Additional environmental performance information for BP Global can be found in the BP Sustainability Review.

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Trans-Alaska Pipeline

BP in Alaska

BP has spent more than half a century exploring and developing Alaska’s oil and gas resources, while playing an important role in driving economic growth and supporting local communities throughout the state. The company began working in Alaska in 1959, started drilling at the massive Prudhoe Bay oil field in 1968, and helped build the Trans-Alaska Pipeline System in the mid-1970s. Since Prudhoe Bay began production in 1977, it has generated 12.5 billion barrels of oil, far exceeding initial projections, thanks in part to enhanced oil recovery technologies that BP pioneered. Four decades after starting up, it remains one of North America’s largest oil fields. BP holds a significant interest in Alaska’s North Slope. The company operates the Prudhoe Bay Unit (PBU), and is a working interest owner (WIO) in other oil fields located on the North Slope. BP is also working with industry partners and the State of Alaska to advance an Alaska liquefied natural gas (LNG) project, which, if sanctioned, would move North Slope gas to global markets.

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Prudhoe Bay well site 5

Where We Work BP Alaska’s operations are centered on the oil fields located in the northern edge of the state known as the North Slope. The North Slope is a remote Arctic region connected by a single gravel road, the Dalton Highway, which is 415 miles long and joins the road system north of Fairbanks.

The North Slope is a treeless wetland that extends 88,000 square miles from the foothills of the Brooks Mountain Range to the Arctic Ocean and west from the Canadian border to the Chukchi Sea. Approximately 500 square miles of the Alaska North Slope have been developed for oil and gas production, less than 1% of the total Alaska Arctic Coastal Plain.

The North Slope experiences extreme winter conditions from October through April. The sun does not rise above the horizon for 66 days starting in November, and winter temperatures across the North Slope frequently dip to minus 30 degrees Fahrenheit with extreme winds, resulting in severe chill factors. The lowest recorded temperature was minus 62 degrees Fahrenheit. The highest recorded temperature was 83 degrees Fahrenheit. Even in the warmest month, July, the average daily temperature is only 45 degrees Fahrenheit.

The oil fields are located primarily on leased state lands and adjacent waters of the Beaufort Sea. The oil reservoirs are thousands of feet deep, located below approximately 2,000 feet of permafrost (permanently frozen soil, rock and ice).

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Prudhoe Bay

BP Alaska operates the Prudhoe Bay Unit (PBU) on 397 square miles (1,028 sq km) of land leased from the State of Alaska. PBU contains nine fields which produce around 55 percent of Alaska’s oil and gas, and in 2016 it averaged 281,700 barrels of oil equivalent each day. BP’s net production from the area is 66,100 barrels of oil equivalent each day.

The original expectation for Prudhoe Bay was to drill 500 wells, produce for 20 years, and recover 9 billion barrels of hydrocarbon resources. BP Alaska currently operates approximately 1200 wells, is celebrating 40 years in Prudhoe Bay, and has produced over 12.5 billion barrels of oil. During the last three decades Prudhoe Bay has been a proving ground for oil field technology that has helped BP Alaska and other companies go beyond what was ever thought possible in maximizing production from this super-giant field.

Facilities include approximately 1200 active wells on 45 pads, 7 oil and gas separation facilities, 2 gas plants (handling and injection), a power plant, 2 seawater plants (treatment and injection), a crude oil topping plant, approximately 850 miles of flowlines (cross country pipelines) and 450 miles of well lines (running from wellhouse to processing facility), approximately 230 miles of roads, 2 docks, and hazardous and solid waste management facilities. Support facilities include three main camps with offices, dining halls, and recreational facilities; 2 medical facilities; and 2 fire stations. Roads and pads are on approximately 5 feet of gravel, and facilities are on pilings to prevent thawing of permafrost. The oil production facilities take in crude oil from well sites and process it for shipment down the Trans-Alaska Pipeline by separating the oil from gas and water. The gas and water are re-injected into the reservoir for enhanced oil recovery (EOR).

