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BOEM publishes final Chukchi SEIS, affirms 2008 holding of lease sale
The Bureau of Ocean Energy Management has published the final supplemental environmental impact statement for the 2008 Chukchi Sea lease sale in which Shell, ConocoPhillips, Statoil and other companies purchased leases. The agency has been reworking the document as a consequence of a federal District Court in Alaska order in an appeal against the validity of the sale’s original environmental impact statement.
“Alaska is a critical component of our nation’s energy portfolio, and the Chukchi Sea has substantial oil and gas potential, as well as sensitive marine and coastal resources that Alaska Native communities depend on for subsistence,” Secretary of the Interior Sally Jewell said on Feb. 12 when announcing the release of the SEIS. “The updated analysis is a major step toward resolving the 2008 oil and gas leases that have been tied up in the courts for years. We remain committed to taking a thoughtful and balanced approach to oil and gas leasing and exploration in this unique, sensitive and often challenging environment.”
Affirms the sale The proposed action in the SEIS affirms the 2008 lease sale. However, BOEM says that the document will be subject to a waiting period of at least 30 days before the agency makes a final decision on the sale.
The District Court has placed a hold on all Chukchi Sea lease-related work until BOEM issues a new record of decision for the sale. As a consequence, the agency has been barred from making an approval decision on Shell’s Chukchi Sea exploration plan until after a record of decision affirming the sale has been issued. Shell wants to resume its program of exploratory drilling in the Chukchi Sea in the coming summer.
BOEM says that it received more than 400,000 comments on the draft version of the SEIS.
Appeal in 2008 The lawsuit driving the rework of the SEIS dates back to Jan. 31, 2008, when the Native Village of Point Hope and 12 environmental organizations appealed in the District Court against the original environmental impact statement for the sale. The sale went ahead in February 2008, with the Department of the Interior receiving high bids totaling $2.7 billion from multiple bidders.
In July 2010 the District Court upheld the appeal and required Interior to remedy three issues relating to the validity of the EIS under the terms of the National Environmental Policy Act. As a consequence of the court decision, Interior prepared an SEIS, published in August 2011, with a record of decision affirming the lease sale following in October 2011. In February 2012 the District Court dismissed the appeal, saying that Interior had remedied the deficiencies in the original EIS.
The plaintiffs then elevated the appeal to the 9th Circuit Court of Appeals.
9th Circuit opinion On Jan. 22, 2014, the 9th Circuit Court issued an opinion, upholding the appeal on the grounds that Interior had erred in arbitrarily assuming that conducting the lease sale would ultimately result in the production of 1 billion barrels of oil from the Chukchi Sea. The 1 billion barrel figure apparently represented the possible production from an initial Chukchi Sea development, based on assumptions that a field smaller than this would not be viable and that the probability of finding a field larger than this would be relatively low. But the 9th Circuit judges criticized what they said was the lack of an explanation of why production would be expected to stop with that first field, and a lack of consideration of how variations in oil prices might impact production economics.
Following the 9th Circuit decision, the District Court picked up the case again and on April 24, 2014, remanded the matter back to Interior for remedy of the flaw that the appeal court had identified in the SEIS. The District Court prohibited lease-related activities such as exploration drilling in the Chukchi Sea until BOEM, the agency within Interior preparing the SEIS, had completed the revisions to the document and made a revised decision on holding the lease sale. The court also barred BOEM from making any approval or completeness decisions on Chukchi Sea exploration plans, although the agency was allowed to review the plans without making any formal decisions on them.
On Oct. 31 BOEM published a draft revised SEIS for public comment. And the agency has now published a final SEIS, taking into account the comments that it receive on the draft document. The proposed action in the final SEIS affirms the original 2008 lease sale and the validity of all of the leases issued in that sale.
Two oil fields assumed Given the level of exploration and development likely to happen as a consequence of the 2008 lease sale, only a portion of the total Chukchi Sea oil and gas resources would be developed from leases sold in the sale, the SEIS says. It is likely that the outcome of holding the sale would be the development of one anchor oil field with perhaps 2.9 billion barrels of recoverable oil and a satellite field with perhaps 1.4 billion barrels of recoverable oil, the document says. Field development might result in 465 producing oil wells, 93 service wells and in the installation of eight offshore platforms. Development would require the laying of offshore and onshore pipelines.
Following exploration and field delineation, the installation of offshore platforms and the subsequent start of oil production would take place 10 years after initial exploration activities. Oil production would end 53 years after the start of exploration. Natural gas production would likely lag behind oil production, starting in year 31 and continuing until 74 years after initial exploration, the SEIS says.
Varying impacts The SEIS says that the anticipated exploration, development and production activities would likely have only minor impacts on water and air quality, and on fish, with moderate impacts on lower trophic organisms. Impacts on marine mammals could range from negligible to moderate, although the impact on mammals of large oil spills could range from negligible to major. Economic impacts would be major in terms of employment and labor income, although the envisaged activities could have major impacts on subsistence harvesting at various times, the SEIS says.
The cumulative effects of the activities, in conjunction with other actions in the region, could, however, have major impacts on offshore water quality and fish, the SEIS says.
The SEIS recognizes that as many as 800 relatively small oil spills may occur as a consequence of exploration, development and production activities. The SEIS also assumes a likelihood that two larger spills of 1,000 or more barrels of oil may happen.
The SEIS also evaluates the possibility of a very large oil spill, with oil flow rates peaking at perhaps more than 60,000 barrels per day. A spill of this magnitude, while very unlikely, would have a significant impact on a variety of environmental resources, the SEIS says.
Environmental controversy People who support responsible Arctic offshore oil development have expressed frustration at the court-enforced delays in exploration efforts in the Chukchi. And Shell, the company leading those efforts, has assembled a substantial oil spill response fleet and constructed equipment such as an Arctic oil containment dome to prevent damage from an offshore oil spill. But environmental organizations express much skepticism about the practicalities of recovering spilled oil from ice-laden seas.
“We are disappointed that Interior would rush forward with a development plan under which there is a 75 percent chance that one or more large oil spills (more than 1,000 barrels, or 42,000 gallons, of oil) would occur if the leases are developed,” said Cindy Shogan, executive director of Alaska Wilderness League, in response to the publication of the SEIS. “Instead, of rushing to a decision to cater to Shell’s wishes to drill this summer, the agency should get the analysis right and fully inform the public about the risks of drilling in the Chukchi Sea.”
- Alan Bailey
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