Ninth Circuit Stalls Alaska Offshore Drilling Project

This January 2013 photo shows a floating drill rig in Alaska’s Kiliuda Bay. (James Brooks/Kodiak Daily Mirror via AP, File)

(CN) — A Ninth Circuit panel on Monday halted a project to build a nine-acre gravel island in the Alaskan Arctic’s only kelp forest, finding that multiple government agencies greenlighted the proposal without properly considering the consequences.

The federal appeals court panel rejected an argument often relied on by proponents of oil and gas pipelines: that fossil fuel extraction in the United States is good for the environment, because it replaces oil and gas projects in countries with weaker environmental laws.

The government should have calculated emissions from overseas use of oil drilled off the coast of Alaska and didn’t bother to estimate the number of polar bears expected to be harmed by the project before granting permits, according to the ruling from U.S. Circuit Judges Richard Paez and Johnnie Rawlinson, both Clinton appointees, and U.S. District Judge Leslie Kobayashi, an Obama appointee sitting by designation from the District of Hawaii.

Hilcorp Alaska wants to build its oil extraction island in an area of Foggy Island Bay called “the boulder patch,” which has shallow, cobble-strewn waters home to a diverse wealth of creatures, including threatened and endangered polar bears, whales, seals, walruses and sea otters, as well as numerous species of fish and seabirds.

In October 2018, the Bureau of Ocean Management used Fish & Wildlife’s findings to approve the project. 

But the U.S. Fish & Wildlife Service signed off on the project without considering its effects on polar bears and used mitigation measures that weren’t guaranteed to happen to determine that the project would have “no adverse effect” on marine mammals, the judges found.

The agency will now have to reconsider the project in light of the ruling.

As the Bureau of Ocean Energy Management explained in court documents and at hearings, it analyzed the pollution that would issue from the construction and operation of the Liberty drilling project. But it didn’t estimate the greenhouse gas emissions that would result from the burning of that oil to heat homes and fuel cars — most of which would happen in other countries. 

Not only did the agency decline to calculate such emissions, it didn’t explain why it skipped that step, beyond a reference in an appendix to its 600-page environmental impact statement where it said the project would have “only a negligible impact on foreign consumption and emissions levels.”

Environmental groups led by the Center for Biological Diversity sued in December 2018, claiming the approval was misleading without those numbers.

The judges agreed, noting in a ruling written by Judge Paez that emissions from foreign oil consumption are “reasonably foreseeable.” Although such estimates are readily available, Paez wrote, the agency has repeatedly declined to take them into account.

In one study, the Stockholm Environment Institute used numbers from the agency’s own reports to show that the Keystone XL Pipeline would increase foreign oil consumption 10 times as much as the agency had estimated the project would increase oil consumption within theU.S. Another study published in the journal Nature showed that taking foreign oil consumption into account meant that the Keystone Pipeline would increase greenhouse gas emissions by four times the amount government agencies were estimating using domestic emissions alone.

“BOEM did not summarize existing research addressing foreign oil emissions nor attempt to estimate the magnitude of such emissions,” Paez wrote. “It cannot ignore basic economics principles and state — without citations or discussion — that the impact of the Liberty project on foreign oil consumption will be negligible.”

After all that, Paez said it was “somewhat perplexing” for the government to claim that drilling in the Arctic would result in less greenhouse gas emissions than foregoing the project altogether. The argument was based on a claim common to proponents of petroleum projects: that oil and gas projects conducted in the U.S. actually reduce emissions by replacing oil and gas projects in countries with weaker environmental protections.

It was an argument advanced by Justice Department attorney James Maysonett at a November 2019 hearing at the Pioneer Courthouse in Portland, Oregon.

“It may be counterintuitive, but that doesn’t mean it’s irrational to say that if we don’t develop oil and gas resources in this country and we choose instead to rely on foreign and imported oil, we can stick our head in the sand and say that has no environmental effects,” Maysonett told the judges.

Paez rejected that reasoning.

“It is unclear from the administrative record what justifies these assumptions and not those needed to estimate foreign oil consumption,” Paez wrote.

The environmental groups behind the lawsuit celebrated their win on Monday.

“This is a huge victory for polar bears and our climate,” said Kristen Monsell, oceans legal director at the Center for Biological Diversity. “This project was a disaster waiting to happen that should never have been approved. I’m thrilled the court saw through the Trump administration’s attempt to push this project through without carefully studying its risks.”

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