AlaskaDispatch

Jill Burke | Aug 3, 2010

Despite last month’s court order to halt any activity related to oil and gas exploration in the Chukchi Sea, Royal Dutch Shell has successfully lobbied for the chance to complete some of its planned activities in the Arctic this summer.

The initial injunction came after a federal judge in Anchorage found that the federal government hadn’t completed all of the work required before offering up acreage in the Chukchi Sea under lease sale 193. Failure by regulators to evaluate the effect of natural gas development on the environment and to determine whether missing information in the reviews was relevant or essential were among the judge’s main concerns.

Shell argued that the injunction effectively blocked it from putting to use a vessel, workers and equipment that had been contracted to conduct scientific studies in support of future exploration and development activities. The work, which includes mapping the sea floor, water quality tests and other marine studies, has been taking place for the last four years, and discontinuing it now will cause irreparable harm to the company’s $11 million investment in its 2010 Arctic research program, Shell argued.

ConocoPhillips also sought relief for Shell. Like Shell, the company has a lease stake in the Chukchi, some of which it’s attempting to assign to a third company, Statoil USA. Statoil is selling acreage in the Gulf of Mexico to ConocoPhillips, and part of that larger deal involves the sale of Chukchi Sea leases to Statoil, according to court records. Judge Ralph Beistline’s June injunction was so broad, federal officials aren’t even willing to sign off on the change in ownership for fear it will be considered “lease activity” under the court’s June order.

The newly minted Bureau of Ocean and Energy Management, formerly the Minerals Management Service, also urged Beistline to ease up. It echoed Shell’s arguments, and also stood up on behalf of Statoil. Statoil is poised to conduct a significant amount of geological and geophysical surveys in the Chukchi, but unless it gets the go-ahead by Aug. 6, the venture stands to lose a lot of money. Crews and ships are standing by at a cost of $300,000 per day; Statoil has already spent $1.5 million to develop the seismic plan and could spend up to $40 million to complete the studies, argued attorneys for the Department of Justice, representing the U.S. Department of the Interior and BOEM. If the Aug. 6 deadline is missed, “it is likely the project will be cancelled,” noted the attorneys. In their briefs, they asked Beistline to allow “desk work” and work that does not physically impact the environment to continue.

The state of Alaska is also pushing for planned work to continue, arguing in part that job opportunities for Alaskans are more important that any minimal impacts to the environment.

Monday, Beistline clarified his order “to permit (Shell) to proceed with those scientific studies which have already been approved or are pending approval by BOEMRE and are planned for the summer of 2010, to include activities under the approved Work Plan that were fully examined in the Agency’s (Environmental Impact Statement) and are unrelated to the defects identified by the Court.”

The revised order makes no mention of Statoil’s project or its looming deadline, although in it Beistline does acknowledge he is continuing to evaluate “other pending motions.”

Contact Jill Burke at jill(at)alaskadispatch.com

SOURCE ARTICLE

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