Conflicting federal interests exposed in Alaska drilling debate

Last month, the U.S. Fish and Wildlife Service moved to save the polar bears when it designated nearly 200,000 square miles of the Arctic as critical habitat for the animals, deemed threatened by the federal government.

Last week, the Interior Department and its Bureau of Ocean Energy Management, Regulation and Enforcement decided new oil development could move forward in the Arctic, including smack in the middle of the bears’ home turf.

That’s left players on both sides scratching their heads in what amounts to a classic struggle between development and environmental interests. But the Fish & Wildlife Service designation does introduce a new regulatory element into the government’s consideration of an exploration permit that oil company Royal Dutch Shell has said it needs this month in order to be in a position to catch the summer drilling season in the Beaufort Sea. The new wrinkle could mean delays that force the oil company to spend another Arctic drilling season on the beach.

“I think it highlights the schizophrenia within the Department of the Interior,” said Brendan Cummings, senior counsel at the Center for Biological Diversity, the national conservation organization that has taken the lead as the Arctic’s chief non-governmental environmental watchdog. “You have one agency that’s charged with protecting fish and wildlife, and you have another agency … that still thinks its job is to say yes to oil.”

The polar bear is the latest animal to gain federal protection under the Endangered Species Act, and environmental groups have long used the law as a legal hammer for stopping development projects throughout the country, including in the Arctic. Under the law, federal agencies must specifically evaluate certain criteria — habitat, for instance, or economic issues — all of which can be and often are challenged in court.

Conservation organizations have for years pushed the government to list species as threatened or endangered, and then have followed up by forcing designated areas to be set aside as critical habitat. The polar bear is not the first and certainly not the last Arctic species to be identified as needing special consideration. Late last week, Fish &Wildlife proposed listing two species of ice seal under the Endangered Species Act, and environmental groups already are seeking protection for walruses and other creatures that are suffering from a changing Arctic climate.

“I think there’s a clear intent to lock down the Arctic from oil and gas development and the (Endangered Species Act) is the way to do that,” said Reed Hopper, the lead attorney for the Pacific Legal Foundation in a case challenging the 2-year-old decision that listed polar bears as threatened.

That case also involves conservation groups arguing that polar bears should actually be listed as endangered, the highest level of protection, and awaits a response from the federal government.

The feds are due to respond by Dec. 23, with arguments now set for February.

Last month’s designation of an area the size of California as critical polar bear habitat sets up a tougher regulatory hurdle for Shell, which is seeking approval to drill a single well in the Beaufort Sea this summer. Shell wants to sink an exploratory well in Camden Bay, about 15 miles off the coast near Kaktovik and just offshore of the Arctic National Wildlife Refuge, long considered a hot prospect for another major Alaskan oil discovery.

Shell’s offshore drilling program suffered a setback earlier this year when environmental groups won legal challenges over lease sales in the Chukchi Sea. And the BP oil spill in the Gulf of Mexico this spring led the Obama administration to halt all offshore drilling while reconsidering the government’s regulatory role. The administration announced last week that it would continue to ban drilling offshore in the Eastern Gulf of Mexico and in the Atlantic Ocean, but it would let some drilling move ahead, including in the Arctic. But, officials including Interior Secretary Ken Salazar, made it clear they would look carefully at Shell’s proposal for the Beaufort.

Much of the opposition to Arctic drilling, polar bears aside, continues over how a spill cleanup, including one from a blown-out well, could be achieved. Although Shell has put together a plan and equipment that goes beyond any cleanup program assembled in Alaska, environmental groups contend the technology just doesn’t exist to overcome the Arctic’s harsh conditions, especially in the winter.

To that end, the Bureau of Ocean Energy Management announced Thursday it would begin taking public comment on Shell’s oil spill response plan, with comments due by Dec. 23.

Michael Bromwich, director of the bureau, said last week in answer to a question about Shell’s application: “We have been in communication with Shell, obviously, as both the Secretary and I said we are processing their permit in the normal course. … We understand that Shell needs a decision and when we’ve completed the review and analysis we’ll be in a position to make our decision, but we’re not going to be constrained by any artificial deadline.”

The critical habitat designation doesn’t automatically prohibit development activities in the area, but it does mean regulators need to more carefully consider the effects of development on the polar bear. Cummings, of the Center for Biological Diversity, said that means the Bureau of Ocean Energy Management will have to consult with Fish & Wildlife Service before approving the permit application.

Other species that have been listed under the Endangered Species Act haven’t been in oil development areas. The polar bear review will be the first time Fish & Wildlife will have to determine whether oil development will “adversely modify” critical habitat in the context of Alaska offshore drilling, Cummings said.

Moreover, he said, the habitat is narrow in that its confined to Alaska and not the bears’ range worldwide. Previous analyses of the bears’ population concerns looked at the global picture, he said.

Mary Cody, a wildlife biologist for the Bureau of Ocean Energy Management in Alaska said her agency has already been consulting with the Fish & Wildlife Service about the polar bear because it has been a listed species. So the critical habitat designation, while requiring a new level of review, doesn’t necessarily delay the process, she said.

While the designation may make it more difficult for Shell to obtain a drilling permit, neither side thinks the Obama administration will deny the permit. Even Cummings thinks the politics are stacked against the bears because both Alaska senators — Democrat Mark Begich and Republican Lisa Murkowski — are ardent supporters of offshore exploration and production.

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