by Brian McGraw on April 25, 2011
Shell announced today, for now, it must end a project to drill for oil off the coast of Northern Alaska, because of a decision made by an EPA appeals board to deny permits to acknowledge that Shell will meet air quality requirements. This is not part of ANWR.
Companies that drill for oil must go through extensive permitting processes and invest billions of dollars as payments for leasing the land, exploring for possible oil fields, equipment, etc. This is all done with the understanding that assuming they follow the letter of the law, there is a chance that this investment won’t be flushed down the toilet at the end of the tunnel. It appears that in this case Shell has followed procedure and that emissions will be below any standards required by the EPA:
The EPA’s appeals board ruled that Shell had not taken into consideration emissions from an ice-breaking vessel when calculating overall greenhouse gas emissions from the project. Environmental groups were thrilled by the ruling.
“What the modeling showed was in communities like Kaktovik, Shell’s drilling would increase air pollution levels close to air quality standards,” said Eric Grafe, Earthjustice’s lead attorney on the case. Earthjustice was joined by Center for Biological Diversity and the Alaska Wilderness League in challenging the air permits.
Talk about moving the goalposts. They must have been really desperate to cancel this project given that this was the best straight-faced excuse they could muster. Not only do you have to be below the legally required emission limits but you must also not even be “close” to the limits, as defined by unelected officials, one of whom is a former attorney for the Environmental Defense Fund.
Events like this are a prime example of why many in Congress want to strip authority from the EPA. Shell had reportedly invested over $4 billion in this project. When companies make investment decisions, consideration is given to whether or not bureaucrats can make arbitrary decisions to shut the project down halfway through a multi-year process. There are many other countries with natural resource reserves who do not subject economic activity to such unpredictable insanity, and in the eye of a corporation, after an event like this these locations begin to look more preferable to dealing with the United States.