U.S. court strikes down Bush oil leasing plan

Fri Apr 17, 2009 10:38pm BST
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By Yereth Rosen

ANCHORAGE, Alaska, April 17 (Reuters) - An appeals court on Friday struck down the Bush administration's five-year plan for offshore oil and gas leasing, saying it was put into effect without proper environmental review.

The U.S. Court of Appeals in Washington, D.C. ordered the Interior Department to rewrite the 2007-2012 plan, which was challenged by a coalition of environmental groups and Alaska Natives.

That entire leasing program, which includes several lease sales to be held as well as a 2008 sale in the Chukchi Sea that drew a record $2.66 billion in high bids, is vacated because its "environmental sensitivity rankings are irrational," the ruling said.

Although the case disputes oil development in the Alaska outer continental shelf, the court's ruling mandates a rewrite for the entire nation, said Peter Van Tuyn, an Anchorage attorney who represented an Inupiat Eskimo village and some of the environmentalists who objected to the plan.

Upcoming Alaska lease sales that were slated to be held between 2010 and 2012, including sales in the Beaufort and Chukchi Seas and North Aleutian Basin, "no longer exist," Van Tuyn said. "There is no leasing schedule."

It is unclear what will happen to the leases sold last year for exploration rights to the remote Chukchi. Shell (RDSa.L: Quote, Profile, Research) was the major player in that lease sale, spending $2.1 billion to acquire leases. Shell and ConocoPhillips (COP.N: Quote, Profile, Research), which also acquired leases in the sale, have conducted seismic testing in the area and said they plan to start drilling in 2010.

Van Tuyn said he is doing further research to determine whether those leases are now voided.

"That's an open question," he said. "I think Interior should suspend them pending further analysis."  Continued...

 
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