Ninth Circuit Remands Part of EIS for Shell’s Chukchi Lease

The United States Court of Appeals for the Ninth Circuit held that a portion of the environmental impact statements prepared prior to federal oil and gas leasing in the Chukchi Sea, off Alaska’s Arctic coast, was improperly prepared, and sent the matter back to the district court that heard the lawsuit for further action. The Federal Government had awarded these leases to Shell Gulf of Mexico Inc., ConocoPhillips Co., and Statoil USA E&P Inc., in OCS Lease Sale No. 193 on Feb. 6, 2008.

The court held that the final and supplemental EISs, prepared by what was then the US Minerals Management Service, improperly relied on an estimate of 1 billion bbl of total economically recoverable crude from beneath the Chukchi Sea, when some early estimates in 2005 of recoverable Chukchi Sea crude, when work began on the EIS, were as high as 12 billion bbl.

In a partial dissent, Judge Johnnie B. Rawlinson concurred with most of the opinion but questioned whether the agency’s decision to use the 1 billion bbl estimate was arbitrary. Selection of that amount was the product of agency expertise based on indications that substantial development obstacles made it unlikely future Chukchi Sea production would ever reach its full economic potential, she wrote.

Click here to read the Ninth Circuit’s opinion.

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