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Vol. 16, No. 41 Week of October 09, 2011
Providing coverage of Alaska and northern Canada's oil and gas industry

Back to the court

Point Hope & environmentalists appeal BOEM Shell Beaufort plan approval

Alan Bailey

Petroleum News

In what has become something of a standard practice for any major Alaska oil and gas permitting decision, a group of organizations opposed to Arctic offshore oil and gas development has appealed to the U.S. Court of Appeals for the 9th Circuit over the Bureau of Ocean Energy Management, Regulation and Enforcement’s Aug. 4 conditional approval of Shell’s Beaufort Sea exploration plan. Shell plans to drill up to four wells in the Beaufort Sea, starting in 2012, with those wells targeting the Sivulliq and Torpedo prospects on the west side of Camden Bay, to the east of Prudhoe Bay.

In a Sept. 29 petition to the court, the Native Village of Point Hope and a bevy of 12 environmental organizations said that the BOEMRE approval decision violated both the Outer Continental Shelf Lands Act and the National Environmental Policy Act.

“Petitioners are adversely affected and aggrieved by the decision to approve Shell Offshore Inc.’s exploration plan for the Beaufort Sea,” the petitioners said.

Briefing schedule

The court has set a deadline of Dec. 19 for submission of the petitioners’ opening brief, with respondents answering briefs due by Jan. 17, 2012. In administrative appeals of this type, the courts tend to defer to the technical expertise of the agency that has made the decision under appeal, with courts assessing whether the decision was legally sound, based on relevant statutes, agency regulations and legal precedents.

Shell has said that it needs to make a go/no-go decision by late October on whether to organize and deploy its drilling operations for the 2012 open water season. That decision deadline will clearly arrive long before the court is likely to make a decision in the appeal. The company has said that its deployment decision will depend on the end-of-October status of the various permits that it requires, and that it feels that its permits will be sufficiently robust to withstand legal challenge — in April 2010 the 9th Circuit Court dismissed appeals against the approval of Shell’s 2011 Beaufort Sea and Chukchi Sea exploration plans.

“We feel we have some very strong permits and we feel that there is reason to be optimistic that our permits will survive a court challenge,” Pete Slaiby, Shell’s vice president in Alaska, told Petroleum News Sept. 30. “Litigation will always be a risk we have.”

Oil spill concerns

In a Sept. 29 press release announcing the appeal against Shell’s plan, Earthjustice, the law firm that filed the court petition on behalf of the appellants, questioned Shell’s ability to clean up oil from Arctic waters, should an oil spill accident occur.

“Allowing Shell to drill when it has no credible plan to clean up an oil spill in the Arctic’s icy waters, and instead simply assume it can clean up 95 percent of oil spilled isn’t just unrealistic, it’s insulting and irresponsible,” said Earthjustice attorney Holly Harris.

Earthjustice said that an Arctic Ocean oil spill would devastate wildlife, including polar bears and other marine mammals; that any attempt to clean up oil in Arctic waters would likely prove ineffective; and that there is a lack of sufficient scientific information about the Arctic offshore environment to adequately assess the risks of offshore drilling. The law firm also cited statements made by the U.S. Coast Guard about the lack of a USCG capability to respond to an Arctic offshore oil spill.

Shell has assembled its own, self-contained oil spill response fleet that would be mobilized in parallel with any offshore drilling operation. The company has also made arrangements for nearshore and shoreline responses to any oil spill accident. Shell is implementing new well capping and spill containment technology, based on lessons learned from the Deepwater Horizon disaster in the Gulf of Mexico. The company has said that its oil spill response arrangements are more than capable of dealing with a worst case spill from any of the wells that it plans to drill.

“I believe we have a very robust oil spill response plan,” Slaiby said. It was robust before Deepwater Horizon and has become even more robust since then, he said.

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