Court Prohibits Shell Drilling in Alaskan Oil Well

Royal Dutch Shell, Europe's largest oil company, can't drill the deepest offshore Alaskan well after a federal appeals court said the government's approval of the plan violated environmental laws.

The U.S. Court of Appeals in San Francisco today threw out the Interior Department's approval, saying the agency hadn't taken a "hard look" at how Shell's drilling would affect endangered bowhead whales and native Alaskans' activities. The ruling affirms a court order that blocked drilling last year.

Environmental groups and Eskimo villagers claimed that drilling in the Beaufort Sea could harm the whales and fish that Inupiat Native Alaskans depend on. The groups sued the Interior Department's Minerals Management Service, which regulates oil development in federal waters, saying the agency failed to do a proper environmental review before granting Shell a permit.

"The agency is not relieved of its responsibility to conduct more specific analysis on how this project will affect the Inupiat harvest of bowhead whales," two judges on the three-judge panel said in the ruling. One judge dissented.

Shell, which abandoned U.S. arctic exploration 21 years ago, has said it invested $200 million in the project to drill wells in the Beaufort Sea. One well, 14,000 feet beneath the sea floor, would exceed the deepest Alaskan well by 3,000 feet.

Alaska's North Slope Borough, home to 7,500 people in eight communities, claimed noise from the drilling might prompt bowhead whales to divert their migration route farther offshore, making it harder for native hunters to find the animals. The group also said the project increases the risk of an oil spill.

Lawyers for Shell, based in The Hague, Netherlands, and the Bush administration, which sided with the company in the case, told the appeals court at a hearing in December that studies showed that the drilling didn't have a significant effect on the whales.

Author: Jo Amey