US: Court Says Shell Can't Drill Near Alaska

A federal appeals court on Thursday blocked Royal Dutch Shell from drilling oil wells off Alaska's North Slope after finding that the Interior Department had failed to conduct an environmental study before issuing the company's drilling permit.

In a long-awaited ruling, the
court said that the Minerals Management Service, the federal agency in
charge of offshore leasing, had violated the 1970 National
Environmental Policy Act by failing to take a "hard look" at the impact
that offshore drilling would have on bowhead whales in the Beaufort Sea as well as indigenous communities on the North Slope.

decision canceled Shell's permit to drill at a prospect called
Sivulliq, about 16 miles off northern Alaska, and ordered the agency to
begin the process from scratch.

"There remain substantial
questions as to whether Shell's plan may cause significant harm to the
people and wildlife of the Beaufort Sea region," the United States
Court of Appeals for the Ninth Circuit, in San Francisco, said in its
ruling. One judge, Carlos T. Bea, on the three-judge panel dissented.

groups, including the Alaska Wilderness League, as well as the North
Slope Borough, which represents the indigenous Inupiat people, had sued
to stop Shell from drilling, claiming that the company's plans to send
icebreakers, drill ships and vessels to conduct seismic surveys might
harm bowheads. The whales migrate through the Beaufort Sea twice a year
and are the basis of the Inupiat community's subsistence culture.

decision is a costly setback for Shell, which had waged a vigorous
campaign to expand offshore exploration in Alaska. The company recently
spent $2.1 billion to acquire leases in the Chukchi Sea, after spending
$84 million to buy leases in the Beaufort Sea. The company said it
would review its options.

"We believe the M.M.S. did a thorough
job and that Shell has met or exceeded requirements for responsible
Arctic exploration," the company said in a statement. "Shell is
committed to operating safely and responsibly and will continue to
comply with all regulatory requirements."

The oil industry had
been looking at the case as a test on how to tap the Arctic's
hydrocarbon potential, and offset declines from the onshore Prudhoe Bay
oil field. It comes at a time of renewed public debate in the country
about opening other offshore tracts for exploration.

Charles Clusen, the director of the Alaska project at the Natural Resources Defense Council,
one of the plaintiffs in the case, said the ruling left it to the next
administration to decide how offshore drilling would be conducted in
the nation's Arctic region.

"This is really a signal that Shell's
plan was simply too much, too fast, and too shoddy," Mr. Clusen said.
"By this decision, the court has opened the door to a new
administration to take a whole new approach, and hopefully a more
precautionary approach, to America's Arctic and make sure we don't lose
endangered species."

In a statement, the Minerals Management
Service said it was disappointed by the ruling and defended its
environmental review process.

AMP Section Name:Natural Resources
  • 183 Environment

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