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- ACTIVE Surly great deal of of} lies beneath Alaska's North Slope and the adjacent oceans. Some of this of} approximately 12 billion barrels recovered to date-has been produced from the supergiant Pru~hoe Bay field and nearby areas. However, despite evidence of large of} deposits beneath the outer continental shelf (OCS) off Alaska's North Slope, no of] has yet been produced from it. The Bering Sea off Alaska' s west coast also has received attention from the of} industry, but no significant evidence of commercial deposits has been found there. Producing of} from beneath the Chukchi, Beaufort, and Bering seas is difficult. The areas are remote from major industrial centers, transporta- tion, and refinery facilities (except those close to Pru~hoe Bay). The weather is harsh; ice covers Be areas and threatens human structures for varying amounts of time during the year, and the area is dark for long periods in winter. Although engineering and technology have overcome many of these obstacles, increased awareness of the environmental and socioeconomic effects of oil and gas activities has resulted in increased environmental regulation of those activities and controversies over whether and how Hey should occur. To help provide a scientific basis for evaluating these concerns, the U.S. House of Representatives, in its fiscal-year 1991 appropriations report for the Department of the Interior, requested Hat He Minerals Management Service (MMS) seek advice from He National Research Council (NRC) about the adequacy of scientific and technical information relevant to the potential environmental consequences of three Alaskan lease sales planned

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2 OCSDECISlONS: ALASKA for 1991 and 1992: Sale 126 (Chukchi Sea), Sale 124 (Beautort Sea), and Sale 107 (Navarin Basin in the Bering Sea). MMS also asked the NRC to consider options other than conducting additional studies in case Me information was inadequate in any respect. In response, the NRC convened the Committee to Review Alaskan Outer Continental Shelf Environmental Information, which has prepared this report. The committee considered the adequacy of scientific information relevant to decisions concerning all phases of the OCS oil and gas process: leasing, exploration, development, production, and decommissioning. It also took seriously MMS's request for a review of options other Man conducting additional studies. The committee was not asked and did not consider whe- ther any of! and gas activities shout be undertaken in Alaska. It soon became clear to the committee that industry interest-and hence the potential for any effects of OCS activities-was much lower in the Navarin Basin than in the Chukchi and Beautort seas. Indeed, after Me committee began its work, Sale 107 was deferred for further review until 1996. Therefore, this report focuses much more on the Chukchi and Beau- fort seas than it does on He Bering Sea. To obtain information for its review, the committee read environmental impact statements for the three lease sales, technical reports obtained from MMS's Alaska Region; synthesis reports; peer-reviewed publications; several relevant NRC reports; and documents obtained from Be Norm Slope Borough, the oil industry, and other organizations. In addition, the committee received briefings from MMS in Washington, D.C., and Anchorage, Alaska. In Alaska, the committee visited Barrow and Prudhoe Bay and adjacent oil fields. It received briefings in close places and held discussions with residents and elected officials of Barrow and Be Norm Slope Borough and with officials of ARCO, British Petroleum, and Alaska Clean Seas. In Anchorage, Be committee received briefings from state officials and representatives of environmental organizations, consulting firms, Be University of Alaska, and others. It also received briefings from officials of ARCO, Mobil, and Shell at its meeting in Irvine, California. The committee's major conclusions and its discussion of possible alternatives to additdonal studies are summarized below. Chapter ~ presents detailed recommendations for additional studies Mat would be useful for OCS decisions, particularly those concerning development, production, and . . decommissioning.

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ADEQUACY OF I~FO~T10 I ON OCS DECISIONS EXECUTIVE SUMMARY 3 The committee concluded that the environmental information currently available for Be Chukchi, Navarin, and Beautort OCS areas is generally adequate for leasing and exploration decisions, except with regard to effects on the human environment (i.e., socioeconomic effects, as defined in the OCS Lands Act). Prelease and lease-stage effects on the human environ- ment which can begin even before any physical or biological changes take place-are a special category of effects discussed in Chapter 6. In general, the information available for resource geology, the physical environment, biotic resources, spills, and mitigation and remediation activities adequately reflects the differences between Arctic OCS areas and other U.S. OCS areas where development and production have already occurred. In making this determination, the committee recognized that OCS of! and gas activities present a variety of risks to the biological and human environ- ment, and that even with sometimes sketchy knowledge, bounds could be put on the extent of those risks. Whether or not to accept He risks is a policy issue, not a scientific question. MMS's Environmental Studies Program (ESP) and of! and gas resources assessment efforts have yielded information that is credible and useful in establishing a general characteriza- tion of the living resources, physical conditions, social and economic setting, and likely of! and gas resources in the Arctic OCS. Although Be geological characterizations are sound, the resource estimates appear conservative; this might affect any estimates of impacts and Be ability to plan for the future. In contrast, Be committee concluded Cat the information is often not sufficient to support decisions about development, production, transporta- don, and siting of onshore facilities. Much of this information, of course, can only be obtain after exploration has identified a proposed development site. MMS should concentrate on fewer, longer-term studies of Be living resources, social and economic conditions, and physical processes to develop Be additional information needed. The studies' design and results should be peer-reviewed.

