OFFSHORE DRILLING:

Interior to assess effects of possible Arctic oil spill

The Interior Department will study the potential impacts of a "very large oil spill" in the Arctic Ocean as part of a court-ordered supplemental review of oil and gas leasing off Alaska's northwest coast, the agency said.

The draft supplemental review will determine the fate of 2.8 million acres of Chukchi Sea leases that sold for nearly $2.7 billion in February 2008 and will inform the agency's approach to future drilling proposals in the Arctic, the department said.

The review is part of Interior's draft supplemental environmental impact statement (SEIS) released last October and will comply with a summer 2010 ruling by a federal district court in Anchorage that Interior failed to analyze the environmental impacts of natural gas development from the lease and failed to consider missing scientific data.

Based on the supplemental review, Interior Secretary Ken Salazar will decide whether to affirm, modify or cancel the sale, the department said last October.

The draft study drew more than 150,000 comments and prompted the agency to initiate the oil spill study, federal attorneys said in a court filing last week.

"Due to the Deepwater Horizon oil spill, many commenters requested an analysis that takes into account the possibility of a blowout during exploration," attorneys said. "Current information and the possible submission of exploration plans for the Chukchi Sea in 2012 make analysis of a [very large oil spill] appropriate at this time."

The 2008 lease sale was challenged by native Alaskans and a dozen environmental groups that argued Interior violated the National Environmental Policy Act and failed to consult with federal biologists about the effects to endangered species. Two major oil companies and the state of Alaska intervened in the suit.

The oil spill review drew concern from Royal Dutch Shell PLC, a major lease holder in the Chukchi Sea that was recently forced to postpone drilling in the Beaufort Sea after its air permit from U.S. EPA was rejected by a federal appeals board (Greenwire, Feb. 3).

The Interior study could further delay company drilling plans and potentially cost thousands of jobs and energy independence from new offshore development, Curtis Smith, a company spokesman, told the Anchorage Daily News. Smith added that the extended schedule for the spill analysis goes beyond actions required by the court.

Interior's Bureau of Ocean Energy Management, Regulation and Enforcement said it plans to release a revised draft SEIS by late May and will offer 45 days for public comment. The review should be finalized by late October 2011.

Leah Donahey, western Arctic and oceans program director for the Alaska Wilderness League, a plaintiff in the case, praised the review and noted that Interior's initial environmental study lacked information in "hundreds of areas" but failed to evaluate how the missing information could affect its decision process.

"We are glad that BOEMRE is applying lessons learned from the Deepwater Horizon disaster to the Arctic Ocean, by incorporating the impacts of a very large oil spill into their new analysis," Donahey said in a statement.

The new timetable will allow the agency to incorporate findings from a U.S. Geological Survey report due out in April that will explore the scientific unknowns of Arctic offshore drilling, Donahey said.

"BOEMRE needs to obtain essential missing information and use that information to reconsider whether drilling leases should be allowed in the Chukchi Sea," she said.

Interior said it will file a progress report to U.S. District Court Judge Ralph Beistline no later than May 6.

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