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Reuters: Appeals court blocks Shell drilling in Arctic

Wed Aug 15, 2007 6:36PM EDT

LOS ANGELES (Reuters) – A U.S. federal appeals court in San Francisco on Wednesday upheld an order blocking Royal Dutch Shell Plc from exploratory drilling in the Beaufort Sea off Alaska’s north coast.

“We are disappointed,” said Shell in a press statement that added that no drilling will mean the loss of “hundreds of permanent jobs that would be created if Shell is successful in Alaska.”

The ruling essentially says that a handful of environmental groups, Alaska Native groups and the North Slope Burough 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.

With December being the first chance for the three-judge panel to address the issue again, this shuts out Shell from drilling this winter before the Beaufort Sea freezes.

The three-judge panel ruled on Wednesday that the groups challenging Shell “raised serious questions and demonstrated the balance of hardships tips sharply in their favor,” according to the ruling.

The ruling upholds a July 19 hold on Shell’s operations called until the ruling issued Wednesday.

The challenge to Shell said bowhead whales were endangered by the exploratory drilling, as was sustenance hunting.

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