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Vol. 16, No. 35 Week of August 28, 2011
Providing coverage of Alaska and northern Canada's oil and gas industry

Heading for a decision

BOEMRE releases final SEIS for disputed $2.6B 2008 Chukchi Sea lease sale

Alan Bailey

Petroleum News

On Aug. 18 the Bureau of Ocean Energy Management, Regulation and Enforcement released a final version of its supplementary environmental impact statement for the February 2008 Chukchi Sea lease sale. The final SEIS affirms the original decision to hold the sale.

Selection of the preferred alternative “would affirm the issuance of the leases pursuant to lease sale 193 (the 2008 Chukchi Sea sale) as held and be implemented by removing the suspension of operations imposed on those leases,” BOEMRE said in the final SEIS document. And the agency wants public comments on this final version of the document by Sept. 26, to enable the Secretary of the Interior to make a final determination by a court-imposed deadline of Oct. 3 on whether to uphold the lease sale, retrospectively cancel the sale or modify the sale.

Court ruling

The SEIS comes as a result of a July 2010 federal District Court for Alaska ruling in an appeal against the Chukchi Sea lease sale by the Native Village of Point Hope, the Inupiat Community of the Arctic Slope and 12 environmental organizations. The ruling required BOEMRE to make changes to some aspects of the original EIS for the lease sale and the court has banned all lease-related oil and gas exploration activities in the Chukchi Sea unless the changes are made and the lease sale re-affirmed.

BOEMRE has placed on hold permitting and exploration plan review work relating to Chukchi Sea leases until the court case is resolved — Shell, ConocoPhillips and Statoil all plan to explore leases that they purchased in the 2008 sale in which companies paid out more than $2.6 billion in bonus bids.

Earlier this year District Court Judge Ralph Beistline set the Oct. 3 deadline for SEIS completion in recognition that Shell, the company at the forefront of moves to search for oil in the Chukchi Sea, needs time to plan for any Chukchi Sea drilling in 2012, if the results of the lease sale are upheld.

Incomplete EIS

In ruling the original lease sale EIS deficient the court said that BOEMRE should have considered the potential future impacts of Chukchi Sea natural gas development, rather than just oil development. The agency should also have evaluated the significance of missing Chukchi Sea environmental data, and should also have assessed the practicalities of obtaining that data, the court said.

In an initial draft SEIS released in 2010 BOEMRE made modifications to take account of the issues that the court had raised. However, after reviewing public comments on that draft, the agency subsequently decided to add a section assessing the potential impacts of a very large oil spill in the Chukchi Sea. The idea was to consider what might happen as a consequence of an unlikely but possible spill from a hypothetical well blowout scenario.

A revised draft SEIS was published for public review in May. The final SEIS that has now been released reflects the outcome of that public review and incorporates several modifications, including revisions to the text; some revised thresholds for determining when impacts become significant; and additional illustrations, figures and tables. A new appendix summarizes comments on both the draft SEIS and the revised draft SEIS, as well as BOEMRE’s responses to those comments.

“We have worked diligently to address the District Court’s concerns in a thorough and comprehensive manner,” said BOEMRE Director Michael Bromwich in announcing the release of the final SEIS. “This will ensure that decisions relating to this lease sale will be made in a careful, balanced manner using the best scientific information available.”

Welcome & disappointment

Alaska politicians welcomed the move toward resolution of the legal impasse over the lease sale.

“Release of this environmental review is one more step in the right direction toward oil and gas development in Alaska’s Arctic,” said Sen. Mark Begich.

Sen. Lisa Murkowski said that thousands of Alaskans had submitted comments supportive of oil development in the Chukchi and Beaufort Seas.

“This will encourage the companies to proceed with their Chukchi exploration plans,” she said.

“This is a positive development for Alaska’s economy,” said Rep. Don Young. “While many outside groups continue to do all they can to lock up Alaska’s resources, Alaskans have once again shown through their public feedback and input the importance of resource development.”

Environmental groups, on the other hand, expressed disappointment that BOEMRE still supports the lease sale, as held in 2008. BOEMRE has concluded that no essential information is missing from the SEIS, despite a recent U.S. Geological Survey report commenting that missing scientific information is a major constraint on critical Arctic decision making, said Carole Holley, Alaska program co-director for Pacific Environment.

“Over a quarter million American citizens wrote the administration, urging to slow down this freight train before a catastrophic wreck destroys not only America’s Arctic ecosystems but also the people and the culture that depend on them,” Holley said.



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