A U.S. federal appeals court has thwarted Royal Dutch Shell Plc’s plan to drill the deepest offshore Alaskan oil well amid the concern of project’s adverse effect on bowhead whales and other animals.
A federal court in San Francisco accepted the environmental groups and Eskimo’s request to require more research on their impact on marine wildlife. The court put on hold the U.S. Minerals Management Service’s approval of the plan and scheduled an Aug. 14 hearing.
The ruling deals a serious blow to Shell’s plan to drill up to four exploration wells during the brief Arctic summer. Shell was the high-bidder in two recent lease sales for offshore tracts in the Arctic, spent more than $44 million for offshore leases in the Beaufort Sea.
In April, the company intensified its program by bidding $39 million for offshore leases, including more than $14 million for Flaxman Island northwest of the Arctic National Wildlife Refuge.
The plan submitted by Shell Offshore Inc. proposed to drill up to 12 exploration wells on 12 tracts over three years, including four exploration wells this summer.
Shell, the world’s second-largest oil company, has already invested $200 million in the drilling program. It claimed that company has thoroughly studied the effects on sea mammals and developed a plan to respond to oil spills. The Interior Department’s Minerals Management Service had approved Shell’s drilling plans in February, but environmentalists advocated that Interior Department failed to take seriously the threat posed to bowhead whales and other wildlife.
However, federal court’s ruling will halt the exploration and further research may cause a significant delay or prevent drilling altogether in 2007.
Oil had been discovered at Sivulliq in the 1980s but Shell had abandoned U.S. arctic exploration 21 years ago, due to the high cost of developing oil fields in the Beaufort Sea.
However, galloping oil prices in the international market and increasing pressure from the Venezuela and Russia force driller to ponder over Sivulliq prospect.
Shell had planned to drill one well to 14,000 feet (4,267 meters) beneath the sea floor, which would exceed the deepest well drilled in Alaskan waters by 3,000 feet. Two additional wells will be 7,000 feet deep. But now all visions and its plan seems to doom away as court has hammered its futuristic plan.
Via: IHT
