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BOEM to rework Chukchi sale EIS; court allows some related activities
In a court order issued April 24 federal District Court Judge Ralph Beistline has accepted a proposal by the parties in the appeal against the 2008 Chukchi Sea lease sale that the Bureau of Ocean Energy Management should rework the environmental impact statement for the sale. Drilling operations in Chukchi leases will be prohibited until the rework has been completed and until BOEM has made a revised decision on holding the sale, the court order said. The order said that if there is a challenge to BOEM’s revised decision, parties in the appeal must confer on a new briefing schedule for the appeal.
Meantime, Beistline is allowing BOEM to review exploration plans relating to Chukchi Sea leases, but the agency cannot make any approval or completeness decisions on the documents while the drilling suspension is in place.
The court order also allows companies to conduct ancillary activities such as seismic surveys in the Chukchi Sea under the terms of geological and geophysical permits.
The Native Village of Point Hope and the 12 environmental organizations that appealed the lease sale had asked the court to ban all company and government agency activities relating to Chukchi Sea exploration until the appeal is resolved.
Shell, ConocoPhillips, Statoil and others bought leases in the 2008 sale — Shell and ConocoPhillips have placed their Chukchi Sea exploration efforts on hold, in part because of the lease sale appeal.
On March 31 BOEM and Shell had recommended to the court the rework of the environmental impact statement as an appropriate response to a 9th Circuit Court of Appeals decision, upholding the appeal on the grounds of an inadequate lease sale environmental analysis. However, the plaintiffs in the case declined participation in that recommendation. On April 18, following a court order for a joint report by all parties in the case, the parties filed a report upholding the recommendation for a rework of the environmental analysis but disagreeing on some other points.
Disagreements All parties in the case agreed that BOEM cannot approve any Chukchi Sea exploration plans while the rework of the lease sale decision is in progress. However, the plaintiffs objected to a request by BOEM that the agency should meantime be able to review exploration plans, albeit without issuing any decisions relating to the documents. The plaintiffs also disagreed with a request by BOEM to allow ancillary lease activities in Chukchi Sea leases during the period that the lease sale environmental analysis is on remand. The plaintiffs wanted the court to tell BOEM to view the leases as not having been issued and not to take into consideration any investments made in the leases. And, while the plaintiffs proposed that parties in the appeal file briefs with the court on the various points of disagreement, BOEM and Shell said that they believe that the court already had sufficient information to issue an order on how to proceed.
Inadequate oil estimate In their opinion upholding the appeal against the lease sale, the 9th Circuit judges said that the Department of the Interior had inappropriately used an estimate of 1 billion barrels of economically recoverable oil in assessing the lease sale’s potential environmental impacts. The 1 billion barrel figure apparently represented the possible production from an initial Chukchi Sea development, based on assumptions that a field smaller than this would not be viable and that the probability of finding a field larger than this would be relatively low. But the 9th Circuit judges criticized what they said was the lack of an explanation of why production would be expected to stop with that first field, and a lack of consideration of how variations in oil prices might impact production economics.
—Alan Bailey
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