The development of Alaska offshore oil resources is the center of legal disputes involving exploration permits issued by the Department of the Interior. Environmental groups have filed multiple lawsuits to impair the permitting process, and this one alleged violations of the National Environmental Policy Act (NEPA) and the Outer Continental Shelf Lands Act (OCSLA). At issue was a revised exploration plan prepared by Shell following an extensive environmental assessment and approved by the Department. The Government’s latest estimates show that the Beaufort Sea contains a staggering 6.3 billion barrels of undiscovered oil that is economically recoverable at roughly current market prices, and a recent economic analysis estimates that the development of these resources, including the Chukchi Sea, will create an annual average of over 54,000 new jobs over the next 45 years, generating $145 billion in employee payroll.
The NAM and other business groups filed an amicus brief Feb. 3, 2012, arguing that the OCSLA was adopted with the specific goal of encouraging the expeditious exploration and production of the Outer Continental Shelf. Thousands of exploration plans have already been approved under quick timetables, including 31 exploratory wells in the Beaufort Sea. The Department should be able to use its scientific and technical expertise to approve the exploration plans without undue court interference.
The first lawsuit was filed challenging an offshore exploration plan in the Beaufort sea, and a second was filed challenging a similar plan in the Chukchi Sea. These cases were consolidated in March, and on April 3, the NAM and other business groups filed a supplemental amicus brief raising the same concerns we had expressed before.
On May 25, the Ninth Circuit rejected the environmental challenges to the exploratory permits. It found that one part of the challenge was made moot by a subsequent filing of documentation, and that the agency was not arbitrary and capricious in issuing the company's plan with the documentation provided. Also, an agency can approve applications that have inconsistent statements, because the statements were not made by the agency and the statements reflected changing circumstances. Other evidence in the record need not be fully reconciled by the agency as long as the agency's conclusion is supported by substantial evidence on the record considered as a whole. The agency complied with the law's requirements to ensure that the exploration plan would not probably cause serious harm or damage to life, property or the environment, and its decision is entitle to deference when supported by the record.