Vol. 15, No. 7 Week of February 14, 2010
Providing coverage of Alaska and northern Canada's oil and gas industry

Corps denies permit

Click here to go directly to this story within the full PDF version of this issue, with any maps, photos or other artwork that appears in some of the articles.

Email it to an associate.

National interest in Colville River Delta overrides local interest in CD-5

Kristen Nelson

Petroleum News

The U.S. Army Corps of Engineers has denied ConocoPhillips Alaska permits to develop the CD-5 project on Alaska’s North Slope west of the Colville River Delta in the National Petroleum Reserve-Alaska.

The corps’ record of decision, dated Feb. 5, acknowledged local and state support for the project, which would see the first development of oil and gas resources within NPR-A, but said overriding national interests drove the denial, specifically concerns about “further impacts to the aquatic resources” in the Colville River Delta, which lies just east of NPR-A.

ConocoPhillips had local and state support for the project; both the U.S. Environmental Protection Agency and the U.S. Fish and Wildlife Service opposed the project, citing aquatic values in the Colville River Delta.

ConocoPhillips had reached resolution on local concerns about the project with changes in bridge location and an agreement to fund a road to connect the nearby community of Nuiqsut to the project’s road system.

Major parts of the project included a new drilling pad in NPR-A, CD-5, one major and two smaller bridges — carrying pipelines as well as road traffic — and a road connecting CD-5 to central Alpine facilities.

“We are disappointed with the Corps of Engineers decision,” ConocoPhillips Alaska spokeswoman Natalie Lowman told Petroleum News in a Feb. 5 e-mail.

“We have diligently tried to permit this project for almost five years and we intend to exercise our right to appeal the denial,” she said.

In a follow-up e-mail Feb. 9 Lowman said the environmental impact statement completed in 2004 “concluded that a roaded bridge project was the preferred alternative, and the local landowner, the village of Nuiqsut, has endorsed that approach.”

She said ConocoPhillips hasn’t “made a decision on any path forward other than to appeal the decision.”

The CD-5 project represents “more than $600 million in investment, and 400 direct new jobs per year during construction, plus hundreds of support jobs,” Lowman said, and the project cannot move forward “until this issue is resolved with the Corps of Engineers.”

Oil movement the issue

It wasn’t the drill pad in NPR-A that triggered the denial, but the connection between CD-5 and the Alpine processing facilities.

ConocoPhillips proposed a bridge across the Nigliq Channel of the Colville River, with a road to CD-5 on the west side of the channel and back to Alpine facilities on the east side.

The pipeline carrying unprocessed crude oil from CD-5 would have been on vertical support members and would have crossed the Nigliq Channel on the bridge on its way to Alpine for processing. After processing at Alpine, the crude would move through the Alpine pipeline to connect with North Slope pipeline infrastructure to the east.

The corps said in a Feb. 5 statement announcing the denial that it “has determined that there are other practicable alternatives that would have less adverse impact on the aquatic ecosystem and still meet the overall project purpose.”

“Other alternatives with less environmental impacts could include horizontal directional drilling but would require new permit applications,” the corps said, referring to placing the pipeline under the Nigliq Channel using horizontal directional drilling.

ConocoPhillips’ permit applications (under Section 404 of the Clean Water Act and Section 10 of the Rivers and Harbors Act) were to discharge fill material over 62 acres of wetland tundra to construct the drill pad, access road, bridge crossings and pipeline supports.

Aquatic environment

The corps said in its decision that it was concerned about impacts to the Colville River Delta, “the largest and most complex delta on the Arctic Coastal Plain of Alaska,” which drains nearly 30 percent of the North Slope, provides habitat for some 80 species of birds, numerous fish and migrating caribou, and is within the subsistence hunting and fishing areas of the Native Village of Nuiqsut.

The Environmental Protection Agency and the U.S. Fish and Wildlife Service objected to granting the permits.

EPA told the corps it had determined that the Colville River Delta is an aquatic resource of national importance, triggering action under a 1992 memorandum of understanding between EPA and the Department of the Army.

EPA recommended denial of the permits.

So did the U.S. Fish and Wildlife Service, which also told the corps it had found the delta to be an aquatic resource of national importance, and also cited a memorandum of understanding with the corps.

The corps said it “does not take a position on the designation of the CRD as an ARNI … (but) recognizes that impacts within the CRD floodplain may have a greater effect on the surrounding environment than impacts outside of the CRD due to the unique aquatic resources, its value as habitat, and its connectivity to other waters of the United States.”

The CD-5 drilling pad, on the other side of the Nigliq Channel from the Alpine facilities, is not in the Colville River Delta, but 2.5 miles of the road back to Alpine and the bridges would be.

Corps alternatives

The corps said in its record of decision that it identified two alternatives “that minimize impacts to aquatic resources within the floodplain of the CRD.” Neither alternative, the corps said, has significant adverse environmental consequences.

