newsminer.com

ANCHORAGE -- Shell Oil Co. is abandoning plans to drill in the Beaufort Sea this year because of an unresolved court case, company officials said Friday.

Despite the setback, the Dutch-owned company still remains heavily committed to extracting fossil fuels from Arctic waters off Alaska's northern coast, said Shell general manager Pete Slaiby, who recently joined the company's expanding Anchorage office.

"We've still got a big program here even without the drilling," Slaiby told The Associated Press. "Obviously we're disappointed about not being able to drill, but we are pleased with the amount of other work that's ongoing."

The lawsuit, currently being decided by the 9th Circuit Court of Appeals, alleges that officials with the federal Minerals Management Service issued drilling permits to the company without a thorough understanding of the potential harm to the Arctic environment and marine wildlife.

The court ruled that Shell could not drill while it was deliberating the case and no one knows when a decision will be reached.

The case is one of several brought by environmental and Alaska Native groups that oppose various aspects of offshore drilling and leasing in the remote region, which is home to bowhead whales, seals and polar bears.

"We will just continue to press the federal government to undertake all the environmental reviews they've been ignoring in their rush to allow drilling," said Whit Sheard, Alaska program director of Pacific Environment.

In recent predictions, the company has said production would not begin for at least another 12 years. For now, Shell's summer plans will include marine mammal studies, seismic work to determine the location of oil and gas formations and pipeline survey work for a potential offshore field, Slaiby said.

Environmental groups oppose the seismic tests, which can disrupt the communication and feeding patterns of marine mammals.

Shell paid about $84 million for 179 federal leases in the Beaufort Sea and has invested more than $200 million total in the region, according to Shell spokesman Curtis Smith.