8A
THE DAILY ASTORIAN • MONDAY, JANUARY 8, 2018
Alaska may open up again
for oil leasing, but risks linger
By DAN JOLING
Associated Press
ANCHORAGE, Alaska
— President Donald Trump’s
plan to open America’s oceans
to petroleum drilling drew
condemnation from West
Coast and Florida governors
but was welcomed in the state
where most lease sales could
be held.
Alaska Gov. Bill Walker,
an independent facing re-elec-
tion this year, embraced Inte-
rior Secretary Ryan Zinke’s
proposed 19 lease sales in
the state, including six in the
potentially oil rich but envi-
ronmentally sensitive Arctic
Ocean waters.
“The Department of Inte-
rior’s draft five-year offshore
leasing plan is an important
step toward allowing Alas-
kans to responsibly develop
our natural resources as we see
fit,” he said.
But the big question
is whether oil companies
will commit the substan-
tial resources it would take
to invest in a frontier area
where the cost of drilling is
extremely high compared to
other regions — and simul-
taneously face the wrath of
environmental groups fiercely
opposed to Arctic offshore
drilling.
Royal Dutch Shell spent
$2.1 billion on Chukchi
Sea leases in 2008, invested
another $5 billion overall in
U.S. Arctic waters, and pulled
out after drilling a dry hole in
2015. Oil companies closely
watched Shell’s experience,
said Mark Barteau, director
of the University of Michigan
Energy Institute.
“There’s lower hanging
fruit elsewhere,” Barteau said.
“It’s all about going after the
easy stuff first.”
Shell has no current plans
to pursue future offshore
Alaska exploration, said Shell
spokesman Curtis Smith in an
email. It was too early to know
how Trump’s draft five-year
plan would play into future
portfolio decisions.
“Given the desire to keep
pace with natural field decline
and the inherent uncertainty
associated with exploration,
California has ample
weapons to fight
Trump on drilling
Solid regulatory
and legal tools
By ELLEN
KNICKMEYER
Associated Press
James Brooks/Kodiak Daily Mirror
An Army CH-47 Chinook helicopter flies over the Kulluk, the Shell floating drilling barge
off Kodiak Island in Alaska’s Kiliuda Bay, as salvage teams conduct an in-depth assess-
ment of its seaworthiness in 2013.
more options are always pref-
erable when it comes to poten-
tial lease acreage — both on
and offshore,” he said.
The Beaufort Sea, off Alas-
ka’s north coast, holds an esti-
mated 8.9 billion barrels of oil,
and the Chukchi, off Alaska’s
northwest coast, holds an esti-
mated 15.4 billion barrels.
Arctic waters also provide
habitat for threatened polar
bears, walruses and bowhead
whales and are the home of
Inupiat villages. Hanging over
any Arctic water sales is the
question of whether spills —
which drilling critics say are
inevitable — can be cleaned
up in ice-choked or ice-cov-
ered water along coastline
with negligible infrastructure
compared to the Gulf of Mex-
ico and other drilling regions.
Alaska’s bitter cold, fierce
storms and darkness in winter
add to the challenge.
“With an oil spill impossi-
ble to contain or clean up in
these remote waters, today’s
decision needlessly places in
harm’s way the wildlife, cul-
tures and communities that
have long called this region
home,” said Brad Ack, the
World Wildlife Fund’s senior
vice president for oceans, said
Thursday.
Environmental
groups
delayed Shell’s exploratory
drilling with successful law-
suits challenging the fed-
eral government’s inadequate
environmental review of Arc-
tic waters preceding the 2008
sale. Two years later, after the
Deepwater Horizon spill in the
Gulf of Mexico, federal reg-
ulators negotiated strict Arc-
tic operating rules to prevent a
similar disaster off Alaska.
The requirements include
a shortened drilling season,
second drilling rigs stationed
nearby that could drill relief
wells after blowouts and an
armada of support vessels
ready to cap blowouts or clean
up spills.
The aftermath of Shell
drilling in 2012 gave critics
another Alaska drilling prob-
lem to highlight. A Shell drill-
ing barge, the Kulluk, broke
loose from its towing vessel
and ran aground near Kodiak
Island. And the company Shell
hired to drill at a second site
paid $12.2 million after plead-
ing guilty to eight maritime
pollution and safety counts.
