Imagine a world where one, single government agency would study all potential impacts of energy exploration offshore, and then, upon completion of its work, however long it needed to take, be empowered to issue one, single permit to allow that project to proceed. Now imagine a world with no heaven — it’s easy if you try. No hell below us; above us only sky. Good tune, right? Snap out of it, man: No such government office exists. Even so, the good guys score a win every now and again – and the news out of EPA today on Shell’s pending air permit would certainly qualify as that.  

We’ll let Reuters’ Alaska writer take the story from here:

The U.S. Environmental Protection Agency on Thursday tentatively approved a key air-quality permit that would allow Royal Dutch Shell to conduct oil-drilling operations later this year in Alaska’s Chukchi Sea.

The permit would allow emissions from the drilling ship and associated vessels that Shell plans to mobilize in the Chukchi during the summer and autumn open-water season. …

“We very much appreciate the work done by EPA Region 10 to issue Shell a draft air permit for our 2010 Chukchi drilling program,” Pete Slaiby, Shell Alaska’s vice president, said in a statement. “The issuance of this draft permit starts the clock on a critical timeline of events that will ultimately determine if we can explore our Alaska leases in 2010,” he added.

Interestingly, word of EPA’s long-awaited decision on the air permit hit our mailboxes a full 18 hours before we read about it on the Reuters site. Who gets credit for breaking the story? Not exactly sure it’s the most scientific calculation ever made, but a press release from new Alaska senator Mark Begich migrated into our Outlook at 5:35 PM yesterday afternoon. And the sentiment it contained hit the target squarely on the mark:

“Alaska has long been America’s energy storehouse and a green light on this Shell development means Alaska’s energy will continue to help fuel our nation’s factories and automobiles,” Begich said. “It has become increasingly clear that energy policy is national security policy, and the U.S. needs to focus more on production of our rich energy resources right here at home. Let’s stop paying billions a year to hostile countries and start putting Alaskans to work.”

But while it might’ve slid into a home a half-second late, the Reuters piece is indispensible in one key regard: It adds some much needed context to the challenges that remain before a single drop of oil can ever be produced in the Chukchi. Shell manager Peter Slaiby lays out the landscape in an extended quote toward the bottom of the piece:

“While today’s announcement is good news, the length of the public comment period combined with likely appeals still pushes the boundaries of our ability to drill in 2010,” he said in his statement. “Obviously, the windows in which we have to operate are limited and a decision to move forward is an extremely expensive one. We will continue to monitor our options in the days ahead as we get closer to making that critical decision.”

Ah, yes: The public comment period. Where would we be without it? Seriously: Where would the Interior Department be if it weren’t able to access the sage advice and unique wisdom found in the thousands of identical form letters aggregated and sent in by well-meaning environmental groups? Of course, in reality, these folks aren’t interested in using the public comment period as a force for good – only as a means of delay.

Incidentally, the only public comment period that should matter, in our estimation, is the public hearing that EPA is holding with Alaskans next month – on February 16. The Anchorage paper sheds some additional light on how that effort is slated to go down:

The EPA is taking public comment on its proposed permit through Feb. 17, Begich said. The EPA has tentatively scheduled a public hearing for Feb. 16 in Barrow that would be teleconferenced in Wainwright, Point Lay, Point Hope and Atqasuk, communities that could be affected by Chukchi oil and gas development.

And, by the way: If you can’t make that hearing, you shouldn’t hesitate to shoot off an email from wherever you’re at. According to EPA, you should direct your correspondence here: R10ocsairpermits@epa.gov. And if you click here, you’ll find about 150 other ways in which you can make your voice heard.

We may live in a crazy, crazy world, but when it comes to energy here in Alaska, we try to keep things real simple-like: Oil comes from the north, and natural gas comes from the south. Of course, in truth, there’s plenty of natural gas up on the North Slope as well – “large volumes,” according to the federal government – but as yet, we don’t have the means of getting it to the folks who need it. It’s a reality we hope to change in the future, to be sure, but for now, Alaska’s natural gas is used (basically) just by Alaskans. And the vast majority of it comes from the Cook Inlet’s 28 producing gas fields in Southcentral.

