The original case brought by the environmental group the Centre for Biological Diversity (CBD) against the MMS, decided on April 17th earlier this year, specifically targeted Alaska’s Chuck-chi Sea, Beaufort Sea, and Bristol Bay off-shore areas included in the MMS’s 2007-2012 plan.  The Court’s decision in April, however, seemingly put an unclear hold on all MMS OCS leasing nationwide thus the Secretary of Interior, Ken Salazaar, requested a clarification from the Court which came out yesterday.  The clarification returns to the initial lawsuit by the Center for Biological Diversity towards the Minerals Management Service (a part of the Department of Interior) and states only Alaska applies to its decision and that other leases in the American OCS can proceed as normal.  The Court Tuesday ordered the MMS to provide addition study to Alaskan lease sales with regard to potential environmental impacts in surrounding “open water” areas to leases.  In addition regular 60 day progress reports to this effect should be submitted to the Court and the litigant, CBD, would have 30 days to decide legal action after each report. 

The effect of this decision and resultant reporting and environmental impact study is that additional MMS environmental coastal zone study must be completed in accordance with the MMS’s regular leasing guidelines.  This actually was done in previous 5 year plans (plans during 1987-2002 years) and it is because of this departure in practice that the courts made the decision they did.  It is expected the MMS will be able to provide data sets for the additional coastal zone evaluation from 2002 to the present within a few months.  From this, it is expected the MMS will approve future lease sales in the Alaskan OCS. 

The Appeals Court in its decision did not state however, that the current 5 year lease plan would be closed, or put on hold as some anticipated, rather that just the additional study needed to be complete. Regardless of the MMS’s compliance with the Court’s decision the Secretary of Interior will still have to provide a decision on top of MMS’s recommendation to lease.  It is at this point that Secretary Salazaar has the power to put the breaks on OCS leasing in Alaska and, in a worst case scenario, possibly rescind the largest recent sale 193. This would require the Federal Government paying back $2.6 Billion in lease revenues to the industry for the sale. 

The Secretary had recently visited Alaska to hold town hall meetings on OCS and publicly stated he believed Alaska to be special and unique in its OCS, which one could interpret as a belief that it requires special protection.  A majority of Alaskans support exploration in its OCS however many in the coastal areas expressed concern for effects on fisheries and traditional whaling in the event of an oil spill.  The Governor, State Legislature and Congressional delegation all expressed support for lease sales to take place in Alaska’s OCS.  Statements by many Alaskan politicians have come out after this weeks decision.  As Alaska relies on the taxes from the production of oil and gas for 87% of its tax revenue it is highly important for the state’s economic well being that oil and gas continue to be produced.  Given that the time from leasing to exploration to possible production is measured it decades, delays now could result is economic depression later on.

The Chuck-chi Sea lease sale 193 off NW Alaska is of significant importance to Alaska and the nation as the area was estimated by the MMS to hold over 15 billion barrels of oil.  This is the same amount that has currently been pumped from Prudhoe Bay, America’s largest oil field, since 1977.  Three sales have taken place in the Chuck-chi Sea previously in 1988, 1991 and in February 2008 with the famous sale 193 which generated over $2.6 billion dollars alone.  That is the largest amount ever earned in a lease sale in Alaska.  The area of sale 193 ranged from 50-200 miles offshore and included 29.7 million subsea acres.

Nation wide MMS leases in the OCS generate 27% of domestic oil production and 15% of America’s natural gas with an average $10 billion in revenue to the nation. 

Map of OCS Leasing Program (pdf)

Visit the MMS web site here.

 View Senator Lisa Murkowski's statement, and Alaska State Senator Lesil McGuire's statement in Juneau. 

Federal Court Issues Another Favorable Ruling on OCS Development (pdf)