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Continuing challenge to Arctic OCS drilling Speakers pitch in on the debate about the appropriate level of environmental assurance for offshore oil and gas leasing and drilling Alan Bailey Petroleum News
To drill or not to drill is the core question in the current controversy surrounding oil exploration in the outer continental shelf off northern Alaska. Shell is chomping at the bit, preparing to drill in its federal leases in the Arctic Ocean’s Beaufort and Chukchi seas during this year’s summer open water season, while ConocoPhillips is laying plans to drill in the Chukchi Sea in 2012. In the Chukchi Sea, both companies are targeting prospects in federal leases they purchased in a U.S. Minerals Management Service 2008 lease sale that has been challenged in the courts.
The federal government, in this case MMS, has jurisdiction over the outer continental shelf’s submerged lands, subsoil and seabed which lie between state waters — 3 nautical miles from shore — and international waters.
At stake are potentially huge offshore oil and gas resources that could knock a significant dent in U.S. oil imports, boost natural gas supplies for a future North Slope gas pipeline and bring continuing financial wellbeing for many Alaskans.
But while the oil companies stress the steps they are taking to understand and protect the environment, and while regulating agencies explain the rigor of their permitting requirements, a vigorous debate continues regarding whether there has been adequate consideration of potential environmental damage as a consequence of industrial activities in the outer continental shelf, or OCS, off northern Alaska.
And at the Alaska Forum for the Environment in Anchorage on Feb. 8 people from government agencies, oil companies, North Slope communities and an environmental organization presented their perspectives on Alaska OCS oil exploration opportunities and risks.
Responsible development John Goll, regional director for the U.S. Minerals Management Service, emphasized his agency’s obligation under the Outer Continental Shelf Lands Act to realize the value of U.S. offshore resources while also maintaining high standards of environmental protection.
Goll characterized the MMS procedures for permitting offshore exploration and development as a winnowing process, starting with the big picture when planning an oil and gas lease sale schedule, and progressively narrowing the focus as companies move from broad exploration, to drilling at specific sites and then on to field development. Company plans, as they progressively home in on specific developments, have to move through a series of environmental reviews and permitting thresholds, with repeated opportunities for public comment on what is proposed.
“During this process we do overview what is going on from the industry standpoint and inspect their activities,” Goll said.
And, in addition to putting company plans under an increasingly powerful microscope, as those plans take shape, MMS has regulations designed to prevent offshore accidents and pollution, he said. Those regulations spell out, for example, the need to survey for drilling hazards before any drilling is commenced and they require an agency review of well designs, platform designs and other aspects of oil company operations.
Goll also commented that MMS sponsors a great deal of research on the offshore environment and on offshore technologies. The agency has funded more than $300 million of Alaska environmental research since 1970, with $43 million allocated to research that is in progress or planned to begin in 2010 in the Chukchi Sea. The agency has also been funding research into offshore oil spill prevention and research, Goll said.
“We at MMS do and have had a robust oil spill research program with regard to both looking at preventing spills from occurring and also spill response,” Goll said.
Importance of science Michael Macrander, Shell’s science lead in Alaska, picked up on the benefits of scientific research in the offshore.
“To me one of the benefits of offshore oil and gas activity is the investment in science that it brings,” Macrander said. “… Historically there has been a strong relationship between oil and gas interest in the offshore and the number of dollars that are spent on science.”
Oil companies have joined the effort spearheaded by MMS to understand the offshore ecosystem. For example in 2009 MMS, Shell, ConocoPhillips and other organizations funded the deployment of more than 40 scientists to do research on the Chukchi Sea, Macrander said.
“That was the beginning of a program that we anticipate certainly getting larger and larger, as we move forward,” he said.
Scientists have gained a new mechanistic understanding of how the Chukchi Sea works, in terms of the interaction of ocean currents and subsea topography, and the resulting ice patterns and impacts on marine organisms, Macrander said. And in 2007 an industry-funded overflight program first detected major coastal haulouts of walrus, when ice departed the Chukchi Sea, he said.
Shell and ConocoPhillips have deployed more than 40 seafloor acoustic recorders in the Chukchi Sea, recording background sounds and animal calls, Macrander said.
Focus on Chukchi Bruce St. Pierre, senior environmental coordinator for ConocoPhillips, said that his company has shifted its exploration focus from the National Petroleum Reserve-Alaska to the Chukchi Sea, following some disappointment in its search for new, large oil reserves in NPR-A.
“With the purchase of our leases out in the Chukchi we really want to spend some effort and some energy trying to get out there and drill a well in 2012,” St. Pierre said.
So far ConocoPhillips has conducted some seismic surveys and environmental studies in the Chukchi Sea. In 2008 the company did some site clearance work and conducted comprehensive research, establishing baseline environmental data at its Devil’s Paw prospect, with that work program continuing and including some seafloor coring in 2009, St. Pierre said.
“We’re trying to find a blend between regional (environmental) studies and some local, specific studies,” St. Pierre said. “When you put in exploration plans, a lot of the information that goes in there needs to key in on those areas where you want to go out and do your drilling.”
And in its offshore operations, the company has taken steps to avoid conflicts with subsistence hunting and has worked with Shell to minimize the number of vessels working concurrently on industrial activities, St. Pierre said.
“We want to be able to do it right, work with the local communities, work with the science portion of it, and get out there and see if we can find a resource that all of us could benefit from,” St. Pierre said.
NSB wants balance Tom Lohman, an environmental specialist with the North Slope Borough, said that the borough is not opposed to oil and gas development, but is concerned about achieving a balance between environmental protection and the desire for jobs and revenues. The borough depends on oil and gas revenues for the funding of basic borough services, including schools, health programs, search and rescue, and police, Lohman said.
