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Alaska Gov Touts Crt Ruling On Offshore Oil Lease

August 28, 2009

SAN FRANCISCO (Dow Jones)–Alaska Governor Sean Parnell on Friday praised a federal appeals court decision that he said will allow Royal Dutch Shell (RDSA) to continue exploring for oil and gas in the Beaufort Sea.

The 9th U.S. Circuit Court of Appeals in Anchorage in a ruling Thursday threw out a complaint against the federal government over its environmental review for a lease sale in the Beaufort Sea on Alaska’s Outer Continental Shelf.

Two local groups, the North Slope Borough and the Alaska Eskimo Whaling Commission, sued the U.S. Minerals Management Service, which sells offshore leases for oil and natural gas drilling, over 2007 leases, saying the agency didn’t adequately consider how seismic activity and other exploration operations would affect local wildlife. The court disagreed, affirming a previous decision by a federal district court.

Parnell said exploration and development of the Outer Continental Shelf is “critical to the state’s long-term economic future.”

Shell is pleased with the decision and has “completed three years of scientific and seismic programs leading up to what we expect to be a very successful Beaufort Sea drilling program in 2010,” company spokeswoman Kelly op de Weegh wrote in an email.

It was unclear what effect the ruling would have in light of a federal appeals court ruling in April that threw out federal leases off Alaska’s coasts and ordered the Interior Department to redo its environmental review of environmentally sensitive areas in the Beaufort, Bering and Chukchi seas. In a subsequent ruling the U.S. Court of Appeals for the District of Columbia Circuit ordered the agency to report back to the court every 60 days with progress reports on its review of the Alaska lease sales.

Based on government estimates, Alaska has some of the largest undiscovered oil and gas resources in the nation. The Alaska seas also are considered some of the most ecologically sensitive areas of the world, home to polar bears, whales, seals and walruses.

-By Cassandra Sweet, Dow Jones Newswires; 415-439-6468; [email protected]

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