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Providing coverage of Alaska and northern Canada's oil and gas industry
February 2006

Vol. 11, No. 8 Week of February 19, 2006

Show me, says Itta

New NSB mayor casts friendly eye on extended reach drilling for offshore

Kay Cashman

Petroleum News

The new mayor of the North Slope Borough says if the oil industry can show him technology that ensures the protection of the Chukchi and Beaufort seas he would “welcome discussions” about exploring and producing oil outside the barrier islands. But so far Edward Itta says he has “seen nothing — no new technology — that would allay” his many concerns.

In a recent interview with Petroleum News Itta said he is “pleased” Shell has hired his predecessor, former borough Mayor George Ahmaogak Sr., as its Alaska community affairs manager.

“I think he will be a great asset for Shell,” Itta said. “He certainly has a lifetime of knowledge and experience regarding the offshore up here. I’ve worked with him in the past. I still intend to work with him in his capacity with Shell.”

Itta has plans to meet with Ahmaogak “on Feb. 21 or 22.”

“I am looking forward to meeting with him,” he said.

Ahmaogak’s primary responsibility with Shell is working with local communities, including those on the North Slope where Shell is currently focused on exploring its Beaufort Sea leases.

But it will take a lot to make Itta, who describes himself as “pro-development,” approve of oil and gas activities outside the barrier islands in the Beaufort or Chukchi seas of northern Alaska.

“Mayors before me were opposed to (oil and gas activities) in the offshore and mayors who come after me will be opposed, and I am opposed,” he said.

On Feb. 1, Itta told the U.S. Minerals Management Service “there’s a reason for this continuity” with borough mayors. “It tells you how deeply we feel about protecting the migratory paths of the bowhead.”

At the MMS public scoping meeting for the upcoming Chukchi Lease Sale 193 he said if exploration and development could be done without disrupting the whales, then the borough might support outer continental shelf activity “just like we support most onshore development. But industrial activity out in the ocean — the seismic work and the ship traffic and construction and operation of wells — it all makes a lot of noise, and that noise carries through the water. The bowheads hear it, and it changes their normal patterns of travel and feeding.”

The borough’s other major concern is “the risk of an oil spill or even the accidental loss of drilling muds, solvents or any of the many other toxic liquids associated with oil activity. What happens when that stuff gets loose in the ocean? How far does it spread? How much damage does it do to the bowhead’s feeding grounds? And how do these toxins affect the health of the bowhead and the Inupiat who eat them?” Itta asked.

“We know that oil spill cleanup uses primitive technologies with very questionable rates of success. There is no technology to clean up a spill in broken ice conditions, and even in the best conditions, nobody in industry can honestly brag about their ability to really protect the environment in the case of a sizeable spill,” he said.

“These are the things that keep our whalers awake at night. We don’t want to stand in the way of development if we don’t have to. But when some of the most important elements of our traditional culture are being endangered while there is plenty of oil to be found onshore, then we have to stand up and ask the hard questions.”

Extended reach drilling meets approval

Technology that generated a flicker of optimism in Itta for offshore drilling was industry’s ability to drill several miles offshore from an onshore location — i.e. extended reach drilling.

David Harding, public relations person for the North Slope Mayor's office and for the Government Affairs office, raised the subject of extended reach drilling during the interview with the mayor, referring to a Feb. 5 PN article that mentioned BP’s plan to drill and produce its Beaufort Sea Liberty prospect from a single onshore drill pad, drilling wells into the reservoir as far as eight miles from shore.

BP’s original plan was to develop Liberty from a gravel island, which is what it did with Northstar, the only field currently producing oil in Alaska’s OCS. But it scrapped that plan in favor on an onshore development as extended reach drilling technology improved.

Using “leading edge technology,” Harding said, “seems to be turning offshore drilling into onshore drilling.”

“Surely anything that can be originated from land is going to be less of a challenge for spill clean up versus in the water,” the mayor said, mirroring Harding’s enthusiasm for BP’s plans at Liberty.

Unfortunately, most of the Beaufort and Chukchi cannot be reached with ERD unless it originates on an island or other offshore structure (or vessel). All the wells in the Chukchi drilled to date, for example, were 70-plus miles from shore.

