Feds aim for revised Chukchi EIS by March 2015


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This Dec. 11, 2012, photo shows the derrick and stern of the drill ship Noble Discoverer as the vessel is docked at a pier in Seward while it was under investigation by the U.S. Coast Guard for possible safety violations. The Noble Discoverer, owned by Noble Corp., drilled in the Chukchi Sea in 2012 for Royal Dutch Shell. The federal agency in charge of Arctic drilling released a schedule for a supplemental environmental impact statement that may allow Shell to return to the Chukchi in 2015.

Photo/Dan Joling/AP

The federal agency charged with managing Outer Continental Shelf leasing off Alaska’s coasts plans to have a revised environmental impact statement for the 2008 Chukchi Sea OCS sale completed by next March.

Whether that will give Shell enough time to mobilize to drill next summer is questionable.

The U.S. Bureau of Ocean Energy Management filed a status report on its revised EIS plan with Alaska U.S. District Court Judge Ralph Beistline May 23. The schedule calls for the agency to have a draft supplemental environmental impact statement, or SEIS, ready by August and to have its final EIS by next February.

A Record of Decision, the final approval of the revised EIS, would occur in March 2015 under the plan filed by BOEM.

Shell was noncommittal on how the schedule would affect any preparations for 2015.

“We are considering the implications of the timeline presented in the status report and continue to work with the Department of Interior,” Shell spokeswoman Meg Baldino said in a statement. “We have made no decisions on the timing for our future exploration plans.”

Even if BOEM meets its goal of having an ROD in March 2015, the schedule could be thrown into further disarray if there are further court filings by environmental litigants who are challenging the validity of the estimates, which seems likely.

Beistline ordered BOEM to provide periodic status reports in late April as part of an order that the agency redo its 2008 estimate of possible recoverable oil discoveries in the Chukchi Sea. That followed an earlier U.S. 9th Circuit Court decision that rejected the agency’s estimate that one billion barrels of oil might be found in the lease sale area.

The U.S. Minerals Management Service had developed the estimate as part of the original EIS done for the sale.

Environmental groups and an Alaska tribal organization filed a lawsuit challenging the estimate as unrealistically low. How much oil might be found established the guideline for the agency’s analysis of a possible oil spill in the Chukchi Sea.

Shell has been exploring in the region and drilled two partial wells in 2012, one in the Chukchi Sea and one in the Beaufort Sea. The company hopes to resume drilling in 2015 in the Chukchi Sea but has put off a return to the Beaufort Sea for now, Shell has said.

ConocoPhillips and Statoil also have plans to explore leases acquired in the 2008 sale but have said they will file applications after the legal challenges are resolved and federal regulatory guidelines are clear.

BOEM told the district court in its filing that it has started drafting parts of the SEIS draft and has completed the economic simulations to derive new hypothetical production estimates. The agency has also started its update of the Oil Spill Risk Analysis for the revised environmental impact statement.

Shell earlier filed an exploration plan for its plan to resume drilling in the Chukchi Sea, and in his order Beistline allowed BOEM to continue to process exploration applications. 

There are two separate processes used by BOEM that involve estimates of possible discoveries and oil spills. One is an estimate for the entire lease sale, which covers a wide area off Alaska’s northwest Arctic coast.

As a part of the EIS the agency must also make an estimate for a possible oil spill based on the reserves evaluation.

Later, when a company submits an application to explore specific prospects, as Shell has done for its “Burger” prospect, a separate estimate for possible reserves from that prospect is developed and evaluated by the BOEM.

That is the estimate that provides a basis for a more targeted oil spill risk assessment, and the required oil spill contingency plan Shell or other companies must develop.

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