Environmental concerns: Shell's Beaufort drilling programme has been blocked
Shell ruled out of Beaufort drilling
A US federal appeals court in San Francisco has upheld an order blocking supermajor Shell from exploratory drilling in the Beaufort Sea off Alaska's north coast.
The three-judge panel ruled that the environmental groups challenging Shell "raised serious questions and demonstrated the balance of hardships tips sharply in their favor."
"We are disappointed," Shell said in a press statement, adding that no drilling will mean the loss of "hundreds of permanent jobs that would be created if Shell is successful in Alaska."
The ruling deals a serious blow to Shell's plan to drill up to four exploration wells during the brief Arctic summer to test a $44 million investment the company placed in the region in 2005, Reuters reported.
The ruling essentially says that a handful of environmental groups, including Alaska Native groups and the North Slope Borough, have merit in their arguments that the drilling could harm the environment.
This sets up proceedings for the same Ninth Circuit Court of Appeals to look into the matter more fully.
However, with December being the first chance for the three-judge panel to address the issue again, Shell has been shut out from drilling before the Beaufort Sea freezes for winter.
Whaling and environmental groups said the US Department of Interior's Minerals Management Service did not study the possible negative impact of drilling fully when it approved Shell's drilling plans in February 2007.
Shell officials, on the other hand, say they believe they have met all requirements and can adequately safeguard from harming the Beaufort Sea and the North Slope.
Shell said it is in Alaska to stay.
"Alaska is a long-term commitment for Shell," the company's statement said.
"Despite today's court decision, we see a bright future for Shell in Alaska."