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Denying Shell’s Arctic Lease Extension Correct, Enviro Groups Tell Interior

Eight conservation groups led by Earthjustice have filed to intervene and defend a decision by federal officials to deny Royal Dutch Shell plc the right to extend its drilling leases offshore Alaska.

Without an extension, Shell's Beaufort Sea leases are set to expire in 2017, and the Chukchi Sea leases would expire in 2020. The oil major holds more federal leases offshore Alaska than any other producer, acquired mostly in a 2008 federal auction, and it has spent billions to develop potential oil and gas reserves. However, following disappointing initial drilling results last summer, Shell in September halted its exploration efforts for the foreseeable future (see Daily GPISept. 28, 2015).

Shell requested the leases it holds be suspended for five years, not canceled, to prevent another operator from bidding on them in a future auction. The Department of Interior's Bureau of Safety and Environmental Enforcement last month rejected the request, and Shell appealed to the Interior Board of Land Appeals (BLA) (see Daily GPIDec. 16, 2015).

Conservation groups, long a bane to Shell's Arctic drilling program, in their motion to intervene before the BLA said the lease cancellations should stand (Shell Gulf of Mexico Inc. and Shell Offshore Inc., IBLA-2016-48). The regulations governing appeals to the BLA permit intervention by a person who would be "adversely affected if the board reversed, vacated, set aside or modified the decision" under view. Earthjustice said in the filing an appellant would be adversely affected if it had a "legally cognizable interest, and the decision on appeal has caused or is substantially likely to cause injury to that interest." The "legally cognizable interests" include "recreational, aesthetic and conservation values," the motion said.

"The Arctic Ocean is ground zero for climate change, and drilling in such a sensitive region threatens the whales, seals and countless other wildlife that call it home," Earthjustice attorney Erik Grafe said. "So last fall, we welcomed the news that Shell was leaving the Arctic Ocean, at least for now. This appeal, however, is the oil company's latest attempt to keep the door open for drilling.

"The agency was right to reject Shell's extension request...The government has concluded there is a 75% chance of a major oil spill if oil companies develop the region, and experts agree that there is no way effectively to contain and clean up a spill in the Arctic Ocean. Developing and burning Arctic Ocean oil is incompatible with efforts to combat climate change. To help stave off the worst effects of climate change, the Arctic Ocean must be off limits to future drilling."

Earthjustice is representing the Alaska Wilderness League, Center for Biological Diversity, Greenpeace, Friends of the Earth, National Audubon Society, Northern Alaska Environmental Center, Sierra Club and The Wilderness Society.

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