Fuzzy Numbers Called Out in Alaskan Oil Study

(CN) - Suspect numbers fueled a study that opens Alaska's remote Chukchi Sea to future oil and gas development, the 9th Circuit ruled Wednesday.

The decision is the latest in a challenge to a 2008 lease sale that opened a large area of land in the southern Arctic Ocean between Alaska and Russia to exploration, from which the government made about $2.6 billion.

Concerned by potential threats to the sea's bowhead whales, polar bears and other endangered species, as well as the subsistence lifeways that still thrive in some native communities along the coast, the Native Village of Point Hope, the Inupiat Community of the Arctic Slope and 10 environmental groups filed a federal complaint objecting to the sale.

The plaintiffs claimed specifically that the Bureau of Ocean Energy Management (BOEM) of the Department of the Interior had left important information out of its environmental impact statement, and that the agency's estimate, for benchmark purposes, that the lease area would produce just 1 billion barrels of economically viable oil was arbitrary.

After directing the agency to gather more information, and disagreeing with the plaintiffs as to the arbitrary nature of the numbers, U.S. District Judge Ralph Beistline ruled for the government, finding the impact study sufficient, at least for the lease-sale stage of the project.

A three-judge panel of 9th Circuit reversed some of those findings Wednesday.

The panel was unanimous that the agency had provided all the information required at this stage, but split over the 1 billion barrel benchmark.

BOEM had argued that the 1 billion barrel estimate, which other agencies and the public criticized during the comment process, actually represented a realistic scenario because of the remoteness of the area and the many practical barriers to large-scale production there.

Indeed, David Shilton, who represented the Department of the Interior at oral arguments in the case last year, told the panel that the chances of actual development occurring in the sea was "less than 10 percent."

While practical, however, that approach defies the letter of the National Environmental Policy Act (NEPA), the appeals panel found.

"Having decided that oil production was reasonably foreseeable, NEPA required BOEM to base its analysis on the full range of likely production if oil production were to occur," Judge William Fletcher wrote for the panel. "It did not do so here."

Writing in partial dissent, Judge Johnnie Rawlinson reminded the other judges that they have "extremely limited" power to review an agency's analysis of its own technical data.

"It is beyond dispute that the Chukchi Sea contains oil deposits well in excess of one billion barrels," Rawlinson wrote. "But that is not the point. The point is whether the selection of one billion barrels as the benchmark was the product of agency expertise."

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