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4 OCS DECISIONS: ALASKA ~JOI I~FO~T10~ GAPS The major information gaps concern certain aspects of He potential social and economic impacts of OCS oil and gas activities, the extent and temporal distribution of ice gouging, and physical oceanography and its relation to important ecological processes. The greatest perceived and feared conse- quences of OCS development in the Arctic OCS concern of] spills and interference with marine mammals-especially bowhead whales Mat are critical to the subsistence economy of Me Alaskan Natives. These fears have been exacerbated by a lack of mutual trust among Be parties involved and by limited public confidence in the motives of MMS, Me of! industry, and those who oppose development. It is clear Cat substantial involvement of all potentially affected parties, including Alaska Natives, is a prerequisite for a successful approach to the development of Arctic OCS oil and gas resources. It is not clear to the committee whether any additional studies could provide enough information to satisfy all parties. A major information need is to determine the extent and temporal distribution of ice gouging. Gouges in the seafloor caused by the grounding of large ice masses have been detected to water depths of more than 50 meters, and the gouges are abundant nearer the shore. However, there is insufficient information to determine He frequency of these events, which obviously can affect structures on the seafloor. The model of ocean circulation that has been used is elaborate but inevitably inaccurate because of limited spatial resolution and major uncertainties about the physical processes and the mathematical conditions applied to model boundaries in die water. Neverdleless, the model's output is still a useful rough guide to the paw and fate of spilled oil, although a simpler mode} might have been just as useful and credible. Another NRC committee recently reviewed He information available for oil and gas leasing in over OCS areas and concluded that trajectory estimates have relied too heavily on general circulation models (GCMs). This committee believes He same conclusion holds for He three lease areas involved here. With the relative lack of observations available, MMS's initial reliance on model predictions is understandable, but as previous NRC reviews noted, trajectory predictions must be tied more closely to field observations Han Hey have been. For developing models, the committee concluded that He existing "botto~up" approach of trying to produce the best possible mode} should be replaced with a "top down" or targeted approach driven by

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EXECUTIVE SUMMARY 5 specific concerns about key ecological species and processes; this would give better focus to mode} development. For example, oceanographic mo- dels should be driven by a need to understand formation of leads (Ion", narrow passage of open-water passing through a region of sea ice that is navigable by surface vessels and air-breathing mammals) in spring, which in turn influence the migration and distribution of whales and birds. Modeling the fate of spilled oil in ice, however, is not very refined and requires improvement. The MMS Environmental Studies Program (ESP) in Alaska is extensive, substantive, and high quality. It has established a credible characterization of social and economic conditions in Northern Alaska, and it has addressed several important questions. The program has carried out some studies that analyze potential changes associated wig OCS development-particularly economic impacts. However, Hat work has failed to deal adequately with other issues that are critical to predicting and managing impacts on the human environment during all phases of He OCS development process, ranging from leas~ng-stage activities to the longer-term impacts of develop- ment and production. There is a particular need for attention to the social and cultural effects of leasing, exploration, development and pro- duction-including He gradual or long-term changes that can be expected to take place even in the absence of spills-as well as the broader range of sociocultural disruptions that can result from a spill and persist for years. As a result of omissions in the program to date, a sigruficant fraction of the social and economic information Hat would be necessary for informed decisions about leasing, development, production, and termination is unavailable. As a corollary, not enough effort has been devoted to He pragmatic questions of what steps, if any, could be taken to avoid or lessen harmful consequences. Finally, He committee is concerned Hat recent reductions in He budget and staff of MMS's ESP in Alaska~specially but not exclusively in social science disciplines-will limit He quality and quantity of future work. ~LT[~TIV[S TO ADDITIONAL STUDII S MMS's ESP is based on He sensible premise Hat if Were is enough information, sour decisions can be made about balancing He negative and positive effects of development. Sometimes that is true, but in over cases

