Appeals court finds US acted properly in Alaska leasing review

Appeals court finds US acted properly in Alaska leasing review

Washington (Platts)--27Jul2006

The US Department of Interior acted within the law when it issued a final
environmental impact statement in December 2003 that would open 8.8 million
acres of Alaska's National Petroleum Reserve to oil and natural gas leasing, a
federal appeals court said.

In a July 26 ruling, the US Ninth Circuit Court of Appeals upheld a
district court order rejecting a lawsuit filed by seven national and Alaskan
environmental groups, which argued, among other things, that the agency's EIS
was inadequate because it failed to include site specific analysis for
locations where drilling might occur.

Interior argued that no such analysis was possible until it is known
where the drilling is likely to take place and that can only be known after
leasing and exploration.

The court agreed, saying that in assessing the environmental impact of
the leasing program for purposes of preparing the final EIS, the department
"had no way of knowing what, if any areas subsequent exploration would find
most suitable for drilling."

The problem, the court added, is "that until the lessees do exploratory
work, the government cannot know what sites will be deemed most suitable for
exploratory drilling, much less for development. We are left with a 'chicken
or egg' conundrum in that if plaintiffs' interpretation of its requirements
were adopted, [the National Environmental Policy Act] could never be satisfied
in the circumstances of this case."

The court said, however, that because NEPA applies "at all stages of the
process," any later plan for actual exploration by lessees will be subject to
review before being accepted, rejected or modified by Interior.

"Plaintiffs will have an opportunity to comment on any later EIS," the
court said, adding that "permits from several agencies may be required and
additional permit conditions imposed for the protection of land, water and
wildlife resources."

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