Now, for folks who don’t know, the Cook Inlet (and not the North Slope) is considered the birthplace of Alaskan oil and gas — with the first commercial discovery of oil taking place in the Swanson River field in 1957. Today, the buzzword is gas, and these fields help provide the region with reliable energy for electrical power generation and heating. It’s also gas that’s helped spawn and support Alaska’s petrochemical industry – an industry that churns out the fertilizer (especially urea fertilizer, which has more nitrogen than all the rest) that farmers use to put food on America’s table.

So that’s the back-story. What’s the front one? Well, flipping through the Anchorage Daily News this morning, we come across a lovely piece filed by Elizabeth Bluemink reporting on a new analysis released this week by the Alaska Department of Natural Resources. Turns out Cook Inlet’s got a ton of available natural gas.

Despite recent public debate about future natural gas shortages in Southcentral Alaska, the Cook Inlet area contains enough known natural gas to supply the region’s energy needs for a decade or longer, according to a new study by the Alaska Department of Natural Resources.

The department’s staff reviewed data from the 28 producing gas fields in Cook Inlet and estimated that roughly 1.14 trillion cubic feet of gas in those fields remains to be tapped.

According to EIA, 88.3 billion cubic feet of natural gas is delivered to Alaska’s consumers each year. Which means 1.14 trillion cubic feet of Cook Inlet gas – and just Cook Inlet gas, mind you — can keep our state humming for another 13 years. The complete Alaska DNR report, incidentally, can be found here. One sentence in particular, maybe a throw-away line to some, struck us as especially worthwhile in the report:

It will be critical for all stakeholders to recognize the significant impediments that will hinder development of the remaining gas resource in the Cook Inlet basin, and work together to overcome them.

Naturally, the impediments about which it speaks are plain to anyone with even a passing interest in responsibly developing Alaska’s natural resources: lawsuits, federal access restrictions, federal wilderness laws, and byzantine state, local and federal permitting rules. That’s true not only in Cook Inlet, as we know – but throughout the state, both onshore and offshore.

But we’ll leave those gripes for another post. Today, the news is good: Lots of gas for Alaskans in Alaska, and a ton more energy to offer the nation in the future – if those in power in Anchorage, Juneau, San Francisco, and Washington, D.C. allow us to step up and deliver it.

Hey, maybe this is the way it’s always gone, but you tell us if you see anything wrong with this picture:

Federal agency (we’ve changed the names to protect the guilty) informs private companies that, after years of environmental assessment, areas offshore Alaska will be available for lease; private company makes good-faith bid for the right to lease that acreage, wins bid, and turns over billions to federal agency; after a few more years of wrangling, federal agency informs private company that exploration may proceed, albeit conditionally; a third-party doesn’t like that decision, and files a lawsuit to stop it; the conversation over the future of that lease now expands to include the third-party litigant, the courts, and the federal agency – but contracted to exclude the company that invested those billions of dollars in the lease in the first place.

Follow all that? In 114 words, that’s basically the situation as it presently exists up here in Alaska. On Dec. 7, we blogged on this very site that Secretary Salazar’s MMS agency had tentatively approved of Shell’s plan to do preliminary work on three of the wells it leased from the government in 2008 – not talking about anything major here, just drilling a couple of test wells to see whether the $2.1 billion investment it made in the area last go-round could potentially bear fruit.

Is it possible the anti-energy groups read that post? Tough to know for sure, but it sure didn’t take ‘em long to strike. Last week, two separate rounds of lawsuits were filed in San Francisco’s Ninth Circus court: one by a long-time anti-energy group here in Alaska supported by national environmentalists, and the other? Well, by those same national environmentalists themselves:

A coalition of environmental groups and Arctic communities has filed a second lawsuit aimed at blocking a Shell Oil subsidiary from drilling in the Beaufort Sea.

The group sued Tuesday, hours after a group that helps manage Eskimo whaling in Alaska filed a similar lawsuit.

