US considers Arctic offshore oil exploration

U.S. regulators are evaluating an application by a company seeking to explore for oil in the Arctic.

On June 12, the federal Bureau of Ocean Energy Management or BOEM announced that it had deemed Eni US Operating Co.'s exploration plan (or EP) to be submitted, and invited public comment on the plan. The company is a subsidiary of the Italian gas and oil company Eni S.p.A.

Under federal law, an Exploration Plan describes all exploration activities planned by the operator for a specific lease or leases, including information on locations, timing, drilling processes, and actions to be taken to meet safety and environmental standards and to protect access to subsistence resources. 

According to its Exploration Plan for the Nikaitchuq North Project dated March 2017, Eni proposes to drill into submerged lands on the Outer Continental Shelf beneath the Beaufort Sea, from its existing Spy Island drillsite which is located in Alaska state-jurisdictional waters.  Eni has secured federal leases for the "Alaska – Harrison Bay Block 6423 Unit".

BOEM's decision to deem the Exploration Plan as submitted triggers various deadlines:

• BOEM has opened a 10-day public comment window to provide information on issues that should be examined in the application's Environmental Assessment.  This window closes at midnight Eastern Time on Thursday, June 22.
• BOEM opened a 21-day public comment window for comments on the Exploration Plan itself.  This window closes at midnight Eastern Time on Monday, July 3.
• BOEM has 30 days within which it must evaluate the Exploration Plan, including a site-specific Environmental Assessment under the National Environmental Policy Act. By the end of the 30-day period BOEM may approve the EP, require modifications to the EP, or disapprove the EP.

While the Obama administration placed an indefinite hold on further leasing in much of the Beaufort Sea and other U.S. Arctic waters in December 2016, the Trump administration has expressed interest in reversing this decision in favor of expanded U.S. Arctic oil exploration and production.  The Arctic Ocean is home to significant fossil fuel resources, but environmental and logistical concerns have recently proved challenging.