February 06, 2004 --- Vol. 10, No. 15February 2004

Court upholds state’s decision on Redoubt Shoals development

An Alaska Superior Court judge has upheld the state’s decision to allow commercial development of the Redoubt Shoals oil and gas prospect in lower Cook Inlet. The Alaska Department of Law said Feb. 5 that a Feb. 3 decision rejected litigation by Cook Inlet Keeper aimed at blocking the project.

In rejecting the latest appeal, the Superior Court relied on House Bill 86, passed by the Legislature last May and signed into law by the governor in June, the department said. HB 86 gave direct legislative authorization to oil and gas projects in the Cook Inlet basin that already have their state environmental permits.

“HB 86 was a fair and reasoned step to avoid endless litigation over projects that have already passed a thorough environmental review,” Alaska Attorney General Gregg Renkes said in a statement. “I am gratified that the court agreed with the governor and the Legislature, and opened the way for environmentally responsible development of our rich petroleum resources.”

The Department of Law said the Superior Court also upheld a second provision of HB 86 which narrows the range of parties allowed to appeal coastal zone approvals issued by the Department of Natural Resources. That provision, the department said, “will prevent Cook Inlet Keeper from pursuing future appeals like the one that delayed the Redoubt Shoals project.” HB 86 provided that unless a claim is based on the United States Constitution or the Alaska Constitution, consistency determinations can only be appealed by “the applicant or an affected coastal resource district.”

The department said that Cook Inlet Keeper’s suggestions that HB 86 violated provisions of the Alaska Constitution failed to persuade the judge, who noted that the state has an important interest in “promoting oil and gas development with minimal delay and expense to the public.”

The Department of Law said litigation over the Redoubt Shoals development has been active since the late 1990s and said the Superior Court’s decision declines to hear Cook Inlet Keeper’s second appeal of decisions to grant the project its environmental permits.

State conditionally approves Three Mile Creek unit

The Alaska Division of Oil and Gas has conditionally approved formation of the Three Mile Creek unit so that state leases set to expire at the end of January can be included in the unit.

Aurora Gas LLC and Forest Oil Corp. are partners in the proposed 8,156 acre unit, on the west side of Cook Inlet, with Aurora holding approximately 79 percent of the acreage and Forest approximately 21 percent.

The unit includes two state oil and gas leases, 5,596 acres, and two Cook Inlet Region Inc. leases, 2,560 acres.

The state said the applicants identified two natural gas prospects within the unit area, the Three Mile Creek and the Olson Creek prospects, and committed to acquire new seismic data over the unit area, drill an exploration well in each prospect, and obtain approval of a participating area during the three-year term of the agreement.

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