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Army Corps, Conoco fight CD-5 lawsuits Litigation could jeopardize late 2015 production goal on first oil development project inside National Petroleum Reserve-Alaska Wesley Loy For Petroleum News
Federal officials and ConocoPhillips are asking a court to declare them the winners in two cases challenging what is poised to become the first oil production project within the National Petroleum Reserve-Alaska.
The project is known as CD-5, planned for just inside the eastern boundary of the vast reserve. It will function as a “satellite” to the large, ConocoPhillips-operated Alpine field situated in the Colville River Delta to the east.
The company has said it aims to start production from CD-5 in late 2015, with output expected to reach about 15,800 barrels of oil per day. Oil from CD-5 would move by pipeline to the Alpine processing facility.
But the lawsuits in U.S. District Court in Anchorage could block development of the satellite field.
One suit was brought by seven residents of Nuiqsut, a predominantly Inupiat Eskimo village about 8.5 miles southeast of the CD-5 site. The Arizona-based Center for Biological Diversity brought the other suit.
The U.S. Army Corps of Engineers is the defendant in each case. The suits challenge the wetlands fill permit the Corps granted ConocoPhillips in December 2011 for construction of CD-5, including a drill pad and an access road with bridge across a channel of the Colville River.
ConocoPhillips intervened in the cases on the side of the Army Corps.
‘Proxy’ for conflict Recently, the Corps and ConocoPhillips each filed papers asking the court for “summary judgment,” or victory, in the lawsuits.
In their Nov. 22 filing, lawyers for ConocoPhillips argued the lawsuits are ordinary, presenting “no unique or precedent setting legal issues.” The court, they said, must address the usual issues in such challenges: whether the permitting agency considered the relevant factors and then properly explained its decision.
The lawsuits center on one “unremarkable” drill site of typical design for Alaska’s North Slope, ConocoPhillips said.
But as the first and only production project to be approved within the petroleum reserve, which is a frontier zone west of the North Slope’s existing oil fields, CD-5 is “being used as a proxy for a broader conflict about resource development,” the company argued.
“On one side, the local Alaska Native community, the United States government, the State of Alaska and local North Slope government support CD5, as finally designed, mitigated and approved, because it is a carefully planned project that incorporates decades of North Slope development experience and input from stakeholders,” ConocoPhillips said. “On the other side, however, some advocacy groups oppose access to and oil production from the Petroleum Reserve, no matter how carefully it has been planned and analyzed, how limited and mitigated are the impacts, and how much support it has from expert agencies and affected communities.”
Why the reversal? The plaintiffs contend the Corps failed to do the necessary environmental analysis for CD-5, and violated several federal laws including the Clean Water Act.
They want the court to vacate the permit.
ConocoPhillips struggled mightily to get the permit in the first place.
The Corps initially denied it, saying the CD-5 satellite could be a roadless development with a pipeline punched beneath the Colville River channel, rather than suspended over it.
The permit denial rankled Alaska elected officials, and ConocoPhillips appealed.
Ultimately, the Corps issued the permit, allowing the road and bridge and dropping the idea of an underground pipeline.
The plaintiffs fault the Corps for its reversal.
Like ConocoPhillips, lawyers for the Corps have filed a motion for summary judgment.
The agency “considered and analyzed all of the environmental impacts associated with construction of CD-5, and ... it documented and thoroughly explained its decision to grant the permit to ConocoPhillips,” lawyers for the Corps argued.
One agency finding was that a wintertime leak “from an underground pipeline under the ice could take months to discover, and result in contamination in the Colville River extending into the Arctic Ocean, whereas a leak on the ice from a suspended pipeline would be quickly detected and more easily removed from the surface of the ice,” the Corps motion said.
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