Providing coverage of Alaska and northern Canada's oil and gas industry
August 2014

Vol. 19, No. 31 Week of August 03, 2014

Federal judge declines to vacate permit for emerging CD-5 project

U.S. District Judge Sharon Gleason has denied a motion to set aside, or vacate, the federal permit for a ConocoPhillips oil development now under construction in the National Petroleum Reserve-Alaska.

A handful of residents from the nearby village of Nuiqsut wanted the permit vacated as part of their lawsuit challenging the wetlands fill permit the U.S. Army Corps of Engineers granted for the project in December 2011.

ConocoPhillips is now well along on construction of the Colville Delta 5 project.

CD-5 is one of a number of satellite fields designed to feed into processing facilities at the large, ConocoPhillips-operated Alpine field.

More significantly, CD-5 is poised to become the first oil production drill site inside the vast petroleum reserve. As such, the project has become a focal point for resistance to the oil industry’s slow expansion into the western North Slope frontier.

Explanation needed

The Nuiqsut villagers are suing the Army Corps, and not ConocoPhillips directly. The oil company has intervened in the case to help defend the permit it received from the Corps.

In late May, Gleason ruled the Corps had violated NEPA, the National Environmental Policy Act, by failing to explain why it chose not to do a supplemental environmental impact statement for the CD-5 project. The supplement would consider changes to the project since 2004, when the original EIS for Alpine satellites was done.

On July 22, Gleason issued an order sketching out how the case will now proceed.

The order notes that the Corps, ConocoPhillips and the Nuiqsut plaintiffs all agreed the 2011 permitting decision should be remanded to the Corps to rectify the NEPA violation, which the Corps says it can easily do.

The villagers asked the judge to vacate the permit pending completion of the remand. But Gleason declined to do so.

The judge wrote that “vacatur at this junction is not warranted because, as ConocoPhillips has demonstrated, the disruptive consequences it would have in the midst of the construction project weigh so heavily against it.”

Gleason noted that the plaintiffs “for whatever reason” didn’t file suit until more than a year after the Corps granted the permit.

Now, she wrote, “the project is already substantially constructed.”

Construction progress

The judge’s order summarizes the status of construction.

“ConocoPhillips indicates that the following construction work has already occurred at CD-5: the gravel footprint has been laid, four bridge structures have been installed, and a multi-season ice pad has been created,” the order says. “This summer and fall, ConocoPhillips plans to conduct tie-in work, install decking on two bridges, install the spans on the Nigliq Channel bridge, and ‘season’ (i.e., compact) the gravel on the CD-5 road and pads. The gravel seasoning can only be done in summer, when temperatures are consistently above freezing.”

ConocoPhillips told the judge that pulling the permit now would throw CD-5 into a state of “regulatory confusion,” and leave the partially completed project vulnerable to erosion or other problems.

The Corps, on remand, must explain whether a supplemental EIS is needed, taking into account post-2004 climate change information, Gleason ordered.

She gave the Corps a deadline of Aug. 27 to complete the remand and report back. Meantime, gravel seasoning and bridge installation may proceed.

- Wesley Loy

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