August 15, 2007 --- Vol. 13, No. 73August 2007

Shell reviewing Beaufort Sea options following court decision

Following today’s order by the U.S. Court of Appeals for the 9th Circuit extending the court’s stay on Shell’s planned Beaufort Sea drilling activities, Shell is assessing the fallout from the court’s decision.

“The court has ruled and Shell will abide by the ruling,” Shell spokesman Curtis Smith told Petroleum News today. ”We will continue to comply with the court order and continue our engagement with the North Slope communities. We are still reviewing all implications of the decision for this year’s exploration plan.”

But, in today’s order, the court prohibited Shell from starting its Beaufort Sea program until the court rules on an appeal by the North Slope Borough and the Alaska Eskimo Whaling Commission against the approval by the U.S. Minerals Management Service of Shell’s Beaufort Sea exploration plan. That court ban does not bode well for any possibility of Shell doing Beaufort Sea drilling this year — as part of its order, the court published a revised schedule for the court case, indicating that the case would continue into December, well after the likely end of this year’s open water season in the Beaufort Sea.

Two other appeals, both by groups of environmental organizations, against MMS approval of the Shell exploration plan are also progressing through the 9th Circuit Court of Appeals on the same schedule. The environmental groups say that noise and the potential for oil spills from offshore drilling would threaten various marine animals. Earth Justice, a legal firm representing several of the groups, today expressed satisfaction with the court’s decision.

“We’re pleased that the court is stopping these harmful activities,” Earth Justice attorney Deirdre McDonnel told Petroleum News.

On July 24 Shell signed a conflict avoidance agreement with the Alaska Eskimo Whaling Commission for the company’s 2007 offshore exploration program — that agreement included the cessation of drilling activities during the Cross Island whale hunt that starts in late August. And Shell has been assembling a fleet of vessels for its Beaufort Sea operations, including two drill ships and a new, purpose-built oil spill response vessel. The company has planned a comprehensive marine mammal monitoring program, including the use of aerial surveillance and marine mammal observers on vessels.

The full story will be in the Aug. 19 issue of Petroleum News, which will be available online at noon on Friday at

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