The Department of Interior's (DOI) Minerals Management Service (MMS) is readying its first federal Outer Continental Shelf (OCS) oil and natural gas lease sale offshore Alaska in 17 years, but the sale could pit the MMS against another DOI agency that is considering whether to list the polar bear as a threatened or endangered species.

MMS earlier this month finalized Chukchi Sea Sale 193, now set for Feb. 6. The sale, first announced last year, would include about 29.7 million acres (12.02 million hectares) in waters 95-262 feet deep (see NGI, Aug. 13, 2007). The sale area in northwest Alaska extends about 25-200 miles offshore from north of Point Barrow to northwest of Cape Lisburne, and it is estimated to hold 15 billion bbl of oil and 76 Tcf of natural gas.

"We received excellent comments from Alaska Gov. Sarah Palin, North Slope Borough Mayor Edward Itta, from other community and tribal leaders, and industry and environmental groups," said MMS Director Randall Luthi. "We believe our decision is a good balance, and will allow companies to explore this intriguing frontier area while still protecting the resources important to the coastal residents."

However, the DOI's U.S. Fish and Wildlife Service (FWS) now is considering whether polar bears should be listed as threatened or endangered under the federal Endangered Species Act (ESA). Some of the polar bears' most critical habitat is located in the Chukchi Sea region. Last week the FWS announced it would take up to another month before releasing its decision on whether to list the bears under the ESA.

"We expect to provide a final recommendation to the Secretary of the Interior and finalize the decision within the next month," said FWS spokeswoman Valerie Fellows.

She said the delay came after scientists with the U.S. Geological Survey provided the FWS with a study about sea ice trends and the effect on the world polar bear population. The study found that within the next 50 years, shrinking sea ice would leave a small surviving population of the world's polar bears in the islands of the Canadian Arctic. Two-thirds of the world's polar bears, including Alaskan and Russian bears, likely would disappear, the scientists said.

"The polar bear's existence is increasingly threatened by the impact of climate change-induced loss of sea ice," said the World Wildlife Fund's Margaret Williams. "The chances for the continued survival of this icon of the Arctic will be greatly diminished if its remaining critical habitat is turned into a vast oil and gas field."

Luthi noted that all of the leases in next month's sale would be subject to existing MMS regulations, which include extensive requirements for safety, drilling operations and pollution prevention, and rules of other agencies protecting marine mammals, endangered species and air and water quality. The sale area ,he said, would not include nearshore waters ranging from about 25 to 50 miles from the coast, which includes the nearshore "polynya" through which the bowhead and beluga whales, other marine mammals and marine birds migrate north in the spring, and in which local communities subsistence hunt.

Leases issued from the sale would include stipulations to address environmental effects that may occur because of exploration and development of the area's oil and gas resources, Luthi noted. These stipulations call for protection of biological resources, including protected marine mammals and birds, and methods to minimize interference with subsistence hunting and other subsistence harvesting activities.

"MMS funds a robust environmental studies program to monitor the effects of industry activity in the OCS, including more than 40 ongoing Arctic-specific studies," said Luthi. "Following up on a workshop attended by over 100 scientists and stakeholders, we are inaugurating a new suite of research for the Chukchi Sea to further monitor marine mammals, other communities, hydrocarbons and subsistence uses."

Alaska's Palin also is not in favor of listing the polar bear on the ESA.

"I strongly believe that adding them to the list is the wrong move at this time," Palin wrote in an editorial that appeared in the Jan. 5 edition of The New York Times. "My decision is based on a comprehensive review by state wildlife officials of scientific information from a broad range of climate, ice and polar bear experts." She added, "Polar bears are more numerous now than they were 40 years ago."

However, environmental groups are threatening to file a lawsuit, which could waylay plans by any producers intent on exploring the Arctic regions of the Chukchi Sea.

In a response to a similar legal challenge by Alaska stakeholders and environmental groups, last year the Ninth U.S. Circuit Court of Appeals delayed a plan by Royal Dutch Shell to begin exploration activities in the Beaufort Sea, where it holds MMS leases (see NGI, Aug. 20, 2007).

Subsidiary Shell Offshore Inc. had been scheduled to begin drilling some exploration wells on the Sivulliq prospect. However, the plaintiffs argued that MMS rushed the approval without completely analyzing potential environmental impacts or establishing a thorough public vetting process. A stay was granted in that case pending final arguments, and a court ruling is expected in the coming months.

Two sales have been held in the Chukchi Sea Planning Area previously. Sale 109 was held in 1988 with 351 leases issued, and Sale 126 was held in 1991 with 28 leases issued. All of those leases have expired. The MMS Final Notice of Sale and the Chukchi Sea final environmental impact statement are available at www.mms.gov/alaska.

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