Opinion ID: 2352543
Heading Depth: 3
Heading Rank: 1

Heading: The Dispute Concerning Alaskan Crude's Oil Spill Contingency Plan.

Text: The operator of an oil exploration facility must develop a contingency plan in case of an oil spill and obtain approval of that plan from DEC in consultation with AOGCC. [3] The contingency plan requirements are based primarily on the number of barrels of oil per day that the exploration facility should be prepared to contain in the event of a spill; that number is known as the response planning standard. [4] Gas-only wells, however, are exempt from these requirements. [5] When the Unit was formed, Alaskan Crude seemed to suggest that it intended to use the Burglin 33-1 well to explore for both oil and gas. Almost one year after the Unit's formation, Alaskan Crude requested an 85% reduction in the response planning standard for the Burglin 33-1 well, neither requesting a declaration that the well was a natural gas exploration facility nor mentioning the rules exempting gas-only wells. DEC approved the reduction on AOGCC's recommendation but also noted AOGCC's determination that it would be inappropriate to classify the well as a gas-only well. Alaskan Crude requested reconsideration, citing the statutory exemptions for gas-only wells and arguing that the 85% reduction was insufficient. After a hearing (which the parties did not attend), AOGCC reaffirmed its earlier determination that Burglin 33-1 was not a gas-only well and further reduced the response planning standard based upon new computer modeling of the well's potential flow rate. Alaskan Crude then indicated that it was now planning to test the well at a shallower depth than it had previously intendeda depth which would not be capable of unassisted flow to the surfaceand requested that AOGCC reconsider its decision on this basis. AOGCC treated Alaskan Crude's request as a new application for a recommended response planning standard based upon the shallower depth and further reduced the response planning standard to 115 barrels of oil per day. Alaskan Crude did not seek agency rehearing of this determination; instead, it appealed to the superior court pursuant to AS 22.10.020(d), arguing that the well is gas-only and is exempt from oil spill contingency planning. [6] The superior court upheld AOGCC's determination on December 8, 2010. [7] That decision is the subject of a separate appeal to this court.