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Vol. 18, No. 13 Week of March 31, 2013
Providing coverage of Alaska and northern Canada's oil and gas industry

Having another go at it

NMFS publishes new draft Arctic EIS offering more offshore drilling options

Alan Bailey

Petroleum News

The National Marine Fisheries Service in conjunction with the Bureau of Ocean Energy Management has issued a new draft version of its environmental impact statement, or EIS, for future oil and gas exploration activities in the Alaska Arctic offshore. The new draft document includes options for up to four exploration drilling programs per year in the Beaufort Sea and up to four drilling programs per year in the Chukchi Sea — an earlier draft, published in December 2011, had only considered the possibility of up to two drilling programs in each sea.

One alternative that includes the expanded drilling provision also eliminates some timed closures of environmentally sensitive areas included in the 2011 draft.

Response to concerns

The revised document clearly represents the Fisheries Service’s response to concerns expressed by the oil industry about the earlier draft. The industry had commented that, with the limits of two drilling programs per year being less than the number of companies operating offshore leases in the Arctic region, the EIS had contained no options allowing all companies to explore leases they had purchased from the government.

The new draft EIS, while addressing the industry concerns, still contains a range of alternatives, including a “no-action” alternative to prohibit future oil and gas exploration. The two government agencies involved in preparing the EIS have yet to choose a preferred alternative that would lead to a final rule on future permitting. Some environmental organizations, concerned about what they see as unacceptable environmental risks in Arctic offshore oil and gas development, have urged the agencies to adopt the no-action alternative.

Future policies

The final EIS and its associated agency ruling will set future policies for the terms under which incidental harassment authorizations and seismic survey permits will be issued, while also providing a framework for the types of mitigation measures that companies will be required to put in place to minimize environmental impacts from their offshore exploration activities.

The Fisheries Service will be accepting comments on the new draft document through May 28 and the agency is scheduling a series of public meetings during the week of April 8 as part of the comment-gathering process. The North Slope Borough and the Alaska Eskimo Whaling Commission have been working with the federal agencies on the EIS. The Fisheries Service is an agency within NOAA.


The EIS is unusual in that it is being prepared in expectation of future permit applications, rather than in response to any specific application from a would-be offshore explorer — normally an EIS, prepared under the terms of the National Environmental Policy Act, is a response to a specific proposed action that may have a significant environmental impact and that involves the federal government in some way. In the case of this particular EIS, the “proposed actions” triggering the EIS are the anticipated need for the Fisheries Service to issue authorizations for the “incidental take” of marine mammals during future exploration activities, and anticipated requests for the Bureau of Ocean Energy Management to authorize permits for future geophysical surveys on the federal outer continental shelf. And, because the Fisheries Service authorizations are required in any offshore area, the permit ruling spawned from the EIS will apply to Alaska state waters within three miles of the shoreline as well as federal waters further offshore.

Began in 2006

The history of the EIS goes back to an effort in 2006 by the U.S. Minerals Management Service, the precursor agency to the Bureau of Ocean Energy Management, to conduct a programmatic environmental assessment for the multiple seismic surveys anticipated for the Arctic outer continental shelf in response to an upsurge in interest in exploration of the Arctic offshore. Over time, with concerns about the possible cumulative impacts of multiple exploration programs, the original assessment morphed into an EIS encompassing both seismic surveys and exploration drilling, with the Fisheries Service as the lead agency in the EIS preparation.

In responding to the issue of the new draft EIS, U.S. Sen. Lisa Murkowski, R-Alaska, expressed skepticism about whether the EIS is actually needed, given the mandated environmental reviews that already occur at various stages of the offshore oil leasing, exploration and development life cycle.

“While I appreciate NOAA’s decision to take a second look at the EIS, I continue to believe it’s unnecessary for the agency to conduct this review,” Murkowski said. “I remain concerned about the scope of the EIS and the potential for area closures and additional mitigation and technological requirements to result in a de facto moratorium on the development of oil and gas in the Arctic. I have long said that we should move forward with development in the Arctic only if it can be done safely, but don’t believe this EIS contributes to that goal.”

U.S. Sen. Mark Begich, D-Alaska, welcomed the Fisheries Service’s willingness to expand the drilling options to more realistic levels. Begich said that he had urged NOAA to work with the Interagency Working Group for Alaska, a consortium of federal agencies set up by President Obama to streamline federal permitting in Alaska.

“This is real progress,” Begich said. “The fact that NOAA heard what the (congressional) delegation and I had to say, worked with other federal agencies, and came back with an expanded document shows that the Interagency Working Group is really beginning to understand Alaska. Having said that, it’s a big document, and we still have a lot of work ahead of us to ensure all agencies and stakeholders are working together. We need to make sure to balance responsible offshore oil and gas development with protection for the subsistence resources that have sustained North Slope residents for centuries.”

Six alternatives

The revised draft EIS proposes six alternatives for an eventual ruling on the future of incidental take authorizations and seismic permits for the Arctic offshore.

Alternative 1: A no-action alternative that would prohibit the future issue of authorizations and permits.

