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Court orders Shell Oil to suspend drilling off Arctic shore

Federal hearing on company's exploration plan set for Aug. 14

Posted: Sunday, July 22, 2007

ANCHORAGE - A federal appeals court has ordered Shell Oil to stop its exploratory drilling program off the north coast of Alaska, at least until a hearing in August.

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The order, issued Thursday by the 9th U.S. Circuit Court of Appeals, comes after the federal Minerals Management Service in February approved Shell's offshore exploration plan for the Beaufort Sea.

"Vessels currently located in the Beaufort and Chukchi seas shall cease all operations performed in furtherance of that program, but need not depart the area," the order said.

Opponents contend that the Minerals Management Service approved Shell's plan without fully considering that a large spill would harm marine mammals, including bowhead and beluga whales. They say polar bears also could be harmed, and they question whether cleaning up a sizable spill would even be possible in the icy waters.

Company officials are obviously disappointed, said Shell spokesman Curtis Smith.

"But the court has asked for more information, and we will provide it. We will comply with the court order and continue to welcome discussions with the North Slope communities," he said. "Alaska is a long-term investment for Shell."

Shell was the high bidder in two recent lease sales for offshore tracts in the Arctic. In 2005, Shell Exploration & Production Co., part of Royal Dutch Shell, spent more than $44 million for offshore leases in the Beaufort Sea.

In April, the company intensified its program by bidding $39 million for offshore leases, including more than $14 million for Flaxman Island northwest of the Arctic National Wildlife Refuge.

The plan submitted by Shell Offshore proposed to drill as many as 12 exploration wells on 12 tracts over three years, including four exploration wells this summer. That prompted a lawsuit by the North Slope Borough, several conservation groups and a group of American Indians and Alaska Natives.

A hearing is planned for Aug. 14 in San Francisco.



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