Alaska Drilling Project Squashed By Court Decision Was Touted By Oil-Friendly Former Trump Official

picture-6706-1473698561.jpg
on

This week, a federal court overturned the Trump administrationโ€™s approval for what would have been Alaskaโ€™s first drilling project in federal waters, citing faulty analyses of how the Arctic oil and gas facility would affect the climate and polarย bears.

The Department of Interior approved Hilcorpโ€™s Liberty project in October 2018. However, months before the agency completed the projectโ€™s environmental review and issued its decision, a high-ranking Trump Interior official said he expected it would be approved and went on to praise and defend the company, despite Hilcorpโ€™s checkered environmental and safety record inย Alaska.

The officialโ€™s comments, alongside the courtโ€™s ruling, cast doubt on the integrity of the Trump administrationโ€™s approval process for oil and gas development inย Alaska.

Hilcorp Alaska LLCโ€™s Liberty project was slated for the shallow federal waters of the Beaufort Sea, off of Alaskaโ€™s North Slope. In 2014, the Houston, Texasโ€“based company proposed building first an artificial island using gravel mined onshore and dumped into roughly 20 feet of water, and then constructing a drilling platform on the nine-acre island with a sprawling 24-acre totalย footprint.

This island oil production site would be connected to shore via a five-mile-long underwater pipeline. The drilling and processing facility, which would produce an estimated 65,000 barrels of oil a day, would be located five miles offshore, roughly in between the oil producing area at Prudhoe Bay and the coast of the Arctic National Wildlife Refuge (ANWR).

This crude oil site also would overlap with a highly productive and biodiverse portion of rare high-arctic kelp forest known as the Boulder Patch and is home to a number of threatened and endangered marine mammals, including polar bears, whales, andย walruses.

Earthjustice attorney Jeremy Lieb, who is representing multiple conservation groups in the lawsuit against the Trump administration, celebrated the courtโ€™sย decision.

โ€œIt’s really unacceptable to be developing new oil offshore in the Arctic right now. It’s not consistent with what science tells us about the need to reduce carbon emissions quickly and to protect sensitive places like the Arctic,โ€ he told DeSmog. โ€œThis is an irresponsible project that’s going to have unacceptable impacts and the federal government shouldn’t have been considering [it] in the firstย place.โ€

โ€˜Supportive of That Kind ofย Industryโ€™

On April 20, 2018, while the Interiorโ€™s Bureau of Ocean Energy Management (BOEM) was incorporating feedback from the public and finalizing the environmental impact statement for the Liberty project, Interior official Joe Balash gave a brief update at an Arctic-focused symposium in Seattle,ย Washington.

During his update he acknowledged that the symposiumโ€™s date coincided with the anniversary of BPโ€™s Deepwater Horizon oil spill in 2010, before lamenting that that disaster, which released 3.2 million barrels of oil into the Gulf of Mexico over nearly three months, had the effect of stifling offshore oil development in his home state ofย Alaska.

Balash, who was appointed in 2017 as the Interiorโ€™s Assistant Secretary for Land and Minerals Management, went on to preview the coming decision for Hilcorpโ€™s Liberty project, saying he expected a final decision later that year. โ€œGiven where oil priorities are today, Iโ€™m assuming that would be an affirmative decision,โ€ he said, โ€œthat would be supportive of that kind ofย activity.โ€

When questioned about this comment, Balash emphasized that the decision had not yet been made on the projectโ€™s fate but that the agency would follow the law. โ€œUltimately, the decision on whether to go forward with the decision is going to be based on the law and regulations, not our feelings toward the applicant,โ€ Balash said. He went on to defend Hilcorpโ€™s record in Alaska, particularly surrounding a 2017 underwater methane gas leak from a Hilcorp pipeline in Cook Inlet that took almost four months to stop. Methane is a powerful globe-warmingย pollutant.

