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April 01, 2014 --- Vol. 20, No. 19April 2014

BSEE says it will order Chukchi drilling suspension

In a filing submitted to federal court in Alaska yesterday, the Bureau of Safety and Environmental Assessment said that it is going to direct a suspension of drilling activities in Chukchi Sea leases because of a continuing appeal over the validity of the 2008 lease sale in which companies purchased the leases. Companies exploring in the Chukchi Sea have already suspended their drilling plans, with Shell and ConocoPhillips, two of the companies, citing the appeal as one reason for the drilling hiatus.

In January the U.S. Court of Appeals for the 9th Circuit upheld an appeal against the environmental impact statement for the lease sale, saying that the Department of the Interior had failed to adequately consider the extent of potential Chukchi Sea oil development when assessing the possible environmental impacts of the lease sale. The 9th Circuit court remanded the case back to the federal District Court in Alaska. And on March 17 the Alaska court ordered the parties in the case to file a proposed way forward for the case by March 31. BSEE’s filing, submitted jointly with Shell, is a response to that order.

BSEE has offered to rework the environmental impact statement, to correct the deficiencies identified by the 9th Circuit court. The agency has asked the District Court to meantime sanction ancillary, non-drilling activities in the Chukchi Sea leases, and to allow the agency to process lease-related documents such as exploration plans.

Lawyers for the plaintiffs in the case, the Native Village of Point Hope, the Inupiat Community of the Arctic Slope and 12 environmental organizations, have submitted a separate filing to the District Court requesting more time to consult with their clients and to arrive at an agreement with the defendants over how proceed in the appeal case.

—Alan Bailey

See story in April 6 issue, available online at 11 a.m., Friday, April 4 at www.PetroleumNews.com

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