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Suspensions Lifted on Chukchi Lease Sale


A recent Department of the Interior decision clears the way for rigs such as the Kulluk, which made news in 2012, to explore for oil under the Chukchi sea. Photo by Petty Officer 1st Class Sara Francis courtesy of the US Coast Guard.

Interior Department officials have lifted suspensions on a controversial oil and gas lease sale on the Chukchi Sea, clearing the way for a decision on Shell Oil Co.'s revised Chukchi Sea exploration plan.

The announcement on March 31 from Interior Secretary Sally Jewell drew quick critical responses from major environmental groups, including Oceana, Earthjustice, the Center for Biological Diversity, the Sierra Club, the Natural Resources Defense Council, and others.

Oceana and others cited language in the Bureau of Ocean Energy Management's own final second supplemental environmental impact statement that says there is a 75 percent chance of one or more large spills occurring from activities on the 2.8 million acres of leases that Shell and other companies purchased in lease sale 193.

Shell spokeswoman Megan Baldino in Anchorage acknowledged that Jewell's decision clears the path for BOEM to conclude its review and make a decision on Shell's revised Chukchi Sea exploration plan.

"The execution of that plan remains contingent on achieving the necessary permits, legal certainty and our own determination that we are prepared to explore safely and responsibly," she said.

"The Arctic is an important component of the administration's national energy strategy, and we remain committed to taking a thoughtful and balanced approach to oil and gas leasing and exploration offshore Alaska," Jewell said. "This unique, sensitive and often challenging environment requires effective oversight to ensure all activities are conducted safely and responsibly."

With Interior's record of decision in hand, the Bureau of Ocean Energy Management may begin formal review of a company's exploration plan for the Chukchi Sea. That will include public engagement and additional environmental analyses, plus a review of other federal agencies and approval of activities before any exploration activity can occur.

Legal challenges in the aftermath of the original environmental impact statement for lease sale 193 prompted a federal court decision remanding the lease sale back from BOEM for further analysis. The most recent court decision, from the Ninth Circuit Court of Appeals specifically addressed BOEM's estimates of production levels from oil continental shelf oil fields that they might discover in the Chukchi Sea.

In February the Interior Department released proposed regulations to ensure that future exploratory drilling activities in the US Arctic outer continental shelf are done safely and responsibly, subject to strong and proven operational standards, the agency said.

Susan Murray, deputy vice president for the Pacific for Oceana, called the announcement "expected and disappointing.

"The Obama administration has steadfastly refused to fully and fairly evaluate the risks of selling leases in the Chukchi Sea and, instead, treats the leases sold in 2008 as if they're set in stone."

The government violated the law when it decided to hold lease sale 193, and the government's subsequent reasons to stand by the sale are no more persuasive, she said. "As Shell's failed 2012 season shows, companies simply are not ready to operate in the Arctic Ocean. "There is no proven way to clean up spilled oil in icy, remote Arctic waters, and Shell has repeatedly failed to assess or mitigate risk appropriately," she said.


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