ARCTIC:

Interior's new air-permitting role expected to speed drilling

Alaska lawmakers say they don't want to eliminate environmental protections for oil and gas exploration off their northern shores; they just want a pro-drilling cop on the beat.

After waiting more than five years for U.S. EPA to issue valid air permits for Royal Dutch Shell PLC to explore for oil in the Arctic Ocean, Sen. Lisa Murkowski (R-Alaska) inserted language in this year's omnibus appropriations bill that would hand the job over to the Interior Department, which has policed air quality in the Gulf of Mexico for decades.

The move -- one of the few significant policy riders to survive this year's appropriations cycle -- emboldened energy proponents who support an increase in domestic production, but was blasted by environmentalists as an underhanded ploy to lift protections and fast-track risky Arctic drilling.

Murkowski said the move is a procedural fix intended to give Shell and other companies a predictable process for developing leases in the Chukchi and Beaufort seas, which are believed to contain 27 billion barrels of oil.

Shell's 2011 drilling plans were thwarted when EPA's Environmental Appeals Board sided with environmentalists and some Alaska Natives, faulting the agency's analysis of the impacts of nitrogen dioxide emissions from drill ships on the Alaska Native communities (Greenwire, Feb. 3).

"No matter what anyone's opinion is about offshore oil and gas development, in the Arctic or elsewhere, it is indefensible for a permit application to take six years when the EPA administrator has testified, as she did in my Appropriations subcommittee, that there is no anticipated human health risk at issue," Murkowski told the House Energy and Commerce Committee at a hearing earlier this year on a bill that would limit the appeals board's role.

Murkowski last week said transferring air quality oversight would fix a broken permitting system without compromising environmental protections, since Interior has more than 40 years of experience handling compliance in the Gulf.

"It gives Alaska parity with the Gulf, as well as remove a process that is clearly broken," said Murkowski spokesman Robert Dillon, who emphasized that the move does not hinder a group's ability to sue.

But environmentalists warned that Interior's air quality standards in the Gulf are much weaker than EPA's.

For one, Interior measures how offshore emissions from drill ships and support vessels affect air quality onshore, while EPA measures them from as close as the ship's rail.

"The rules that they use [in the Gulf] are very weak compared to the EPA," said Peter Van Tuyn, an Anchorage-based attorney who represents conservation groups. "EPA has a system in place that's stringently designed to meet air quality standards. They've got requirements that air quality not be deteriorated in a significant way, as we've seen in the past."

Environmentalists also worry that it will be more difficult to monitor air quality oversight at Interior, which bundles its reviews into much larger exploration plans. Under federal law, challenges to exploration plans must go straight to a federal appeals court, bypassing administrative challenges or district court proceedings.

Dillon said the accelerated process is crucial for companies that risk losing millions of dollars each time a permit is remanded or delayed by a court case, a strategy he said obstructionist groups have used to perfection in the Arctic.

"We want strong federal oversight, but we're saying the Interior has a much stronger track record, a proven track record, of being able to handle these kinds of projects appropriately; protect the health, protect the environment, but also allow economic activity to go forward," he said.

'Streamlining' or 'rubber-stamping'?

It's unclear how Interior would implement an air quality regime in the Arctic.

An agency spokesperson declined to comment on the new oversight, which has technically not been signed into law. But he pointed to the agency's regulations in the Gulf and a notice to lessees that described how companies must comply with the rules.

A review of a recent Shell exploration plan in the Gulf -- Interior's first since the Deepwater Horizon disaster in April 2010 -- shows air quality issues are mentioned on 14 out of more than 180 pages.

A former Interior official under the George W. Bush administration said he had never been formally briefed on air quality issues during his tenure. And none of several sources familiar with Interior's oversight in the Gulf could think of a case where air quality has derailed an oil and gas exploration plan.

"What Senator Murkowski dubs 'streamlining' is no less than an attempt to eliminate EPA oversight of air permitting and put it in the hands of the Interior Department, which is known for rubber-stamping dangerous drilling projects," said Rebecca Noblin, the nonprofit Center for Biological Diversity's Alaska director.

Murkowski's language would task the comptroller to conduct a study comparing air quality oversight between EPA and Interior, taking into account the number of permits, average wait time and the experiences of applicants. The study is due by fall 2014.

"They should know these things before they write the air experts out of the equation," Van Tuyn said. "By including that language, I think the rider is the best evidence of how this was simply a crass political decision with a lame effort to at least keep track of the cat that got out of the bag."

Both proponents and critics of the air quality switch noted that the language could have significant long-term impacts on Arctic offshore development.

While most policy riders in appropriations bills expire at the end of the fiscal year, Murkowski's move would give Interior permanent oversight in the Arctic, an oil-rich region where oil and gas firms have invested billions of dollars.

In contrast with EPA, whose mission is narrowly defined to protect public health and the environment, Interior is tasked with both safeguarding the environment while allowing responsible development.

"The Interior Department's mission, their statutory mission, is the responsible development of America's resources for the benefit of the country," Dillon said. "That is not the EPA's mission."

Van Tuyn agreed, but in more pessimistic terms.

"Interior is very close to this industry," he said. "They are charged with getting the oil out of the ground."

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