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Court upholds Shell's Arctic spill response plans for offshore Alaska

Sean Doogan
The Shell drilling rig Kulluk that was used during the company's exploratory drilling during the summer of 2012. Courtesy Mark Meyer / Greenpeace

A U.S. District Court judge has upheld the government’s approval of Shell Oil’s Arctic spill response plan.  On Monday, federal judge Ralph Beistline upheld the Bureau of Safety and Environmental Enforcement’s (BSEE) approval of Shell’s plans to respond to a spill while drilling for oil and gas in the Chukchi and Beaufort Seas, off Alaska’s western and northern coasts. The case represents the first time a court has considered whether the federal agency erred in approving a spill-response plan.

The original lawsuit was filed by Shell itself.  In February 2012, Shell sued several environmental groups ahead of its planned summer drilling in the Arctic, saying it wanted to, “beat the environmental groups to court,” after years of fending off lawsuits in trying to win approval for Arctic drilling. In July of that year, 11 environmental groups sued BSEE, which is part of the Department of the Interior, claiming its approval of Shell’s oil spill response plan was done without regard to the Endangered Species Act and the National Environmental Policy Act. The court combined the lawsuits onto one case.

The decision was a setback for the environmental groups trying to stop Arctic drilling.

'No doubt of the need to reconsider'

“After Shell’s troubled 2012 season, there is no doubt of the need to reconsider whether and how oil companies can meet their obligation to operate safely and responsibly in the Arctic,” said Ocean Conservancy Arctic director, Andrew Hartsig.

On its own, the decision does not mean Alaska will see exploratory drill rigs in the Beaufort Sea or Arctic Ocean next summer. Shell scrapped plans to drill this year after facing setbacks in exploratory drilling last summer. It has not yet said if it plans to resume in 2014.

Melting sea ice has opened the Arctic to renewed interest in energy exploration -- but it hasn’t been easy for companies keen to tap into billions of barrels of oil and 30 percent of the world’s undiscovered natural gas reserves believed to lie beneath Arctic waters.

Shell didn’t finish drilling its exploratory wells in the Arctic last year, due partly to late melting sea ice and storms.

The company’s Arctic spill response plan was predicated on the claim it could clean up as much as 95 percent of any oil spilled offshore, before crude could reach land. That figure was the crux of the environmental group’s complaints about how the plan was approved.

“Never before in history has a company been able to clean up that much oil during an off-shore spill,” said Holly Harris of Earthjustice, the group that headed up the environmental organizations’ legal team.

Harris said that during the 1989 Exxon Valdez spill -– that sent as much as 11 million gallons of crude into Prince William Sound in Southcentral Alaska -- only 8 percent of the oil was recovered. Harris added that during the 2010 Deepwater Horizon spill in the Gulf of Mexico -- that leaked 210 million gallons of crude -- just 3 percent was recovered.

Shell’s Arctic spill plan relied on the 95 percent at-sea clean-up figure. Its near-shore resources were based on the amount of equipment needed to recover the remaining 5 percent that the company said could reach the coast.

'Thorough in its analysis'

In a written statement, Shell Alaska spokesperson Megan Baldino wrote, “The ruling is welcome news and validates that the Department of Interior was thorough in its analysis of Shell’s oil spill response plans for work offshore Alaska.”

Harris said she’s not yet sure if the environmental groups will appeal the decision to the Ninth Circuit Court of Appeals. Other environmental groups said their focus going forward would be on Arctic drilling regulations.

“Shell’s plans are based on unrealistic assumptions and unproven technologies. If these plans satisfy the law, then the law is broken,” said Oceana deputy vice president, Susan Murray.

Contact Sean Doogan at sean(at)alaskadispatch.com