Shell’s Arctic Offshore Drilling Ambitions Stymied in Appeals Court

Shell’s ambitions to drill for oil off the coast of Alaska received another blow Wednesday, when the 9th Circuit Court of Appeals ruled that the Interior Department had failed to adequately assess the scale of oil production that could result from the 2008 sale of leases in the Chukchi Sea.

The court challenge — brought by a group of some of the nation’s most prominent environmental organizations — was based in part on an estimate by the Bureau of Ocean Energy Management (BOEM) that 1 billion barrels of oil was “economically recoverable” from the Chukchi Sea leases.  The environmental review of the lease sale was based on that number.

“In the case before us, BOEM was fully aware from the very beginning that if one billion barrels could be economically produced, many more barrels could also be economically produced,” the opinion said.  The appeals court called the estimate “arbitrary and capricious,” and said that under the National Environmental Policy Act, the government must “base its analysis on the full range of likely production if oil production were to occur. It did not do so here.”  The case was sent back to U.S. District Judge Ralph Beistline in Alaska for additional review.

Shell’s Arctic Offshore Drilling Ambitions Stymied in Appeals Court