Judge urges timely Chukchi SEIS rework

Says revised document needs to be legally robust but says 2012 drilling season should not be lost as a result of rework timing

Alan Bailey

Petroleum News

In the latest development in the appeal against the U.S. Minerals Management Service’s 2008 Chukchi Sea outer continental shelf lease sale in Alaska federal district court, Judge Ralph Beistline has rejected a request by Shell to set a July 1 deadline for completion of a supplementary environmental impact statement for the sale. However, in the April 22 court order declining Shell’s request Beistline also said that the court wants to see expedited resolution of the appeal.

“Absent a decision from the (federal) administration to stop outer continental shelf exploration or the discovery of evidence that would preclude such development, the court sees no good reason why another season (the 2012 season) should be lost,” Beistline wrote in the court order.

Court injunction

In October BOEMRE duly published a draft supplemental EIS addressing the court’s concerns. During a public review of the draft document the agency received more than 150,000 comments. The agency proceeded to revise the SEIS, taking into account the comments that it had received, but in early March it told the court that it had opted to add to the document an assessment of the potential impact of a very large oil spill. Adding this new assessment in draft form to the document might take until late May, with a subsequent public review running through to early July and a final record of decision for the new SEIS likely to be filed in late October, BOEMRE told the court.

Shell request

“Because of BOEMRE’s delays on remand, not only has the 2011 drilling season been lost, the 2012 drilling season is in jeopardy,” wrote attorney Kyle Parker in Shell’s March 17 court filing. BOEMRE’s addition of a very large oil spill analysis to the SEIS “flies in the face” of a July 2010 court order that had stated that the remand of the original lease sale EIS only required BOEMRE to address the three concerns that the court had raised, Parker wrote.

In his April 22 order declining Shell’s request for a deadline for SEIS completion, Beistline said that both Shell and BOEMRE had made good arguments for their positions. But, although actions taken as a consequence of a court remand should not in general go beyond what the court remand order requires, the court cannot in this instance ignore the unanticipated and very significant oil spill that occurred in the Gulf of Mexico in 2010, Beistline wrote.

“As noted by the federal defendants (BOEMRE), it is in every party’s best interest that the SEIS be as technically and legally sound as possible,” Beistline said. “That being said, however, the court wants to see the process expedited.”

The various parties involved should proceed with the intent of completing the SEIS well in advance of the 2012 drilling season, Beistline wrote.

Memo describes 1.4 million barrel Chukchi spill

BOEMRE staff prepared the memo as part of an initiative to add a very large oil spill assessment to a new Chukchi Sea lease sale supplemental environmental impact statement. The agency is preparing the SEIS in response to a court order in an appeal against the 2008 Chukchi Sea lease sale in which Shell, ConocoPhillips, Statoil and other companies bought oil and gas leases.

The memo describes a hypothetical oil spill from an unspecified prospect in the central part of the Chukchi Sea lease sale area, in a situation with an out-of-control well penetrating an especially thick, permeable oil reservoir, and where the well blowout preventer proves completely ineffective. The envisaged spill scenario does not appear to take into account the availability of any form of spill containment device, of the type that was developed to eventually contain the Macondo well blowout in the Gulf of Mexico.

According to the memo, if the drilling vessel that is drilling the well is also able to drill a relief well, the blowout could be brought under control in about 39 days. That timeframe would extend to 44 days were it necessary to use a second drilling vessel, already positioned with the Chukchi Sea, to drill the relief well. And were it to be necessary to use an out-of-region drilling vessel for relief well drilling, the timeframe would extend to about 74 days.

Initial oil flow from the well would rapidly peak at 61,000 barrels per day, steadily tailing off thereafter and dropping to about 18,000 bpd by day 30, the memo says. By day 39, by which time the well could have been brought under control, 1.4 million barrels of oil would have spilled from the well, with that total volume of spilled oil increasing to 1.5 million barrels by day 44 and 2.2 million barrels by day 74. Were all attempts to control the well to fail, 2.4 million barrels of oil would have escaped from the well by day 90, the memo says.

Hypothetical scenario

“The numbers referenced in the memo are not from proposed drilling,” Callahan said. “They are purely hypothetical, provided to environmental analysts who will, in turn, use them to ensure that decisions are based on the best science available. Any operator that proposes drilling an actual well must conduct an independently verified analysis of potential environmental impacts, including possible oil leaks.”

And on May 3 in a University of Alaska Anchorage panel discussion of managing Arctic offshore oil risks, Jeffrey Loman, deputy director of BOEMRE Alaska region, said that the goal of assessing a very large oil spill, as envisaged in the memo, is to fully inform government decision makers of the potential risks involved in offshore exploration. BOEMRE’s new approach is to consider a worst-case scenario — the largest spill that could hypothetically occur — rather than, as in the past, use a mindset of only considering the most likely size of a spill, Loman said.

In the event of permitting a specific drilling operation, the worst-case spill volume for that specific operation at that specific site could be significantly less that the hypothetical worst-case scenario considered in the memo, Loman said.

—Alan Bailey