|
State, BP win Northstar lawsuit Court rules Alaska did not violate environmental laws in coastal zone determination Larry Persily Petroleum News Juneau Correspondent
The Alaska Supreme Court has settled a 4-year-old lawsuit by dismissing claims that the state and BP Exploration (Alaska) Inc. violated Alaska’s environmental laws in permitting and developing the Northstar oil project.
The court rejected arguments filed by the international environmental group Greenpeace that the state erred in not considering the cumulative effects of development in the area. The court also rejected the claim that the state improperly treated Northstar as a phased project.
The justices were unanimous in their decision, issued Oct. 16. A Greenpeace spokeswoman said Oct. 22 the group had not decided whether to appeal. The deadline to seek reconsideration is Oct. 27.
BP spokesman Daren Beaudo said the company views such litigation as part of the process of developing oil fields in Alaska. “It’s part of the process for third parties to disagree. We welcome the scrutiny.” Permit work started in 1995 Shell discovered oil in 1983 at the offshore field, six miles northwest of Prudhoe Bay. BP acquired majority interest in the field in 1995 and started engineering, design and permit work that same year. Construction of the man-made drilling island started in 1999, with production coming online in 2001.
Northstar is averaging about 60,000 barrels per day, with operations located on a single, five-acre production island and the oil pumped to shore through an undersea pipeline. The field contains an estimated 175 million barrels of recoverable oil. BP holds a 98 percent interest in the field, with Murphy Oil Co. holding 2 percent.
Exploration and development costs for the project totaled about $900 million, Beaudo said.
BP was required to get permits from several state and federal agencies, including passing a determination from the Alaska Division of Governmental Coordination that the project met the state’s coastal management laws. Greenpeace challenged that determination in its 1999 lawsuit. History of opposition Greenpeace also filed a separate lawsuit to stop work on the temporary ice road to the man-made island, but lost that case in 1999. Several Greenpeace protestors were arrested at the site in 2000, and a federal judge later that year issued a restraining order to keep protestors at least 200 yards away from the property.
State Superior Court Judge John Reese of Anchorage ruled against Greenpeace on the permit issues, prompting the appeal to the Supreme Court.
In its lawsuit, Greenpeace argued that state law should follow a broad definition of cumulative impacts for judging projects, similar to federal law.
The Supreme Court justices found “no convincing support for Greenpeace’s theory that … (Alaska Coastal Management Program) consistency determinations must formally analyze a project’s cumulative impacts, applying the federal definition of cumulative impacts.” Court firm in backing state State law requires review of a project’s “known and predictable effects,” the justices said. “It does not require … (the Division of Governmental Coordination) to speculate about unknown and unpredictable future events.”
Greenpeace also had put forth the argument that the Alaska Constitution’s provisions for managing the state’s natural resources supported its call for a cumulative-impact analysis, but the justices rejected that claim, too.
The plaintiff’s claim of illegal permit phasing was based on its allegation that the state had issued some permits prematurely, thereby allowing work to proceed before completion of the Coastal Management Program consistency review.
“A short but complete answer to Greenpeace’s claim of improper phasing is that the Northstar project simply was not phased,” the Supreme Court said. “Alaska law did not require a formal cumulative impacts analysis and … the state’s consistency review did not improperly treat Northstar as a phased project.” Plus for state’s efforts to attract investment Alaska Attorney General Greg Renkes used his press release on the court decision to highlight the administration’s intent to encourage more oil and gas development in the state. “Along with the changes the Murkowski administration has made to the Coastal Zone Management Program, this decision will improve the climate for investment in oil and gas resources,” Renkes said.
Gov. Frank Murkowski earlier this year moved the coastal zone program from the governor’s budget and management office to the Department of Natural Resources. In calling for the legislative change, the governor said he was changing the coastal zone program to the “simplest of the three management techniques allowed by the federal act.”
He added, “Resource development should not be held up by the sheer complexity of government.”
| 