Both suits aim to block plans by Shell Gulf of Mexico Inc. to drill two wells off Alaska’s north coast.

On one hand, none of this should’ve come as a surprise to anyone who’s been following this issue with any intensity. Back in September, we passed along some interesting numbers compiled by the Institute for Energy Research on how many energy-related leases have been the object of litigation from these folks over the past few years:

The number of suits filed in federal court to delay, defer or outright deny the development of domestic energy resources has grown more than 700 percent in the past decade; from 167 protests per year between 1997 and 2000, to 1,180 a year from then until now.

How amazing is that? 1,200 lawsuits a year – three-and-a-half separate instances of suit filed each and every day. It’s quite a racket this groups have going, if you ask us – and none plays the racket any better than the Crag Law Center in Portland, Ore. According to its own website, this outfit is responsible for locking up millions of acres of taxpayer-owned land, working to prevent dead trees and under-brush from being taken off the forest floor, and even filing suit to prevent a McDonald’s restaurant from opening its doors. Seriously, guys? You’ve never had the McRib?

In any event, folks who actually live here in Alaska and care about its economic future and well-being aren’t taking the news of these lawsuits lying down. By way of the Juneau Empire (did you know that Juneau’s the only U.S. state capital that’s inaccessible by roadway?), we get word from the governor’s office that the state of Alaska “will intervene” in the case:

Gov. Sean Parnell said the state intends to show its support of a federal decision allowing Shell to proceed with offshore oil exploration.

The governor said the state will intervene in a lawsuit brought by environmental groups challenging the decision by the Minerals Management Service.  Shell plans on drilling three exploratory wells in the Chukchi Sea next year off Alaska’s northwest coastline.

Environmental groups bitterly oppose drilling.

That last line has it right: these groups bitterly oppose both the process for, and the product of, exploring for American energy. We get that. Unfortunately, now that the folks charged with actually exploring for that energy have been cut out of the process, the conversation on how to proceed in the future is now limited to the entities on this list: 1) Groups that “bitterly” oppose exploration, 2) Courts that bitterly oppose it too, and 3) a federal agency headed up by a man who, though not bitter, seems to oppose it right along with the rest.

Oh boy: we can’t WAIT to see how this whole thing turns out.

So, OK. Secretary Salazar found his way into our good graces earlier this week by approving a modest 2010 offshore exploratory plan for the Chukchi – basically will allow Shell to drill three separate test wells further than 60 miles from shore, and maybe, just maybe, provide some clarity regarding whether the $2.1 billion investment it made there in 2008 is worth its salt.

As noted, the news out of Washington wasn’t exactly an unconditional slam dunk. As Shell’s Pete Slaiby noted in the Washington Post on Monday, the Salazar announcement is only one half of the equation — to actually start exploring out there, EPA will need to get off its can as well:

Shell officials called the MMS conditional approval a positive step but noted the company is still waiting for an air discharge permit from the Environmental Protection Agency.

“It’s critical that we achieve this permit in a timeline manner to enable a go-ahead decision on our 2010 program,” said Shell Alaska Vice President Pete Slaiby.

But, OK. At least the secretary is doing his part to move this thing closer to the goal line; and for that, he deserves some encomia. Consider those granted. But then we get press releases from his department like the one we got yesterday – ones that make us stop, reflect, and occasionally laugh out loud.

The release is entitled: “Salazar Announces MMS Plan to Establish Atlantic Renewable Energy Office” – a title that belies the hilarious nature of what’s contained therein. But then you go ahead and read the first sentence:

COPENHAGEN – Today, as he toured the Middelgrunden wind farm near Copenhagen Denmark, Secretary of the Interior Ken Salazar announced that the Minerals Management Service (MMS) will establish a new regional office in 2010 to support renewable energy development on the Outer Continental Shelf (OCS) off the Atlantic seaboard.

Apparently, Secretary Salazar was so inspired by his boat-ride to Middelgrunden this week that he felt compelled – right there and then – to declare it his government’s intention to do something bold – something unprecedented: open up a regional permitting office for offshore wind at the Jersey Shore.

