Obama Arctic leasing plan gets mixed review

By DAN JOLING

ANCHORAGE, Alaska

Alaska officials who want more petroleum drilling called President Barack Obama's new Arctic Ocean lease sale plan a delaying tactic that will slow oil extraction indefinitely.

Environmental groups Wednesday gave the plan a mixed review, praising a delay for more study but wondering how the administration could sign off on immediate drilling where leases already have been sold.

Obama and Interior Secretary Ken Salazar announced Wednesday that lease sales planned in the Chukchi and Beaufort seas over the next two years will be canceled and no additional leases will be offered until additional scientific data is collected to consider the effects of industrialization.

They did, however, withdraw leases from previous sales.

Shell Oil, which paid $2.1 billion for Chukchi leases in 2008, is an immediate beneficiary of that decision. Shell awaits air permits from the Environmental Protection Agency but hopes to drill three exploratory wells this summer.

U.S. Rep. Don Young called Obama's announcement a "smoke and mirrors plan," subjecting Arctic waters to unnecessary study.

"This plan closes more than it opens, and is a complete farce," the 19-term Republican representative said. "There is no question that this 'Obama Moratorium' will have dire impacts on the economic future of our country."

Pacific Environment spokeswoman Carole Holley said postponing additional Arctic leases was prudent, but allowing high-risk drilling to continue in the Chukchi was "an affront to ecological common sense in a rapidly melting Arctic and an insult to the traditional subsistence communities of Alaska."

Any drilling in the Chukchi and Beaufort seas will continue to face judicial scrutiny. Environmental groups have targeted drilling at all regulatory levels, claiming basic information, from wildlife habits to basic navigation date, is lacking.

The stakes are high in Alaska, where state government takes in about 90 percent of its general fund revenue from the petroleum industry but falling production fills only about one-third of the trans-Alaska pipeline.

Alaska's northern outer continental shelf holds an estimated 25 billion barrels of oil and 120 trillion cubic feet of natural gas, said Gov. Sean Parnell. He called future leasing uncertain under Obama's plan.

"By not maintaining a predictable lease program in the Alaska OCS, 35,000 job opportunities are still unavailable to Alaskans, the cost of energy will go up, and the U.S. will continue to depend on imported oil," he said.

Alaska elected officials would like to refill the pipeline and find additional natural gas to support a proposed multibillion-dollar natural gas pipeline to Lower 48 states.

Alaska's oceans, meanwhile have been hammered by global warming. The summer sea ice minimum has diminished by nearly 40 percent below average since satellite monitoring began in 1979. Low sea ice and projection of less in the future led the Interior Department to put polar bears on the threatened species list. Late last summer, walruses gathered on Alaska's northwest shore in unprecedented numbers as sea ice receded far beyond shallow outer continental shelf waters where they could dive for clams and other prey.

Environmental and some Alaska Native groups say industrial activity associated with the petroleum industry -- loud air guns used in seismic surveys, ship traffic and spills -- will only exacerbate human damage to wildlife.

A lawsuit filed by three environmental groups and an Alaska Eskimo village was a driver for Obama's revised drilling policy.

A federal appeals court ruled one year ago that the Bush-era Interior Department did not properly study the environmental impact of expanding oil and gas drilling off the Alaska coast.

In his revised environmental sensitivity analysis, Salazar said the Bush administration relied on only two studies. The expanded analysis, he said, used nearly 50.

Salazar said he retained the 2008 Chukchi lease sale because information from its scientific studies -- including the crucial question of whether an oil spill can be cleaned up in broken ice -- will help him determine whether additional lease sales are needed in the 2012-2017 program.

He halted remaining sales in the Chukchi and Beaufort, he said, because the estimated benefit is outweighed by potential environmental damage.

South of the Bering Strait, Salazar said a planned 2011 lease sale in Bristol Bay would be canceled indefinitely. He noted a lack of infrastructure and the bay's valuable natural resources. They include the world's largest sockeye salmon fishery. Fishermen and environmental groups hailed the decision.

"The benefits of extracting a small, finite amount of oil and gas resources at the heart of our most valuable, renewable fisheries resources simply don't outweigh the tremendous risks," said Kelly Harrell, director of the Alaska Marine Conservation Council.

Salazar's revised lease sale program still faces a 30-day public comment period. A final program also must pass the scrutiny of the appeals court.