Confusion: Interior unsure of next step for Alaska offshore leases.
Interior unsure of ruling’s effects off Alaska
Days after a Washington DC appellate court handed down a ruling vacating the current five-year plan for offshore leasing, a Department of Interior official charged with overseeing development in Alaska said he is not entirely sure what the ramifications will be for oil and gas development.
Kim Elton, director of Alaska Affairs for the Department of the Interior, said his office is still studying the ruling and could not say how it affected past and future leasing off Alaska.
In an interview with UpstreamOnline, Elton said the ruling seems to support “several different conclusions” with respect to how it affects leasing.
“We are still trying to suss out what the impact of the three-judge ruling was,” he said.
The judgement, handed down Friday, vacated the current five-year leasing plan and remanded it to Interior on the grounds that the department did not adequately prove the plan would not harm the environment.
The plan governs not just Alaska properties, but also those that have been leased in the US Gulf and those planned for leasing in the Gulf and off Virginia.
In Alaska, the decision further clouds plans by Anglo-Dutch supermajor Shell to begin exploratory drilling off the northern coast.
In 2005, Shell spent more than $44 million for 84 offshore leases in the Beaufort Sea.
The US Minerals Management Service in February 2007 approved an outer continental shelf exploration plan submitted by Shell. In it, Shell proposed drilling up to 12 exploration wells on 12 tracts over three years.
Regardless of how lawyers and judges ultimately define the scope of the ruling, Elton said it holds lessons for Interior as the agency moves forward with amendments to the current plan, as required, and a proposed new five-year plan that could open more offshore acreage to development.
Elton said it shows that the department needs to thoroughly investigate all development scenarios and not make hurried assumptions based on the work of the previous administration.
“We too often end up doing things in a rushed way without recognising the fact that the paradigm is likely to be challenged,” he said.
“And if we don’t do our upfront work we allow a group of people wearing black robes or a person wearing a black robe to set policy.”
Though industry officials and some Republicans in the US Congress have called for a quick approval of further offshore development, Elton said the latest ruling should convince people that rushing to formulate land-use policies leave them open to challenge in court.
“The lesson is clear that if you don’t inject a certain amount of pragmatism, if you don’t have a deliberate approach you open the door for somebody else,” he said. “If you work carefully beforehand you can get to a policy position that might be sustained.”