Shell Arctic Drilling Plans Blocked By Courts

Shell's plans to drill for oil in the Arctic's Chukchi Sea have been handed a major setback by a U.S appeals court which ruled that the Department of the Interior had underestimated the potential environment impact. The courts ordered the federal government to do a new assessment.

Judge William Fletcher of the 9th Circuit Court in San Francisco ruled that the Bureau of Ocean Energy Management (BOEM) estimate that Shell would only extract one billion barrels was far too low. In the court opinion that Fletcher authored, he said that the numbers were "arbitrary and capricious" and ordered the agency to re-do the environmental analysis based "on the full range of likely production if oil production were to occur."

The ruling came as a result of a January 2010 lawsuit brought by a coalition of native and environmental groups after the U.S. government auctioned off millions of acres in the Chukchi Sea to oil and gas development in 2008. Shell was awarded the concession after bidding $2.6 billion.

"It makes no sense to open up the fragile, irreplaceable and already melting Arctic Ocean to risky drilling for dirty oil that will only exacerbate climate change already wreaking havoc on the Arctic and elsewhere," said Erik Grafe, an attorney at Earthjustice, an environmental group that led the lawsuit.

Other plaintiffs included the Native Village of Point Hope, Inupiat Community of the Arctic Slope, Alaska Wilderness League, Center for Biological Diversity, Defenders of Wildlife, National Audubon Society, Natural Resources Defense Council, Northern Alaska Environmental Center, Oceana, Pacific Environment, Resisting Environmental Destruction on Indigenous Lands (REDOIL), Sierra Club, The Wilderness Society and World Wildlife Fund.

The Chukchi Sea is home to iconic species such as polar bears, walrus, beluga whales, bowhead whales, and seals as well as indigenous communities who have depended for millennia on the ocean for their subsistence way of life.

"The Chukchi Sea and its coast are remote - the coast contains only four small communities that are not connected to a road system, lack deepwater harbors, and can only be reached by plane or, in summer, by boat," the groups noted. "The region is hundreds of miles from the nearest coast-guard station and lacks rescue and oil spill response capacity."

"This is a massive blow to Shell's Arctic ambitions," said John Sauven, executive director of Greenpeace UK told the Guardian. "Shell had already lost the case for Arctic drilling in the court of public opinion - today they have lost the case in a court of law as well."

The ruling is also a setback for President Barack Obama who personally helped Shell obtain authorization to drill for oil in Alaska, In November 2010, almost two years after he was elected, Obama told William K. Reilly and Carol M. Browner, two former heads of the Environmental Protection Agency, what he wanted them to do. "Where are you coming out on the offshore Arctic?" he asked. "What that told me," Reilly told the New York Times, "was that the president had already gotten deeply into this issue and was prepared to go forward."

The local indigenous community has been protesting against Shell's plan since the concession was awarded. "Our village has been there 4000 years. Our biggest concern is spilled oil getting into the ocean and affecting the marine mammals that we depend upon. Your clean-up ability is not adequate," Robert Thompson, a village of Kaktovik on the edge of the Arctic Ocean in Alaska, told shareholders at the company's 2012 annual meeting in the Hague.

• 183 Environment