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Challenging times for AK permitting With the state having become an environmental battleground, prospects for major permit decisions in 2011 look bleak, lawyer says Alan Bailey Petroleum News
With nongovernmental environmental organizations on the offensive, unprecedented levels of development related litigation going through the courts and an era of considerable change in regulatory agencies, very few major Alaska resource development permitting decisions will likely be made in 2011, Jeffrey Leppo, an attorney with Stoel Rives LLP, told the Seminar Group’s Fifth Annual Permitting Strategies in Alaska seminar on Jan. 21.
Alaska has world-class natural resources and an economy dependent on natural resource development, but has become a focus of national attention, a key battleground in the national debate over environmental conservation, climate change and resource development.
“The environmental conservation advocacy groups are really on the attack at the moment. … They’re well funded, well staffed. They’re very thoughtful. Their actions are not random or frivolous,” Leppo said.
These groups are finding some sympathy among regulators and have been bolstered by some bad facts such as the fallout from the Deepwater Horizon disaster in the Gulf of Mexico.
“You take all that lightly at your peril,” Leppo said.
Major decisions sued Every significant permitting decision in 2010 was sued and the same will likely happen again in 2011, he said. Meantime, some re-alignment is going on among the various stakeholders, with recent challenges driving the formation of new coalitions and with Native organizations tending to align with responsible development.
But, although there are many permitting uncertainties at the moment, the process for carrying out reviews under the National Environmental Policy Act has in fact become relatively predictable and stable.
“The basic concept of NEPA is that you have to prepare a thoughtful, reasonably thorough analysis of environmental impacts,” Leppo said.
NEPA reviews typically result in environmental assessments and the development of environmental impact statements. Although the NEPA process can be time consuming and costly, in addition to being subject to the discretion of government agency staff, the process is well understood.
The 9th Circuit Court, the federal appeals court that covers Alaska, has a track record of favoring NEPA decisions made as a consequence of the lengthy process of preparing an environmental impact statement, rather than from the much simpler environmental assessment procedure, Leppo said. However, recent 9th Circuit decisions have somewhat veered from this trend. On the other hand, the consequences of the Deepwater Horizon disaster will push the NEPA process more down the EIS route, while the presence of an Endangered Species Act listed species in the area of a project will also tend to increase the need for an EIS.
Climate change considerations have so far not caused any particular problems in the context of NEPA, even although the NEPA process now requires projects to assess climate change related issues, Leppo said.
Wildlife protection Wildlife protection has become a major and uncertain issue, especially given the interrelated regulatory schemes of the Endangered Species Act and the Marine Mammals Protection Act.
The Marine Mammals Protection Act has in the past proved very effective in Alaska waters, Leppo said. This act is important in Alaska because of the fact that Alaska marine mammals, although consisting of relatively few species, tend to be abundant over very broad geographic areas. And depending on the species, some aspects of the MMPA are more stringent than the ESA, while other aspects are less stringent, Leppo said.
A new and significant regulatory complication in Alaska is the specification of critical habitat for animals listed under the ESA, with the habitat designations for the polar bear and the Cook Inlet beluga whale both causing angst.
Both the National Marine Fisheries Service and the U.S. Fish and Wildlife Service have long considered the designation of critical habitat to be something of a waste of money and resources, with the consequences of an ESA listing flowing from the listing itself, rather than from the habitat designation, Leppo said. And, having in the past been pulled up by Congress for designating habitat too broadly and then having been sued by environmental groups for not designating any habitat, the agencies have now moved to a mode of operation where they tend to designate everything as critical habitat, while saying that the economic impacts of the designation are trivial.
Opposite tacks So, while the agencies argue that critical habitat, although mandated under the ESA, has no conservation benefit, environmental organizations take the opposite tack, saying that critical habitat designations are highly beneficial. And the 9th Circuit Court has disagreed with the agency position that jeopardy to a listed species, as determined from an ESA listing, can be viewed as equivalent to the adverse modification of the species’ habitat.
“So now there’s this ongoing battle to try figure out what does that mean,” Leppo said.
On Jan.13 the Center for Biological Diversity issued a 60-day notice of intent to sue, to have several government agencies consult over the polar bear critical habitat, not only for recent oil and gas leasing decisions but also for leasing decisions going back as far as 1979, Leppo said.
And there have been three notices of intent to sue, issued by Native organizations, the State of Alaska and the oil and gas industry, challenging the polar bear critical habitat designation. In addition several lawsuits relating to the polar bear listing are making their way through the courts.
Block development Conservationists are using the interrelationship between the ESA and the MMPA to prevent people getting permits and to block development activities, with the ESA now being applied to animals that are relatively abundant and agencies not appearing to have a plan for dealing with this changing situation.
“Getting to the end point where we know what’s listed and what’s designated and then trying to figure out how to operate in that environment would be a more stable regulatory environment than the one we’re facing in 2011,” Leppo said.
Meantime, with the broad national goals of environmental advocates not appearing amenable to compromise in Alaska, moves to stop oil and gas development have been gaining traction.
“All is not lost. It is important to be persistent. I think ultimately development will proceed in the state, but maybe not in 2011 because of the uncertainties associated with all of these issues,” Leppo said.
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