But, although the borough has on the whole enjoyed good relations with the oil industry, its relationships with some government agencies have been less harmonious, Lohman said.
“Our concerns over the years have been in that balancing act between going forward with leasing, going forward with operations and going forward with development, or taking a step back and taking a harder look at the potential impacts,” Lohman said.
In particular, disagreements between the borough and agencies have revolved around what the borough considers to be a lack of sufficient environmental information to decide when to move forward on development and around what the borough feels is inadequate agency consideration of the borough’s interests.
And Lohman pointed out what he sees as a flaw in the step-wise, winnowing permitting process that Goll had outlined: The commitment of huge sums of money by industry into an exploration and development program may make it difficult to face critical environmental issues once companies are some way down the exploration and development road.
“Our sense has been that with each one of those successive steps, important decisions, the real hard look that we’d like to see, get put off to a point where hundreds of millions of dollars (have been) invested and decisions to maybe slow things down become more difficult,” Lohman said.
Necessary environmental information should be assembled before making decisions on expensive exploration and development, he said.
Out of the loop And Lohman slammed changes made to the Alaska coastal management program in 2003, saying that the new state program had left the borough out of the coastal management loop.
“We have no mechanism to formally be at the table and influence what goes on in the OCS,” Lohman said. “We’d like to have that back.”
People should not view this borough position as anti-development: Projects went forward prior to 2003 and would continue to move forward if the borough regains its influence over what goes on, Lohman said.
Local people on the North Slope know what’s best for the North Slope communities — permitting delays have cost revenue and jobs, but some delays could be avoided if local people had an opportunity to help shape projects, Lohman said.
On the other hand, agencies need to realize that, in a culture in part dependent on subsistence hunting, many people in North Slope communities have to hunt to put food on the table, as well as hold a full-time job — layering on to that the time required to participate in a multiplicity of public processes meetings for oil and gas development, as well as meetings associated with local government, becomes impossible.
“Something’s got to change. … The system is broken. … We have great respect for the oil companies and the agencies … but we’ve got to find a better way of working more efficiently,” Lohman said.
ASRC concurs Teresa Imm, director of resource development for Arctic Slope Regional Corp., the Alaska Native regional corporation for the North Slope and a major provider of services to the oil industry, concurred with the North Slope Borough’s position.
“There are a lot of issues that the communities in our region have to face with respect to resource development,” Imm said, “and trying to get the information out there in a manner that people can tangibly use and understand, to be able to make intelligent and informed decisions is really, really important.”
Development is not a foregone conclusion and communities do have a role to play in development decisions, she said.
ASRC is concerned about the long-term sustainability of the North Slope communities, with part of that concern centered on the future of the infrastructure that supports those communities, as oil production declines. At the same time companies are having to start to search offshore for significant new oil and gas resources.
“How can development in the Arctic occur in a safe, environmentally friendly manner … that will take into account our shareholders, their lifestyles and incorporate traditional knowledge?” Imm asked, adding that ASRC has been taking steps to better understand what offshore development might look like, what the implications are and what would be the safety measures.
“Without knowledge we can’t help be part of shaping what that future looks like,” Imm said.
OCS development appropriate? Whit Sheard, Alaska program director for Pacific Environment, questioned whether offshore oil and gas development is appropriate in Arctic waters or the Bering Sea, given what he characterized as unanswered questions about environmental risks coupled with a shortage of information about the offshore Arctic environment.
Sheard echoed Lohman’s concerns about the phased OCS permitting process, saying there was a series of critical environmental questions that have remained unanswered through the initial, broad phases of Alaska OCS oil and gas permitting.
“During the broader planning process … there was a series of fundamental questions that were either ignored or completely went unanswered, and as this process moved along we were forced to go back to the courts to say ‘here’s some fundamental issues that haven’t been addressed,’” Sheard said. “And we’ve been victorious on several of those cases. Several are still pending.”
Moving forward through the permitting process while leaving open some fundamental environmental questions, forecloses the opportunity to address those questions because of the increasing level of commitment to development, he said.
The issue of possible offshore oil spills is a major concern, as is the potential impact of industrial noise, he said. And then there is the question of the impacts of climate change in the region.
Ecological chaos “There’s ecological chaos occurring,” Sheard said. For example, the biological changes impacting the walrus are pushing them towards extinction and it’s vital to understand that situation before adding another stressor to that environment, he said.
Sheard particularly criticized the MMS 2007-12 OCS lease sale plan that included the 2008 Chukchi Sea lease sale and which the United States Court of Appeals for the District of Columbia has vacated, pending a revised MMS environmental analysis for the Alaska OCS. MMS understated the environmental sensitivity of the Chukchi Sea and understated the potential impact of a Chukchi Sea oil spill, he said.
“The (permitting) process is absolutely broken,” Sheard said. “… We need to revisit the Arctic. We need to do baseline studies. We need to talk about reasonable and rational development.”
Earl Kingik, a resident of the Chukchi Sea village of Point Hope, the village at the center of challenges to Chukchi Sea offshore development, questioned what would happen to the Chukchi Sea animal life, were there to be an offshore oil spill.
“I’m a hunter. I hunt bowhead whales. I hunt walrus. I hunt seals. I hunt polar bears,” Kingik said. “I hunt all species of animal in my garden … the garden that keeps my people together. Now our garden is being invaded.”
As the oldest settled community on the North American continent, Point Hope has for thousands for years depended on marine animals, he said.
“The animals come to us,” Kingik said. “The animals give themselves to us so we can feed our community.”
The community does not have cows, sheep, goats or horses; the community cannot grow crops; the community needs the marine animals to come to it, he said.
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