Environmental Impact Statement approved for Beaufort Sea project

A federal agency has approved the Final Environmental Impact Statement for a new oil project in the Alaskan Beaufort Sea where an Alaska Native corporation is part-owner.

If the project is built it would add 60,000 to 80,000 barrels per day of new oil moving through the Trans Alaska Pipeline System.

Oil royalties and taxes, however, would go to the federal government, which owns the subsurface mineral rights.

Hilcorp Energy and BP are the major owners of Liberty, which is in shallow water five miles north of the coast. A minority stake, however, is owned by Arctic Slope Regional Corp., the Alaska Native regional development corporation for the North Slope.

If the project proceeds it will expand ASRC’s stake in North Slope oil development, which is already substantial.

Liberty is an offshore oil deposit that has been known for years and previously planned for development with a gravel artificial island, then by drilling long “extended-reach” production wells from shore, both plans ultimately dropped.

Now the artificial island idea is back, proposed by Hilcorp and BP.

The companies would build a nine-acre gravel island to support a production facility. An undersea pipeline would be built to shore, to connect with existing oil field pipelines.

The final approval for the Environmental Impact Statement by the U.S. Bureau of Offshore Energy Management sets the stage for a Record of Decision by the U.S. Department of the Interior and the granting of federal permits for the project.

After that Hilcorp, BP and ASRC must make the final decision to build the field.

The project would be a virtual carbon-copy of NorthStar, a similar offshore field, now producing, developed by BP in 2000. Northstar, now owned and operated by Hilcorp, is to the west of Liberty and six miles offshore and is similarly connected by undersea pipeline to onshore pipelines.

Meanwhile, there are two other companies besides Hilcorp producing oil from offshore gravel islands, Eni Oil and Gas at its Nikiachuq field and Caelus Energy from the Oooguruk field, both west of Northstar and Liberty.

Eni and Caelus also support their offshore wells with a buried subsea pipeline.

There has not been an oil spill, at least one that reached open waters, in the 18 years since BP began the first offshore production from Northstar.

Conservation groups, however, are ringing alarm bells about the Liberty decision by BOEM.

“The Trump administration is glossing over the dangers of Arctic drilling. Hilcorp has a terrible safety record in Alaska and shouldn’t be given the chance to drill and spill in these treacherous waters,” said Kristen Monsell, oceans legal director for the Center for Biological Diversity.

Hilcorp has been fined by state agencies for safety violations at Northstar and its other production operations.

Meanwhile, ASRC, which is owned by Inupiat shareholders in Arctic Slope communities, owns 10 percent of Liberty, with BP owning 40 percent and Hilcorp,which is the operator of the project, with 50 percent. Hilcorp and BP were formerly 50-50 partners until BP sold part of its share to ASRC.

Many of ASRC’s shareholders have opposed offshore oil development in the Beaufort Sea because of the effect an offshore spill would have on bowhead whales, which migrate through the Alaskan Beaufort Sea near the offshore oil projects.

Bowheads are important to the Inupiats’ subsistence culture.

ASRC, based in Utqiagvik (formerly Barrow) also owns 100 percent of 18 offshore federal leases purchased from Shell and is now a significant owner of offshore as well as onshore oil resources.

The corporation also now receives substantial oil royalties from production in the Alpine field and CD-5, which will increase as new developments occur in the Colville River area west of the Prudhoe Bay and Kuparuk River fields.