April 28, 2010 --- Vol. 16, No. 30April 2010

Parties in OCS lease sale appeal file schedule for case

The parties in the appeal in the U.S. Court of Appeals for the District of Columbia against the U.S. Minerals Management Service 2007-12 outer continental shelf lease sale program have filed a schedule for resolving the case. The disputed lease sale program includes the 2008 Chukchi Sea lease sale that raised $2.6 billion in bonus bids.

Shell is planning to drill up to three Chukchi Sea exploration wells in 2010 in leases that it purchased in the 2008 lease sale.

In a document filed with the D.C. court on April 27 the parties in the appeal say that the petitioners may ask the court for an injunction to block Shellís Chukchi Sea drilling program until the appeal case is resolved.

The D.C. court originally upheld the appeal in April 2009, saying that MMS had not done an adequate environmental analysis of the potential impacts of oil and gas leasing in the Alaska OCS. The court subsequently directed MMS to rework that environmental analysis for reconsideration.

On April 2 the U.S. Department of the Interior published its proposed revised environmental analysis and lease sale program, affirming the 2008 Chukchi Sea lease sale. This preliminary revised program is now going through a 30-day public review and the secretary of the Interior could issue a final version of the revised program as early as May 17, the parties in the appeal case say.

The parties say that in parallel with issuing the revised program, the secretary of the Interior will file with the court a motion to dismiss the appeal. There will then follow a 28-day period during which the parties will file responses to Interiorís motion and replies to those responses. If the court then determines that Interiorís revised lease sale program complies with the courtís 2009 opinion, the court will dismiss the appeal against the program.

If, however, the court does not accept the new environmental analysis it could send the lease sale program back to Interior for further revisions, presumably leaving continuing uncertainty around the status of the Chukchi Sea leases issued in 2008.

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