The first alternative has a drilling pad at the location proposed by ConocoPhillips, but the pad is larger because this alternative is a road-less development. The 19.5-acre pad would be connected to an airstrip by a 1.1-mile road.

The pipeline carrying the crude oil would be drilled under the Nigliq Channel using horizontal directional drilling — the method used to install the pipeline from Alpine which carries processed crude oil under the Colville River.

“This alternative was included because it primarily avoided impacts to the Colville River Delta,” the corps said.

The corps’ second alternative involves a smaller pad, but includes an 8-mile road connecting CD-5 “to the existing Nuiqsut dump road,” and an expansion of 1.25 miles of the existing Nuiqsut dump road “to a two-lane road suitable for heavy truck traffic.”

Storage and vehicular infrastructure would be added at the Nuiqsut airstrip, so CD-5 could be supplied from Nuiqsut and by ice roads in the winter for drill rig transportation.

This alternative would also take oil to Alpine via a pipeline drilled under the Nigliq Channel using horizontal directional drilling.

EPA suggested ultra-extended-reach drilling from existing Alpine facilities, but the corps said information provided by ConocoPhillips indicated the orientation and low permeability of the CD-5 reservoir “make UERD technically difficult given current drill rigs.”

Project support

The corps said it received support for the ConocoPhillips’ proposal from the Alaska Department of Natural Resources, which commented on the modifications the company had made to the project. DNR said those modifications reduced impacts to hydrology, subsistence and the environment of the Colville River Delta. DNR also said a pipeline suspended on a bridge over the Nigliq Channel reduces the potential for scour and long-term maintenance.

The North Slope Borough told the corps it had adopted an ordinance approving the CD-5 master plan. The borough said it preferred a bridge rather than HDD, and said there was local concern about contamination when the Alpine sales oil line was drilled because an unknown amount of drilling mud was lost.

The borough also noted that a road connection between Nuiqsut and new infrastructure including a bridge would allow spill response teams from the village to be mobilized quickly, and said road access would make it possible for residents to drive to work and to access other subsistence areas.

Nuiqsut is across the Nigliq Channel from existing Alpine facilities.

The Native Village of Nuiqsut, the City of Nuiqsut and Kuukpik Corp. commented jointly, telling the corps they supported the CD-5 project as proposed, and noting that the project reflected major compromises, specifically the bridge location and a memorandum of understanding between ConocoPhillips Alaska and Kuukpik Corp.

The corps acknowledged the support, but said it evaluates impacts and determines the least environmentally damaging practical alternative based on its statutes and regulations.

The corps said a significant portion of the memorandum of understanding involved ConocoPhillips reimbursing Kuukpik Corp. “for the construction of a road from Nuiqsut to the CD-5 access road. The road to Nuiqsut is not a part of CPAI’s proposal and will require additional permitting and review,” the corps said, adding that it “cannot guarantee that a Department of the Army permit could be issued for the Nuiqsut road.”

Anadarko Petroleum Corp., ConocoPhillips’ partner in the Alpine field, told the corps it supported the project as proposed, and said while HDD is technically feasible it poses significant risks for pipeline corrosion, sedimentation, slugging and leak detection.

Anadarko also said an HDD alternative would increase air traffic and noise, which may impact subsistence resources.

Water issues in the delta

The corps said water circulation through the project site is different in the Colville River Delta than west of the delta, with the western limit of the delta defined as the western bank of the Nigliagvik Channel.

The delta, more than 25 miles long, encompasses some 250 square miles with the majority of the water within its watershed carried through two main channels, the East Channel and the Nigliq Channel.

Under the ConocoPhillips proposal, the corps said some 2.5 miles of gravel access road (approximately one-third the width of the delta at this location), three bridges with a total of 69 pilings and the 0.03-acre Nigliagvik pad would be constructed within the Colville River Delta.

The drill pad and some four miles of access road would be outside the delta but almost entirely on wetlands. The pipeline corridor would contain approximately 725 vertical support members.

“It is likely that the presence of 2.5 miles of road and three bridges within the delta, perpendicular to the natural flow path, would impact water levels, overland sheet flow, and circulation/fluctuation patterns within the CRD even in events less than 50-year events,” the corps said. “Further disruption of circulation patterns could result if roads, culverts, or bridge abutments, create ice jams.”

Because the HDD alternatives proposed by the corps do not have roads, bridges or bridge abutments within the delta, “these structures will have less impact than the road and bridges in the applicant’s proposal,” the corps said. Any alterations to circulation patterns that did occur would be outside the Colville River Delta.

