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Legality of 2007 Beaufort Sea Lease Sale Affirmed

A recent appeals court ruling means that Shell Alaska may continue to explore and develop its Beaufort Sea leases in Alaska. Recently a three-judge panel of the U.S. Court of Appeals for the 9th Circuit affirmed a lower court decision that the government's Lease Sale 202 was conducted properly in 2007.

"This decision is good news for Alaska and for the nation's energy security," said U.S. Sen. Lisa Murkowski (R-AK). "I've always felt that the MMS [Minerals Management Service] met the 'hard look' standard in their environmental assessment of the 2007 lease sale."

Last month Shell Offshore Inc.'s exploration plan for two leases in the Beaufort Sea was deemed complete by the U.S. Department of the Interior's MMS, and that plan is now under review at MMS. As part of its review the agency will prepare an environmental assessment specific to Shell's exploration. Upon completion of the technical and environmental review, MMS must decide if the plan is approved, requires modifications or is disapproved (see NGI, Aug. 17).

The leases were obtained by Shell Offshore during Beaufort Sea oil and gas lease sales 195 and 202 in 2005 and 2007, respectively. The sales were included in the 2002-2007 five-year oil and gas leasing program and are not affected by the recent court decision on the current leasing program, which sent the 2007-2012 program back to MMS for additional environmental reviews (see NGI, April 20).

"This is good news for the State of Alaska," said Gov. Sean Parnell. "Outer Continental Shelf [OCS] development is critical to the state's long-term economic future. The OCS offers the greatest opportunity for new oil discoveries in the Arctic, and barriers against exploration and development there continue to fall."

The appeals court decision comes on the heels of two favorable federal court decisions, Parnell noted. The District of Columbia Circuit Court recently agreed with Alaska that oil companies should be allowed to continue with data-gathering activities for oil and gas development in the Chukchi Sea. Additionally, the U.S. District Court in Alaska granted the state's motion to intervene in a case in which the Native village of Point Hope and environmental groups seek to rescind dozens of leases issued by the federal government under an offshore oil and gas lease sale conducted for federal waters in the Chukchi Sea.

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