US Challenged over Approval of Shell Gulf Drilling Plan

WASHINGTON (Dow Jones Newswires), June 10, 2011

Environmental groups Thursday sued the Obama administration over its approval of a Shell plan to drill for oil deep under the Gulf of Mexico.

The suit was the opening salvo in what could be a lengthy legal fight over U.S. drilling policy following the resumption of oil and gas exploration after the Deepwater Horizon disaster. It came a day after ExxonMobil announced one of the largest oil discoveries ever in the Gulf, signaling that as oil companies use newly issued federal permits to return to the area after last year's oil spill, they are also likely to face more legal battles.

"Before new deepwater Gulf drilling occurs, the government must make a realistic assessment of the risk to the Gulf's ecosystem, its communities, and the many jobs that depend on tourism, fishing and recreation. It has utterly failed to do so here," said David Guest, an attorney with Earthjustice, which filed the suit on behalf of the Sierra Club, the Gulf Restoration Network and the Florida Wildlife Federation.

The groups alleged that federal regulators violated environmental laws when they approved Shell's plan to drill eight wells about 72 miles off the Louisiana coast last month and asked the Eleventh Circuit of the U.S. Court of Appeals in Atlanta to nix the approval.

The review of Shell's proposal was conducted under a new regulatory regime that was instituted after Deepwater Horizon and designed to improve safety and strengthen environmental protection. It found no evidence that the plan would significantly affect the quality of the "human environment."

The environmental groups say the government underestimated the likelihood of a major oil spill and failed to account for weaknesses in the company's plan to contain or prevent a blowout like the one that occurred in the Gulf last year.

A spokeswoman for the Bureau of Ocean Energy Management, Regulation, and Enforcement, which approved Shell's plan, declined to comment.

Shell spokeswoman Kayla Macke said in an email that Thursday's legal filings "fail to take into account the comprehensive nature of the approved exploration plan," which "reflects numerous improvements to enhance safety and to protect the environment."

"We will fully assist the government in defending this plan," Macke said.

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