Alternative 2: The annual possibility of up to four seismic surveys in the Beaufort Sea and up to three seismic surveys in the Chukchi Sea; up to three site clearance and shallow hazard survey programs in each sea; one on-ice survey in the Beaufort Sea; and one exploration drilling program in each sea.

Alternative 3: The annual possibility of up to six seismic surveys in the Beaufort Sea and up to five seismic surveys in the Chukchi Sea; up to five site clearance and shallow hazard survey programs in each sea; one on-ice survey in the Beaufort Sea; and up to two exploration drilling programs in each sea.

Alternative 4: The same as alternative three, but allowing up to four concurrent drilling programs annually in each sea.

Alternative 5: The same as alternative four, but with some mandated timed closures of environmentally sensitive areas.

Alternative 6: The same as alternative four, but with the potential inclusion of a broader range of mitigation measures to reduce impacts on marine mammals, and with a requirement for the use of some alternative seismic technologies for reducing environmental impacts.

The EIS defines a single drilling program as a series of drilling operations conducted by company using a single marine drilling unit, with no concurrent drilling of multiple wells.

Adverse impacts

In assessing the overall potential environmental impacts of the various alternatives, the draft EIS says that, other than the no-action alternative, actions under all alternatives “would cause moderate adverse impacts to bowhead and beluga whales from noise disturbance, risk of ship strikes and habitat degradation.” Bowhead and beluga whales are two whale species commonly found in Alaska’s Arctic waters.

The EIS also says that the increased drilling activity that would be allowed under alternative four “could increase the impact level to major adverse for bowhead whales.” However, the time/area closures envisaged under alternative five could reduce the impacts of the drilling to moderate levels by redistributing the locations of drilling activities and preventing drilling activities at certain times in locations where environmental impacts would be particularly significant, the EIS says.

And, while the use of alternative seismic technologies as envisaged under alternative six could reduce environmental impacts “on a small scale,” the benefits of using these technologies are as yet difficult to determine, the draft EIS says.

The draft EIS also includes an analysis of the potential impact of a hypothetical very large oil spill in the Beaufort Sea during an exploration drilling activity. The Bureau of Ocean Energy Management presented a similar very large oil spill analysis in its revised EIS for the 2008 Chukchi Sea lease sale.

The EIS characterizes a very large oil spill in the Beaufort Sea as having a low probability.

But the oil spill analysis concludes that a spill of this type would have major impacts on multiple environmental resources including water quality, bird life and whales, while having minor to moderate adverse impacts on seals, walrus, terrestrial mammals and cultural resources. Impact on air quality would be minor, the EIS says.

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The early EIS: a benefit or a problem?

Although criticized by some an unnecessary, could the continuing effort by the National Marine Fisheries Service, or NMFS, to develop a programmatic environmental impact statement for Arctic oil and gas exploration actually benefit the oil industry by reducing some of the uncertainties associated with environmental permitting and environmental mitigation? Or, is it simply premature to attempt an environmental analysis for activities that are not yet planned?

During the Seminar Group’s Permitting Strategies in Alaska seminar on Feb. 28, Ryan Steen, an attorney with Stoel Rives, commented that there is a growing trend towards EIS development at as early a stage as possible in a project life cycle. The preparation of an EIS forms part of the process for implementing the National Environmental Policy Act, or NEPA, a federal statute that that requires a thoughtful and thorough analysis of the probable environmental impacts of projects, Steen said.

And, although a NEPA review leading to an EIS does not result in the issue of a permit as such, the open-ended nature of the NEPA statute leaves plenty of scope for litigation that can result in significant project delays. So starting early makes sense.

“You want to get started in plenty of time, so that NEPA doesn’t hold up your other permits,” Steen said.

But a lack of sufficient information about what a project will precisely involve may cause difficulties in early EIS development, Steen said.

In the case of the NMFS EIS, the Fisheries Service has said that it anticipates having to do many marine mammal incidental harassment authorizations for future oil and gas activities — the agency thinks that it would be best to do a single EIS up front, to cover all of the potential activities as one batch, Steen said. But, while that seems at least in concept to be a reasonable idea, it does raise the “early EIS” question of whether sufficient information is known about future exploration projects to, in fact, be able to develop a useful document.

If a document such as this is developed prematurely the EIS could end up being supplemented multiple times within a few years, or perhaps be replaced by subsequent EIS documents, Steen said.

Early EIS development also potentially raises another emerging issue — the question of missing environmental information pertinent to the analysis of potential environmental impacts. This missing information question is at the core of a multi-year lawsuit challenging the EIS for the 2008 Chukchi Sea oil and gas lease sale, the lease sale in which Shell, ConocoPhillips, Statoil and others purchased leases, Steen said. Environmental groups have claimed that the EIS does not adequately consider missing environmental information for the Chukchi Sea.

After a major rework of the EIS by the Department of the Interior following a federal District Court in Alaska ruling in the case, the appeal has now moved to the 9th Circuit Court of Appeals. The 9th Circuit’s eventual decision in this case will set an important precedent for the future treatment of missing information in a NEPA analysis, Steen said.

—Alan Bailey