Op-Ed: Open the Outer Continental Shelf to energy exploration
Since 2005, Shell Oil has spent hundreds of millions of dollars to buy leases in hopes of being able to explore for oil off the coast of northern Alaska. Based on past drilling, the area has proven oil deposits and seemed to be a sure bet for increasing domestic oil supply.
But so far Shell has not been allowed to look for oil, much less extract a single barrel of it. Why? Because we have created a regulatory and permitting process covering offshore energy development for most of the nation that guarantees delay, and a legal system that has no sense of urgency in making a decision—any decision.
Two years ago environmentalists teamed up with Alaska Natives who depend on subsistence whaling for their livelihoods and culture. They sued to stop exploratory drilling off northern Alaska claiming that it could disturb the whales and interfere with traditional bowhead whale hunts. While Shell has worked earnestly with whalers to meet their concerns, there doesn’t seem to be any sense of urgency among federal regulators and 9th U.S. Circuit Court of Appeals.
As one who insists that threats to traditional whaling, which is the backbone for Alaska’s northern Native lifestyle, must be fully addressed, I still find it disappointing that we have created a system that is paralyzed from making timely decisions on whether development can or can’t occur. I believe that given the more than three decades of experience we have in Arctic energy development and the new technoIogy that we now have, environmentally sensitive development can occur in harmony with traditional lifestyles. But we’ll never find out if the courts can’t make a decision.
Since at least the 1980s, we’ve known that the both the Beaufort and Chukchi Seas off the state’s North Slope hold considerable oil. It was therefore encouraging when Shell decided to spend the money necessary to extract oil in an area called Sivulliq 16 miles off Alaska’s coast.
The company followed the right procedures by securing federal leases for the area (at a cost of $83 million) and won approval from the federal Minerals Management Service in February 2007. It also committed to spending $200 million to rent two ships and build others capable of hauling drilling equipment and containing oil-containment boom as well, just in case it was needed. Shell also built a small fleet ships able to break up or drive away ice-sheets that could pose a threat to floating well platforms.
But here is where the official process began to break down. Other federal agencies—including the Environmental Protection Agency (EPA)—had trouble issuing the endless stream of required environmental permits in time for drilling to start in August 2007. Outside of the Gulf of Mexico, federal agencies from EPA to the National Marine Fisheries Service do not seem to have enough staff to regulate or issue permits for OCS development in a timely manner.
In the midst of the permitting process, Shell was hit with a lawsuit filed by the North Slope Borough, Alaska Eskimo Whaling Commission, and the environmental groups: Resisting Environmental Destruction on Indigenous Lands, the Center for Biological Diversity, Pacific Environment and the Alaska Wilderness League. North Slope residents, who engage in subsistence whale hunting, worried that all the activity in the Beaufort might scare the bowhead whales into deeper waters, making hunting more dangerous. They and environmental groups sued for an injunction to block the drilling. The 9th U.S. Circuit Court of Appeals issued a temporary injunction July 19, 2007, and held a hearing the next month to decide if Shell could proceed later in September, after the whale hunt was over. Fifteen months later, after a second potential drilling season has come and gone, the court still has not ruled.
If Americans didn’t need the energy so badly, if Alaska villagers (who are paying up to $11 a gallon for heating oil for this winter) didn’t need the fuel so badly, and if the U.S. government hadn’t already pocketed the lease money, then Shell’s woes would simply be a sorry tale that at worst could drive oil explorers into the arms of overseas dictators and cost American jobs, while making America more dependent on costly foreign energy sources.
But the U.S. Geological Survey this summer completed its first real assessment of the Arctic’s potential and found that the Alaskan Arctic likely contains 30 billion to 50 billion barrels of recoverable oil and 221 trillion cubic feet of natural gas—the majority of it offshore. Thus while the Arctic likely holds 13% of the world’s yet-to-be-discovered oil, we are making it more difficult to benefit from our nation’s energy bounty. How do we rectify the situation?
First, we need to conduct a modern assessment of how much oil and gas we actually have, something Congress has approved but not authorized the funds to do. The Interstate Oil and Gas Compact Commission estimates we have 30 billion barrels of oil and 134 trillion cubic feet of natural gas locked up in areas that have been legally off limits for years. Those prohibitions lapsed at the beginning of this month, so now we need to know what we have and start the process of tapping into it.
We also need to create consolidated offshore environmental permitting offices for the entire country, not just the Gulf of Mexico. This will allow us to gather marine biologists and regulators under one roof and put an end to the time-consuming insanity of the current permit process. And we must ensure that the judiciary isn’t killing energy production by allowing drilling to be held in court limbo for years.
We should share OCS tax revenues with states and local jurisdictions to offset their infrastructure costs. That will increase the willingness of local residents to accept the ever decreasing risks of offshore development without resort to fight them in court.
And finally, we ought to join the world and approve the Law of the Sea Treaty so America can defend its claim to all of the energy under our continental shelf.
With the nation’s environmental community shifting into overdrive filing suits on everything from how oil and gas exploration will affect polar bears and seals to how carbon emissions affect the air and climate change, we must responsibly streamline the process to tap the OCS while fully protecting the environment. Americans forget we are the world’s third largest oil producer. It’s not like we don’t have the resources to tide us over until the new age of alternative fuels arrives. We just have been misled into thinking we can’t do it safely.
Ms. Murkowski, a Republican, is a U.S. senator from Alaska and member of the Senate Energy and Natural Resources Committee.