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9th Circuit Court of Appeals ruling allows Beaufort drilling

by Channel 2 News staff
Friday, August 28, 2009

ANCHORAGE, Alaska -- A ruling Thursday by the Ninth Circuit Court of Appeals has cleared the way for Shell Oil to resume its exploration and development in the Beaufort Sea.

The court's ruling says the Bush administration was correct in not demanding a new  environmental impact assessment for the company's drilling leases.

The suit filed by the North Slope Borough and the Alaska Eskimo Whaling Commission alleged that the Minerals Management Service was supposed to have included additional environmental work in its studies before a lease sale took place in 2007.

The court rejected those claims.

The decision allows Shell Oil to continue exploration and development of off-shore oil prospects in the Beaufort, but it does not affect Shell's leases in the Chukchi Sea, which are tied up with a separate lawsuit by environmental groups and the village of Point Hope.

Shell spokesperson Curtis Smith said the company hoped to start exploratory drilling next year with a somewhat smaller operation than originally planned.

"We're hopful that we can drill in 2010," Smith said. "Our 2010 plan of exploration was crafted as a direct result of feedback from North Slope stakeholders that we were moving too fast, that it was too much and too soon, and the new plan reflects that."

"It's one year, it's one rig, "It's half the number of wells we previously planned to drill."

While the ruling does remove an obstacle, there remains some work to be done, Smith said.

"The MMS is still reviewing our plan of exploration and we still have some major permits that need to be achieved," he said. "It's a small victory, but there's a long way to go."

In March, the court vacated an opinion issued in November of 2008, which had halted Shell's plans.

Gov. Sean Parnell lauded the Thursday decision, saying that developing the Outer Continental Shelf oil is critical to Alaska's long-term economic future.

Contact Channel 2 News staff at news_desk@ktuu.com