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August 2013
Copyright Petroleum Newspapers of Alaska, LLC (Petroleum News)(PNA)©1999-2019 All rights reserved. The content of this article and website may not be copied, replaced, distributed, published, displayed or transferred in any form or by any means except with the prior written permission of Petroleum Newspapers of Alaska, LLC (Petroleum News)(PNA). Copyright infringement is a violation of federal law subject to criminal and civil penalties.
Vol. 18, No. 32 Week of August 11, 2013

Response plans upheld

Court says BSEE approvals of Shell Arctic spill contingency plans were legal

Alan Bailey

Petroleum News

The federal District Court in Alaska has upheld the Bureau of Safety and Environmental Enforcement, or BSEE, approvals of Shell’s oil spill response plans for the company’s exploration drilling in Alaska’s Beaufort and Chukchi seas. In an Aug. 5 court order District Judge Ralph Beistline said that BSEE had fully complied with all federal statutes and regulations when approving Shell’s plans.

The court order related to two consolidated court cases. In the first of these cases, filed in February 2012, Shell had attempted to pre-empt legal action against its plans by asking the court to declare that the oil spill response plan approvals were legal and valid. In the second case, filed in July 2012, a group of environmental organizations had appealed the plan approvals, claiming that the approvals violated the federal Clean Water Act, the National Environmental Policy Act and the Endangered Species Act.

Upheld request

In his court order Beistline upheld Shell’s request for a declaration that the plan approvals were valid. He also dismissed the appeal against those approvals.

“The ruling is welcome news and validates that the Department of Interior was thorough in its analysis of Shell’s oil spill response plans for work offshore Alaska,” Shell spokeswoman Megan Baldino told Petroleum News in response to Beistline’s decision.

Shell originally filed its oil spill response plans in anticipation of starting its Alaska Arctic offshore exploration drilling program during the open water season of 2012. In the event, although the company started the drilling of one well each in the Beaufort Sea and the Chukchi Sea during that season, the wells were not drilled down to hydrocarbon bearing zones. The company has since deferred further drilling until 2014 at the earliest.

Defer to expertise

In making his ruling in the court cases Beistline followed a well-established precedent whereby courts generally defer to a government agency’s technical expertise in an agency decision. The courts, rather than questioning this expertise, review whether the agency has fully complied with legal requirements when issuing a permit or approving a plan.

The organizations appealing the approval of Shell’s plans said the BSEE had infringed the Clean Water Act in sanctioning the plans because Shell’s views of its ability to recover spilled oil were grossly optimistic, thus raising questions over whether the company’s plans for nearshore and shoreline protection were adequate. The Clean Water Act and its associated BSEE regulations form the legal framework mandating spill response capabilities for offshore drilling.

Beistline disagreed with the challenge, saying that the critique of these aspects of the plan was based on a misinterpretation of the plan contents. BSEE had correctly determined that the plans complied with all applicable regulations, Beistline wrote.

Other critiques under the Clean Water Act included questions over the adequacy of Shell’s oil slick trajectory analysis in the event of a worst-case oil spill and Shell’s analysis of scenarios in which oil might become trapped under winter sea ice. Deferring to BSEE expertise, Beistline said that the agency had thoroughly evaluated these factors and that Shell’s plans appeared to adequately consider the possibility of “overwintered” oil.

Beistline also rejected a claim that BSEE had approved the plans despite an absence of information in the plans about an Arctic containment system that Shell planned to use to cap a well and gather oil, should a well blowout preventer fail. With the containment system being a device that would be used to prevent an oil spill rather than to respond to an oil spill, a containment system specification does not have to be included in a spill response plan, Beistline wrote.

NEPA

Claims of violations of the National Environmental Policy Act, or NEPA, centered on the question of whether the agency should have conducted a NEPA review, potentially including the preparation of an environmental assessment or environmental impact statement, prior to approving the spill response plans.

But, given that BSEE actions involved approving response plans rather than approving an actual oil spill response, those actions did not warrant a NEPA review, Beistline wrote. In addition, the plans came as part of exploration plans for which the government had already conducted an environmental assessment and made a finding of no significant environmental impact, he wrote.

Endangered Species Act

The organizations appealing the plan approvals also claimed that the approvals violated the Endangered Species Act because, before deciding on the approvals, BSEE had not sought an endangered species consultation with the appropriate regulating agencies for any endangered species found in the area of Shell’s drilling. But, since the oil spill response plan approvals simply indicated that the plans met statutory and regulatory requirements rather than authorizing some action that might impact protected animal species, Endangered Species Act consultations were not in fact required, Beistline wrote.

The authority to approve an actual oil spill response lies with the U.S. Coast Guard and with the Environmental Protection Agency, not with BSEE, Beistline wrote. In addition, while the need for Endangered Species Act consultation is only triggered by actions that a government agency has discretion over carrying out, BSEE has no discretion over approving oil spill response plans — if a plan meets the statutory and regulatory requirements, BSEE must approve it, Beistline wrote.






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Copyright Petroleum Newspapers of Alaska, LLC (Petroleum News)(PNA)©1999-2019 All rights reserved. The content of this article and website may not be copied, replaced, distributed, published, displayed or transferred in any form or by any means except with the prior written permission of Petroleum Newspapers of Alaska, LLC (Petroleum News)(PNA). Copyright infringement is a violation of federal law.