Alaska Court Stops All Oil and Gas Activities in Chukchi Sea

On July 21, a federal district court judge in Alaska issued an order halting all oil and gas activities in more than 29 million acres of the Chukchi Sea. The order said that the former Minerals Management Service (MMS) failed to adequately consider the environmental impacts of potential natural gas production in violation of the National Environmental Policy Act (NEPA).

The order was issued by Judge Ralph Beistline of the U.S. District Court for the District of Alaska and effectively blocks oil and gas exploration activity in Lease Sale 193, which brought in $2.66 billion in February 2008. The bid was a record high for an Alaska lease sale, according to a July 23 BNA article (subscription required).

The January 2008 lawsuit to block the sale of the lease was brought by Earthjustice on behalf of the Native Village of Point Hope, City of Point Hope, Inupiat Community of the Arctic Slope, and 12 Alaska and national environmental groups, according to a July 21 joint press release.

Earthjustice claimed that the decision to offer the lease violated NEPA, the Endangered Species Act, and the Administrative Procedure Act. The suit also alleged that the final environmental impact statement filed by MMS (now the Bureau of Ocean Energy Management, Regulation and Enforcement in the Department of Interior (DOI)) lacked essential information, inadequately assessed environmental and human impacts, understated the risks of oil spills, provided misleading information on the effects of seismic activity, and failed to completely assess the dangers to endangered eiders’ habitat. (An eider is a type of large sea duck.)

DOI claimed that the environmental impact statement (EIS) contained the scientific results of years of study and analyses of cumulative effects on eiders, as well as incorporating information from the two EIS’s conducted for the agencies five-year leasing plans.

The court found, first, that MMS did meet the necessary requirements regarding the analysis of the seismic surveying and its mitigating impacts in the final EIS. Second, the court said that the EIS did not include the necessary analysis of the impacts of natural gas exploration. In light of the incentives in the lease for natural gas production, the agency could not have taken “a ‘hard look’ at the impact of natural gas exploration if natural gas development is omitted entirely from the EIS.” The government had argued that omitting the assessment of natural gas production was reasonable because there is not an infrastructure to bring natural gas to the marketplace.

Third, the court noted that NEPA places very specific obligations on agencies when there is incomplete or unavailable information. The EIS contains “dozens if not hundreds of entries indicating a lack of information” about the impacts on various species, according to the order. Earthjustice had argued that MMS had failed to meet the specific obligations under federal regulations to deal with the missing or incomplete information. The court agreed.

Earthjustice had urged the court to invalidate the lease sale or, barring that, sought “an injunction prohibiting further activity under the leases pending completion of the Agency’s NEPA obligations.” The order does not set aside the lease sale; it orders the agency to complete its EIS obligations and halts all oil and gas activity until the agency meets those obligations.

In its July 21 press release, Earthjustice attorney Eric Grafe was quoted saying, “This is an important decision directing the Secretary to consider the need for more information on the Chukchi Sea. We have long argued that more science, more data and more research is needed in the sensitive waters of the Arctic Ocean before oil and gas lease sales or drilling are allowed occur.”

A July 22 article in the Anchorage Daily News reported that a spokesperson for Shell Alaska, one of the oil companies that was successful in obtaining leasing rights, said the company was reviewing the ruling and how it might affect the company’s plans in 2010 and 2011. The newspaper also reported that native groups contend that “it would be impossible to clean up a spill in Arctic waters, far from deep-water ports and airports, especially during periods of broken ice. The nearest Coast Guard base is on Kodiak Island more than 1,000 miles away.”

President Obama’s initial May 28 six-month deepwater oil drilling moratorium halted much of the oil and gas activity in both the Gulf of Mexico and the Pacific region, including plans Shell had for drilling in Alaska waters. That moratorium was overturned, but Interior Secretary Ken Salazar issued a new drilling suspension on July 12 to address many of the concerns that prompted a district court to grant the injunction against the original moratorium. The new moratorium has also been challenged in court.

 

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