2016 Statistics Employees 1,700 people

Capital investment $600,000

Operating budget $1.2 billion

Prudhoe Bay Gross Production (operated) 281,700 bopd

BP Net Production (operated & non operated) 107,900 bopd

Community investment $3.5 million

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Wind-blown red fox in Prudhoe Bay

Safety and integrity programs remain our primary focus. Integrity programs focus on fire and gas systems, safety systems, pipeline renewal, and facility siting. Safety is the number one priority; it is strengthened through contractor management and engagement and a strong control of work program. BP has measurable safety and reliability programs for pipeline assurance on the North Slope, which include frequent inspections and applied technology.

The challenge for the entire industry is to respond to a low oil price environment in a way that improves efficiency and accelerates innovation. BP’s goal is to minimize oil production decline. BP Alaska has boosted overall oil recovery by using enhanced oil recovery (EOR) techniques that include large-scale gas cycling, water flooding around the periphery of the field, miscible gas injection, and water-alternating gas injection; improving reservoir analysis and delineation; using advanced drilling techniques such as horizontal and multi-lateral; and applying advanced well completion methods.

Arctic Studies BP’s presence on the North Slope for nearly half a century has not only helped advance technology in oil and gas development and engineering, but also has vastly increased understanding of Arctic ecosystems, from weather and climate to the flora and fauna that inhabit this northern region, both on land and in the sea.

Before companies like BP began searching for oil on Alaska’s North Slope in the 1960s, most ecological studies in the far north were funded by government programs in the name of basic science. Little was known about what is sometimes called “applied ecology,” or the study of what happens to biological communities altered by human activities.

The discovery of the giant Prudhoe Bay oil field in 1968 and its subsequent development sparked interest in Arctic applied ecology. Scientists wanted to know how development would impact the region’s plants and animals, and how those impacts could be managed. As government research programs have continued in the Arctic, BP and other oil and gas producers have pursued applied ecological research on the North Slope.

BP actively supports scientists working through university, agency, consulting and nonprofit organizations. Together, BP’s long-term studies, along with studies by others, provide an annual snapshot of ecosystem changes in the oilfields. Some of the changes, such as nest initiation dates of shorebirds and soil temperatures, show trends over time. Other changes reflect the ever-changing nature of the environment, with wide ranges from one year to the next driven by everything from weather, to interactions among species, to disease. BP Alaska supports research to further understand polar bear behavior and long-term monitoring of tundra nesting birds to gain a better understanding of potential impacts from industry, climate change, and predators.

Long term monitoring reports that BP Alaska has supported can be found in the North Slope Science Catalog.

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Flow Station 1 processing facility in Prudhoe Bay

How We Work Management Systems

BP Alaska operates under BP’s global Operating Management System (OMS), a comprehensive framework for operating in a safe and reliable manner. OMS focuses on integrating risk reduction and continuous improvement into BP processes. BP Alaska also operates under its Environmental Management System (EMS), which has been certified or attested to the ISO 14001 Standard since 1998. Our resulting EMS provides a structure for managing environmental risks and compliance and improving performance. In June 2016, BP Alaska received an attestation statement from an external contractor indicating that our overarching EMS meets the intent of the ISO 14001:2004 standard. BP Alaska currently holds a single ISO 14001 attestation letter for the North Slope activities conducted under BP’s operatorship.

How we identify and manage environmental impacts

Environmental aspects are activities that have the potential to have an environmental or regulatory impact. BP Alaska identifies environmental aspects through risk identification activities, systematic review of incidents and near-miss events, and routine work practices. Depending on the potential severity of impact, the frequency at which the aspect may occur, and the operational controls that are currently in place, the aspect can become a focus area for developing annual targets to further reduce risk and improve environmental performance.

In addition, BP Alaska internally investigates incidents and near-miss events and takes corrective action to prevent recurrence. Learnings from incidents are shared throughout BP Alaska and if applicable, to the wider BP organization.

With a complex regulatory framework in Alaska, BP Alaska has a team of environmental professionals who track changing regulations, obtain necessary permits for operations, conduct training for compliance with permits and regulations, manage compliance requirements, and advise the operations and projects teams on best environmental practices. This system of operational controls also allows for management of environmental impacts from BP Alaska operations.

