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Denial of ConocoPhillips' permit by Corps of Engineers causes outrage


February 08, 2010

(SitNews) - The US Army Corps of Engineers denied ConocoPhillips' application to build the bridges over the Colville River, in a decision Friday, saying other alternatives would meet overall project goals while better preserving marine wildlife.

Alaska Governor Sean Parnell was outraged with the Corps of Engineers ruling. In a prepared statement released Saturday, the Governor said, "Just in the last six months, we've fought the federal government for tying up Outer Continental Shelf leasing, and for adding bureaucratic nightmares and costs with Endangered Species Act listings and critical habitat area designations. We've seen the U.S. Fish and Wildlife Service and the Environmental Protection Agency show reluctance to approve anything related to jobs in Alaska."

"And then -- first, by delay, and now, through their decision -- the Corps of Engineers continues to set back our nation's chances for economic recovery, domestic energy production, and Alaskans' prospects for jobs." said Gov. Parnell.

U.S. Sen. Lisa Murkowski (R-Alaska), reacted Friday to the Obama administration's denial of Conoco Phillips' permit to construct a bridge that would allow access to what would have been the first oil and gas lease in Alaska's National Petroleum Reserve (NPRA). The US Army Corps of Engineers is insisting the company instead use directional drilling for the development.

Murkowski said in a prepared statement, "For decades, those who oppose developing ANWR or Alaska's offshore fields have continually cited the 23 million-acre NPRA as the area where development should occur instead. If a producer cannot get across the Colville River, however, NPRA's resources are effectively off-limits."

"I am alarmed and amazed by this short-sighted decision, which totally ignores the economics of future energy development in all of northern Alaska," Murkowski said. "Directional drilling can work in ANWR because the oil is concentrated in the northwest corner. That is an entirely different situation than the vast and widely distributed deposits in the NPRA, however, and the administration knows it."

While the one oil deposit that Conoco is trying to access may be within reach of directional drilling, the known deposits that are next in line for development are more than 10 miles away from existing infrastructure and far outside of the technological scope of extended reach drilling. The bridge and the related pipelines are essential for additional oil and gas development from the petroleum reserve said Murkowski.

"If allowed to stand, this myopic decision will kill all future oil development from the nation's largest designated petroleum reserve and probably stop all future natural gas production from the area as well," Murkowski said. "The loss of energy potential is staggering for the nation and it would happen for absolutely no environmentally sound reason."

"America is dangerously reliant on foreign oil. Restricting access to even more of our domestic resources is simply unacceptable," Murkowski said.

Although Conoco Phillips may reapply for the permit, it is clear that they have lost another drilling season because of this regulatory overreach said. Murkowski.

U. S. Senator Mark Begich (D-Alaska) said in a prepared statement Friday, "Today's announcement by the Army Corps that Conoco-Phillips' permit is not approved is obviously disappointing to me and the many Alaskans who are eager to develop the oil and gas potential in the NPRA. Conoco-Phillips had already announced they wouldn't be able to proceed with development next season."

Begich said, "After the parties worked together for years to get agreement on NPRA development, I am deeply disappointed the first project just got knocked off track."

Begich said, "I hope that in the coming months both the company and the permitting agencies can work together to get this valuable project moving forward both economically and in an environmentally responsible way."

"This decision shows that Alaska needs a comprehensive plan to allow development in the NPRA to happen expeditiously and responsibly," said Begich.

Alaska House Speaker Mike Chenault (R-Nikiski), and Alaska House Resources Committee Co-Chair Craig Johnson (R-Anchorage), were also outraged by the decision.

"Conoco has permits for exploration in NPR-A. The last remaining obstacle was the bridge permit for the Colville River. This is a project that garnered widespread support from the outlying communities, within the industry, and stood to finally open up the reserve for development," Speaker Chenault said in a prepared statement. "Today's [Friday] action is another example of administrative obstruction and sets back development for the near term.

"The companies have a long track record of compliance with the permitting process, and have an approved Environmental Impact Statement for the development in the Colville River Delta," Speaker Chenault added. "That the Corps took nearly five years to rule is unbelievable in and of itself."

"It's another sign that Alaska's clearly not open for business, through no fault of our own," Johnson said in a prepared statement. "Today's [Friday's] decision by the Corps sends a terrible message to companies who want to help open up the known reserves on federal lands. They had drilling and exploration permits. They had a road permit. They worked with the government to get this far only to meet resistance from an unresponsive federal bureaucracy. The move means development needs of the Trans-Alaska Pipeline System will have to be met on state land or through renewed development and production at Prudhoe Bay and Kuparuk.

"I was disappointed to read that there was a delay last month, and I am shocked by today's action," Johnson added. "That's half a billion dollars of development lost. That's a lot of jobs for Alaskans and revenue for ARSC and the region. The work was pushed back a year due to company concerns, but now the concern is on any development, period, going forward. That's bad news for Alaska."

The U. S. Army Corps of Engineers' Alaska District found that issuing a permit for the applicant's proposal is not in compliance with 404 (b)(1) guidelines, which states "that no discharge of dredged or fill material shall be permitted if there is a practicable alternative to the proposed discharge which would have less adverse impact on the aquatic ecosystem, so long as the alternative does not have other significant adverse environmental consequences".

Other alternatives with less environmental impacts could include horizontal directional drilling but would require new permit applications. These alternatives minimize impacts to the Colville River Delta, which is the largest and most complex delta on the Arctic Coastal Plain and drains nearly 30 percent of the North Slope. The delta serves as habitat for approximately 80 species of birds, numerous fish, migrating caribou, and is
within the subsistence hunting and fishing areas of the village of Nuiqsut. The delta also represents nearly 70 percent of overwintering fish habitat within the North Slope.

Dow Jones reported that Houston-based ConocoPhillips plans to appeal the decision, company spokeswoman Natalie Lowman said Monday. She also said the company is "disappointed with their decision."



Sources of News:

Alaska Governor Sean Parnell

U.S. Sen. Lisa Murkowksi

U.S. Sen. Mark Begich

U. S. Army Corps of Engineers' Alaska District

Alaska House Majority


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