New Chukchi report due by October

The U.S. Bureau of Offshore Energy Management has developed a revised exploration and development scenario for Chukchi Sea oil and gas development that will be part of a new draft supplemental environmental impact statement, or SEIS, to be issued this fall.

The scenario is confidential for now while being reviewed by other federal agencies, the State of Alaska and the North Slope Borough, the regional municipal government, the BOEM said in an update submitted to the U.S. Alaska District Court in Anchorage.

The agency is now working on revised oil spill scenarios using the draft exploration and development plan.

A new SEIS for the lease sale, held in 2008, was initiated by BOEM after the 9th Circuit Court of Appeals remanded the case to the U.S. Alaska District where it originated for review of the agency’s earlier assumption on a possible discovery in the Chukchi Sea.

The agency used an estimate that a one-billion-barrel find might be found in the Chukchi, which environmental groups challenged, arguing it was too low.

The 9th Circuit Court of Appeals agreed with the plaintiffs that the figure was “arbitrary and capricious” and remanded the case to the U.S. Alaska District Court, which ordered a further review. BOEM subsequently decided to do an SEIS with an eye toward revising the figure.

An Alaska Native tribal group from Point Hope, a coastal village, is part of the lawsuit. Shell, ConocoPhillips, Statoil and Repsol bid more than $2 billion for leases in the 2008 sale.

In its report to the court, BOEM also said it is on track to publish the new draft SEIS in early October and expects to have a Final EIS in late February and a Record of Decision by the U.S. Interior Department giving final approval by March.

Under court order the agency must submit bimonthly reports on progress with the SEIS.

The assumed size of discoveries is important because it provides the basis for the oil spill scenarios and environmental impact estimates in the environmental impact statement.

The figure for a possible discovery in the SEIS is different than an estimate also filed with the government for a specific drilling prospect. The second estimate is based on geological and seismic knowledge of the prospect and leads to a “worst possible” oil spill estimate for that prospect.

It is this number that leads to requirements in permits for a company to have a certain amount of spill containment and cleanup equipment on hand.

Shell, ConocoPhillips and Statoil are planning exploration in the Chukchi Sea OCS leases and Shell drilled a partially-complete exploration well in 2012, and now hopes to return in 2015.

The companies have been waiting, however, for the Department of the Interior to complete revised offshore drilling rules, and must now also wait for the legal issues over the original EIS to be settled.

BOEM said it expects to have a final SEIS in early February 2015, and a Record of Decision in March.

If Shell is to drill in the 2015 open-water Arctic season it must begin mobilizing its drill fleet in March and April.

11/22/2016 - 2:15pm