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Alaska offshore drilling delayed further


Alaska offshore drilling delayed further
Shell blocked from area off Prudhoe Bay due to lawsuit by natives,

The Associated Press
Updated: 7:59 a.m. HT Aug 16, 2007

ANCHORAGE, Alaska - A federal appeals court ruled Wednesday that
Royal Dutch Shell PLC must further postpone plans for exploratory oil
drilling off the northern coast of Alaska.

The 9th U.S. Circuit Court of Appeals also indicated that
environmental and Alaska Native groups have a good chance of
prevailing in their effort to keep the energy giant out of the
Beaufort Sea.

Petitioners, including the Alaska Eskimo Whaling Commission and the
Center for Biological Diversity, have "raised serious questions and
demonstrated that the balance of hardships tips sharply in their
favor," the ruling said.

The appeals court's decision bans Shell from exploration activities
pending a review of anti-drilling petitions. It comes after the court
ordered a monthlong halt to drilling in July.

At issue is whether the U.S. Minerals Management Service complied
with the National Environmental Policy Act in granting offshore
leases to Shell.

"If we had a rational energy policy, this area would never have been
offered for leasing in the first place," said Brendan Cummings, ocean
program director for the Center for Biological Diversity in San
Francisco. "We believe the government's environmental analysis was
woefully inadequate."

Shell's drilling program includes sites not far from the edge of the
Arctic National Wildlife Refuge in northeast Alaska. Polar bears,
various bird species and endangered bowhead whales live in the refuge
and surrounding territory.

Alaska Natives hunt the whales for food under federal subsistence
rules and fear underwater seismic surveys could prompt the migratory
animals to travel farther from shore. Environmental groups say large-
scale industrial activities could jeopardize the health of Arctic

Shell has high hopes for oil resources in the area, which is not far
from Prudhoe Bay, the nation's most productive oil field.

The company 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, Shell 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.

Shell officials believe the company has "met or exceeded requirements
for responsible Arctic exploration," according to a statement
released Wednesday.

"Alaska is a long-term commitment for Shell," spokesman Curtis Smith
said in the statement. "Despite today's court decision, we see a
bright future for Shell in Alaska."

The next hearing is scheduled for early December.

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