Oil company proposes Arctic drilling from artificial island

Within a few years, America could be extracting oil from federal waters in the Arctic Ocean, but it won't be from a remote drilling platform.

Federal regulators are taking comments on a draft environmentalstatement for the Liberty Project, a proposal by a subsidiary ofHouston-based Hilcorp to create an artificial gravel island thatwould hold production wells, a processing facility and the start ofan undersea pipeline carrying oil to shore and connections to thetrans-Alaska pipeline.

The drilling would be the first in federal Arctic waters sinceRoyal Dutch Shell, amid protest both in the United States and
abroad, in 2015 sent down an exploratory well in the Chukchi Sea offAlaska's northwest coast.

• Shell relinquishes offshore leases in Alaska's Chukchi Sea

• U.S., Canada ban offshore drilling in Arctic waters

Supporters like its chances. A final decision is in the hands ofInterior Secretary Ryan Zinke.

President Barak Obama in December signed an executive order designating the bulk of U.S. Arctic Ocean waters indefinitely off-limits to future oil and gas leasing. But President Donald Trump in April signed another order aimed at reversing the policy. Zinke said Trump's actions would put the country on track for energy independence.

Opponents say Arctic offshore oil should stay in the ground,where it won't add greenhouse gases that contribute to global warming and the melting of sea ice, the habitat of polar bears and walruses. They say spills are inevitable and cannot be cleaned up in icy Arctic water.

Questionable record

Opponents also question Hilcorp's safety record. Stateauthorities this year fined the company $200,000 for violations at
another production site. Hilcorp also waited several months toaddress an undersea pipeline leaking millions of cubic feet ofprocessed natural gas in Alaska's Cook Inlet because of danger to divers, Lois Epstein, Arctic program director for The Wilderness Society, said at an Anchorage hearing.

• Alaska underwater pipeline leak may have started in December

"This ongoing gas release into Cook Inlet, visible from the air,was a national embarrassment for Alaska," she said.

The gas leaked from a pipeline supplying fuel to Hilcorpproduction platforms. The company confirmed the leak in February andlowered pressure in the line but waited until April to make repairsbecause of the threat to divers from floating ice. The Alaska Department of Environmental Conservation to date has found no evidence the leak harmed birds, fish or marine mammals.

The latest project is on federal leases sold in the 1990s.

Hilcorp proposes to create the island about 24 kilometreseast of Prudhoe Bay, North America's largest oil field. BPExploration Alaska drilled at the site in 1997 and sold 50 per centof the assets to Hilcorp in 2014.

The island's base on the ocean floor would be 24 acres, about thesize of 18 football fields, with sloped sides leading to a work surface of nineacres, the size of nearly seven football fields.

Trucks would travel by ice road to a hole cut in sea ice and deposit 63,450 million cubic metresof gravelinto six metres of water to create the island. A wall wouldfend off ice, waves and wildlife.

The island would be nine kilometresoff shore. Thesurface would have room for 16 wells, including five to eight
conventional production wells. At peak production, Hilcorpanticipates extracting 60,000 to 70,000 barrels per day for a total recovery of 80 million to 150 million barrels over 15 to 20 years.

Oil would reach shore by a pipe encased by a second pipe andequipped with a leak detection systems. It would be buried to prevent gouging by moving ice.

At the end of production, the company would remove equipment andthe wall and let waves and ice dismantle the island.

Would be Alaska's 19th artificial drilling island

At a public hearing on the project last week, Joshua Kendrick, anattorney for the Alaska Oil and Gas Association, said opposition testimony has focused on rhetoric. Liberty would be the 19th artificial drilling island in Alaska, including four now pumping oilfrom state waters. Decisions should be made by data and science, hesaid, and Hilcorp is not proposing something novel.

"This isn't venturing into new waters. Anyone who sells fear orthe least likely outcome to discourage these types of investments coming forward is doing a disservice to Alaska, doing a disservice to the public," he said.

Andy Mack, commissioner of the state Department of NaturalResources, said the body of information built up from wells ongravel islands in state waters should give people comfort about Liberty's effects on marine mammals and the environment. Like other supporters, he touted Liberty's economic benefits.

"Each of these facilities on its own, frankly, they're not giantfields," Mack said. "But they're all very, very important to theeconomy of Alaska."

Blake Upshaw of the Center for Biological Diversity said spillsare inevitable and routine and cannot be cleaned up in Arctic waters.

"Oil companies have guaranteed safe operations to communities inValdez, the Gulf of Mexico and Santa Barbara over the years, and weall know how projects in those locations turned out," he said.

The Bureau of Ocean Energy Management will collect comment on itsdraft environmental review until Nov. 18.