Lawsuit over Shell's plans for exploratory drilling in Chukchi Sea off Alaska's northwest coast back in hands of federal judge after BOEMRE delivers formal response on court-ordered review of environmental work

Rachel Carter

ANCHORAGE, Alaska , October 4, 2011 (Associated Press) – A lawsuit that stands in the way of Shell Oil's plans for exploratory drilling in the Chukchi Sea off Alaska's northwest coast is back in the hands of a federal judge.

The Bureau of Ocean Energy Management on Monday delivered its formal response to a court-ordered review of environmental work preceding Chukchi Lease Sale 193. Shell Gulf of Mexico Inc. had spent $2.1 billion for the leases in 2008.

Alaska Native and environmental groups sued over the legitimacy of the sale, contending that the bureau's predecessor, the Minerals Management Service, had ignored environmental law requirements before selling petroleum rights on 2.76 million offshore acres.

The bureau in August said it had corrected environmental review flaws. The public had until Sept. 26 to comment on the agency's supplemental environmental work.

Erik Grafe, an attorney for Earthjustice, which represented the 15 plaintiffs in the case, said the agency acknowledged it was missing information on how drilling will affect whales, polar bears, walrus, fish and other Arctic marine species, yet dismissed the importance of such information.

"It basically amounts to a conclusion that nothing is essential," he said.

U.S. District Court Judge Ralph Beistline of Anchorage will review the agency's submission. If Beistline rules against the environmental groups, they can appeal, Grafe said.

Shell Alaska spokesman Curtis Smith issued a statement that said the decision clears the way for BOEM to conclude its review of his company's Chukchi exploration plan. "We believe the Chukchi Plan we submitted in May of this year is technically and scientifically sound, and we look forward to exploring this critical part of our Alaska portfolio in 2012," he said.

The judge in July 2010 had sent the sale back to BOEM, then called the Bureau of Ocean Energy, Management, Regulation and Enforcement, for further analysis. Beistline said at the time that the agency had failed to determine whether information it acknowledged was missing before the sale was relevant or essential under environmental law, or whether the cost of obtaining that information was exorbitant.

The agency had analyzed only the development of the first field of 1 billion barrels of oil. It also acknowledged that the amount was the minimum level of development that could occur on the leases.

The agency said that to comply with the latest court order, it had analyzed the potential effects of natural gas development, the relevance of the missing information, and the environmental impacts of a hypothetical large oil spill scenario.

Grafe, however, said the agency ignored conclusions reached by scientists at the U.S. Geological Survey that identified important missing information about Arctic waters. The BOEM, he said, merely lists boilerplate language with the same handful of reasons for why the missing information was not relevant.

"I think they were papering over a decision that they had already made," Grafe said. "They didn't take a serious look at what's essential."

The groups also contended there was no proven method to clean an oil spill in ice-choked waters - especially in a location as remote as the Chukchi Sea.

Grafe said the groups have until mid-November to file briefs arguing that the sale remains illegal. Briefs in response would be due Dec. 21.

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