In acres the difference lies in the delta: ConocoPhillips’s proposal totals 62.3 acres of aquatic ecosystems, the corps said, 21.3 acres within the Colville River Delta, while the road-less HDD alternative impacts 54 acres, but only 0.4 acre within the delta and the HDD alternative with the Nuiqsut road connection totals 75.4 acres, but with only 0.4 acre within the delta.

The corps said current development within the delta totals some 160 acres, including all existing Alpine pads, pipelines and facilities.

Other satellites possible

The corps said it had been told by ConocoPhillips that there is potential for a satellite development north of CD-5, Fiord West, which may be within the delta; access would be via a gravel road from CD-5. There are two other potential drill sites outside the delta — Greater Moose’s Tooth 1 and 2 — also with planned access by gravel roads from CD-5.

Other drill sites within NPR-A are also possible, ConocoPhillips told the corps, if future exploration is successful.

All of this development would use existing Alpine central processing facilities, “increasing the ACPF footprint to accommodate additional facilities, and increasing air and road traffic impacts,” the corps said.

The corps said “the greatest potential for cumulative effects in the aquatic ecosystem is to the hydrologic functions, and related biological functions. The construction of the east-west bridge and road system across the CRD to CD-5 would have an effect on hydrology channel geomorphology.”

Under the two HDD alternatives, the corps said, it is unlikely that a road-bridge system would be constructed to Alpine from NPR-A in the future.

In the case of the road-less development, “the CD-5 airstrip has the potential to link the future satellite developments” and in the case of the alternative with the road between CD-5 and Nuiqsut, “Nuiqsut would likely become the logistics and transportation hub for the future developments” in eastern NPR-A.

Did you find this article interesting?
Tweet it
Digg it

Submit it to another favorite Social Site or Article Directory. Facebook Furl Mixx NewsVine Reddit StumbleUpon YahooMyWeb Google LinkedIn Live MySpace Sphinn Technorati Yahoo! Buzz
Print this story | Email it to an associate.

Alaska officials unhappy with decision

Statements from Alaska’s elected officials in response to the denial of ConocoPhillips’ CD-5 permits were negative.

“I am alarmed and amazed by this short-sighted decision, which totally ignores the economics of future energy development in all of northern Alaska,” said U.S. Sen. Lisa Murkowski, R-Alaska.

Murkowski noted that a road across the Nigliq Channel is widely considered to be a step in oil and gas development within the National Petroleum Reserve-Alaska.

“If allowed to stand, this myopic decision will kill all future oil development from the nation’s largest designated petroleum reserve and probably stop all future natural gas production from the area as well,” she said.

“Today’s announcement by the Army Corps that Conoco-Phillips’ permit is not approved is obviously disappointing to me and the many Alaskans who are eager to develop the oil and gas potential in the NPR-A,” said U.S. Sen. Mark Begich, D-Alaska.

“After the parties worked together for years to get agreement on NPR-A development, I am deeply disappointed the first project just got knocked off track,” he said.

Begich said the decision shows “that Alaska needs a comprehensive plan to allow development in the NPR-A to happen expeditiously and responsibly.”

Alaska Gov. Sean Parnell said the denial was part of a pattern of federal delays.

“Just in the last six months, we’ve fought the federal government for tying up Outer Continental Shelf leasing, and for adding bureaucratic nightmares and costs with Endangered Species Act listings and critical habitat area designations. We’ve seen the U.S. Fish and Wildlife Service and the Environmental Protection Agency show reluctance to approve anything related to jobs in Alaska,” Parnell said.

“And then — first by delay, and now, through their decision — the Corps of Engineers continues to set back our nation’s chances for economic recovery, domestic energy production, and Alaskans’ prospects for jobs.”

State legislators also displeased

Alaska House Speaker Mike Chenault, R-Nikiski, and House Resources Committee Co-Chair Craig Johnson, R-Anchorage, also commented on the corps’ action.

Chenault said ConocoPhillips has permits to explore in NPR-A.

“The last remaining obstacle was the bridge permit for the Colville River. This is a project that garnered widespread support from the outlying communities, within the industry, and stood to finally open up the reserve for development,” Chenault said, calling the denial “another example of administrative obstruction.”

Johnson said the decision was “another sign that Alaska’s clearly not open for business, through no fault of our own” and “sends a terrible message to companies who want to help open up the known reserves on federal lands.”

—Kristen Nelson

Petroleum News - Phone: 1-907 522-9469 - Fax: 1-907 522-9583
[email protected] --- ---

Copyright Petroleum Newspapers of Alaska, LLC (Petroleum News)(PNA)©2013 All rights reserved. The content of this article and web site may not be copied, replaced, distributed, published, displayed or transferred in any form or by any means except with the prior written permission of Petroleum Newspapers of Alaska, LLC (Petroleum News)(PNA). Copyright infringement is a violation of federal law subject to criminal and civil penalties.

This story has 188 lines. and it is 5527 pixels high.