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Environmental Performance This report addresses six key areas of environmental impact resulting from our onshore BP Alaska operations: air emissions, land use, spills, waste and pollution prevention, permitted water discharges and water use, and wildlife. Relevant data from these areas are listed in the figures in each section below. Data specified in “tonnes” are in metric tons unless otherwise indicated.

Air Emissions

Air emissions are a significant environmental aspect of BP Alaska’s operations, with nitrogen oxides (NOx) being the most strictly regulated pollutants. Other air emissions that are regulated by federal regulations and the State of Alaska include sulfur oxides (SOx), carbon monoxide (CO), and particulate matter (PM). Permits are required for construction and operations as well as changes to industrial and living facilities. BP Alaska manages its emissions on an ongoing basis through operational controls, including flaring. Flaring is strictly regulated to minimize emissions and volumes of natural gas consumed. BP Alaska continues long-term projects at several processing facilities to improve emissions source equipment. BP Alaska also developed a monitoring plan for PM and a preventive maintenance program for fugitive emissions using forward looking infrared (FLIR) cameras to detect leaks (fugitive emissions are natural gas leaks associated with facility piping that impact air quality and can pose an integrity threat to facilities). Reducing “black smoke” emissions is a continual focus.

The graph above illustrates a trend in tonnes of air emissions for Prudhoe Bay operations from 2012 to 2016; the pollutants included in the amount shown for each year are NOx, SOx, PM, and CO. The graph to the left depicts the total production flare mass in tonnes for PBU from 2012 to 2016.

Total Regulated Air Emissions: NOx, SOx, PM and CO (tonnes)

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Alaska Clean Seas performing a spill drill

Land Use

BP Alaska operations occur in a tundra environment, which is comprised of wetlands underlain by permafrost. To protect the tundra and avoid thermal subsidence, facilities are built on gravel pads. Any activity affecting the tundra, such as placement of gravel for a pad expansion or travel on an ice road requires permits through local, state and/or federal agencies.

We minimize our impact on tundra in the winter by

using ice roads and pads to access pipelines for inspections. Technological improvements in drilling allow closer spacing of wells and horizontal wells, which allows access to the oil reservoir while minimizing additional tundra impact.

Spills

Spills can occur from a variety of activities. BP Alaska records, cleans up, and reports all spills and leaks in accordance with local, state and federal requirements. BP Alaska has programs in place to reduce spill numbers and monitor and evaluate spill reduction progress. Examples of spill risk reduction are routine replacement of hydraulic hoses and use of liners under vehicles when parked on ice roads and pads.

Facilities and pipelines are maintained through an integrity management system: an integrated process with many activities and procedures that are interlinked, requiring attention to continuous improvement, with a clear understanding of the design and operating parameters, risks and reliability, inspection requirements, and assessment for continued operation. With this system, BP Alaska can monitor and reduce spill risk.

Reportable Spills

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Satellite Accumulation Area for waste

Waste and Pollution Prevention

BP Alaska's primary waste streams are drilling waste and solid waste. BP Alaska promotes pollution prevention by encouraging source reduction, waste minimization, appropriate recycling efforts, and material substitution consistent with environmental requirements. Examples of this practice include recycling tires and using refillable totes instead of barrels. Drilling wastes that cannot be managed through re-use or recycling are disposed of using state and federally-permitted subsurface injection wells. The graphs below illustrate the trends in volumes of waste recycled, the volumes of disposed hazardous waste, and the volumes of disposed non-hazardous wastes each year from 2012 to 2016.

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Caribou mother and calf taking a drink from a tundra pond

Water

Fresh water consumption is not a significant environmental issue for BP Alaska, as our production facilities do not consumptively use fresh water for industrial processes. However, fresh water is used for domestic supply, to build temporary ice roads, and for drilling operations. BP Alaska’s water use is regulated by the State of Alaska. Our facilities produce waste water primarily in the form of produced water (water separated out of the crude oil during processing). Such water is beneficially reused by injection into the oil-bearing reservoirs to maintain reservoir pressure and for EOR. Domestic wastewater from our camps is treated at our wastewater plants and discharged to surface water in accordance with state and federal permits. The graph to the left below illustrates freshwater withdrawn in cubic meters (m3), while the graph to the right shows how much produced water is reinjected in tonnes each year since 2012.

