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A CI lease suspension
District Court Judge rules that federal lease sale EIS needs to be reworked
Alan Bailey for Petroleum News
In a July 16 court order Judge Sharon Gleason of the federal District Court in Alaska ordered the Bureau of Ocean Energy Management to rework the environmental impact statement for BOEM's December 2022 lease sale for federal waters of the lower Cook Inlet. A group of environmental organizations had challenged the legality of the sale, on the grounds of alleged deficiencies in the sale's EIS. Gleason has found in favor of the plaintiffs, but has said that, to comply with the federal Inflation Reduction Act that mandated the sale, the sale needs to be suspended pending corrections to the EIS, rather than be cancelled.
Hilcorp Alaska, the only bidder in the lease sale, bought a single lease. Gleason ordered that Hilcorp's lease also be suspended until a new, approved EIS is issued.
The judge said that the court is retaining jurisdiction over the situation during the development of a supplemental EIS for the lease sale and requires status reports at six-month intervals on what is being done.
An inadequate range of alternatives Gleason agreed with the plaintiffs' argument that the EIS had not considered an adequate range of alternatives for the lease sale. In particular BOEM had not included for consideration any options that could reduce environmental impacts by significantly reducing the number of lease blocks available in the sale, Gleason wrote.
The judge also agreed that BOEM had failed to take the requisite hard look at the impact of vessel noise on Cook Inlet beluga whales -- the Cook Inlet beluga whales are listed as endangered under the Endangered Species Act. Several documents in the record for the case indicate that a number of noise creating activities associated with vessels operating in the Cook Inlet can significantly impact the whales, Gleason wrote.
Another issue revolved around the cumulative impact of lease related activities on the whales, when impacts of those activities are added to the impacts of other things happening around the Cook Inlet. Gleason agreed with the plaintiffs that that the EIS should have included a cumulative impact analysis specific to impacts on beluga whales as distinct from other marine mammals.
Impacts from water pollution unlikely However, Gleason ruled against another of the plaintiffs' arguments, an argument that BOEM should have considered the impacts of sewage discharges and other runoffs into the Cook Inlet as part of the assessment of the cumulative impacts of lease related activities. Studies have not established that water pollution poses a notable risk to Cook Inlet beluga whales. Nor have the studies undermined BOEM's assertion that Cook Inlet water quality is suitable for marine life, Gleason wrote.
The plaintiffs had also asserted that BOEM had failed to adequately consider the potential impacts of a large oil spill on beluga whales. However, Gleason found that the agency had appropriately considered the potential impacts of a large spill and had concluded that a spill was unlikely to have population-level impacts on the whales, in particular because the whales spend most of their time outside the lease sale area.
Hilcorp's interest in lower Cook Inlet exploration For a number of years Hilcorp has shown interest in exploration drilling in the federal waters of the lower Cook Inlet. In a 2017 lease sale the company acquired 14 leases in the inlet, southwest of Kachemak Bay. The company subsequently conducted offshore 3D seismic surveying during the summer of 2019 -- the company appeared interested in an oil prospect penetrated by ARCO's Raven No. 1 well in 1982. The prospect, about halfway across the inlet, due west of the town of Homer, contains a known oil resource in a Cretaceous reservoir. Apparently the new seismic survey revealed a 65,000-acre, four-way closure with the oil discovery at the top.
In 2021 Hilcorp conducted a geohazard survey in its lower Cook Inlet leases, presumably in anticipation of drilling in the leases. But there have been no further reports of activity in the leases since then. The company had previously indicated an interest in bringing a jack-up rig to the inlet for drilling in the lower Cook Inlet -- the jack-up rig that the company recently acquired for drilling in the upper Cook Inlet is apparently limited to shallower water than is found in the area of the lower Cook Inlet prospect.
According to BOEM data, the lease block that Hilcorp purchased in the 2022 lease sale is not immediately adjacent to the lease blocks that the company purchased in the 2017 lease sale.
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