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Bill Freeman,* Shell Oil, J. Daniel Arthur,* CH2M HILL, Technical Reviewers: Bill Bryson, Kansas Corporation Commission, Jerry Mullican, Railroad Commission of Texas, Paul Roberts, Nebraska Oil & Gas Conservation Commission, Don Warner, University of Missouri-Rolla, Lori Litzen, Shell Western E&P Roger Noble, CH2M HILL Abstract The competition between ever-expanding environmental regulations and the ongoing decrease in environmental protection resources has prompted both regulatory agencies and industry to more closely examine the use of these limited resources. In the underground injection control (UIC) program, technical and managerial professionals from industry and government must at times evaluate whether or not certain ground water aquifers should be protected. If an aquifer exemption is clearly justified, the operator should not have to protect it, hence conserving valuable environmental protection resources. However, some state and federal agencies would prefer never to approve an aquifer exemption even though some are justified. This is apparent as the variations regarding how aquifer exemptions are processed by agencies seems largely to be resulting from the lack of clear guidance on aquifer exemptions and the lack of understanding for the term "reasonably expected" as intended by EPA and Congress. Because of the lack of positive instruction from state and federal agencies and a general lack of awareness on industry's part, the aquifer exemption process continues to be somewhat esoteric and often times misunderstood. The purpose of the UIC Program as mandated by Congress is to protect underground sources of drinking water (USDW) being used in public water systems, as well as to protect potential USDWs where there is a reasonable likelihood that these sources will be needed in the future. However, Congress did not intend for EPA to protect all potential USDWs. If it was reasonably expected that a potential USDW could not be used in the future as a public water system, protection of that aquifer would not be required. In fact, EPA affirmed that it would be a misallocation of resources to seek to protect as drinking water sources aquifers which in fact would not be used by public water systems. The ensure that such aquifers would not be protected, EPA developed an aquifer exemption process under 40 CFR 144.7 and 146.4 by which aquifers could be evaluated for their potential use as future public water systems. Government and Industry should utilize the aquifer exemption process as much as possible to ensure that the wise use of limited environmental protection resources is accomplished. The Clinton Administration appears to also endorse this position. In an April 1994 Letter to Congressman Earnest J. Istook on the domestic oil and gas industry, President Clinton stated: "we intend to help on the cost side… by reducing unnecessary and inefficient costs and regulations. I have challenged federal agencies to eliminate regulatory overkill and to attack regulatory barriers and subsidies here and abroad". Introduction The competition between ever-expanding environmental regulations and the ongoing decrease in environmental protection resources has prompted both regulatory agencies and industry to more closely scrutinize these scarce resources. P. 671

Deepwater developments CAN be affordable in low price environments! One key is to view designs through a new lens as we create our development concepts. This paper describes how Shell un-shackled the talents of the industry's engineering and construction communities to create very viable, low cost development systems for potential Gulf of Mexico prospects. The paper speaks to the ways that corporate orthodoxies were challenged to enable these solutions, engaging Shell's technical experts creatively to define new solutions. The results of our findings were both surprising and compelling. Most importantly, there continues to be space for new, low cost deep water developments. This paper presents an alternative approach to the design and execution of low cost deep water development systems that are demonstrably affordable in a low price environment. The paper describes how Shell un-shackled the talents of the industry's engineering and construction communities to create very viable, low cost development systems for potential Gulf of Mexico prospects. It speaks to the ways that corporate orthodoxies were challenged to enable these solutions, engaging Shell's technical experts creatively to define new solutions. The approach used was simultaneously rigorous and un-fettered. Shell's efforts began by defining bare-bones surface and subsea facilities that included only minimal systems and sparing, and smaller compliments of Operations personnel. Shell relied heavily on input from the contractor community to define these initial, minimum systems. During the subsequent review of these facilities designs, Shell asked of all internal stakeholder a series of key questions designed to make visible incremental costs and functionalities of additional systems above the proposed minimums. This bottoms-up approach resulted in the selection of only high value-added functionalities that mitigate business risk, while making transparent the decision processes that lead to them. The final designs represented very workable, operable and maintainable systems that reduced capital cost by between 15 and 25%, based solely on scope reductions. As a result of this approach, Shell has reset the baseline from which they will develop future prospects. We conclude from this approach that deep water developments can be affordable in low price environments. One key is to view designs through a new lens as we create our development concepts. Most importantly, there continues to be space for new, low cost deep water developments into the future.

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