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Shell, BP Can Explore for Oil Offshore From Alaska, Judge Rules

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Shell, BP Can Explore for Oil Offshore From Alaska, Judge Rules 

By Tony Hopfinger

July 2 (Bloomberg) — Royal Dutch Shell Plc and BP Plc can explore for oil in Alaska’s Arctic waters, according to a ruling by an Anchorage federal judge, who dismissed a lawsuit that sought to block the companies’ exploration plans.

Environmental groups and an Alaska Eskimo village on May 5 sued federal agencies which issued offshore exploration permits to Shell and BP, claiming the vibrations and sounds created by seismic testing could harm whales and other marine mammals. The groups wanted regulators to do more studies.

U.S. District Court Judge Ralph Beistline ruled today that the agencies followed proper procedures in granting the permits and that Shell and BP can conduct seismic testing for oil in Alaska’s Arctic waters during the northern hemisphere’s summer and autumn. The permits cover exploration activities and don’t allow for drilling for oil.

“The public interest in energy development favors upholding the permits,” Beistline said in his order.

Dwindling discoveries have pushed oil companies into more remote regions, such as the Alaska Arctic, to benefit from record demand and prices. The U.S. is debating whether to increase domestic drilling both on land and offshore. President George W. Bush has called for more offshore oil exploration and the topic is factoring into the presidential election.

Environmentalists challenging the exploration permits will consider appealing the ruling to the U.S. 9th Circuit Court of Appeals in San Francisco, Clayton Jernigan, a lawyer with Earthjustice, which represents the groups, said.

Requesting Injunction

“Our options are to appeal the case and potentially request an injunction from the 9th Circuit,” Jernigan said in a phone interview today.

Shell spokesman Curtis Smith declined to comment apart from saying the ruling came after business hours. Shell plans to carry out its seismic program in Alaska this summer, he said.

Steven Rinehart, a BP spokesman, declined to comment.

Shell, the world’s second-largest oil company, last month canceled its summer drilling program in the Beaufort Sea, located off the northern coast of Alaska, citing another lawsuit that has prevented the company since last summer from launching its drilling program.

In the lawsuit, the 9th Circuit Court of Appeals last year sided with Eskimo whalers and agreed to place an injunction on Shell’s Beaufort drilling program. The court hasn’t made a final decision on Shell’s drilling.

To contact the reporter on this story: Tony Hopfinger in Anchorage at[email protected].

Last Updated: July 3, 2008 02:25 EDT

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