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Vol. 12, No. 30 Week of July 29, 2007
Providing coverage of Alaska and northern Canada's oil and gas industry

9th Circuit suspends Shell Beaufort Sea drilling program

On July 19 the U.S. Court of Appeals for the 9th Circuit placed a temporary hold on Shell’s 2007 Beaufort Sea drilling program while the court considers a motion to stay the program until the court rules on an appeal by the North Slope Borough and the Alaska Eskimo Whaling Commission against the U.S. Minerals Management Service approval of the Shell program.

Shell had planned to start drilling the Sivulliq prospect on the western side of Camden Bay at some time after Aug. 1. But the court has ordered a halt to the company’s operations.

“Vessels currently located in the Beaufort and Chukchi Seas shall cease all operations performed in furtherance of that program, but need not depart the area,” the court said.

Expedited resolution

The court is expediting resolution of the motion to stay and has scheduled oral arguments for Aug. 14. The court had previously ordered the parties in the case to file statements regarding the status of some environmental mitigation measures. Those measures include incidental harassment authorizations from the National Marine Fisheries Service and the U.S. Fish and Wildlife Service, and a site-specific bowhead whale-monitoring program.

The court also wants to see MMS’s final determination of the adequacy of Shell’s measures to avoid conflicts with subsistence hunting “in the light of the parties’ failure to reach a Conflict Avoidance Agreement.” Petroleum News understands that negotiations over the conflict avoidance agreement are still in progress.

“We had to do something,” North Slope Borough Mayor Edward Itta said in response to the July 19 court order. “When the bowheads are forced to go farther offshore, our whalers are put at greater risk out in the Arctic Ocean. We stand the chance of losing our whaling crews and the traditional food that feeds our families.”

And the borough said that MMS had approved Shell’s exploration plan “over the objections of its own scientists, who concluded that the exploration activities would threaten bowhead whales and endanger the lives of the subsistence hunters.”

MMS: appropriate actions

MMS maintains that it has taken the appropriate actions to ensure safe and environmentally responsible offshore exploration.

“MMS diligently performs all appropriate environmental reviews and meets all statutory requirements when preparing for any offshore leasing activity,” MMS spokeswoman Robin Cacy told Petroleum News July 20. “MMS will continue to work closely with all constituents and maintains a strong commitment to safe energy production.”

And Shell wants continuing dialogue with the borough.

“We’re disappointed, but we’ll comply with the court order. And we’ll continue discussions with the North Slope Borough,” Shell Alaska spokesman Curtis Smith told Petroleum News July 26.

Two other appeals, both by groups of environmental organizations, against MMS approval of the Shell exploration plan are going through the 9th Circuit Court of Appeals. The court has issued a consolidated briefing schedule for all of the cases, with opening briefs due on Aug. 17 and answering briefs due on Sept. 26.

The North Slope Borough and a group of environmental organizations have also appealed to the Environmental Appeals Board minor air quality permits granted to Shell by the U.S. Environmental Protection Agency. And the borough has requested that the commissioner of the Alaska Department of Natural Resources review a ruling by Alaska’s Office of Project Management and Permitting that Shell’s exploration program is consistent with the Alaska Coastal Management Plan.

— Alan Bailey



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