OK, so maybe it’s not buckle-over-in-writhing-pain hilarious, but seriously – if the rest of the world doubted our country’s commitment to addressing climate change before, there simply can be no doubt any longer. Secretary Salazar and his new seashore permit stand has officially put an end to all that.  

We know he’s busy in Copenhagen this week, but wonder if he’ll ever get up to Alaska to see some of the energy resources we’ve got offshore as well?

UPDATE: Interesting sequence of events here, upon further inspection.

On Wednesday, the Danish wind turbine manufacturer Vestas announced its intention to continue paying 500 employees at a currently idled plant in Salazar’s home state of Colorado – you heard that right: continue to pay them full salary for producing ZERO new wind turbines. And then on Thursday, Salazar visit a Danish wind farm – one in which Vestas has a significant stake (as would be expected, considering it’s Denmark). Probably just a coincidence, is all.

UPDATE II: In addition to wind, did we mention that greener-than-thou Denmark produces a ton of oil and natural gas offshore as well? Secretary Salazar’s press release didn’t indicate whether he visited any of THOSE offshore installations on his boat ride to Middelgrunden – so just in case that little part of Denmark’s history was omitted from his briefing materials, we include this (by way of the Toronto Globe and Mail):

In reality, the Danish economy is more dependent on fossil fuels and the wealth they create than at any time in the country’s history. The fuels come from the North Sea, whose reserves gave Denmark its first oil production in 1972.

In 1990 Denmark’s oil production was 7-million cubic metres (one cubic metre equals 6.3 barrels). Production peaked at 22.6-million cubic metres in 2004. In 2007, the figure was a still-hefty 18.1-million. Natural gas production has doubled since 1990.

A reader reminds us that Maersk Oil is especially prolific in these parts of the North Sea; this map of its existing offshore production facilities (lifted from its website) would seem to confirm that.

Salazar: “A key component of reducing our country’s dependence on foreign oil is the environmentally-responsible exploration and development of America’s…resources”

Hallelujah. The Interior Department’s bureaucracy that oversees offshore energy production – the Minerals Management Services (MMS) – finally cleared the way earlier today for responsible, job-creating energy production in the Chukcki Sea. Well, not exactly. But, as Sen. Murkowski says: “This is progress.”

Secretary Salazar didn’t exactly wax poetic, but here’s what he said in a press release entitled “Salazar Conditionally Approves Shell’s Exploration Plan For Certain Chukchi Sea Leases”:

“A key component of reducing our country’s dependence on foreign oil is the environmentally-responsible exploration and development of America’s renewable and conventional resources,” said Salazar. “By approving this Exploration Plan, we are taking a cautious but deliberate step toward developing additional information on the Chukchi Sea.”

In 2008, Shell’s subsidiary paid $2.1 billion for leases during Chukchi Sea Oil and Gas Lease Sale 193. The 2008 sale was included in the previous Administration’s 2007-2012 Five-Year Oil and Gas Leasing Program to cover leasing for oil and gas in the Outer Continental Shelf for that five-year period.  The Exploration Plan now approved allows Shell to drill up to three exploration wells during the July-October open water drilling season.

“Our approval of Shell’s plan is conditioned on close monitoring of Shell’s activities to ensure that they are conducted in a safe and environmentally responsible manner,” added Salazar. “These wells will allow the Department to develop additional information and to evaluate the feasibility of future development in the Chukchi Sea.

Sens. Murkowski and Begich were also quick to applaud Sec. Salazar and MMS’s for finally getting off their respective cans and moving forward with a commonsense plan that will create good jobs up here and help drive down foreign oil imports from unstable regions of the world.

US Sen. Lisa Murkowski

“This is progress,” Murkowski said. “Today’s announcement from the MMS is an encouraging sign that Alaska’s oil and natural gas resources can continue to play a major role in America’s energy security.”

“While this represents a step forward, significant hurdles remain before exploration can advance in the Chukchi,” Murkowski said.

