By Margaret Bauman
Alaska Journal of Commerce

Federal minerals managers are preparing for their first federal offshore oil and gas lease sale in the Chukchi Sea since 1991, while environmental groups are still hoping for a postponement.

The Minerals Management Service in Anchorage on Jan. 2 issued its final notice of sale for the Chukchi Sea, outlining the sale area, terms and conditions, and requirements for protecting the environment and natural resources.

The sale is scheduled for Feb. 6, MMS director Randall Luthi said.

“We believe our decision is a good balance, and will allow companies to explore this intriguing frontier area while still protecting the resources important to the coastal residents,” Luthi said. “All leases will be subject to MMS's existing regulations that include extensive requirements for safety, drilling operations, and pollution prevention, plus regulations of other agencies protecting marine mammals, endangered species, and air and water quality.”

North Slope Borough Mayor Edward Itta said on Jan. 4 that “with all the changes happening out in the Chukchi Sea, I don't think we should be adding to the problem with offshore oil exploration.”

Itta said that like other North Slope whaling captains, he was worried about the unprecedented melting of the arctic ice pack and its implications for traditional Native subsistence whaling.

Even without climate change, the mayor said he felt underwater noise associated with oil drilling and the potential for a catastrophic spill argue against offshore development.

In its environmental impact statement, the MMS acknowledges that noise from seismic surveys and drilling would deflect the bowhead whale migration from its customary path and could disrupt subsistence whaling, Itta said. While the agency has proposed a buffer zone along the coast, it is unclear whether noise from beyond the buffer zone would affect migrating whales or other marine life in the area, he said.

The borough has asked MMS to gather more baseline data before considering development. “You can't measure the impacts over time if you don't have a starting point,” Itta said. “That's the whole purpose of baseline data.”

Margaret Williams, managing director of the World Wildlife Fund's Kamchatka and Bering Sea Program, said her organization, as well as other environmental groups, would like the Interior Department to postpone the sale.

On Dec. 26, the Alaska Wilderness League, Audubon Alaska, the Center for Biological Diversity, Earthjustice, the Natural Resources Defense Council, the Northern Alaska Environmental center, Oceana, Pacific Environment, Sierra Club and the Wilderness Society asked MMS to delay any decision on the lease sale until it considered new information contained in its letter.

The lengthy document outlined issues related to summer sea ice retreat, polar bears, walrus, humpback and fin whales and gray whales, noting that substantial new information has surfaced since the federal environmental impact statement on the proposed sale was completed.

The sale area contains about 29.7 million acres offshore Alaska from north of Point Barrow to northwest of Cape Lisburne, and extends from about 25 to 200 miles offshore.

The Chukchi Sea is considered one of the last frontier areas of North America with potential as a significant source of oil and gas. The Chukchi Sea contains an estimated 15 billion barrels of oil, although exploration is needed to assess what may be commercially available. The MMS final notice also includes proposed royalty suspensions on production subject to price thresholds.

Two sales have been held previously in the same planning area. Sale 109 was held in 1988 with 351 leases issued, and Sale 126 in 1991 with 28 leases issued. All of those leases have expired.

“The World Wildlife Fund is not against oil development,” Williams said. “There have to be certain places where it just isn't OK to develop. The Arctic is extremely vulnerable right now.”

She noted that the U.S. Fish and Wildlife Service last year recommended that polar bears be listed as threatened species because of the affects of climate change on the mammals.

Fish and Wildlife said Jan. 7 that the agency has postponed making a decision on the listing, with an announcement to come a few weeks after the deadline.

The department has never declared a species threatened or endangered because of climate change, and the issue complicated the decision, federal officials said.

Should they be listed, “we assume that the Chukchi Sea would have a large area of critical habitat,” Williams said. “One area is the southern Beaufort Sea, which we share with Canada; the other is the Chukchi Sea population that we share with Russia. We know very little about the Chukchi Sea population, which hasn't been studied in a decade, and the ice (there) has changed significantly.”

If the polar bears get threatened species status, the lease sale would have to go through a National Environmental Policy Act consultation process to ensure species protection.

The sale area will not include near-shore waters ranging from about 25 miles to 50 miles from the coastline, which includes the near-shore area through which bowhead and beluga whales, as well as other marine mammals and marine birds, migrate north in the spring, and in which local communities subsistence hunt.

MMS officials said leases issued would include stipulations to address environmental effects that may occur because of exploration and development of oil and gas. These stipulations call for protection of biological resources, including protected marine mammals and birds and methods to minimize interference with subsistence hunting and other subsistence harvesting activities.

Margaret Bauman can be reached at margie.bauman@alaskajournal.com.