February 11, 1998 --- Vol. 4, No. 9February 1998

Court rules in favor of DNR in lease sale 78 (Cook Inlet) suit

Kenai Superior Court Judge Charles Cranston ruled Jan. 28 that the Department of Natural Resources’ revised consistency determination for oil and gas sale 78 (Cook Inlet) complies with the Alaska Supreme Court’s direction in Ninilchik Traditional Council v. Noah.

The Kenai Superior Court issued a temporary restraining order in January 1994, then decided the case on its merits and upheld the lease sale in October 1994. The case was appealed to the Alaska Supreme Court, which allowed the sale to go forward on Oct. 31, 1994, but in a Dec. 27, 1996, opinion, remanded the case to DNR with instructions to consider district coastal management programs.

DNR issued a revised consistency determination on remand on July 1, 1997.

Appellants continued to challenge DNR’s consistency determination, arguing DNR had not considered cumulative effects of the sale on air and water quality and on coastal habitat and did not review reasonably obtainable information in analyzing cumulative effects.

The court said DNR noted that the Kenai Peninsula Borough found the revised consistency determination consistent with its district coastal management plan.

The court found that DNR considered the important factors of the district coastal management policy which require that land use activities be planned and conducted to mitigate anticipated adverse impacts on fish and wildlife, and also noted that the policy states that “focused application of this goal is reserved until a specific activity is proposed.”

A fundamental difference between the parties, the court said, relates to whether DNR must fully address cumulative effects at the lease sale or whether it can monitor and alleviate cumulative effects at various stages of development and production.

The Alaska Supreme Court rejected the argument that cumulative effects must be dealt with at the lease sale, the court said, assuming, instead, “that DNR will impose appropriate measures … at each subsequent stage.”

Anchorage Superior Court affirms DNR decision that sale 85A in best interest of the state

Anchorage Superior Court Judge Sigurd Murphy affirmed on Jan. 27 the finding of the Department of Natural Resources that state oil and gas sale 85A (Cook Inlet exempt) was in the best interests of the state.

Kachemak Bay Conservation Society, the Cook Inlet Keeper, Trustees for Alaska, Stacey Marz, Michael O’Meara and Daniel Zatz had appealed DNR’s decision that sale 85A was in the best interests of the state, consistent with the Alaska coastal management program and consistent with the Kenai Peninsula Borough coastal management plan.

DNR has shown, the court said, that it is in the best interests of the state to make available for oil and gas leasing state lands in which the oil and gas industry has an interest.

On the issue of phased determinations — whether DNR need look at all possible results of oil and gas leasing before the sale — the court held that, “To require DNR to speculate about the location and size of related facilities and activities is not feasible because it would not be possible to obtain the necessary information.”

Further, the court said, “DNR has made clear that each subsequent phase of the proposed activity is subject to discretion through applicable permitting regulations, and that alternative decisions can be made based upon the developing information.”

The court said that state statute, as revised by the Legislature in 1994, “permits DNR to conduct best interest findings and consistency determinations in phases provided DNR and the specific lease sale meet certain conditions.”

Petroleum News - Phone: 1-907 522-9469 - Fax: 1-907 522-9583
[email protected] ---