Hilcorp, during its short time operating in Alaska since 2012, has quickly amassed a list of spills and violations. By 2015, the company had raised the ire of state regulators. โ€œThe disregard for regulatory compliance is endemic to Hilcorp’s approach to its Alaska operations and virtually assured the occurrence of this violation,โ€ the Alaska Oil and Gas Conservation Commissionย wrote to Hilcorp in November 2015, as first reported by Inside Climate News. โ€œHilcorp’s conductย isย inexcusable.โ€

Less than three years later, at the Arctic symposium in 2018, Balash boasted about his role in bringing Hilcorp to Alaska when he was working as commissioner for the Alaska Department of Natural Resources (DNR). โ€œIโ€™m familiar with Hilcorp,โ€ he said. โ€œAs DNR commissioner, I helped bring them toย Alaska.โ€

In Balashโ€™s job with the Department of Interior, he was responsible for overseeing policy development and implementation for BOEM, among other bureaus. That sometimes meant being โ€œpersonally responsible,โ€ as he told the Alaska Oil and Gas Association in May 2018, for rolling out new oil and gas leasing programs and even ushering select environmental impact statements across the finishย line.

He described his work in Alaska as being hands-on in a way thatโ€™s atypical for an official of his rank. โ€œIโ€™m involved day-to-day in the work thatโ€™s being done here,โ€ Balash told the group of Alaska oil and gas industry representatives, according to a transcript of the event DeSmog reviewed, โ€œwhich is a little unusual for an assistant secretary to spend this amount of timeย on.โ€

Months later, Balash was featured prominently in the Department of Interiorโ€™s press release announcing the green light for Hilcorpโ€™s Liberty drilling project in Arctic waters. That press release touted the governmentโ€™s โ€œrigorous evaluation process based on the best and most recent scienceย available.โ€

โ€œUsing input from North Slope communities, tribal organizations, and the public, we have developed a robust set of environmental mitigation measures and safety practices that will be applied to this project,โ€ Balash said in theย statement.

โ€˜Major Errorsโ€™ Made byย Interior

Several conservation groups, including the Center for Biological Diversity, took issue with the Interiorโ€™s assessment of the Liberty projectโ€™s expected impacts to the climate and wildlife, and in 2019, filed a lawsuit against Interior Secretary David Bernhardt, BOEM, and the Fish and Wildlife Service (FWS) that challenged theย decision.

Lieb, the Earthjustice attorney, told DeSmog, โ€œHere, it was clear that the agency had made major errors and not taken the hard look that it’s required to take under the National Environmental Policy Act at the impacts of this project. And that it failed to comply with the Endangered Species Act in considering the potential impacts to polar bearsย here.โ€

On Monday, December 7, 2020, the Ninth Circuit Court of Appeals ruled in agreement with the conservation groups, overturning Libertyโ€™s approval and directing the federal government to redo certain analyses in the environmental review process before granting Hilcorpโ€™sย permit.

One of these analyses centered on the way BOEM calculated the Arctic drilling projectโ€™s greenhouse gas emissions. Instead of adding up the direct emissions from constructing and running the facility along with the indirect emissions from burning the oil produced there, the agency used an economic model that is trying to predict how the project would affect global energy supply and demand, and then calculating the net balance of climate pollution, according toย Lieb.

A โ€œbig flawโ€ with this model, Lieb said, is that it overstates the climate pollution released if the Liberty project isnโ€™t built and understates the emissions if it is. โ€œBOEM was essentially not considering the emissions from this oil if itโ€™s burned outside the United States,โ€ Lieb said, leading the agency to argue that this oil drilling project would actually have a net benefit to theย climate.

Polar bear on an island in the Beaufort Sea
A polar bear seen on Alaskaโ€™s Barter Island in the Beaufort Sea in 2015.
Credit: Arthur T. LaBar, CC BYNCย 2.0

The other major part of this lawsuit focused on the Fish and Wildlife Serviceโ€™s determination that the project would not jeopardize the areaโ€™s polar bears, which are protected under both the Endangered Species Act and Marine Mammal Protectionย Act.

In coming to this decision, the agency is required to consider how Hilcorp would reduce or offset harm from its activities to the bears and their habitat. The court found that these mitigation measures were not specific enough โ€” or even certain to occur at all โ€” to support FWSโ€™s ultimate decision that the project would not threaten the continued existence of polar bears. Thatโ€™s despite the agency concluding that denning mothers and their cubs would likely be affected by nearly every step of theย project.

In addition, according to the federal ruling, the agency noted but failed to account for the ways in which the drilling siteโ€™s activities could harm the bears without directly killing or injuring them โ€” such as via noise and other disturbances that affect their behavior, such as their ability to findย food.

โ€œFWS appears to conclude that the Liberty project, as a whole, will not significantly impact polar bears, with or without the mitigation measures,โ€ the court wrote in its ruling thisย week.

