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Whalers trying to harpoon Shell permits

Nukapigak whaling crew.jpg

Shell is having trouble finalizing an agreement with Alaska Native subsistence whalers, which if unresolved, could complicate efforts to get key permits the company needs to begin exploration drilling in the Alaska Beaufort Sea later this month, federal officials say.

The company is assembling a small armada that includes two drill ships, icebreakers and support tugs, a barge equipped with oil spill equipment and a small tanker, all in hopes to begin drilling in the Beaufort Sea in late July or early August.

John Goll, Alaska regional director for the U.S. Minerals Management Service, said Shell is required to have a plan to minimize impacts on whales and other wildlife before operations can begin. A conflict avoidance agreement reached with local subsistence users, who are Inupiat Eskimos, is typically part of that plan.

Federal officials, speaking on background, said the major unresolved issue involved is the whalers' request that Shell cease operations for up to 30 days during September, the time that bowhead whales migrate along the northern Alaska coast and whalers hunt them.

Shell has countered with an offer of a 10-day operations shutdown, according to a federal official.

Jeff Walker, the MMS regional supervisor for field operations, said Shell officials told him that the company would cease drilling operations until whalers from Nuiqsut, the nearest Inupiat community to the exploration area, had secured the number of whales they need.

"We would like to see the parties come to an agreement themselves," Goll said. "If the agreement is not signed, we'll have to make some decisions."

Inupiat villages along the coast depend on the whales as an important part of their annual food supply.

"We're still at an impasse," said Harry Brower, chairman of the Alaska Eskimo Whaling Commission, which is representing the whalers. "We're trying to set up a meeting between Shell and whalers in the affected communities, which are Kaktok, Nuiqsut and Barrow.

"We're concerned about drilling being underway during the migration and we're also concerned about protection of the habitat," Brower added. "Camden Bay, where Shell will be drilling, is an important resting area for the bowheads." The whales pause in that area before heading west along the coast toward Barrow, along the Chukchi Sea, he said.

Brower said he is hopeful the issue can be resolved.

Shell did not return phone calls on the status of the negotiations, but Rick Fox, the company's Alaska asset manager, told an Anchorage business group June 25 that the company is facing challenges in securing permits needed to begin drilling.

Window for drills, whales

The length of the shutdown period is critical to Shell because the company has only a three-month period in mid-to-late summer that the Beaufort Sea is free of enough ice that drill ships can operate safely.

Late August, September and the early part of October is the probable drilling window before winter sea ice makes operations unsafe. Given those constraints, a lengthy shutdown to allow the whales to pass through could prove devastating to Shell's plans to drill three Beaufort Sea exploration wells this summer.

For Inupiat whalers, the issues are just as urgent. Shell is drilling in an area of the eastern Alaska Beaufort Sea several miles offshore Point Thomson, where Exxon Mobil Corp. and several other companies have found large gas and condensate reserves, and northwest of the Arctic National Wildlife Refuge.

Shell is proposing to drill in the path used by bowhead whales in their annual fall migration from their summer grounds off the Mackenzie River delta in Canada to their winter grounds, which scientists believe is in the Bering Sea.

The Inupiat are concerned that underwater noise from vessel engines and propellers and drilling from Shell's operations could deflect the whales, causing them to go farther offshore and beyond where the whalers can safely hunt them from the small, open boats they use.

Scientific studies with whales in the Beaufort Sea conducted by BP have demonstrated that bowheads do react to sharp underwater noises, such as those from vessel engines. BP has had a continuing series of underwater acoustics studies underway for several years in connection with its Northstar field, a small oil field five miles offshore the Prudhoe Bay field that began production in 1991.

To obtain its federal permits, Shell needs Incidental Take Permit authorizations from the National Marine Fisheries Service and the U.S. Fish and Wildlife Service to cover unintentional encounters the company may have with marine mammals, such as whales or polar bears.

Agency regulations require that industry operators secure a Conflict Avoidance Agreement with local Native subsistence hunters before those permits can be issued.

The Conflict Avoidance Agreements have been negotiated yearly for companies doing seismic or near-shore exploration in the Beaufort Sea and are usually routine. This year, however, the scale of Shell's exploration program and its location several miles offshore and in the path of the bowhead migration has elevated the Native hunters' concerns to new levels.

Borough tries tax block

The North Slope Borough has also filed suit to block Shell's permits, but the legal effort has been unsuccessful so far.

The borough government, which covers the Arctic Slope region, cites risks for Native communities from offshore spills and adverse effects on wildlife but no compensating benefits, such as increased tax base, North Slope Borough Mayor Edward Itta has said in past statements.

Unlike onshore producing fields, which are subject to municipal property taxes, Shell's operations are in the Outer Continental Shelf, beyond state and local tax jurisdictions.

Shell, for its part, is trying to help the local Inupiat population in other ways. The company has contracted with Arctic Slope Energy Services, an oil field service subsidiary of Arctic Slope Regional Corp., the Alaska Native regional corporation owned by all Inupiat Eskimos in the region.

The company has also offered a $500,000 grant to the borough to help to build community infrastructure, and is discussing a training program to employ workers from the villages in offshore operations.

Alaska is not the first region where Shell's offshore drilling has raised concerns over whales. In Sakhalin, in Russia's Far East, Shell was forced to reroute a pipeline from offshore platforms to shore after international environmental groups and Russian agencies raised concerns over the effects on endangered gray whales that feed in nearby waters.

© By Tim Bradner, Alaska Journal of Commerce

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