On March 31 the Department of the Interior issued a record of decision upholding Chukchi Sea lease sale 193 the lease sale held in 2008 in which Shell, ConocoPhillips, Statoil and other companies purchased leases.
“The Arctic remains an important component of the administration’s national energy strategy,” said Janice Schneider, Department of the Interior assistant secretary for land and minerals management, the official who signed the record of decision. “The Chukchi Sea has enormous oil and gas potential and is home to a unique and sensitive ecosystem and Alaska Native communities that rely on the Chukchi Sea for subsistence. With today’s decision, we remain committed to balancing potential oil and gas development with protecting sensitive resources.”
The decision, coming as the consequence of a rework of the supplemental environmental impact statement for the sale, following a federal court decision in an appeal against the sale, will enable the Bureau of Ocean Energy Management to review Shell’s latest Chukchi Sea exploration plan. Shell plans to resume its program of Chukchi Sea exploration drilling this summer, but requires a number of permits and an approved exploration plan in order to proceed with the program.
“Today’s record of decision reaffirms lease sale 193 and clears the way for the Bureau of Ocean Energy Management to conclude its review and make a decision on our revised Chukchi Sea exploration plan,” Shell spokeswoman Megan Baldino told Petroleum News in a March 31 email. “The execution of that plan remains contingent on achieving the necessary permits, legal certainty and our own determination that we are prepared to explore safely and responsibly.”
Development scale understated
In the appeal against the lease sale, the Court of Appeals for the 9th Circuit had ruled that Interior had understated the potential scale of Chukchi Sea oil development when conducting an evaluation of the potential environmental impacts of the sale. The federal District Court in Alaska subsequently ordered Interior to rework the supplemental environmental impact statement, to correct the deficiency specified by the 9th Circuit Court.
BOEM published a final version of the supplemental EIS on Feb. 12. The record of decision follows a mandatory 30-day waiting period, after publication of the environmental document in the Federal Register on Feb. 20. The District Court had banned Chukchi Sea lease-related activities until the new record of decision was issued.
“Working closely with our partner agencies at the federal, state and local levels, our analysts brought to bear the best science available to produce a careful and robust analysis,” Schneider said. “I am very grateful for their work, and for the input we received from our stakeholders throughout the entire process.”
The Alaska Oil and Gas Association, the trade association for the Alaska oil and gas industry, praised Interior’s decision.
“This is a step in the right direction,” said AOGA President and CEO Kara Moriarty. “The Arctic offshore is the next chapter of Alaska’s oil and gas success story, and today’s decision clears another significant hurdle.”
Dates back to 2008
The lawsuit in question dates back to early 2008 when, just prior to the Chukchi Sea lease sale being held, the Native Village of Point Hope and 12 environmental organizations appealed in federal District Court in Alaska, claiming several deficiencies in the EIS for the sale. After changes mandated by the District Court to the EIS and the issue in February 2012 by Interior of a new record of decision, the case was elevated to the 9th Circuit Court of Appeals.
In April 2014 the 9th Circuit court made its ruling in the case, remanding the case back to District Court, thus triggering the SEIS rework that has now been completed.
Environmental organizations remain adamantly opposed to oil and gas leasing in the Chukchi Sea, saying that oil industry activities pose an unacceptable high risk to the Arctic offshore environment.
“The Obama administration has steadfastly refused to fully and fairly evaluate the risks of selling leases in the Chukchi Sea and, instead, treats the leases sold in 2008 as if they’re set in stone,” said Susan Murray, Oceana’s deputy vice president for the Pacific, in response to the new record of decision. “As courts have twice shown, the government violated the law when it decided to hold lease sale 193. The government’s subsequent reasons to stand by the sale are no more persuasive.”
However, on March 17 the Native Village of Point decided to withdraw from the case, saying that its involvement in the litigation was impeding discussions in the North Slope region about responsible resource development.
