November 21, 2008

Court cancels an Alaskan drilling permit

A U.S. federal appeals court canceled a Royal Dutch Shell permit to drill for Alaskan oil, citing an agencies failure to conduct an environmental review.

The court ruled that the U.S. Minerals Management Service failed to conduct a required environmental review before giving the company a permit to drill in the Sivulliq oil field about 16 miles off of northern Alaska, The New York Times reported Friday.

The 1970 National Environmental Policy Act required the agency to take a hard look at the environmental impact of the project, the Times reported.

There remain substantial questions as to whether Shell's plan may cause significant harm to the people and wildlife of the Beaufort Sea region, said the U.S. Court of Appeals for the Ninth Circuit in San Francisco.

Several environmental groups and the North Slope Borough, representing Inupiat natives, had sued, claiming the drill ships and ice breakers could harm bowhead whales that migrate twice a year through the Beaufort Sea, the Times said.

The company has spent about $84 million to buy Beaufort Sea leases and claimed the Minerals Management Service did a thorough job.

Shell has met or exceeded requirements for responsible Arctic exploration, the company said in a statement.