A three-judge panel ruled that BOEM, as well as FWS, โ€œacted arbitrarily and capriciouslyโ€ in coming to their respective decisions about the Liberty projectโ€™s impacts, and as a result, it threw out the 2018 approval โ€” and the projectโ€™s mitigation measures โ€” which were praised byย Balash.

Interior Department Press Secretary Ben Goldey told DeSmog, โ€œInteriorโ€™s actions are based on the law and the best available science. We will continue to take actions that support our nationโ€™s energy independence despite relentless obstruction from radical environmental special interest groups.โ€ He did not respond to questions about whether the agency would proceed to redo the analyses as it reexamines the permit decision or whether it would challenge the courtย ruling.

Hilcorp did not respond to a request forย comment.

Hilcorp Alaska team receiving 'outstanding partner' award from U.S. Fish and Wildlife Service Alaska in 2018
Members of the Hilcorp Alaska team receive an Outstanding Partner award from Fish and Wildlife Service Regional Director Greg Siekaniec in May 2018.
Credit: U.S. Fish and Wildlife Service Alaska, CC BYNCNDย 2.0

Following Environmentalย Law

The downtown Seattle conference room where Balash was speaking to a diverse audience working on Arctic issues in April 2018 was perched at the edge of waters where just a few years earlier, a rainbow flotilla of โ€œkayaktivistsโ€ and Indigenous paddlers had swarmed Shellโ€™s Arctic drilling rig to delay its journey toย Alaska.

Balash told the audience he was very proud of bringing Hilcorp to Alaska. He shortly thereafter began ranting about the 50-year-old bedrock environmental law, the National Environmental Policy Act (NEPA), which he helped implement for major infrastructure projects such as Liberty, saying that it โ€œdrives me crazy, what NEPA hasย become.โ€

He said its documentation of potential environmental impacts, which can run thousands of pages long for complex projects, has turned into a โ€œmonstrosity that defiesโ€ the law, calling it โ€œnonsensical and counterproductive.โ€ Since these comments, the Trump administration has finalized a sweeping overhaul, and weakening, of the law, which legal experts say limits the depth and scope of environmental reviews as well as the public feedback on proposals that affect communities where those projects would beย built.

That day in 2018, Balash ended his comments praising the administrationโ€™s early efforts to limit such reviews. โ€œI think that is going to help both the agencies and the public in getting to better decisions,โ€ heย said.

According to Lieb, the federal government is now responsible for conducting a supplemental environmental impact statement and new Endangered Species Act review for Hilcorpโ€™s Liberty project. That would open up another round of public review of the Arctic drilling effort, and likely give the incoming Biden administration the chance to weigh in on itsย approval.

Less than a year after the Department of Interior first approved Hilcorpโ€™s Liberty project, Balash left the federal government. In his resignation letter, he took credit for helping pave the way for this Arctic drillingย project.

His new job? Government relations in Alaska for drilling company Oilย Search.

Main image:ย Beaufort Sea coastline along Alaskaโ€™s North Slope. Credit: ShoreZone, CC BYย 2.0

picture-6706-1473698561.jpg
Ashley is Senior Editor of DeSmog. She is also a freelance science and environmental journalist, and a contributing science writer for Natural History Magazine. Her work has appeared in publications such as The Atlantic, Slate, Science, Scientific American, Discover Magazine, Hakai Magazine, and Medium.

Related Posts

on

A 1961 oil and gas well is the suspected source of a geyser eruption in the region where Permian wastewater disposal is causing a flurry of earthquakes.

A 1961 oil and gas well is the suspected source of a geyser eruption in the region where Permian wastewater disposal is causing a flurry of earthquakes.
on

Tech firms like Amazon and Google โ€˜have enormous responsibilityโ€™ for driving fossil fuel expansions, climate expert argues.

Tech firms like Amazon and Google โ€˜have enormous responsibilityโ€™ for driving fossil fuel expansions, climate expert argues.
Analysis
on

Below-market pipeline tolls amount to an extra $18.8 billion subsidy to the oil industry, report finds.

Below-market pipeline tolls amount to an extra $18.8 billion subsidy to the oil industry, report finds.
on

FTCโ€™s latest findings bolster claims of collusion among shale producers raised in ongoing Congressional probes and major class-action lawsuits.

FTCโ€™s latest findings bolster claims of collusion among shale producers raised in ongoing Congressional probes and major class-action lawsuits.