After Shell pullout decision, environmentalists target Liberty project off Alaska

Fresh from what some environmentalists claim is a victory that forced Shell to drop its ambitious plans to search for oil in Arctic waters off Alaska, the Sierra Club is urging supporters to rise up to stop a separate offshore Alaska energy project

An emailed message from the Sierra Club declares that "another drilling threat has come to light" -- the proposed new oil production at the offshore Liberty unit in the Beaufort Sea.

"Even though Shell has announced they will end oil exploration off of Alaska's Arctic Coast 'for the foreseeable future,' another oil company -- Hilcorp Alaska LLC -- is trying to obtain permits to drill in the Arctic Ocean. Now, it's up to dedicated activists like you to make sure they never get the opportunity to drill," said the message from Dan Ritzman, director of the Sierra Club's Arctic campaign.

The message calls Hilcorp's plan, which includes an artificial island to hold drilling and processing facilities, "unbelievable" and "dangerous."

Miyoko Sakashita, oceans director and senior counsel for the Center for Biological Diversity, said her organization will also seek to prevent Liberty's development.

"The last thing we need is another Arctic drilling project," she said. Though the Liberty project is much closer to shore and much smaller than anything Shell envisioned, in the offshore Arctic, "any drilling is too much drilling," she said.

If plans to develop Liberty have just come to light for the Sierra Club's Arctic campaign, they have been in the public eye for several years.

Though much more modest than Shell's plan for exploring far-offshore areas of the Chukchi Sea, Liberty is far more advanced, well past the exploration phase. What is being considered is how to bring its discovered oil, now estimated by federal officials to be 150 million recoverable barrels, into production. To accomplish that, new Liberty operator Hilcorp has submitted a development and production plan that is now being reviewed by the Bureau of Ocean Energy Management.

The oil would be shipped by pipeline into existing infrastructure on the North Slope and, ultimately, into the trans-Alaska oil pipeline. That makes Liberty oil important to Alaska's economy, even if it does not come from state territory, development supporters say.

"Liberty's potential contribution is a literal infusion into the lifeblood of our state," state Sen. Cathy Giessel, who chairs the Alaska Senate Resources Committee, said in comments filed with BOEM. "For residents in my district, the Liberty Project means good paying, living wage jobs for working Alaska families, keeping their roots in our towns for another generation."

Drilling at and around the Liberty unit is nothing new, nor are artificial islands for oil and gas development in shallow waters of the Beaufort Sea.

The initial discovery of what is now called the Liberty Reservoir was made through exploratory drilling conducted on offshore leases held by Shell in the 1980s. To make that drilling possible, Shell built Tern Island, an artificial structure, in 1981 and 1982, the Hilcorp plan says.

BP Exploration (Alaska) Inc. made further discoveries in the 1990s, confirming what it said was a deposit of 120 million recoverable barrels. BP submitted the first full development plan in 1998. The company replaced that in 2007 with a reconfigured development plan that proposed production through ultra-extended-reach wells drilled from an existing land site. That plan won approval from the Minerals Management Service in 2008, and BP started on-site work to bring Liberty into production.

Rig and well-drilling challenges, which caused projected costs to mount, and complication arising from the Deepwater Horizon disaster prompted BP to drop that ultra-extended-reach plan, a decision the company made formal in 2012.

Hilcorp last year bought its half share of Liberty and became unit operator. Its pending plan reverts to the island concept in BP's first Liberty plan. It also promises to use lessons from the relatively new Oooguruk and Nikaitchuq oil fields, which are being produced from artificial islands built in water that is only about six feet deep, and the Northstar field that began production in 2001 and is operated from an island in water about 40 feet deep, Hilcorp's plan says.

Caelus Energy operates Oooguruk; Eni operates Nikaitchuq and Hilcorp operates Northstar, having bought that from BP, as well as the half-share of Liberty and other assets.

Not all environmentalists currently oppose Liberty development or Hilcorp's vision for it. Lois Epstein, Arctic program director for The Wilderness Society, said she is reserving judgment on Hilcorp's plan until she learns more about it and hears the opinions of people in the North Slope villages.

BOEM is soliciting comments on the Liberty plan. It has scheduled a series of public meetings for early November, part of the scoping process that determines what issues the agency should consider as it conducts its environmental impact analysis.