US Sen. Mark Begich

“This is another positive step for Alaska’s oil and gas industry. While challenges remain, approval of this exploration plan demonstrates Alaska will continue to play an important role in helping meet America’s energy needs.”

“I will continue to work with Interior Secretary Salazar to include protections that address concerns Alaskans and the rest of the nation have to develop these resources in a responsible manner,” Begich said. “The successful development of these reserves and those of the Beaufort Sea are key to the long term viability of the Trans-Alaska Pipeline and the future of the Alaska natural gas pipeline.”

Only one state in the Union produces more American oil each year than Alaska, and no: contrary to conventional wisdom (see below), it’s not Rhode Island. Of course, that honor goes to our friends from Texas – but here’s an interesting nugget for you: For as much oil as Texas produces onshore, even more comes from the state’s adjacent (and federal) Outer Continental Shelf (OCS).

This prolific tract is more commonly known as the Gulf of Mexico – and for the offshore doubters out there, it stands today as a vexing monument to what can be achieved when cutting-edge, space-age technology meets a localized federal energy policy that encourages producers to go out and look around.

Of course, that same technology is available up here in Alaska. What’s lacking, however, is the federal policy piece – one that would finally allow our state to do for the nation (and itself) what states along the Gulf Coast have continued to do, and successfully so, for the better part of three generations.

You can take a look at the numbers for yourself on this phenomenon; they don’t lie. Alaska produced 249,874,000 barrels of oil for American energy consumers in 2008 – not a single drop of it from energy-rich areas along the state’s adjacent federal OCS. And it’s not as if folks have gone out to look for some out there and come back empty-handed. The U.S. Geological Survey estimates that as many as 157 billion barrels of oil – 15 ANWRs! – lie ready, willing and able to be gotten above the Arctic Circle – much of that in areas within the jurisdiction of the U.S. Department of the Interior.

So that’s the policy as it exists today: Yes, there are staggering amounts of energy available for production up here, but no: none of it will be available to create jobs, revenue and opportunity here in the United States. But wait. A column we came across today in the San Luis Obispo (Calif.) Tribune from Earthjustice advisor Buck Parker says it’s “time to correct past wrongs in Arctic oil development.” From the piece:

Salazar should follow the advice of NOAA and hold off permitting new oil and gas activity in the Arctic until we have a better idea of how to respond when oil inevitably leaks and until we know a lot more about Arctic wildlife. … It is not too late for Salazar’s Interior Department to correct course and protect the Arctic Ocean.

Not to put too fine a point on this, but let us reiterate: Not a stitch of oil development has taken place in the Arctic – not because there’s no energy in the area, but because the federal government has done everything in its power (real and perceived) to deny us access to it. Apparently, this point isn’t fully known by this fella from Earthjustice – because, after all, he wouldn’t knowingly mislead his readers into thinking otherwise. Would he?

The full column is probably worth your read, if for no reason than to fully appreciate the lengths to which anti-energy activists will go to convince the American people that oil exploration in Alaska’s OCS is happening right now, that it’s ruining a pristine environment, and that federal officials must act at once to “correct past wrongs” in the region by bringing existing development to an immediate end.

But there’s no need to worry, Mr. Parker. Your apparatchiks in Washington are doing a bang up job at preventing that development as it is.

Just about everyone in America not living in the city of Houston knows that local planning and zoning ordinances are a basic fact of life.

But what would happen if the federal government attempted to apply those same local rules to 1.76 billion acres offshore? Carving up our oceans as if they were city blocks – using the same system to prevent domestic energy exploration as the anti-development crowd uses to defeat the local Wal-Mart. Sounds outrageous, right?

If you thought the Department of the Interior was bad, wait until you get a load of the Council on Environmental Quality (CEQ). An office run directly out of the White House, CEQ has teamed up with the National Oceanic and Atmospheric Administration (NOAA) to put forward a new “science-based” approach to regulating our nation’s oceans. The eggheads at NOAA call this thing “marine spatial planning.” All you need to know is that it will result in less access to less energy (and fishing, and tourism opportunities) along America’s outer continental shelf.

