Chukchi drilling analysis released

SCENARIO: Missing environmental data not needed before sale, it says.

October 12, 2010 

Two months after a judge found flaws in the government's environmental assessment of petroleum drilling in the Chukchi Sea, federal offshore regulators released a revised analysis that was immediately denounced by environmental and Alaska Native groups.

The report analyzed the most viable natural gas development and production scenario for Chukchi leases rather than a minimum scenario. It concluded that certain missing environmental information, such as how a spill might affect a specific species, was not essential for going ahead with the lease sale.

A previous analysis only looked at the development of the first field of 1 billion barrels of oil, which the Minerals Management Service acknowledged was the minimum level of potential development and that there was high interest in natural gas development, according to a judge's ruling in July.

Earthjustice and groups that sued to halt drilling called the revised assessment hasty and incomplete for failing to fill the government's acknowledged data gaps about basic biology and habitat use of endangered whales, threatened polar bears, walrus, seals, sea birds, migratory birds, fish and other species.

Michael Bromwich, director of the Bureau of Ocean Energy Management, Regulation and Enforcement, acknowledged that Alaska's frontier areas need additional scientific, environmental and spill risk analysis before any determinations are made as to future leasing and permitting. He called the analysis a step in the process.

"More review is yet to come that looks at the Arctic region as a whole," Bromwich said. His agency replaced the former Minerals Management Service after the Deepwater Horizon blowout in the Gulf of Mexico.

Offshore drilling in the Arctic Ocean is a key issue in oil revenue-dependent Alaska, where the trans-Alaska pipeline is running at about one-third capacity because of diminishing North Slope reserves and where state official hope to see a natural gas pipeline built and filled in part with offshore gas.

U.S. District Judge Ralph Beistline's July ruling also said the agency failed to determine whether information it acknowledged was missing before the sale was relevant or essential under environmental law, or whether the cost of obtaining that information was exorbitant.

The Chukchi lease sale in February 2008 brought in nearly $2.7 billion for the federal government from the sale of 2.76 million acres, including $2.1 billion in high bids submitted by Shell Gulf of Mexico Inc.

Earthjustice's lawsuit placed a legal cloud over the sale. Shell had hoped to drill two Chukchi Sea wells during ice-free months this year.

Interior Secretary Ken Salazar suspended drilling permits after the Gulf blowout.

Brendan Cummings, an attorney for the Center for Biological Diversity, said the draft environmental statement was as superficial as the original. The review acknowledges the possibility of a greater level of development but concludes it probably will not change the impacts, he said.

The assessment also concludes information missing on specific species is not needed.

"They just do the sweeping generality, which they've done before and what they did in the Gulf," he said. "An oil spill would be bad, here's a sort of broad-brush account of what an oil spill might do, but it's not going to happen so we're not really worried about it."

Cummings called it a "ritual of compliance" instead of the meaningful review promised after the Gulf blowout.

"They're not deeply examining the fundamental question of, 'Is this the appropriate place for oil development?' " he said.

Bromwich acknowledged that the draft environmental report analyzed specific issues raised by the court but said it did not address whether additional environmental analysis should be undertaken for future leasing and permitting.

Bromwich said the agency will take public comment on the draft through Nov. 30 and will schedule public hearings in Anchorage and villages closest to the sale area before publishing a final environmental statement.

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