Shell’s Arctic plans hit a wall as Court slams drilling licenses

by Mark Floegel

January 23, 2014

The mobile drilling unit Kulluk is towed by the tugs Aiviq and Nanuq in 29 mph winds and 20-foot seas 116 miles southwest of Kodiak City, Alaska, Sunday, Dec. 30, 2012. Response crews fight severe weather in the Gulf of Alaska while working with the Kulluk.

© The United States Coast Guard

In May 2010, as oil from BPs failed Macondo well gushed unabated into the Gulf of Mexico, President Obama promised the American people his administration would do better.

“There’s enough responsibility to go around,” President Obama said. “That includes, by the way, the federal government.”

“For too long, for a decade or more, there’s been a cozy relationship between the oil companies and the federal agency that permits them to drill. It seems as if permits were too often issued based on little more than assurances of safety from the oil companies.

“That cannot and will not happen anymore. To borrow an old phrase, we will trust, but we will verify,” hesaid.

Now we learn that over a year after that speech, the federal agency that permits oil companies to drill in this case in the fragile Arctic environment is still doing an inadequate job.

On Wednesday a three-judge panel of the Ninth Circuit Court of Appeals ruled that the Bureau of Ocean Energy Management (BOEM) merely guessed in July 2011 when it stated there were one billion barrels of recoverable oil under the Chukchi Sea north of Alaska in the Environmental Impact Statement (EIS) that allowed the sale of undersea resources to go forward.

The judges noted that colleagues both within and outside of BOEM criticized the number BOEM used. The Environmental Protection Agency said the figure lacked adequate support and the Fish and Wildlife Service called BOEMs analysis flawed.

Despite these clear warnings and in the face of the Presidents promise after the BP disaster that his administration would do better, the employees at BOEM clearly continue to cut corners, seemingly in an attempt to speed oil production in a precious environment that if despoiled will never recover.

Meanwhile, Shell hovers nearby, desperate to put the humiliations of its failed 2012 Arctic attempt behind it and equally desperate to get any return on the more than $5 billion dollar investment it has poured into this doomed adventure thus far, especially in the wake of last weeks dire profit warnings.

The very lease at the centre of the case is the same one that Shell notoriously failed to drill last year, and the same one it is chomping at the bit to get at again this summer.

There can be no doubt that Shell was woefully underprepared and either naive about Arctic conditions or just plain negligent last year. To find now, as the Court of Appeals has done, that the license itself was based on information so flawed that the Courts opinion called it “arbitrary and capricious must call into question (again) the entire process surrounding the awarding of the licences. The fact that one of the BOEM analysts involved admitted in an email that he called up the numbers “off the top of (his) head”, only confirms Greenpeaces strong conviction that the Arctic is being put at dire risk and that clearly nothing has been learned since the dark days of the Deepwater Horizon disaster and the Presidents hollow words that followed.

It would be comforting to write this debacle off as a legacy from the Bush eras anti-environment stance and the often disastrous kow-towing to big corporates. Unfortunately, it was this government that charged forward with this deeply flawed (this is, in fact, the second time the Environmental Impact Statement has had to be redone) license in 2011. President Obama said combating climate change will be a primary focus of his second term and central to his legacy as a leader.

He must do better. We, as a nation, cannot afford the governments continued slipshod ways.

Mark Floegel

By Mark Floegel

Mark Floegel is the research director with Greenpeace USA. He has been working on public advocacy issues since 1987. Particular areas of issue expertise include: the effects of chlorinated chemicals on human health and the environment pertaining to pulp and paper mills; toxic waste incinerators; sustainable fisheries and forestry; renewable energy; acid rain, and sustainable agriculture.

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