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Shell Averts Challenge to Arctic Drilling Plans

     (CN) – Shell’s oil-response plans for spills off the coast of Alaska received proper federal approval, the divided Ninth Circuit ruled Thursday.
     The challenge by environmentalists at issue here represents just one of the hurdles confronting Shell in its years-long effort to develop offshore oil and gas resources in the remote Beaufort and Chukchi seas on Alaska’s Arctic coast, Judge Jacqueline Nguyen wrote for the court.
     Multiple lawsuits and the wreck of one of its drill rigs also “waylaid” Shell’s exploration efforts, as did the 2010 moratorium on Arctic drilling put in place after the Deepwater Horizon spill, according to Nguyen’s 31-page majority opinion.
     For Nguyen and the colleague who joined in her opinion, however, the Alaska Wilderness League, Greenpeace, the Sierra Club and seven other environmental organizations cannot hold up Shell further by challenging the approval of its oil-response plans by the Bureau of Safety and Environmental Enforcement.
     Affirming the grant of summary judgment by a federal judge in Anchorage, Nguyen saw nothing arbitrary or capricious in the bureau’s approval.
     The environmentalists had contended that Shell was unrealistic in claiming that it would achieve a mechanical recovery of 90 percent to 95 percent of any oil spilled in the Arctic, but Nguyen noted Thursday that this argument misunderstands the record, “which shows that Shell never assumed” such a recovery rate.
     And even assuming that it did, BSEE did not rely on any such assumption in approving Shell’s OSRPs,” Nguyen wrote, abbreviating the name of the bureau and the response plan.
     Since its plan approval was a nondiscretionary action, moreover, the bureau faced no obligation to conduct a consultation under the Endangered Species Act, according to the ruling.
     Since the Clean Water Act is ambiguous on what kind of action plan approvals represent, Nguyen said the court “must defer to the agency’s interpretation of the statute unless it is unreasonable.”
     “It is not our role to displace the agency’s reasonable construction of a statute that it is responsible for administering,” she said.
     As for the claims under the National Environmental Policy Act, Nguyen said the bureau faced no obligation to prepare an environmental impact statement.
     NEPA is subject to a “rule of reason” that frees agencies from preparing a full such statement, and the bureau thus reasonably concluded that it must approve any response plan that meets statutory requirements, the ruling states.
     Judge Dorothy Nelson dissented based on her finding that the bureau engaged in agency action that triggered the requirement for a consultation under the Endangered Species Act.
     “In my view, the bureau’s decision to approve or reject an oil spill response plan is precisely the kind of discretionary act that triggers ESA consultation,” Nelson said.
     “The implementing regulations bolster my view, as they make clear that the bureau can exercise its discretion to benefit a protected species.”
     Neither the Oil Pollution Act nor its implementing regulations sets forth a “rigid, mechanical set of requirements that specify when the bureau must approve an oil response plan,” she added.
     “There is no checklist to be ticked off; approval is not rote,” she said. “Rather, the Bureau must consider a wide range of environmental, ecological and other factors in deciding whether an oil response plan meets the ‘maximum extent practicable’ standard.”
     The bureau was also not exempt from NEPA review because it did in fact possess the kind of discretion that required such review, Nelson said.
     “Certainly, an agency may rely on prior analysis to discharge its duties pursuant to NEPA,” the dissent states. “But an agency cannot discharge its duties pursuant to NEPA solely by relying on prior analyses if those analyses do not fulfill NEPA’s purpose of ensuring ‘that the agency has taken a hard look at the environmental effects of the proposed action.’
     “The prior analyses do provide some consideration of oil spill response techniques, but they have nothing to say about alternatives to Shell’s proposed plans.”
     Neither side could be reached for comment on Thursday.

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