Wednesday, September 26, 2012

Emerging Issues in the Arctic Part 7: Coda

Last spring, I set out to blog about developments in the Arctic, hoping to identify theoretical perspectives, policy angles, legal conflicts, cool technologies and news items of interest. It was easy enough to predict that the eyes of the world would be turned on the Arctic region this summer, to see how much ice melted, how many cargo ships passed through the Northern Sea Route and the Northwest Passage, and whether Shell Oil would succeed in drilling for oil in the Beaufort and Chukchi Seas. Well, the extent of ice melt has set records. Russia continues to industrialize along the Northern Sea Route. And commercial shipping across the Northwest Passage is finally happening. But, despite having sent 2 drill ships, more than 20 support vessels, a capping stack and emergency equipment into the area, Shell finally announced on September 17 that it will not be drilling for oil and gas in the Arctic in 2012.

How anticlimactic!

How did a result Shell did its best to portray as inevitable become so evitable?

There are two simple explanations: First, earlier this month, as Shell began to drill a top well at a site on the Chukchi Sea, a 30 mile-long, 12 mile-wide, 25-meter thick piece of ice drifted toward the site. The drill ship had to move, and there is no longer enough time to drill a full well. That’s the kind of thing that goes down up in the Arctic. Second, more recently, the company's new containment dome, an important component of its highly scrutinized oil spill response system, was damaged during the final tests being conducted near the port town of Bellingham, Washington. Without the containment dome operating, the Coast Guard would be unlikely to approve of the response system, and the Department of Interior would be unlikely to issue the final permits necessary to drill. So, instead of pressing its luck and trying to drill deep against the odds, Shell will content itself with drilling a number of top wells—which, according to the company do not threaten a blowout or oil spill—and look forward to next year, when it will try again strike oil. 

But there is a more complex explanation, as well: Shell’s decision to scale back its plans is the temporary stopping point in an ongoing dialogue among the company, the oversight agencies, the State of Alaska, national and local environmental groups, native Alaskan communities and the courts that is working and re-working its way through administrative, political and judicial channels. Emily Meazell and Jim Rossi have written a sequence of important pieces exploring the dialogic possibilities of serial litigation in administrative law. (You can start here, go here, and then here). Admittedly, the battle over drilling in the Arctic falls outside Professors Meazell’s characterization of “serial litigation” as an iterative back-and-forth between the agencies and the courts on a particular aspect of a rulemaking or adjudicatory process; yet, I think it falls inside Professor Rossi’s expansion of the “dialogue” concept to incorporate a more generalized perspective on judicial review. For the sake of giving it a name, I would say that what we have here is a prime example of “assault litigation.” Assault litigation involves repeated challenges to a single administrative project—be it a rulemaking or any type of adjudication—brought in a number of different lawsuits spread out over a relatively short period of time and from a variety of legal angles.  

Now, Shell has spent upwards of $4.5 billion and six years working its way over, around, and through various regulatory hurdles and legal challenges (in addition to ice and weather delays and technical glitches) in pursuit of tapping the oil and gas reserves beneath the waters offshore Alaska’s Arctic coastline. Shell lost a case or two in the early days, but judicial review has been favorable of late. In the last six months alone the company has successfully defended a series of lawsuits challenging everything from the leases granting it the right to drill to several different approvals of its emergency oil spill response plans to its air permits. Yet, the assault litigation has had a visible impact on audiences other than the defendant agencies and the courts. Interior Secretary Ken Salazar, technically a defendant in some cases, has been particularly involved, frequently weighing in publicly on the company’s plans and the department’s review of them and making clear that Shell’s operations are being scrutinized not only by engineers and technocrats at Interior, the Coast Guard, and EPA, but also by executive officials operating at the highest political levels. Meanwhile, Congress has introduced legislation that would, among other things, expedite lease sales in the Arctic. Other oil companies have announced that they are backing away from plans to proceed in the Arctic, for the time being, due to “regulatory uncertainty.”

Would the agencies have required as much from Shell as they have in the absence of the assault litigation? (This question leaves aside the question of whether, as plaintiffs claim, the agencies are still not requiring enough.) Would Shell be drilling today, perhaps without a properly functioning containment dome, possibly taking bigger risks on the ice floe, without the increased heat? Does the fact that Shell keeps winning in court indicate that there is something wrong with opponents’ ability to fire multiple challenges to a single project? Does it indicate that something is right? And what does it mean about the fragmented structures of environmental and natural resources law?

Not sure. But I look forward to looking at these questions more closely soon.

While the Arctic may be made safer by the participation, increased application of agency expertise, and greater political accountability encouraged by the assault litigation, Shell’s not drilling this year does not mean that the Arctic is saved. In fact, as the record ice melt, ongoing industrial development, increased shipping and tourism traffic, and oil and gas drilling by other nations in other offshore jurisdictions all make plain, the Arctic, as we have known it for the last four hundred years, is history. And an all-out litigation war is not going to change that.

-- Michael Burger

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