Thankfully, if news out of Washington, D.C. is any indication, our elected leaders on Capitol Hill aren’t letting this scam go unnoticed. Led by coastal state representatives and Alaska’s own Don Young, 69 members of the House (59 Republicans, 10 Democrats) sent a letter to CEQ head Nancy Sutley this week demanding an explanation for why they’re doing this, and a clarification on just how many jobs we expect to lose under a policy that bigfoots Interior on offshore management policy. From the AP:

Dozens of U.S. representatives sent a letter Monday to the head of the President’s Interagency Ocean Policy Task Force with concerns that the policy will block offshore energy development and cost jobs.

Sixty-nine House members, including Alaska Rep. Don Young, signed the letter in which they responded to the task force’s interim report released last month.

We’d be remiss here if we didn’t mention the role that NOAA administrator Jane Lubchenco is playing in all this. Previously a big-time marine professor at Oregon State, Ms. Lubchenco has written extensively in the past about “our unsustainable use of resources,” the “explosive growth of the human population,” and the “social compact” that “exploiters” such as fishermen and other commercial interests violate daily.

So spare us the press release, please. There can be little doubt that the new NOAA administrator is using this plan to initiate massive changes in the way Americans access their energy offshore – despite what’s being said about the plan publicly.

Here’s an excerpt from the House letter that address these specific points:

We are particularly concerned about the Task Force’s impact on our nation’s ability to safely develop its own offshore energy, including oil, natural gas and renewable energy.  It is critical that the Task Force’s proposals do not inhibit energy activity offshore in domestic waters and undermine the Department of the Interior’s Five Year Leasing Program for offshore energy development.

So, where does any of this leave us today? Tough to say. The oceans plan was recently put up for public comment for a measly 30 days – roughly 210 days fewer than the Interior Department’s five-year energy plan was available to comment on by the American public. How did that comment period end up? CEQ won’t say. We wonder why that is.

Alaska governor Sean Parnell does not mince words; he wasn’t afraid to stand up for his state’s energy economy and workforce as lieutenant governor, and he’s certainly not slowing down now as the state’s chief executive.

And apparently, he’s not afraid to fly either. This week, the governor will make the 3,300 mile trek from Alaska to Washington, DC, hopefully catching a decent movie along the way, as he embarks upon a busy schedule in the nation’s capital talking up the role that Alaska does, and can continue to, play in securing our nation’s energy future. On the menu? Interior secretary Ken Salazar, a couple folks from the White House, and maybe even the president himself.

The Associated Press reported this today under the headline “Parnell to lobby for OCS drilling in Washington”:

Alaska Gov. Sean Parnell will lobby to open the outer continental shelf to oil development during a trip to Washington, D.C., this week.

Parnell will meet with Interior Secretary Ken Salazar and other top Obama administration officials during meetings scheduled Wednesday and Thursday.

Parnell urged in a letter to Salazar earlier this month that the federal government should allow offshore oil and gas drilling along Alaska’s northernmost coastline.

Parnell called a responsible outer continental shelf leasing program that respects Alaska Native concerns “vitally important to Alaska and the nation.”

Mr. Parnell has shown to be a leader that keeps his word on working to expand Alaska’s energy access. Earlier this month, the governor told an energy gathering this:

Parnell told the group he’s written Interior Secretary Ken Salazar that he supports offshore drilling, the first battle cry in a fight for the state’s future.

“I will personally lead the charge in pursuit of OCS exploration and development,” he said.

So why is the governor fighting so hard to expand Alaska’s energy potentials? Well, according to the article from the beginning of September, Mr. Parnell said:

“We have so much opportunity for jobs and revenue there that it hasn’t really gotten the spotlight that’s been needed.”

Like a clear majority of Americans, Governor Parnell and most Alaskans understand that increasing energy production – of all forms, in all places – will help stabilize and drive down energy prices and help create good-paying jobs at a time when they’re most needed.