Shell finally completed an
exploratory well in 2015 but
it was dry. Citing the disap-
pointing results, and challeng-
ing and unpredictable federal
regulatory environment, the
company abandoned drilling
in U.S. Arctic waters.
The Trump administra-
tion could loosen Arctic drill-
ing operating rules but bidders
would still face environmen-
tal opposition. Protesters in
2015 boarded a Shell drill-
ing rig as it crossed the Pacific
Ocean and hung from a bridge
in Portland to block a com-
pany vessel from leaving for
Alaska. Companies drilling
off northern Alaska could face
similar public relations issues.
“I suspect that’s one of the
things they would consider,”
Barteau said.
With Shell’s departure, for-
mer Interior Secretary Sally
Jewell suspended additional
planned Arctic lease sales and
left them out of the Obama
administration five-year drill-
ing plan, citing a lack of
interest.
Walker, overseeing an
oil-dependent state desperate
to find ways to refill the trans-
Alaska pipeline that once
transported 2.1 million barrels
daily but averaged 527,000 in
2017, took hope from Zinke’s
announcement.
Walker said he looked for-
ward to working with the fed-
eral government to unleash
Alaska’s energy potential
while taking into account envi-
ronmental and safety concerns.
SAN FRANCISCO —
In the decades since a 1969
oil spill near Santa Barbara
tarred sea-life and gave rise
to the U.S. environmental
movement, politicians and
environmental activists have
built up ample ways to make
it difficult but not impossible
for the Trump administration
to renew drilling off Califor-
nia’s coast.
The Interior Depart-
ment said Thursday it plans
to open most federal waters
off the United States to oil
leases.
In California, where no
new federal leases offshore
have been approved since
1984, Gov. Jerry Brown
joined governors of Ore-
gon and Washington state in
vowing to do “whatever it
takes” to stop that from hap-
pening off the West Coast.
State officials, environ-
mental groups and oil-in-
dustry analysts say Califor-
nia has solid regulatory and
legal means to try to make
good on that threat.
For one thing, oil com-
panies know that even if
the federal government sells
leases in federal waters, Cal-
ifornia and other coastal
states by law control the 3
miles nearest to shore, all
along the coasts.
That means California
decides on permits for any
oil pipelines that would con-
nect oil platforms to land,
along with any transport
centers, refineries or hold-
ing stations once the crude
makes it ashore.
“Operators don’t tend
to operate (off) states that
don’t want production,” said
Kevin Book, an analyst with
ClearView Energy Partners
in Washington, D.C.
There are ways around
California’s 3-mile lock
on shore — such as using
ships to transport oil from
platforms in federal waters
instead of pipelines, he said.
But considering all the
potential financial, regula-
tory and legal problems oil
companies would face in
drilling off California, oil
prices would have to go far
higher to make that enticing,
Book said.
“At today’s crude oil
prices, the way companies
look at political risk … when
you do the math on paper it
doesn’t add up,” Book said.
Two Democratic state
lawmakers, Al Muratsu-
chi of Torrance and Han-
nah-Beth Jackson of Santa
Barbara, said Friday they
would reintroduce stalled
legislation from last year
that would bar the state from
permitting pipelines or any
other support for new oil and
gas drilling in federal waters
off California.
Brown joined both U.S.
senators and other state offi-
cials last year in appeal-
ing unsuccessfully to Pres-
ident Barack Obama to ban
California offshore drill-
ing before he left office, and
polls show most Califor-
nians opposed to offshore
drilling.
Californians
vividly
remember the 1969 oil spill
and a 2015 Southern Cali-
fornia spill from a pipeline
serving a platform in fed-
eral waters that blackened
more than 100 miles of pub-
lic beaches and closed two
state parks.
“You walk on the beach
and see oil in the sand and
the water and washing up,
and there’s dead birds and
dead fish,” said Kristen His-
lop, with the Environmental
Defense Center, a Santa Bar-
bara environmental group
formed in response to the
1969 oil spill. “You very
much remember why we
fight so hard to protect our
coastline.”
In California, “we do
have plenty of opportunity to
fight these new oil develop-
ments and we will pursue all
those avenues,” said Linda
Krop, legal counsel for the
same group.
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