Arctic Offshore Leasing Argued for Oil, Gas

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By Alan Kovski

May 6 — The focus of argument during the next five-year program of offshore oil and gas leasing has shifted to the Arctic from the Atlantic, as reflected in comments filed on a draft environmental impact statement for the plan.

Environmental activists urged Bureau of Ocean Energy Management to take leasing in the Beaufort and Chukchi seas out of the 2017–2022 leasing program and argued the draft environmental impact statement did not sufficiently weigh climate change risks.

BOEM, an Interior Department agency, took the Atlantic out of the proposed plan in March in a victory for activists and many local governments along the southern Atlantic coastline (50 ECR, 3/15/16).

Energy industry groups advocated keeping the Arctic offshore in the leasing plan. They were joined by local governments and other organizations representing northern Alaska citizens, where revenues and job opportunities can be hard to find.

The comment period for the draft environmental impact statement ended May 2. The comment period for the proposed leasing plan remains open until June 16.

Arctic Problems Emphasized

Many activist groups used their comments on the draft impact statement to argue that no new offshore leasing should be allowed anywhere, including the Gulf of Mexico, but they focused most of their comments on the Arctic.

“Remoteness, lack of infrastructure, long lead times and the relative lack of existing development counsel overwhelmingly for the region’s exclusion from the program, and the draft EIS is deficient in many ways that downplay the risks of Arctic Ocean drilling,” said a letter filed jointly by the Alaska Wilderness League, Center for Biological Diversity, Greenpeace USA, Sierra Club, Earthjustice and nine other groups.

The Arctic “is experiencing the most rapid climate change of any region on the planet,” the groups said. “The central flaw of the draft EIS is that it fails to inform the public or the decision-maker about the climate consequences and context of the five-year program decision,” the groups said.

The Natural Resources Defense Council couched its criticism of the draft impact statement in the language of the obligations that the National Environmental Policy Act (NEPA) creates. The document “does not consider a reasonable range of alternatives, does not adequately analyze the direct, indirect, or cumulative impacts, does not propose sufficient mitigation, and does not analyze the effectiveness of mitigation,” it said.

High costs and strict regulations have deterred companies from filing any exploration plans for existing leases since Royal Dutch Shell Plc failed to find commercial quantities of oil in the Chukchi Sea in 2015.

More Options Sought

Industry groups told BOEM that rather than narrow the options, it should consider more of them, including analysis of more alternatives within the draft environmental impact statement analysis.

The American Petroleum Institute, National Ocean Industries Association and four other groups joined in a letter objecting that the draft impact statements did not appear to be written to inform decision-making by BOEM and the Interior secretary as required by NEPA. Instead, the draft statements appeared to be merely an explanation of potential environmental impacts, the groups said.

The draft environmental impact statement included three alternatives: Alternative A, designated the proposed alternative, including 10 lease sales in the Gulf of Mexico, one each in the Beaufort Sea, Chukchi Sea and Cook Inlet of Alaska; Alternative B, more restrictive through its protections for environmentally sensitive areas while allowing as many lease sales; and Alternative C, the “no action” alternative, which would mean no leasing program.

Alternative B, with its exclusions or mitigation measures for areas deemed to be especially sensitive for environmental, social or economic reasons, effectively could preclude more exploratory drilling in the Beaufort and Chukchi seas, the industry associations argued.

ConocoPhillips Co., one of the most active companies in onshore Arctic areas of Alaska and a leaseholder in the Arctic offshore, similarly said Alternative B exclusions or seasonal closures contemplated for areas in the Beaufort Sea could remove more than 3 million acres from lease sales and have the same effect as no new leasing in that program area.

Native Groups Support

Local governments and native Alaskan corporations voiced their support for Arctic offshore exploration as long as care is taken to avoid disrupting subsistence hunting and fishing.

“Shell Oil with its drilling program in 2015 has proved that responsible, environmentally friendly exploration can take place,”Olgoonik Corp., the native corporation for Wainwright, Alaska, said on the shore of the Chukchi Sea.

Jobs and revenues amid an inhospitable environment were stressed by the Arctic Slope Regional Corp., another native corporation, representing eight villages and having a shareholder population of about 12,000 Inupiat people.

“It is critical to ASRC that the federal government not take any action that would have the effect of foreclosing the substantial economic opportunities associated with the potential for future responsible development of Arctic OCS and North Slope natural resources,” the organization said.

Similar support for cautious development, couched in terms of respect for native livelihoods, came from the North Slope Borough (the municipal government for eight villages), the village of Kotzebue and the president of the Bering Straits Native Corp.

To contact the reporter on this story: Alan Kovski in Washington at akovski@bna.com

To contact the editor responsible for this story: Larry Pearl at lpearl@bna.com