Freshwater Withdrawn (m3)

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Wildlife

Our operating area is rich with wildlife. North Slope wetlands are a vital summer breeding habitat for many bird species. Caribou seasonally migrate to the coastal plain. The North Slope is a year-round home to animals such as musk oxen, polar bears and fox. Several threatened and endangered species are found in our operating area, including the Spectacled eider, polar bear, and Bowhead whale. BP Alaska has strict non-interference policy for all wildlife. This policy specifies that animals have the right of way and that people cannot interfere with any animals, including sick or injured animals, unless requested to intervene by regulatory agencies. Hunting and trapping is not allowed within the oilfield boundaries. BP Alaska has a wildlife monitoring program that includes monitoring and studies aimed at better understanding any effects that our operations have on wildlife populations. For instance, annual aerial flights with forward looking infrared radar (FLIR) cameras conduct surveys of areas selected for winter off pad/road activities to ensure we don’t disturb or carry out work within proximity of a polar bear den.

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BP in the Community In addition to its oil and gas activities in Alaska, BP is heavily invested in communities across the state through donations to non-profit and education groups, scholarship programs, and volunteer hours from its employees. In 2016, BP Alaska donated approximately $3.5 million to hundreds of organizations throughout Alaska. Our employees support more than 800 community and education organizations and 230 youth teams.

STEM education growing an Alaska workforce

BP supports community and science, technology, engineering and math (STEM) education programs throughout Alaska. Training Alaskans and supporting a quality education system in the state remain key priorities for BP. Of our 1,700 employees in Alaska, over 70 percent are Alaskans and we encourage our contractors to hire and train Alaskans, as well. In order to grow an Alaska workforce, BP has invested millions of dollars toward quality education in the state. Since 2001, BP has contributed more than $30 million to the University of Alaska system. In addition to providing financial support, BP partners with the university on research projects, provides mentors and internships for students, and hires Alaska graduates. BP, partnering with the University of Alaska system, has been instrumental in creating industry-specific programs such as the Asset Integrity and Corrosion Lab, the Alaska Native Science and Engineering program, summer engineering program and Process Technology programs. The BP Teacher of Excellence program receives more than 1,000 Alaska teacher nominations annually and has recognized nearly 700 teachers over the program’s 20-year history.

BP Energy Center

A true gift to Anchorage and communities across Alaska, the BP Energy Center provides meeting space free of charge to more than 500 community and education groups every year. The center underscores BP’s commitment to making Alaska a great place to live, work and raise a family. The training, meeting, and conference facility has seen more than 150,000 visitors since opening in 2002. During normal business hours, the facility is available at no cost via a reservation system to its users. The Energy Center remains a symbol of BP’s ongoing commitment to community and is the centerpiece of BP’s annual multimillion dollar contribution to Alaska’s not-for-profits.

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Information

Additional information about BP and its operations in Alaska can be found at the following websites.

BP Annual Reporting

http://www.bp.com/en/global/corporate/sustainability/reporting.html

BP in Alaska

http://www.bp.com/en/global/corporate/about-bp/bp-worldwide/bp-in-america/our-us-operations/exploration-and-production/alaska.html

BP Sustainability Review

http://www.bp.com/en/global/corporate/sustainability.html

BP HSE Charting Tool

http://www.bp.com/en/global/corporate/sustainability/hse-charting-tool.html

BP Environmental Performance

http://www.bp.com/en/global/corporate/sustainability/environment.html

Contact Us

Tell us what you think.

Are our statements easy to understand, not detailed enough or perhaps too complicated? Is there more information you are interested in knowing? Let us know what you think so we can improve our report. If you have any queries about this report or BP Alaska’s general operations, please write or telephone us and we will be happy to assist.

BP Exploration (Alaska) Inc. P.O. Box 196612 900 Benson Blvd Anchorage, AK 99519-6612 Tel. 1 (907) 561-5111, ask for Regulatory Compliance & Environmental Manager