Short and long term priorities

When asked what his short and long term priorities were for oil and gas Itta said “always, first and foremost, protect our cultural onshore and offshore resources and heritage. … Eskimos were here before oil and plan on being here after oil.”

As part of that effort the mayor would like to see “industry apply traditional knowledge … relative to ice … when they plan offshore activities. We have thousands of years of experience here,” he said.

He’s also “a big advocate of alliances” with industry and government that create “baseline data prior to any major activity” in the offshore.

Itta would also like to see documentation of any “adverse impacts” that might result from oil and gas activity incorporated into this baseline data.

Borough’s impact on offshore activities

In his comments to MMS, Itta said “Since MMS is going to offer the Chukchi for sale again no matter what we say, I would ask that the agency put responsible conditions on any activity.” These include:

• Deferral areas to protect whaling activities;

• Conflict avoidance agreements to ensure proper relationships between developers and subsistence users;

• Proof of the industry’s ability to contain and clean up any spills;

• Risk analysis related to oil spills; and

• Risk analysis related to noise.”

When asked what the borough planned to do to deter or impact offshore activities, Itta said he would continue to participate in MMS’s planning process by offering testimony on behalf of the borough.

He also referred to conflict avoidance agreements (CAA) with the Alaska Eskimo Whaling Commission (AEWC) and a good neighbor policy as being effective vehicles for local impact on offshore activities.

Currently, oil and gas companies are encouraged to have both by federal and state agencies, although they cannot necessarily be required to have them, federal officials told PN on Feb. 16.

“We don’t have the authority to require either of those things, but we strongly encourage them,” MMS Acting Regional Director Rance Wall said. “What we do require is that they show good faith to work things out with the locals and one way of showing that is having a conflict avoidance agreement and good neighbor policy in place.”

The companies, he said, have been willing to work with the borough and locals.

“We haven’t had an activity occur without a conflict avoidance agreement in recent history” (last 10 or 15 years) offshore northern Alaska. Wall said.

“From the state side the agreements are not mandatory, but we do encourage them. The North Slope Borough I think does mandate them at times through their permitting and zoning authority, but not in all cases. The state could mandate a conflict avoidance agreement if the situation warrants but probably not a good neighbor agreement at least like the ones we’ve seen so far,” said the State of Alaska’s Division of Oil and Gas Director, Bill Van Dyke.

Gordon Brower with the North Slope Borough’s planning department says the borough does require a conflict avoidance agreement with the whaling commission “for mainly offshore activities … and we enforce that. During operations for development we do require a good neighbor policy. For exploration activities, only in cases where … conflict is likely to occur” does the borough require a good neighbor policy.

Brower said the IHA, Incident Harassment Authorization from National Marine Fisheries Service (NMFS), “requires operators and vessel activities to get into a CAA with AEWC … as a condition of approval.”

New comprehensive plan basically done

When asked if he and his staff would revisit the borough’s comprehensive plan and Municipal Code Title 19, Itta said no.

“It’s basically finished” and close to distribution, he said.

“We’re still working on portions of Title 19 that apply. … Karla Kolasch is working on that. … She’s one of my special assistants.”

Borough officials have said the new comprehensive plan will incorporate traditional values and help chart a course for the future, including providing direction for managing the borough’s resources in the face of declining revenues.

Title 19 contains the borough’s land management regulations and Barrow zoning ordinances, which were adopted in 1990 and are part of the comprehensive plan.

The title contains a set of land management principles and procedures for development in the borough. Its purpose is to achieve the goals and objectives and implement the policies of the plan, including the coastal management plan.

Key players in Itta administration

Kolasch’s duties under the new mayor include overseeing long range planning projects; coordinating and preparing the mayor’s comments on development related activities and documents; serving as the liaison to the borough’s law, wildlife management, and planning departments; representing the mayor at meetings, hearings and negotiations; working with villages on providing input into development activities; working with federal and state agencies and industry; serving on the North Slope Science Initiative Oversight Group staff committee and the Joint Borough Economic Development Committee; and assisting in coordinating negotiations/activities related to stranded gas.

Other key administrators in Itta’s administration include George Olemaun, chief administrative officer and the man who headed Itta’s transition team, and Johnny Aiken, director of Planning and Community Services. Among other things, Aiken’s department oversees oil and gas permitting and zoning changes.






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