Environment: Federal appeals court nixes fossil fuel lease sales in Chukchi Sea

Shell Oil has been permitted to start preparatory drilling in the Chukchi Sea.
A federal court this week ruled that the Bureau of Energy Management violated environmental laws when it sold leases for fossil fuel production in the Chukchi Sea.

Judges say feds made ‘arbitrary and capricious’ decision on how much oil can be extracted

By Bob Berwyn

FRISCO — There’s no question that there is a lot of oil beneath the seafloor of the Arctic Ocean, and the Chukchi Sea, specifically.

But exactly how much is a question that is still open to debate, according to a federal court, which this week ruled that the U.S. Department of Interior made an “arbitrary and capricious” decision when it sold drilling rights in the area back in 2008 based on an estimate of about 1 billion barrels of oil.

Federal officials may have pulled that number out of a hat, the three-hudge panel of the Ninth Circuit Court of Appeals ruled, ordering the federal government to revise the environmental study for the 2008 lease sale. The court also said federal officials may have low-balled potential environmental impacts of fossil fuel development in the Chukchi Sea.

From the court’s decision:

“First, BOEM has not justified its choice of the lowest possible amount of oil that was economical to produce as the basis for its analysis. The draft EIS scenario stated that the agency chose to focus on a one billion barrel estimate in part because any volume lower than one billion barrels would not be economical to produce. At the same time, BOEM was well aware that if any oil was produced from Lease Sale 193, the economically recoverable oil was very likely to exceed one billion barrels.”

In other words, the Bureau of Energy Management simply picked a convenient number, thus violating federal laws that require rational resource allocation decisions.

The ruling came in response a lawsuit filed by a coalition of Alaska Native and conservation groups made up of: the Native Village of Point Hope, Inupiat Community of the Arctic Slope, Alaska Wilderness League, Center for Biological Diversity, Defenders of Wildlife, National Audubon Society, Natural Resources Defense Council, Northern Alaska Environmental Center, Oceana, Pacific Environment, Resisting Environmental Destruction on Indigenous Lands (REDOIL), Sierra Club, The Wilderness Society, and World Wildlife Fund.  Earthjustice, a nonprofit environmental law organization, represented the groups.

“President Obama now has the chance to do right by the Arctic and the planet by keeping oil drilling out of the Chukchi Sea, said Erik Grafe, an attorney at Earthjustice, which represents the groups. “It makes no sense to open up the fragile, irreplaceable, and already melting Arctic Ocean to risky drilling for dirty oil that will only exacerbate climate change already wreaking havoc on the Arctic and elsewhere,” Grafe said in a prepared statement.

Grafe said he hopes the federal government will step back and make a new decision “in light of a more honest environmental analysis.

“We don’t know nearly enough about the Chukchi Sea ecosystems – let alone about how to clean up an oil spill in ice-locked seas – to let international corporations go around poking holes in the seafloor,” said Audubon president and CEO David Yarnold. “We do know that the Arctic Ocean is crucial for marine birds and mammals, holding globally significant feeding and resting areas for dozens of species, and they need to be protected.  This decision gives the administration a chance to re-consider drilling in the Chukchi.”

The Chukchi Sea is part of America’s Arctic Ocean north of Alaska. There is currently no oil and gas development in the Chukchi Sea.  The Chukchi Sea and its coast are remote—the coast contains only four small communities that are not connected to a road system, lack deep-water harbors, and can only be reached by plane or, in summer, by boat.  The region is hundreds of miles from the nearest coast-guard station and lacks rescue and oil spill response capacity.

The Chukchi Sea lease sale, Sale 193, was originally held in 2008 by the Bush administration. It offered nearly 30 million acres in the Chukchi Sea for oil drilling—an area larger than the size of Pennsylvania.  Prior to the lease sale, there were no active oil leases in the sea.

According to conservation groups, the court affirmed their arguments that the Department of Interior failed adequately to analyze the potentially dramatic environmental effects of the sale before offering the leases, ruling that the BOEM analyzed “only the best case scenario for environmental harm, assuming oil development,” and that this analysis “skews the data toward fewer environmental impacts, and thus impedes a full and fair discussion of the potential effects of the project.”

The agency will have to revise or supplement its analysis for the lease sale once again and must reconsider its lease sale decision.


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