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NEWS BULLETIN

July 20, 2007 --- Vol. 13, No. 66July 2007

9th Circuit Court of Appeals stays Shell Beaufort Sea drilling plan

FEX to shoot Smith Bay seismic next winter, evaluate prospects

On July 19 the U.S. Court of Appeals for the 9th Circuit temporarily stayed the U.S. Minerals Management Service approval of Shell’s exploration plan for the Beaufort Sea. The North Slope Borough and the Alaska Eskimo Whaling Commission have appealed the MMS approval — the court wants time to resolve a motion by the borough and AEWC to suspend the exploration plan until the court rules on the case.

Shell had planned to start drilling the Sivulliq prospect, formerly Hammerhead, on the western side of Camden Bay, at some time after Aug. 1. But the court has ordered Shell to suspend its Beaufort Sea exploratory drilling program until the court resolves the motion.

“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 court said.

The court is expediting resolution of the motion and has scheduled oral arguments for Aug. 14. Meantime the court has ordered the parties in the case to file statements regarding the status of some environmental mitigation measures. Those measures include incidental harassment authorizations from the National Marine Fisheries Service and the U.S. Fish and Wildlife Service, and a site-specific bowhead whale monitoring program. The court also wants MMS’s final determination of the adequacy of Shell’s measures to avoid conflicts with subsistence hunting “in the light of the parties’ failure to reach a Conflict Avoidance Agreement.”

“We had to do something,” North Slope Borough Mayor Edward Itta said in response to the court order. “When the bowheads are forced to go farther offshore, our whalers are put at greater risk out in the Arctic Ocean. We stand the chance of losing our whaling crews and the traditional food that feeds our families.”

And the borough said that MMS had approved Shell’s exploration plan “over the objections of its own scientists, who concluded that the exploration activities would threaten bowhead whales and endanger the lives of the subsistence hunters.”

MMS maintains that has taken the appropriate actions to ensure safe and environmentally responsible offshore exploration.

“MMS diligently performs all appropriate environmental reviews and meets all statutory requirements when preparing for any offshore leasing activity,” MMS spokeswoman Robin Cacy told Petroleum News July 20. “MMS will continue to work closely with all constituents and maintains a strong commitment to safe energy production.”

Two other appeals, both by groups of environmental organizations, against MMS approval of the Shell exploration plan are going through the 9th Circuit Court of Appeals. The court has issued a consolidated briefing schedule for all of the cases. That schedule indicates that the court will not rule on the cases until at least early October.

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