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Court rejects appeals over Shell plans 9th Circuit says that MMS met legal standards for review when it approved Shell’s Beaufort Sea, Chukchi Sea exploration plans Alan Bailey Petroleum News
On May 13 a panel of three judges from the U.S. Court of Appeals for the 9th Circuit rejected an appeal against the U.S. Minerals Management Service’s approval of Shell’s 2010 exploration plans for the Beaufort and Chukchi seas. Shell plans to use the drillship Frontier Discoverer to drill two wells in the Beaufort Sea and up to three wells in the Chukchi Sea during the 2010 open water season.
The Alaska Eskimo Whaling Commission, the Inupiat Community of the Arctic Slope, the Native Village of Point Hope and several environmental organizations had launched the appeal, claiming that MMS had not adequately considered the cumulative impacts of industrial activities on bowhead whales migrating through the areas of drilling activity, and also claiming that Shell’s plans for handling potential drilling emergencies were not adequate.
But the court has found that in approving Shell’s plans MMS had met its obligations under the National Environmental Policy Act and that the agency had met the legal standard for the approval process.
“According to the petitioners, there are multiple deficiencies in the two environmental assessments prepared by the MMS, as well as deficiencies in both of Shell’s proposed exploration plans,” the judges said in their May 13 decision. “We have carefully reviewed the thousands of pages of record and considered each of the alleged deficiencies in context. Under our deferential standard of review, we conclude that, as to both exploration plans, the MMS has met its obligations under NEPA to take a ‘hard look at the consequences of its actions.’”
Shell delighted “I am delighted to hear of the recent decision by the 9th Circuit Court. It once again demonstrates that Shell has submitted robust, safe plans for exploration in the Beaufort and Chukchi seas,” Pete Slaiby, Shell Alaska vice president, told Petroleum News following the court’s announcement. “It is important to keep in mind that we have several more hurdles to cross before our 2010 plans can be executed. In light of the recent spill in the Gulf of Mexico, we are working hard to identify additional measures that could be incorporated into the program to make it even stronger.”
A group of environmental organizations opposed to Shell’s plans expressed their disappointment at the court decision.
“The court was evaluating a decision made before the disaster in the Gulf of Mexico happened,” the group said. “We believe that the new issues this incident has brought to light offer even more evidence that Shell must not proceed with plans for exploratory drilling in the Arctic’s Chukchi and Beaufort seas this summer.”
Impacts on bowheads? The petitioners in the appeal had argued that MMS had not paid sufficient attention to the cumulative impacts on bowhead whales of multiple drilling operations and, potentially, several seismic survey operations during the 2010 whale migration season. And during oral arguments for the appeal Christopher Winter, the attorney representing the Alaska Eskimo Whaling Commission and the Inupiat Community of the Arctic Slope, two of the petitioning organizations in the appeals, had said that MMS failed to take into account the potential disturbance to whales engaged in feeding, especially since Shell’s own marine mammal monitoring in 2007 and 2008 had indicated the presence of numerous whales grazing in the general area of the company’s planned Beaufort Sea operations.
Also during the oral arguments, Deirdre McDonnell, the attorney representing the Native Village of Point Hope, the tribal government for the Chukchi Sea coastal village of the same name, focused on what she claimed to be a deficiency in Shell’s emergency planning and what she said was a lack of adequate oil spill analysis.
Loss of drillship? McDonnell said that Shell had not planned for the ramifications of the loss of, or damage to, the single drillship or any of the support vessels that Shell plans to use. And one concern is the potential need to drill a relief well, to plug an out-of-control well in the event of a well blowout, she said.
“This information is critical here because Shell’s own plans say that in the event of a catastrophic blowout it will use its drill rig to drill a relief well if that becomes necessary,” McDonnell said. “Yet it never says what it will do in the event that the drill rig itself is lost.”
David Shilton, attorney for the Department of the Interior, said that Shell’s planned drilling operations would be far from any established bowhead whale feeding grounds and that there was no evidence for any adverse impacts on bowhead whales from past drilling and seismic survey activity around northern Alaska.
Shell attorney Kathleen Sullivan said that Shell’s plans had taken into account the possibility of the loss or disablement of its drillship or the support craft. And Shilton said that MMS had exceeded regulatory requirements by determining that, prior to a drilling operation, the agency would ask Shell how it would secure an alternative vessel that could drill a relief well.
Legal standard There is a long-standing precedent in administrative appeals that the appeal courts defer to the technical expertise of the government regulatory agencies, with the courts only overturning an agency permitting decision if the court determines that the decision was contrary to law or “arbitrary and capricious” in evaluating the permit application.
Referencing that “arbitrary and capricious” legal standard, Sullivan had pressed during the oral arguments for rapid dismissal of the appeal case.
“We respectfully submit that this court should swiftly … issue a decision denying review here because the petitioners have not remotely come close to the standard for review that Judge Ikuta correctly referenced earlier,” Sullivan said, referring to one of the judges on the 9th Circuit panel. “The standard here is ‘arbitrary and capricious.’ The standard here is not ‘scientific quibble.’ The standard here is, ‘is there a way in which the agency entirely failed to consider relevant impacts.’”
The judges appear to have agreed with Sullivan.
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