Sunday, August 28, 2011

BOEMRE issues revised EIS for Chukchi Sea

By Tim Bradner
Alaska Journal of Commerce

The U.S. Bureau of Ocean Energy Management, Regulation and Enforcement has issued the final supplemental environmental impact statement for the Chukchi Sea OCS Sale 193.

A lawsuit over the EIS is still pending in court, however, and the new document must be cleared by the court for the companies that bid on and won Chukchi Sea leases to finally have clear title to them. The sale was held in February 2008, and netted more than $2 billion on bonus bids, mostly from Shell. ConocoPhillips, Statoil and Repsol also bid.

A court decision on the case could come in October, a source close to the litigation said.

The environmental impact statement for the 2008 sale was challenged by a coalition of environmental and Alaska Native groups and was sent back to the agency for changes by a U.S. Federal District Court in Alaska in July, 2010.

An earlier version of the SEIS to correct the legal deficiencies was prepared in late 2010, but BOEMRE in early 2011 decided on further changes, to include a hypothetical "very large oil spill" scenario and developed a second SEIS that has now been issued in its final version.

Shell officials were pleased by the action.

"Last summer, an Alaska Federal District Court found the environmental impact statement that supported Chukchi Lease Sale 193 lacked certain information from the BOEMRE," said company spokesman Curtis Smith. "The agency has now provided additional information. We remain hopeful the BOEMRE will approve Shell's Chukchi plan of exploration as soon as possible after Secretary Salazar issues the record of decision."

The final document included a very large oil spill scenario, where a well "blowout" occurs that could spill 61,000 barrels of oil per day and last 74 days, spilling a total of 2.1 million barrels. This is a hypothetical spill, however, and is not the "worst case" spill scenario that an explorer would be required to prepare for at a specific exploration location, a BOEMRE official in Anchorage said. That scenario would be tailored to the geologic and environmental conditions at the site, the official said.

BOEMRE held two rounds of hearings in Alaska communities with the 2010 and 2011 versions of the SEIS.

"We have worked diligently to address the District Court's concerns in a thorough and comprehensive manner," said BOEMRE director Michael Bromwich. "This will insure that decisions related to this lease sale will be made in a careful, balanced manner using the best scientific information available."

Shell, ConocoPhillips and Statoil are planning exploration wells in the Chukchi Sea and some federal permits have been issued in draft form by federal agencies. Shell and ConocoPhillips hope to drill exploration wells in the Chukchi Sea in 2013 but have previously said that legal issues surrounding the original lease sale must be resolved.

Republished with the permission of the Alaska Journal of Commerce. Tim Bradner can be reached at tim.bradner@alaskajournal.com.