Shell's Alaska Arctic Spill Response Plan Wins Court Approval


June 11 (Reuters) - A divided federal appeals court on Thursday rejected an effort by a coalition of environmental groups to revoke federal approval of Royal Dutch Shell Plc's oil spill response plans related to drilling on Alaska's remote Arctic coast.

By a 2-1 vote, the 9th U.S. Circuit Court of Appeals said the Bureau of Safety and Environmental Enforcement, which is part of the Department of the Interior, acted lawfully in approving the plans, which relate to Shell oil leases in the Beaufort and Chukchi seas from 2005, 2007 and 2008.

It rejected arguments by environmental groups such as the National Audobon Society, the Natural Resources Defense Council and the Sierra Club, that the approval was "arbitrary" and "capricious," based on Shell's unsupported assumption that it could recover 90 percent to 95 percent of any oil spilled.

Many environmental advocates oppose drilling in the Arctic on concern that any spill might prove difficult to clean up.

Shell hopes to resume Arctic fossil fuel exploration as soon as next month, having put it on hold following a mishap-laden 2012 drilling season.

The company, with offices in London and the Hague, won federal approval in early 2012 for its spill plans, which it updated after the April 2010 explosion of the Deepwater Horizon rig in the Gulf of Mexico. That disaster has cost rival BP Plc tens of billions of dollars.

Writing for the 9th Circuit majority, Circuit Judge Jacqueline Nguyen said the BSEE lacked discretion to reject Shell's plans because they complied with federal oil pollution laws.

She also said Shell never made, and the BSEE did not rely on, an assumption about the company's ability to clean up oil.

Circuit Judge Dorothy Nelson dissented, faulting the BSEE's failure to consult with environmental agencies to ensure Shell complied with laws protecting endangered species and habitats.

Thursday's decision upheld an August 2013 ruling by Chief Judge Ralph Beistline of the federal court in Anchorage.

Holly Harris, a lawyer for Earthjustice representing the environmental groups, said the "troubling" decision "puts the Arctic Ocean at risk from Shell's drilling." She urged the government to reject Shell's drilling plans.

Shell spokesman Curtis Smith called the decision "welcome news," adding: "We look forward to receiving the remaining permits necessary to commence exploration activities offshore Alaska in the weeks to come."

The U.S. Department of Justice, which defended the BSEE approval, did not respond to a request for comment.

The case is Alaska Wilderness League et al v. Jewell et al, 9th U.S. Circuit Court of Appeals, No. 13-35866.

(Reporting by Jonathan Stempel in New York; Editing by Alan Crosby and Grant McCool)

Copyright 2016 Thomson Reuters. Click for Restrictions.


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