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6 OCS DECISIONS: ALASKA it appears Cat additional studies are not cost-effective or even likely to resolve controversies over He effects of development, no matter how much dine and money are spent on them. Because the committee was specifically asked to consider alternatives to additional studies, it has done so in many places in Be report. Three examples are summarized here. Towhead Whales One area of great controversy concerns the effects of OCS of} and gas development on the migration patterns of marine mammals, especially bowhead whales. Because hunting bowheads is so important to Norm Slope communities, Were have been many studies of the effects of noise on bowhead behavior and migration. Despite Lose studies, the effects of noise are not resolved, and it is not clear whether further study can provide resolution. For this reason, the committee believes a reasonable solution is for MMS, Be industry, and Norm Slope residents to attempt to reach agreement on the controversial matters-such as specific times and places Cat various activities occur- and how they should be adjusted, remedied, or mitigated in lieu of or concurrent wig additional studies. Parties should not have to give up rights to other remedies as a precondition to begin Be negotiation, although a mutual agreement would imply that the agreed-on course of action would be adhered to unless additional information showed to everyone's satisfaction that the course of action should be modified. If additional studies are conducted, they should be designed, implemented, and shared by all three parties. There is no guarantee that this approach would be successful, but it seems unlikely Mat it could be less successful or more costly Man the current system of dueling studies and reviews and their accompanying delays and recriminations. The approach might also work for many other controversial questions in Alaska and elsewhere (such as Be effectiveness of causeway breaches for allowing fish migration). Several practitioners have developed considerable skill in this kind of dispute resolution. It is of the utmost importance to build effective and mutually agreeable monitoring programs into any settlement. Monitoring is essential to evaluate an agreement's success and to provide a basis for facilitating similar agreements elsewhere.

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011 SPIllS EXECUTIVE SUMMARY 7 Although the largest spills are usually the result of marine transportation accidents, the frequency of such accidents has declined. Blowout frequency associated with petroleum drilling is 0.03% of wells drilled; the risk of "significant" oil loss-more than 50,000 barrels is even more remote, at 0.01% of wells drilled. Even though large of} spills are rare, they are a major concern in the Arctic because of the perceived inability to clean them up or control them. It seems likely that no amount of additional study of biotic responses to oil, of the viscosity and flammability of of} under various conditions, or other laboratory studies or simulations of of} spills and cleanup technology win completely allay public concern about the effects of spills and the ability to clean them up or mitigate them. Experience with very large marine spills indicates that current cleanup technology and procedures need improvement and further study, especially in situ burning, which is the only current technique wig the potential for recovering much of the oil Tom very large spills. Nonetheless, very few experimental spills have been performed in cold waters-or, indeed, in any OCS waters of the United States. The very limited experience with cold-water spills does not allow scientists to predict confidently the effectiveness of cold-water spill counter- measures. There are few pre-spill data from habitats affected by accidental spills, and during a real spill, it has been difficult to set aside enough control or reference sites to detect He effects of the spill and Be control and cleanup methods used. Experimental spills can be planned and controlled; pre-impact data can be collected to allow proper evaluation of spill and control and cleanup impacts. In addition, Be performance of spill-response teams cannot be optimum if Hey are never permitted to practice using real oil. Perhaps more important, Be sponges and weaknesses of spill responses cannot be evaluated in the absence of practical experience, so sensible and appropriate protection, mitigation, and compensation plans cannot be designed. Mitigating Lono-Term Socioeconomic Affects Among He long-term nonspill socioeconomic impacts Hat need to be

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8 OCSDECISlONS: ALASKA dealt with are the potential for cultural erosion and for socioeconomic overadaptation (overadaptation refers to the difficulty of transferring specialized activities and facilities to other forms of economic production). The potential for overadaptation is exacerbated by He region's remoteness and the limited likelihood of successful economic diversification. Among the obvious possibilities for mitigating those foreseeable effects (as well as for helping to create more positive effects) would be the creation of trust funds. Working cooperatively with Me state and affected local governments (including the Northwest Arctic Borough, as well as the North Slope Borough), MMS could explore the potential for mitigating longer-term effects Trough revenue sharing, as well as through other steps that could help mitigate the coming "bust" by building up locally controlled trust funds. If such funds were sufficiently large, they could even help cushion the impending end of Be Pru~hoe Bay revenues, with the principal being left intact and the annual proceeds being used to fund a significant fraction of the boroughs' current employment and ocher costs.